Note No.: 5 Significant Accounting Policies
5.1 Revenue recognition

Revenue (other than for those items to which Ind AS 109 Financial Instruments are applicable) is measured at fair
value of the consideration received or receivable.

The Company recognises revenue from contracts with customers based on a five step model as set out in Ind
Asll5:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties
thatcreates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract:

A performance obligation is a promise in a contract with a customer to transfer a good or a service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the
Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more
than one performance obligation, the Company allocates the transaction price to each performance obligation in
an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for
satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

Revenue includes the following:

I) Interest Income

Under Ind AS 109 interest income is recognised by applying the Effective Interest Rate (EIR) to the gross carrying
amount of financial assets other than credit-impaired assets and financial assets classified as measured at FVTPL.
The EIR in case of a financial asset is computed

a. As 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.

b. By considering all the contractual terms of the financial instrument in estimating the cash flows

c. Including all fees received between parties to the contract that are an integral part of the effective interest
rate, transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future cash flows is recognised in the statement of profit and loss
with the corresponding adjustment to the carrying amount of the assets. Interest income on credit impaired assets
is recognised by applying the effective interest rate to the net amortized cost(net of provision) of the financial
asset.

II) Dividend Income

Dividend income is recognised on the date when the Company's right to receive the dividend is established, it is
probable that the economic benefits associated with the dividend will flow to the entity and the amount of
dividend can be reliably measured.in case of interim dividend, on the date of declaration by the Board of Directors;
whereas in case of final dividend, on the date of approval by the shareholders.

III) NetGain/(Loss)on Fair Value Changes

Any differences between the fair values of financial assets (including investments, derivatives and stock in trade)
classified as fair value through the profit or loss ("FVTPL") held by the Company on the balance sheet date is
recognised as an unrealised gain / loss. In cases there is a net gain in the aggregate, the same is recognised in "Net
gains on fair value changes" under Revenue from operations and if there is a net loss the same is disclosed under
"Expenses" in the statement of profit and loss.

Similarly, any realised gain or loss on sale of financial instruments measured at FVTPL is recognised in net gain /
loss on fair value changes. However, net gain / loss on derecognition of financial instruments classified as
amortized cost is presented separately under the respective head in the statement of profit and loss.

Income from investments in Equity / Preferance which are included within FVTOCI Category (Fair value through
Other Comprehensive income) are recognised in OCI (Other comprehensive income) except the dividend on such
investments which are recognised in Statement of Profit and Loss.

IV) Other Income

In repect of the other heads of income it is accounted to the extent it is probable that economic benefits will fow
and the revenue can be realiably measured, regardless of when payment is made.

5.2 Financial Instruments

(I) Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual terms and the
business model for managing the instruments, as described in subsequent notes. Financial instruments are initially
measured at their fair value, except in the case of financial assets and financial liabilities recorded at FVTPL,
transaction costs are added to, or subtracted from, this amount. Trade receivables are measured atthe transaction
price. When the fair value of financial instruments at initial recognition differs from the transaction price, the
company accounts for the Day 1 profit or loss, as described below.

When the transaction price of the instrument differs from the fair value at origination and the fair value is based on
a valuation technique using only inputs between the transaction price and fair value in net gain on day 1 (for first
time adoption refer no.8)observable in market transactions, the company recognizes the difference between the
transaction price and fair value in net gain/(loss) on fair value changes.

(ii) Classification of financial instruments

The Company classifies its financial assets into the following measurement categories:

1. Financial assets to be measured at a mortised cost

2. Financial assets to be measured at fair value through other comprehensive income (FVTOCI)

3. Financial assets to be measured at fair value through profit or loss account (FVTPL)

The classification depends on the contractual terms of the financial assets, cash flows and the Company's business
model for managing financial assets.

The Company determines its business model at the level that best reflects how it manages groups of financial
assets to achieve its business objective. The business model is assessed on the basis of aggregated portfolios based
on observable factors.

