MATERIAL accounting policies
1.1 COMPANY OVERVIEW
Jayabharat Credit Limited (referred to as "the Company” (CIN: L66000MH1943PLC003899) was incorporated under the
laws of the Republic of India under Companies Act, 1913 with its registered office at 19-20 Rajabahadur Mansion, 4th
Floor, 22, Mumbai Samachar Marg, Opposite SBI Main Branch Mumbai Maharashtra 400023. Incorporated in 1943, the
Company was in the business of Hire Purchase and leasing and originally registered with RBI under the status of Non¬
Banking Finance Company (NBFC) with Deposit taking Company. The Company is now ceased to be Non-Banking
Finance Company (NBFC) as per RBI letter No. DNBS/ MRO1004/01.046/2019-20 dated 13th January,2020.
1.2 GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IND AS
The Company is headquartered in Mumbai, India. The shares of the Company are listed on Bombay Stock Exchange
(BSE).
The Financial Statements of the Company have been prepared in accordance with Indian Accounting Standards (IND
AS) notified under Companies (Indian Accounting Standards) Rules, 2015.
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities:
I. Certain Financial Assets and Financial Liabilities and Contingent Consideration that are measured at fair value
II. Assets held for sale measured at lower of cost or fair value less cost to sell
III. Defined benefit plan assets measured at fair value
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services at the
date of respective transactions.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted
or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
All amounts disclosed in the financial statement and notes have been rounded off to the nearest ' in lakh up to two
decimals unless otherwise stated.
The Financial Statements for the year ended 31st 2024 were authorized and approved for issue by the Board of Directors
on 22nd May 2024.
NOTE - 2
SUMMARY OF MATERIAL ACCOUNTING POLICIES
The Financial Statements have been prepared using the Accounting Policies and measurement basis summarized below.
2.1 PROPERTY, PLANT AND EQUIPMENT
2.1.1 RECOGNITION
Property, Plant and Equipment are stated at historical cost, less accumulated depreciation/amortized and impairments,
if any. Historical cost includes taxes, duties, freight and other incidental expenses related to acquisition & installation.
2.1.2 SUBSEQUENT MEASUREMENT
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably.
All other repairs & maintenance are charged to profit or loss.
2.1.3 DEPRECIATION
Depreciation on Property, Plant and Equipment is charged on straight line method on useful life prescribed under Part
C of Schedule II of the Companies Act, 2013.
Property, Plant and Equipment individually costing upto ' 10,000 are fully depreciated in the year of acquisition.
The residual values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
2.1.4 DE-RECOGNITION
An item of Property, Plant and Equipment and any significant part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included
in the Statement of Profit and Loss account when the asset is derecognised.
2.2 IMPAIRMENT OF NON FINANCIAL ASSETS
Carrying amount of assets is reviewed at each reporting date where there is any indication of impairment based on
internal/ external indicators. An impairment loss is recognised in the Statement of Profit and Loss where carrying amount
exceeds recoverable amount of assets. Impairment loss is reversed, if, there is change in recoverable amount and such
loss either no longer exists or has decreased or indication on which impairment was recognised no longer exists.
2.3 FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
2.3.1 FINANCIAL ASSETS
2.3.1.1 INITIAL RECOGNITION AND MEASUREMENT
Financial Assets are recognised when the Company becomes a party to the contractual provisions of the Financial
Instrument and are measured initially at fair value adjusted for transaction costs that are attributable to the acquisition
of the financial asset.
2.3.1.2 SUBSEQUENT MEASUREMENT
Debt Instruments at Amortised Cost- A ‘debt instrument’ is measured at the amortised cost if both the following conditions
are met:
• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows,
and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.
After initial measurement, such Financial Assets are subsequently measured at amortised cost using the Effective
Interest Rate (EIR) method. All other debt instruments are measured are Fair Value through Other Comprehensive
Income (FVOCI) or Fair value through Profit and Loss (FVTPL) based on Company’s business model.
2.3.1.3 IMPAIRMENT OF FINANCIAL ASSETS
I n accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss on the financial assets that are debt instruments, and are measured at amortised cost.
• Financial Assets measured as at amortised cost: ECL is presented as an allowance, i.e., as an integral part
of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until
the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying
amount.
• Debt instruments measured at FVTPL: Since financial assets are already reflected at fair value, impairment
allowance is not further reduced from its value. The change in fair value is taken to the statement of Profit and
Loss.
• Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment
allowance is not further reduced from its value. Rather, ECL amount is presented as ‘Accumulated Impairment
Amount’ in the OCI. The Company does not have any Purchased or Originated Credit Impaired (POCI) financial
assets, i.e., financial assets which are credit impaired on purchase/ origination.
2.3.1.4 DE-RECOGNITION OF FINANCIAL ASSETS
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e. removed from the Company’s balance sheet) when:
i. The rights to receive cash flows from the asset have expired, or
ii. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘passthrough’ arrangement; and either
(a) The Company has transferred substantially all the risks and rewards of the asset, or
(b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but
has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control
of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing
involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and obligations that the Company has retained.
2.3.2 FINANCIAL LIABILITIES
2.3.2.1 INITIAL RECOGNITION AND MEASUREMENT
Financial liabilities are classified at initial recognition as financial liabilities at fair value through Profit or Loss, Loans
and Borrowings, and Payables, net of directly attributable transaction costs. The Company’s financial liabilities include
Intercorporate Deposits received and Loans Other Payables.
