Statement of Compliance and Basis for Preparation and Presentation of Financial
These Standalone Or Separate Financial Statements Of The Company Have Been Prepared In
Accordance With The Indian Accounting Standards ("Ind AS") As Per The Companies (Indian
Accounting Standards) Rules 2015 As Amended And Notified Under Section 133 Of The
Companies Act, 2013 ("The Act"), And In Conformity With The Accounting Principles Generally
Accepted In India And Other Relevant Provisions Of The Act. Further, the Company Has
Complied with All the Directions Related to Implementation of Indian Accounting Standards
Prescribed for Non-Banking Financial Companies (NBFCS) In accordance with the RBI
Notification No. RBI/2019-20/170 DOR NBFC).CC.PD.No.109/22.10.106/2019-20 Dated 13
March 2020. Any Application Guidance/ Clarifications/ Directions Issued By RBI Or Other
Regulators Are Implemented As And When They Are Issued/ Applicable.
These Standalone or Separate Financial Statements have Been Approved by the Company's
Board of Directors and Authorized for Issue on 27th May 2024.
Statement of compliance
The financial statements have been prepared in accordance with the provisions of the
Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) issued
by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 read with
sub-section (1) of section 210A of the Companies Act, 2013. In addition, the guidance
notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also
applied along with compliance with other statutory promulgations which require a different
treatment.
The financial statements have been prepared on a historical cost basis, except certain financial
assets and liabilities measured at fair value (refer accounting policy regarding financial
instruments) at the end of each reporting period. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value
of an asset or a liability, the Company takes into account the characteristics of the asset or
liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and / or disclosure
purposes in these financial statements is determined on this basis. Fair value measurements
are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value
measurements are observable and the significance of the inputs to the fair value measurement
in its entirety.
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
• Level 3 inputs are unobservable inputs for the asset or liability.
Application of new and revised Ind AS
All the Ind AS issued and notified by the Ministry of Corporate Affairs under the Companies
(Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are
authorised for issue have been considered in preparing these financial statements.
Presentation of financial statements
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the
format prescribed in the Division III to Schedule III to the Companies Act, 2013 (“the Act”)
applicable for Non-Banking Finance Companies (“NBFC”).
The Statement of Cash Flows has been prepared and presented as per the requirements of Ind
AS 7 “Statement of Cash Flows”. The disclosure requirements with respect to items in the
Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are
presented by way of notes forming part of the financial statements along with the other notes
required to be disclosed under the notified accounting Standards and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
2.2 Functional and Presentation Currency
These Financial Statements Are Presented in Indian Rupees ('INR' Or 'Rs.') which is also The
Company's Functional Currency. All Amounts Are Rounded-Off to the nearest ten, Unless
Otherwise Indicated.
2.3 Basis of Measurement
The Financial Statements Have Been Prepared On A Historical Cost Convention and on an
Accrual Basis, except For Certain Financial Instruments Which Are Measured At Fair Values As
Required By Relevant Ind AS.
Measurement of Fair Values
A Number of Company's Accounting Policies and Disclosures required the measurement of fair
Values, For Both Financial and Non-Financial Assets and Liabilities. The Company Has
Established Policies And Procedures With Respect To The Measurement Of Fair Values. Fair
Values Are Categorized Into Different Levels In A Fair Value Hierarchy Based On The Inputs
Used In The Valuation Techniques As Follows:
Level 1: Quoted Prices (Unadjusted) In Active Markets For Identical Assets And Liabilities.
Level 2: Inputs other than Quoted Prices Included In Level 1 That Are Observable For The
Asset Or Liability, Either Directly Or Indirectly.
Level 3: Inputs for The Asset or Liability Y That Are Not Based on Observeable Market Data
(Unobservable Inputs).
Use of Estimates and Judgments and Estimation Uncertainty
In preparing these financial statements, Management Has Made Judgments, Estimates and
Assumptions That Affect the Application of the Company's Accounting Policies and the
Reported Amounts of Assets, Liabilities, Income, Expenses and the Disclosures of Contingent
Assets and Liabilities. Actual Results May Differ From These Estimates. Estimates And
Underlying Assumptions Are Reviewed On An Ongoing Basis. Revisions To Estimates Are
Recognized Prospectively.
The Key Assumptions Concerning The Future And Other Key Sources Of Estimation
Uncertainty At The Reporting Date That Have A Significant Risk Of Causing A Material
Adjustment To The Carrying Amounts Of Assets And Liabilities Within The Next Financial Year
Are Described Below. The Company Based Its Assumptions And Estimates On Parameters
Available When The Financial Statements Were Issued. Existing Circumstances And
Assumptions About Future Developments, However, May Change Due To Market Changes Or
Circumstances Arising That Are Beyond The Control Of The Company. Such Changes Are
Reflected In The Assumptions When They Occur.
Following are Areas That Involved a Higher Degree of Estimate and Judgment or Complexity in
Determining the Carrying Amount of Some Assets and Liabilities.
Effective Interest Rate (EIR) Method
The company recognize interest income/ expense using a rate of return that represents the
best estimate of a cons t ant rate of return over the expected life of the loans given / taken. This
estimation, by nature, requires an element of judgment regarding the expected behavior and
life-cycle of the instruments, as well as expected changes to other fee income/expense that are
integral parts of the instrument.
Impairment of Financial Assets
The measurement of impairment losses on loan assets and commitments requires judgment, in
estimating the amount and timing of future cash flows and recoverability y of collateral values
while determining the impairment losses and assessing a significant increase in credit risk.
THE COMPANY'S EXPECTED CREDIT LOSS (ECL) calculation is the output of a complex model
with a number of underlying assumptions regarding the choice of variable inputs and their
interdependencies. Elements of the ECL model that are considered accounting judgments and
estimates include:
- The Company's Criteria for Assessing If There Has Been a Significant Increase in
Credit Risk.
- The Segmentation of Financial Assets When Their ECL Is Assessed On a Collective
Basis.
- Development of ECL Model, Including the Various Formulae and the Choice of
Inputs.
- Selection of Forward-Looking Macroeconomic Scenarios and Their Probability
Weights, To Derive the Economic Inputs into the ECL Model.
- Management Overlay Used In Circumstances Where Management Judges That The
Existing Inputs, Assumptions And Model Techniques Do Not Capture All The Risk
Factors Relevant To The Company's Lending Portfolios.
It Has Been the Company's Policy to Regularly Review Its Model in the Context of Actual Loss
Experience and Adjust When Necessary.
|