The business model assessment is based on reasonably expected scenarios without taking 'worst case' or 'stress
case' scenarios into account.

The Company also assesses the contractual terms of financial assets on the basis of its contractual cash flow
characteristics that are solely for the payments of principal and interest on the principal amount outstanding.
'Principal' is defined as the fair value of the financial asset at initial recognition and may change over the life of the
financial asset (for example, if there are repayments of principal or amortisation of the premium/discount).
In making this assessment, the Company considers whether the contractual cash flows are consistent with
a basic lending arrangement i.e. interest includes only consideration for the time value of money, credit risk, other
basic lending risks and a profit margin that is consistent with a basic lending arrangement. Where the contractual
terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related
financial asset is classified and measured at fair value through profit or loss.

iii) Financial Assets and Liabilities

(a) Financial assets measured at amortized cost

These financial assets comprise bank balances, loans, trade receivables and other financial assets.

Financial Assets with contractual terms that give rise to cash flows on specified dates and represent solely
payments of principal and interest (SPPI) on the principal amount outstanding and are held within a business
model whose objective is achieved by holding to collect contractual cash flows are measured at amortized cost.

These financial assets are initially recognised at fair value plus directly attributable transaction costs and
subsequently measured at amortized cost. Transaction costs are incremental costs that are directly attributable to
the acquisition, issue or disposal of a financial asset or a financial liability.

(b) Financial assets measured at fair value through other comprehensive income
Debt instruments

Investments in debt instruments are measured at fair value through other comprehensive income where they
have:

a) contractual terms that give rise to cash flows on specified dates, that represent solely payments of principal and
interest onthe principal amount outstanding; and

b) are held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets.

These debt instruments are initially recognised at fair value plus directly attributable transaction costs and
subsequently measured at fair value. Gains and losses arising from changes in fair value are included in other
comprehensive income (a separate component of equity).

Impairment losses or reversals, interest revenue are recognised in statement of profit and loss.

Upon disposal, the cumulative gain or loss previously recognised in other comprehensive income is reclassified
from equity to the statement of profit and loss.

Equity instruments

Investment in equity instruments are generally accounted for as at fair value through the statement of profit and
loss account unless an irrevocable election has been made by management to account for at fair value through
other comprehensive income such classification is determined on an instrument-by-instrument basis.

Amounts presented in other comprehensive income for equity instruments are not subsequently transferred to
statement of profit and loss. Dividends on such investments are recognised in statement of profit and loss.

c) Items at fair value through profit or loss

The financial assets are classified as FVTPL if these do not meet the criteria for classifying at amortized cost or
FVOCI. Items at fa ir va I ue th rough profit or loss com prise:

• Investments (including equity shares) and stock in trade held for trading;

• Items specifically designated as fair value through profit or loss on initial recognition; and

• Debt instruments with contractual terms that do not represent solely payments of principal and interest.

• Derivative transactions

Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction
costs recognised in the statement of profit and loss as incurred.

Subsequently, they are measured at fair value and any gains or losses are recognised in the statement of profit
and loss as they arise.

Financial instruments held for trading

A financial instrument is classified as held for trading if it is acquired or incurred principally for selling or
repurchasing in the near term, or forms part of a portfolio of financial instruments that are managed together and
for which there is evidence of short-term profit taking, or it is a derivative not designated in a qualifying hedge
relationship. Trading derivatives and trading securities are classified as held for trading and recognised at fair value.

d) The Company classifies its financial liabilities at amortized costs unless it has designated liabilities at fair
value through the statement of profit and loss account or is required to measure liabilities at fair value through
profit or loss such as derivative liabilities.

(e) Derivatives

The Company enters into derivative transactions being equity derivative transactions in the nature of Futures and
Options in Equity Stock/ Index for trading purposes.

