1. Company overview
Shyamkamal Investments Limited (the 'Company') is a Listed company domiciled in India and is incorporated under the provisions of the
Companies Act, 1956 with its registered office located Shop No. 25, LG Target The Mall, Chandavarkar Road, Opp. BMC Ward off, Borivali West,
Mumbai, Borivali West, Maharashtra, India, 400092. The company is also Non-Banking Financial Company - Investment and Credit Company
(NBFC - ICC) registered with Reserve Bank of India (RBI) since 24th March, 1998 with Registration Number 13.00428.
Shyamkamal Investments Limited focuses on bridging the credit gap for individuals, entrepreneurs, and small and medium enterprises (SMEs)
across India. With a diversified lending portfolio that includes personal, business etc. The Company provides accessible, affordable, and customer¬
centric financial solutions, supported by technology-driven processes and strong governance.
The financial statements are approved for issue by the Company's Board of Directors on 12th May. 2025.
2. Basis of preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed in 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, the updated Master Direction - Non-Banking Financial Company - Non-Systemically Important Non-Deposit
taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 ('the NBFC Master Directions'), notification for Implementation of
Indian Accounting Standards issued by RBI vide circular RBI/2019-20/170 D0R(NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13 March 2020 ('RBI
notification for Implementation of Ind AS') and other applicable RBI circulars/notifications. The Company uses accrual basis of accounting in
preparation of financial statements (other than Statement of Cash flows) except in case of significant uncertainties
The standalone financial statements are presented in Indian Rupee (INR), which is also the functional currency of the Company, in denomination of
Lakhs with rounding off to two decimals as permitted by Schedule III to the Act except where otherwise indicated. The standalone financial
statements have been prepared on a historical cost basis, except for certain financial instruments that are measured at fair value.
The financial statements are prepared on a going concern basis as the Management is satisfied that the Company shall be able to continue its business
for the foreseeable future and no material uncertainty exists that may cast significant doubt on the going concern assumption. In making this
assessment, the Management has considered a wide range of information relating to present and future conditions, including future projections of
profitability, cash flows and capital resources.
2.1. Presentation of financial statements
The Company presents its Balance Sheet in the order of liquidity.
The Company prepares and presents its Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity in the format
prescribed by Division III of Schedule III to the Act. The Statement of Cash Flows has been prepared and presented as per the requirements of Ind
AS 7 'Statement of Cash Flows'.
The Company generally reports financial assets and financial liabilities on a gross basis in the Balance Sheet. They are offset and reported net only
where it has legally enforceable right to offset the recognised amounts and the Company intends to either settle on a net basis or to realise the asset
and settle the liability simultaneously as permitted by Ind AS. Similarly, the Company offsets incomes and expenses and reports the same on a net
basis where the netting off reflects the substance of the transaction or other events as permitted by Ind AS.
2.2. Functional and presentation currency
Indian rupee is the functional and presentation currency.
2.3. Use of estimates and judgments
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions.
These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the
period.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are
made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial
statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions
in these financial statements are:
Useful lives of property, plant and equipment
Valuation of financial instruments
Provisions and contingencies
Income tax and deferred tax
Consideration of significant related party transactions
Measurement of defined employee benefit obligations
3. Significant accounting policies
3.1. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
3.1.1. Interest income
Interest income is recognised using effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash
receipts through expected life of the financial asset to the gross carrying amount of the financial asset. When calculating the effective interest rate, the
company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected
credit losses. Interest on overdue interest is recognized in the year of its receipts.
3.1.2. Dividend
Dividend income on the equity instruments held as fair value through other comprehensive income is recognised when the right to receive the
dividend is established.
3.1.3. Gain or loss on derecognition of financial assets
Gain or Loss on derecognition of financial asset is determined as the difference between the sale price (net of selling costs) and carrying value of
financial asset. Gains/(loss) on Investments i.e. from units of Asset Management Companies is accounted on FIFO method at the time of
redemption/ realisation made.
3.1.4. Bad Debt Recovery
Bad debt recovery is recognised as income in the year of receipt.
All other incomes are recognised and accounted for on accrual basis.
3.2. Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
The cost comprises the purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its
working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated
with these will flow to the company and the cost of the item can be measured reliably.
All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the
statement of profit and loss for the period during which such expenses are incurred.
For transition to Ind AS, the carrying value of property plant and equipment under previous GAAP as on 01 April 2017 is regarded as its cost. The
carrying value was original cost less accumulated depreciation and cumulative impairment.
Property, plant and equipment not ready for the intended use on the date of the Balance Sheet are disclosed as "Capital work-in-progress".
Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds and
the carrying amount of the asset at the time of disposal and are recognized in the statement of profit and loss when the asset is derecognized.
Depreciation on property, plant and equipment is calculated on Straight Line method basis using the ratio arrived as per the useful life prescribed
under Schedule II to the Companies Act, 2013.
In respect of property, plant and equipment purchased during the year, depreciation is provided on a pro-rata basis from the date on which such
asset is ready to use. Assets costing less than rupees ten thousand each is fully depreciated in the year of purchase. Depreciation of an asset begins
when it is available for use,i.e, when it is in the location and condition necessary for it to be capable of operating in the manner intended by the
management.
The residual value, useful live and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.
3.3. Intangible assets
An intangible asset is recognised, only where it is probable that future economic benefits attributable to the asset will accrue to the enterprise and the
cost can be measured reliably.
Intangible assets are stated at cost, less accumulated amortization and impairment losses, if any.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "Intangible Assets Under Development".
Separately purchased intangible assets are initially measured at cost. Subsequently, intangible assets are carried at cost less any accumulated
amortization and accumulated impairment losses, if any.
Intangible assets are amortized over the expected duration of benefit or a period of ten years on a straight-line basis. Intangible assets acquired /
purchased during the year are amortised on a pro-rata basis from the date on which such assets are ready to use.
The residual value, useful live and method of amortization of intangible assets are reviewed at each financial year end and adjusted prospectively, if
appropriate.
3.4. Financial Instruments
3.4.1. Initial recognition
The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.
All financial assets and liabilities are recognized at fair value on initial recognition.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through
profit or loss are added to or deducted from the fair value of financial assets or financial liabilities on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
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3.4.2. Subsequent measurement
a) Non-derivative financial instruments
I. Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to
collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
II. Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in
fair value in other comprehensive income based on its business model. For such equity instruments, the subsequent changes in fair value are
recognized in other comprehensive income.
III. Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently measured at fair valued through profit or loss. Fair value
changes are recognised as income in the Statement of Profit or Loss.
IV. Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method.
b) Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Incremental costs
directly attributable to the issuance of equity instruments are recognised as a deduction from equity instrument net of any tax effects.
3.4.3. Derecognition
The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognized when obligation specified in the contract is
discharged or cancelled or expires.
3.4.4. Off-setting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when the company currently has a legally
enforceable right to offset the recognised amount and intends either to settle on a net basis or to realize the asset and settle the liability
simultaneously.
3.4.5. Modification
A modification of a financial asset occurs when the contractual terms governing the cash flows of a financial asset are renegotiated or otherwise
modified between initial recognition and maturity of the financial asset. A modification affects the amount and/or timing of the contractual cash
flows either immediately or at a future date. The Company renegotiates loans to customers in financial difficulty to maximize collection and
minimize the risk of default. A loan forbearance is granted in cases where although the borrower made all reasonable efforts to pay under the
original contractual terms, there is a high risk of default or default has already happened and the borrower is expected to be able to meet the revised
terms. The revised terms in most of the cases include an extension of the maturity of the loan, changes to the timing of the cash flows of the loan
(principal and interest repayment), reduction in the amount of cash flows due (principal and interest forgiveness).
Not all changes in terms of loans are considered as renegotiation and changes in terms of a class of obligors that are not overdue is not considered as
renegotiation and is not subjected to deterioration in staging.
3.5. Fair Value Measurement
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.
The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefit by using the asset in
its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
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.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy. The
fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and
consists of the following three levels:
Level 1 - inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - inputs are other than quoted prices included within level 1 that are observable for the asset or liability either directly (i.e. as prices) or
indirectly (i.e. derived prices)
Level 3 - inputs are not based on observable market data (unobservable inputs).Fair values are determined in whole or in part using a valuation
model based on assumption that are neither supported by prices from observable current market transactions in the same instrument nor are they
based on available market data.
3.6. Income tax
Income tax expense comprises current tax and deferred tax.
3.6.1. Current Tax
Current tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in
which case, the current tax is also recognised in other comprehensive income or directly in equity, respectively.
Current tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates
and tax laws that have been enacted or substantively enacted by the balance sheet date.
Current tax assets and current tax liabilities are offset, where company has a legally enforceable right to set off the recognised amounts and where it
intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
3.6.2. Deferred Tax
Deferred tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in
which case, the deferred tax is also recognised in other comprehensive income or directly in equity, respectively.