All Financial Liabilities are recognised initially at fair value and transaction cost that is attributable to the acquisition of
the Financial Liabilities is also adjusted. Financial Liabilities are classified as amortised cost.
The measurement of financial liabilities depends on their classification, as described below:
i. Financial liabilities at Fair Value Through Statement of Profit and Loss - Financial liabilities at Fair Value
through statement of Profit and Loss include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at Fair Value through statement of Profit and Loss. Financial liabilities are classified as
held for trading if they are incurred for the purpose of repurchasing in the near term.
ii. Loans and Borrowings - After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the Effective Interest Rate (hereinafter referred as EIR) method. Gains and
Losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through
the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as Finance
Costs in the statement of profit and loss.
iii. Other Payables - These amounts represent liabilities for goods and services provided to the Company prior to the
end of financial year which are unpaid. Other payables are presented as current liabilities unless payment is not
due within 12 months after the reporting period.
2.3.2.2 SUBSEQUENT MEASUREMENT
Subsequent to initial recognition, these liabilities are measured at Amortised Cost using the Effective Interest Rate (EIR)
method.
2.3.2.3 DE-RECOGNITION OF FINANCIAL LIABILITIES
A Financial Liability is de-recognised when the obligation under the liability is discharged or cancelled or expired.
Consequently, write back of unsettled credit balances is done on the previous experience of Management and actual
facts of each case and recognised in Other Income. When an existing Financial Liability is replaced by another, from
the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
2.3.3 OFFSETTING OF FINANCIAL INSTRUMENTS
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
2.6 CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents comprise cash in hand, Balances in Bank Account, Remittance in Transit, Cheques in hand
and demand deposits, together with other short-term, highly liquid investments (original maturity less than 3 months)
that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
2.5 TAXES
2.5.1 CURRENT INCOME TAX
Current Income Tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.
Current income tax relating to items recognised outside Profit or Loss is recognised outside profit or loss (either in
Other Comprehensive Income or in Equity). Current tax items are recognised in correlation to the underlying transaction
either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
2.5.2 DEFERRED TAX
Deferred Income Taxes are calculated using Balance Sheet Approach, on temporary differences between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except when it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences and the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax credits and unused
tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either
in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Tax expense for the year comprises of current tax and deferred tax.
2.5.3 INDIRECT TAX
Expenses and assets are recognised net of the amount of GST/ Service Tax paid, except:
i. When the tax incurred on a purchase of assets or services is not recoverable from the tax authority, in which
case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as
applicable.
ii. When receivables and payables are stated with the amount of tax included, the net amount of tax recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
2.6 EQUITY AND RESERVES
i. Share Capital represents the nominal value of shares that have been issued. Any transaction costs associated
with the issuing of shares are deducted from retained earnings, net of any related income tax benefits.
ii. Other Components of Equity includes Other Comprehensive Income (OCI) arising from actuarial gain or loss
on re-measurement of defined benefit liability and return on plan assets and Net (loss)/gain on FVTOCI equity
securities. The balance in OCI may be transferred from OCI to retained earnings when the asset is retired from
use or disposed by the Company.
iii. Retained Earnings include all current and prior period retained profits.
2.7 DIVIDEND PAYMENTS
Annual dividend distribution to shareholders is recognised as a liability in the period in which the dividend is approved
by the shareholders. Any interim dividend paid is recognised on approval by Board of Directors. Dividend payable and
corresponding tax on Dividend Distribution is recognised directly in equity.
2.8 REVENUE RECOGNITION
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, incentive
schemes, if any, as per contracts with customers. Taxes collected from customers on behalf of Government are not
treated as Revenue.
2.9 INCOME RECOGNITION
2.9.1 INTEREST INCOME
Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate
is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the
expected cash flows by considering all contractual terms of the financial instrument but does not consider the expected
credit losses.
2.9.2 OTHER INCOME
Other claims including interest on outstanding are accounted for when there is virtual certainty of ultimate collection.
2.10 EXPENDITURE
Expenses are accounted on accrual basis.
2.11 EMPLOYEE BENEFIT SCHEMES
2.11.1 SHORT-TERM EMPLOYEE BENEFITS
Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term
employee benefits. These benefits include salaries and wages, performance incentives and compensated absences
which are expected to occur in next twelve months. The undiscounted amount of short-term employee benefits to be
paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.
2.11.2 GRATUITY
Liabilities with regard to the gratuity benefits payable in future are determined by actuarial valuation at each Balance
Sheet date using the Projected Unit Credit method. Gratuity is unfunded.
Actuarial gains and losses arising from changes in actuarial assumptions are recognized in Other Comprehensive
Income and shall not be reclassified to the Statement of Profit and Loss in a subsequent period.
2.11.3 PROVIDENT FUND
Eligible employees of the Company receive benefits from a Provident Fund, which is a defined benefit plan. Both
the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified
percentage of the covered employee’s salary.
2.12 FUNCTIONAL AND PRESENTATION CURRENCY
The Financial Statements are presented in Indian Rupee ('), which is Company’s functional Currency and presentation
currency.
2.13 EARNINGS PER SHARE
The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares.
i. Basic EPS is calculated by dividing the profit and loss attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during the period.
ii. Diluted EPS is determined by adjusting the profit and loss attributable to equity shareholders and the weighted
average number of equity shares outstanding for the effects of all dilutive potential equity shares.
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