Derivatives are recorded at fair value and carried as assets when their fair value is positive and as liabilities when
theirfair value is negative. The notional amount and fair value of such derivatives are disclosed separately. Changes
in the fair value of derivatives are included in net gain on fair value changes.

(f) Impairment of financial assets

Overview of the ECL principles

The Company recognises loss allowances (provisions) for expected credit losses on its financial assets that are
measured at amortised costs or at transaction cost which may approximates fair value However at the reporting
date, the company does not have any exposure to non-fund exposures, The Company applies a three-stage
approach to measuring expected credit losses (ECLs) for the following categories of financial assets that are not
measured at fair value through profit or loss:

• debt instruments measured at amortised cost

• loan commitments; and

• financial guarantee contracts

However at the reporting date, the company does not have any loan commitments and financial guarantee
contracts.

Equity instruments are not subject to impairment under Ind AS 109. The ECL allowance is based on the credit losses
expected to arise over the life of the asset (the lifetime expected creditloss), unless there has been no significant
increase in credit risk since origination, in which case, the allowance is basedon the 12 months' expected credit
loss. Lifetime ECL are the expected credit losses resulting from all possible defaultevents over the expected life of a
financial instrument. The 12-month ECL is the portion of Lifetime ECL that representthe ECLs that result from
default events on a financial instrument that are possible within the 12 months after the
reporting date.

Both Lifetime ECLs and 12-month ECLs are calculated on either an individual basis or a collective basis, depending
on the nature of the underlying portfolio of financial instruments. The Company's loan portfolio comprises of only
class, i.e Unsecured loans repayable on demand both to corporates and Indiviuals

Stage 1

All exposures where there has not been a significant increase in credit risk since initial recognition or that
has low credit risk at the reporting date and that are not credit impaired upon origination are classified under this
stage. The Company classifies all standard advances and advances upto 30 days default from the date of demand of
loan under this category. Stage 1 loans also include facilities where the credit risk has improved and the loan has
been reclassified from Stage 2.

The company has only one class of loan portfolio i.e. unsecured loans repayable on demand
Stage 2

All exposures where there has been a significant increase in credit risk since initial recognition but are not credit
impaired are classified under this stage. 31 days to 90 days past due from the date of demand is considered as
significant increase in credit risk.

Stage 3

All exposures assessed as credit impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that asset have occurred are classified in this stage. For exposures that have become
credit impaired, a lifetime ECL is recognised and interest revenue is calculated by applying the effective interest
rate to the amortised cost (net of provision) rather than the gross carrying amount.

90 days past due from the date of demand is considered as default for classifying a financial instrument as credit
impaired.

Since the company has only one class of loan i.e unsecured loans repayable on demand, 12 month expected credit
loss will be just the same as lifetime expected credit loss, because the loan is repayable on demand which is shorter
than 12 months as a result lifetime of a loan is that short period required to transfer cash when demanded by the
company.

Credit-impaired financial assets

At each reporting date, the Company assesses whetherfinancial assets carried at amortised cost and debt financial
assets carried at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that
have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The mechanics of ECL

Ind AS requires the company to calculate ECL based on probability-weighted scenarios to measure the expected
cash shortfalls, discounted at an approximation to the EIR. A cash shortfall is the difference between the cash flows
that are due to the Company in accordance with the contract and the cashflows that the company expects to
receive.

The mechanics of the ECL calculations are outlined below and the key elements are, as follows:

Probability of default (PD) - The probability of default is an estimate of the likelihood of default over a given time
horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously
derecognised and is still in the portfolio.

Exposure at default (EAD)-The exposure at default is an estimate of the exposure at a future default date.

Loss given default (LGD) - The loss given default is an estimate of the loss arising in the case where a default
occurs at a given time. It is based on the difference between the contractual cash flows due and those that the
Company would expect to receive, including from the realisation of any collateral. It is usually expressed as a
percentage of the EAD.

