I Notes Forming Part of the Financial Statements
Note 1 : Corporate Information
ARC Finance Limited is a company limited by shares, domiciled in India, incorporated under the provisions of Companies Act applicable
in India. The Company's shares are listed on BSE, a recognised stock exchange,in India. The registered office of the company is located at
18, RABINDRA SARANI, PODDAR COURT GATE NO.4, 4TH FLOOR, ROOM NO.3, Kolkata, West Bengal, 700001. The company is engaged
in the business of lending. ARC also accepts loans-advances and offers variety of financial services to its customers.The standalone
financial statements comprise of financial statements of ARC Finance Limited for the year ended March 31, 2025.
Note 2 : Basis of preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian
Accounting Standards) Rules, 2015 as amended from time to time and notified under section 133 of the Companies Act, 2013 (the Act)
along with other relevant provisions of the Act and the Master Direction-Non Banking Financial Company ('the NBFC Master
Directions') issued by RBI. The financial statements have been prepared on a going concern basis. The company uses accrual basis of
accounting except in case of certain uncertainties.For all periods up to and including the year ended 31 March, 2025, the company had
prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read
together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016
and the NBFC Master Directions (herein referred as 'Previous GAAP'). These financial statements for the year ended 31 March, 2025 are
the first, the company has prepared in accordance with Ind AS.
2(a) Presentation of financial statements
The company presents its Balance Sheet in order of liquity.The company generally reports financial assets and financial liabilities on a
gross basis in the Balance Sheet.
2(b) Critical accounting estimates and judgements
The preparation of the Company's financial statements requires Management to make use of estimates and judgements. In view of the
inherent uncertainties and a level of of subjectivity involved in measurement of items, it is possible that the outcomes in the subsequent
financial years could differ from those on which the Managements's estimates are based. Accounting estimates and judgements are used
in various line items in the financial statements.
Note 3: Summary of significant accounting
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies
have been consistently applied to all the years presented, unless otherwise stated.
Revenue recognition
(i) Interest income
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be
reliably measured. Interest is recognised on a time proportion basis taking i nto account the amount outstanding and the rate applicable.
(ii) Dividend income
Dividend income on equity shares is recognised when the Company's right to receive the payment is established, which is generally
when shareholders approve the dividend.
(iii) Other income
Other revenues are recognised as per applicable and relevant Ind AS.
(iv) Taxes
Incomes are recognised net of the Goods and Service Tax, wherever applicable.
Expenditures
(i) Finance Costs
Borrowing costs on financial liabilities are recognised as per relevant Ind AS.
(ii) Depreciation, Amortization and impairment
Depreciation has been provided using the written down value method as per the rates prescribed under schedule II of the Companies
Act, 2013.
(iii) Taxes
Expenses are recognised net of the Goods and Services Tax/Service tax, except where the input tax is not statutorily permitted.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, other short term, highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Financial instruments
Financial intruments, comprising of financial assets and liabilities are being recorded as per relevant Ind AS and the changes in significant
changes (increase or decrease) in the credit risk are being monitored and accordingly impairment on financial instruments is recoginsed
against such instruments as per relevant Ind AS.
Investments
The policy opted for recording i nvestments is at amortised cost as per the relevant Ind AS.
Taxes
(i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from ot paid to the taxation authorities, in
accordance with the Income Tax Act, 1961.
(ii) Deferred tax
Deferred tax is provided using the Balance sheet approach on temporary differences between the tax bases of assets and liabilities and
their carryi ng amounts for financial reporting purposes at the reporting date.Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised for deductible temporary differences to the extent that it is probable that
taxable profits will be available against which the deductible temporary differences can be utilised.
Inventories
Inventories of shares have been recorded at lower of cost and net realisable value as per relevant Ind AS.Net realisable value is the
estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the
sale.
Property, plant and equipment
Property, plant and equipment are carried at historical cost (amortised cost) of acquisition less accumulated depreciation and impairment
losses, consistent with the criteria specified in Ind AS 16 'Prope rty, Plant and equipment'.
Impairment of financial assets
The policy opted for recoginsing i mpairment on financial instruments is as per the Expected Credit loss in n coming financial years and
accordingly financial assets are categorised are monitored upon for their timely recovery and resultanlty the Expected Credit loss is
provided for.
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