A) Background
SHALIBHADRA FINANCE LIMITED (“the Company”) is a public Company domiciled in India and incorporated under
the provisions of Companies Act, 1956. The Company is incorporated with an object to carry on the business of
Financing. The Company’s shares are listed on Bombay Stock Exchange (BSE) in India. The Company is registered
as NBFC, Registraion no - 13.00568 with The Reserve Bank of India (Asset Finance Company)
B1 Basis of Preparation
I. Statement of compliance with Ind AS
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 as amended from time to time.
The Company has consistently applied the accounting policies used in the preparation of its Ind AS Balance Sheet
throughout all periods presented, except if mentioned otherwise.
II. Going concern
These financials are prepared on going concern as the Company has earned profits during the year and in the
preceding previous years;
III. Fair value measurement
Fair value is the price that would be received on selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.
Fair values, as applicable, have been determined for measurement and / or disclosure purpose using methods as
prescribed in “Ind AS 113 Fair Value Measurement”.
IV. Use of significant accounting estimates, judgement and assumptions
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind
AS requires management to make estimates and assumptions that affect the reported balances of assets and
liabilities, disclosure of contingent liabilities as on the date of financial statements and reported amounts of income
and expenses for the periods presented. The Company based its assumptions and estimates on parameters
available when the financial statements were prepared.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and future periods are affected.
Estimates and Assumptions
In preparing these financial statements, the management has made judgments, estimates and assumptions which
are prudent and reasonable.
Key assumptions concerning the future and key sources of estimation 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.
Difference between the actual results and estimates are recognized in the period in which the results are known/
materialized.
V. Presentation and disclosure of financial statement
All assets and liabilities have been classified as current and non-current as per Company’s normal operating cycle
and other criteria set out in Schedule III of the Companies Act, 2013 for a company whose financial statements are
made in compliance with the Companies (India Accounting Standards) Rules, 2015.
Based on the nature of products / services and time between acquisition of assets for processing / rendering of
services and their realization in cash and cash equivalents, operating cycle is less than 12 months, however for the
purpose of current/ non- current classification of assets and liabilities, period of 12 months have been considered as
its normal operating cycle.
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is treated as current when it is:
• Expected to be realized or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realized within twelve months after the reporting period, or
• Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The Company classifies all other liabilities as non-current.
VI. Property, Plant and Equipment and Depreciation
Recognition and measurement
Properties plant and equipment are stated at their cost of acquisition. Cost of an item of property, plant and
equipment includes purchase price including non-refundable taxes and duties, borrowing cost directly attributable to
the qualifying asset, any costs directly attributable to bringing the asset to the location and condition necessary for its
intended use and the present value of the expected cost for the dismantling/decommissioning of the asset.
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. All other
repair and maintenance costs are recognised in statement of profit and loss as incurred.
Capital work-in-progress comprises of cost incurred on property, plant and equipment under construction / acquisition
that are not yet ready for their intended use at the Balance Sheet Date.
Depreciation and useful lives
Depreciation on the property, plant and equipment (other than freehold land and capital work in progress) is provided
on a straight-line method (SLM) over their useful lives which are in consonance of useful life mentioned in Schedule II
to the Companies Act, 2013. Depreciation in respect of fixed assets put to use during the year is provided on a pro¬
rata basis with reference to the date of installation of assets
VII. Inventories
Inventory for the Company is the total Loan Outstanding on Vehicle Loan.
In the opinion of the management, 2/3rd of the loan stock is classified as current & 1/3rd is classified as non-current.
VIII. Revenue recognition
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. Revenue is measured at the fair value of the consideration received or receivable,
taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the
government and discounts given to the customers. The Company has applied the guidelines mentioned in Ind AS 18
for Revenue Recognition.
Interest on Vehicle Loans
Income / Interest from vehicle loan is accounted for on an accrual basis and is recognized so as to produce a
constant periodic return on the amount financed. Interest on fixed deposits with Bank on cash basis
Other Income
In respect of other heads of income, the Company follows the practice of accounting for such income on accrual
basis except for interest income on delayed payment charges which are accounted on the basis of the certainty of
collection and /or receipt basis.
IX. Taxes on income
Tax expense comprises current and deferred tax. Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
The deferred tax resulting from timing difference between taxable and accounting income is accounted using the tax
rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred Tax asset is
recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.
X. Investments in equity instruments at FVTOCI
The quoted and unquoted Equity investments are initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in
other comprehensive income and accumulated in the ‘Reserve for equity instruments through other comprehensive
income’. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
There are no equity investments which are held for trading.
XI. Cash and cash equivalent
Cash and cash equivalents include cash in hand, bank balances, deposits with banks (other than on lien) and all
short term and highly liquid investments that are readily convertible into known amounts of cash and are subject to an
insignificant risk of changes in value.
For the purpose of cash flow statement, cash and cash equivalent as calculated above also includes outstanding
bank overdrafts as they are considered an integral part of the Company’s cash management.
XII. Cash flow statement
Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments
and item of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities are segregated.
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