Since all the loans given by the company are repayable on demand, in this specific of on-demand repayable loan
there are two options

1) The borrower is able to pay immediately (if demanded) or

2) The borrower is not able to pay immediately

Hence the company examines whether the borrower has sufficient liquid assets to repay the loan immediately
If the borrower has sufficient liquid assets (cash and cash equivalents) to repay the outstanding loan including
interest accrued therein, then ECL is close to zero, because probablity of default is zero However, the probability of
loss (PD) is not zero, if the company assess that the borrower has no sufficient liquid assets to repay the loan when
demaded and accordingly the Company estimates the PD based on historical observed default rates adjusted for
forward looking estimates, based upon macro-economic developments occuring in the economy and market it
operates in and the relationship between key economic trends like GDP, benchmark rates set by the Reserve Bank
of India, inflation and most importantly the competitive advantage and disadvantage the company has in
com pa rison to its peer grou p(s).

Since the company's loan portfolio mainly comprises of unsecured loans (repayable on demand), Loss given
default (LGD) is always close to 100%.

While the internal estimates of PD, LGD rates by the Company may not be always reflective of such relationships as
temproray overlays (as mentioned In above para(s)), if any, are embedded in the methodology to reflect such
macroeconomic trends reasonably.

Trade Receivables

The Company follows "simplified approach" for recognition of impairment loss allowance on trade receivables. The
application of simplified approach does not require the Company to track changes in credit risk. An impairment
analysis is performed at each balance sheet date on an individual basis for major clients. In addition, number of
minor receivables are grouped into homogenous groups and assessed for impairment collectively Based on
Company's past history and the model under which it works, where it obtains most of the revenues on cut off dates
or on settlement date, the Company does not provide for loss allowances during the reporting period

(I) Write-offs

The Company reduces the gross carrying amount of a financial asset when the Company has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof. This is generally the case when the
Company determines that the client or borrower does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subjected to write-offs. Any subsequent recoveries against such loans
are credited to the statement of profit and loss.

However the Company continue to monitor such bad loans and takes every possible effort towards its recovery
(ii) Fair value measurements

Fair value is a market-based measurement, not an entity-specific measurement. Under Ind AS, fair valuation of
financial instruments is guided by Ind AS 113 "Fair Value Measurement."

For some assets and liabilities, observable market transactions or market information might be available. For other
assets and liabilities, observable market transactions and market information might not be available. However, the
objective of afair value measurement in both cases is the same to estimate the price at which an orderly
transaction to sell the asset or to transfer the liability would take place between market participants at the
measurement date under current market conditions(i.e. an exit price at the measurement date from the
perspective of a market participant that holds the asset or owes the liability).

Three widely used valuation techniques specified in the said Ind AS are the market approach, the cost approach
and the income approach which have been dealt with separately in the said Ind AS.

Each of the valuation techniques stated as above proceeds on different fundamental assumptions, which have
greater or lesser relevance, and at times there is no relevance of a particular methodology to a given situation.
Thus, the methods to be adopted for a particular purpose must be judiciously chosen. The application of any
particular method of valuation depends on the company being evaluated, the nature of industry in which it
operates, the company's intrinsic strengths and the purpose for which the valuation is made.

In determining the fair value of financial instruments, the Company uses a variety of methods and assumptions
that are based on market conditions and risks existing at each balance sheet date.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:

Level 1 financial instruments - Those where the inputs used in the valuation are unadjusted quoted prices from
active markets for identical assets or liabilities that the Company has access to at the measurement date. The
Company considers markets as active only if there are sufficient trading activities with regards to the volume and
liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on
the balance sheet date.

Level 2 financial instruments - Those where the inputs that are used for valuation and are significant, are derived
from directly or indirectly observable market data available over the entire period of the instrument's life. Such
inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical
instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield
curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or
location of the asset or the extent to which it relates to items that are comparable to the valued instrument.
However, if such adjustments are based on unobservable inputs which are significant to the entire measurement,
the Company will classify the instruments as Level 3.

Level 3 financial instruments - Those that include one or more unobservable input that is significant to the
measurement as whole. The Company recognises transfers between levels of the fair value hierarchy at the end of
the reporting period during which the change has occurred. No such instances of transfers between levels of the
fairvalue hierarchy were recorded duringthe reported period.

Further In those cases where fair value is based on models for which some of the inputs are not observable,
the difference between the transaction price and the fair value is deferred and is only recognised in statement of
profit and loss when the inputs become observable, or when the instrument is derecognised.

5.3 Expenses
(I) Finance costs

Finance costs represents Interest expense recognised by applying the Effective Interest Rate (EIR) to the gross
carrying amount of financial liabilities other than financial liabilities classified as FVTPL.

Since the short term borrowings were for short term duration and repayable on demand, hence the same is
recorded attransaction value. All other expenses are recognised as incurred

(ii) Employee Benefits

a) Short-term employee benefits

Short-term employee benefits in respect of salaries and wages, including non-monetary benefits if any are
recognised as expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the
related service is rendered.

b) Defined contribution plans

The Company does not have any obligation towards defined contribution plans

c) Defined benefit plans

The Company does not have any obligation towards defined benefit plans

(iii) Income Tax

The income tax expense or credit for the period is the tax payable on the current period's taxable income

based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable

to temporary differences and to unused tax losses. Current and deferred tax is recognized in Statement of

profit and loss, except to the extent that it relates to items recognized in other comprehensive income or
directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity
respectively.

a) Current tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities using the tax rates and tax laws that are enacted or
substantively enacted by the balance sheet date and applicable for the period.

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.

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off
the recognized amounts and where it intends either to settle on a net basis or to realise the assets and settle the
liabilities simultaneously

b) Deferred tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are
recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities
and their carrying amount in financial statements, except when the deferred income tax arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither
accounting nor taxable profits or loss at the time of the transaction.

Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses 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
utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet 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 assets to be utilised.

Unrecognised deferred tax assets are re-assessed at each balance sheet date and are recognised to the extent that
it has become probable that future taxable profits will a I low the deferred tax asset to be recovered.

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 underlyingtransaction
either in OCI or directly in equity.

Deferred tax assets and liabilities a re offset where there is a legally enforceable right to offset current tax assets and
liabilities and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities are realised simultaneously.

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 balance sheet date.

Goods and services tax/ value added taxes paid on incurring expenses

Since the Company is not required to get registered under Goods and Services Tax Act, (GST ACT), GST paid on
expenses incurred are charged to statement of profit and loss

5.4 Cash and Cash Equivalents

Cash and cash equivalents in the Balance sheet comprise cash on hand, balance with banks on current accounts
and short term, highly liquid investments (if any) with an original maturity of three months or less and which carry
insignificant risk of changes in value.

They are held for the purposes of meeting short-term cash commitments (rather than for investment or other
purposes) For the purpose of the statement of cash flows, cash and cash equivalents are as defined above.

5.5 Leases

At the inception of the contract, the Company assesses whether a contract is, or contain, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. The Company assesses whether:

A) The contract involves the use of an identified asset, this may be specified explicitly or implicitly.

B) The Company has the right to obtain substantially all of the economic benefits from use of the asset throughout
the period of use, and

C) The Company has right to direct the use of the asset.

With effect from April 1,2019, new Ind AS 116 -Leases has come into effect replacing Ind AS 17 Ind AS 116 - Leases
introduces a single, on- balance sheet laese accounting model for lessees. A lessee recognises a right-of-use asset
representing its right to use the underlying asset and a lease liability representing its obligation to make lease
payments. Lessor accounting remains similar to the current standard - i.e. lessors continue to classify leases as
finance or operating leases. However the company does not have any lease contracts as a lessee, hence there is no
impact in the financial statements of the Company