Deferred tax liabilities are recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from initial
recognition of goodwill; or initial recognition of an asset or liability in a transaction which is not a business combination and at the time of
transaction, affects neither accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax
credits to the extent that it is probable that taxable profit will be available against which those temporary differences, losses and tax credit can be
utilized, except when deferred tax asset on deductible temporary differences arise from the initial recognition of an asset or liability in a transaction
that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit or loss.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is
settled, based on the tax rules and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset, where company has a legally enforceable right to set off the recognized amounts and where
it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realized.
3.7. Impairment
3.7.1. Financial assets
The company's financial assets comprise of loans to GoG entities and investments in Money Market Instruments & Equity. Out of these, investments
in Money Market Instruments & Equity are carried at fair value as per Ind AS and hence, no impairment loss is applicable on these investments.
Financial assets which are not carried at fair value i.e. loans to GoG entities, the company has recognized impairment using Expected Credit Loss
(ECL) policy inclusive of ECL model, as per Ind AS, approved by Board of Directors taking into account the unique business model of the company.
The Company recognizes impairment on financial assets, which are not carried at fair value, using expected credit loss (ECL) model as prescribed in
Ind AS.
The company applies a three-stage approach to measure ECL on financial assets accounted for at amortized cost. Assets would migrate through the
following three stages based on the change in credit quality since initial recognition.
At the reporting date i.e. closing date of financial year, an allowance is required for the 12-months ECLs (Stage I). If the credit risk has significantly
increased since initial recognition, an allowance (or provision) should be recognized for the lifetime ECLs for such loans (Stage II), or which are credit
impaired (Stage III).
The measurement of ECL is calculated using three main components: (i) probability of default (PD) (ii) loss given default (LGD) and (iii) the exposure
at default (EAD). The 12-month ECL is calculated by multiplying the 12 month PD, LGD and the EAD. The 12 month and lifetime PDs represent the
PD occurring over the next 12 months and the remaining maturity of the instrument respectively. The Probability of default (PD) represents an
estimate of likelihood that a borrower will be unable to meet its debt obligation during a specified time frame. The LGD represents expected losses on
the EAD given the event of default, taking into account among other attributes, the mitigating effect of collateral value, if any, at the time it is
expected to be realized and the time value of money. The EAD represents the sum of outstanding principal and the interest accrued but not received
on each loan as at reporting date.
Stage I - 12 months ECL.
For exposures where there has not been a significant increase in credit risk since initial recognition and that are not credit impaired upon origination,
the portion of the lifetime ECL associated with the probability of default events occurring within the next 12 months is recognized.
Exposures with DPD less than or equal to 29 days are classified as Stage I.
Stage II: Lifetime ECL - not credit impaired
For credit exposures where there has been a significant increase in credit risk since initial recognition but that are not credit impaired, a lifetime ECL
is recognized.
Exposures with DPD equal to 30 days but less than or equal to 89 days are classified as Stage II.
Stage III: Lifetime ECL - credit impaired
Financial asset is 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. For financial assets that have become credit impaired, a lifetime ECL is recognised.
Exposures with DPD equal to or more than 90 days are classified as Stage III.
A loan that has been renegotiated due to deterioration in the borrower's condition is usually be considered to be credit-impaired unless there is
evidence that the risk of not receiving contractual cash flows has reduced significantly and there are no other indicators of impairment.
The company assesses when a significant increase in credit risk has occurred based on quantitative and qualitative assessments.
The company assesses when a significant increase in credit risk has occurred based on quantitative assessments which will consider Days Past Due
(DPD) for the loan assets i.e. more than 29 DPDs.
In case of significant increase in credit risk based on quantitative assessments, the company assesses the likelihood of increase in credit risk on case to
case basis as per qualitative assessment such as company's nature of business, nature of crisis, role of management of the borrower to tackle the
crisis, steps to be undertaken by the company to tackle the crisis, expected timeline of repayment by the borrower.
If, on the basis of qualitative assessment, it is ascertained that the credit risk has not increased significantly since initial recognition, even when the
repayments are more than 30 days past due but not exceeding 60 days, the company considers it as not significant increase in the credit risk till those
60 days.
On quantitative and qualitative assessments, when exposures are considered to have resulted in a significant increase in credit risk, it would move to
Stage II automatically when accounts are 30 calendar days or more past due, and it would move to Stage III automatically when accounts are 90
calendar days or more past due.
ECL is recognized on Exposure at Default (EAD) as at period end. If the terms of a financial asset are renegotiated or modified due to financial
difficulties of the borrower, then such asset is moved to Stage III, lifetime ECL under Stage III on the outstanding amount is applied.
Reversal in Stages-Exposures will move back to Stage II or Stage I respectively, once they no longer meet the quantitative criteria set out above. For
exposures classified using the qualitative assessment, when it is based on fair judgement that they no longer meet the criteria for a significant
increase in credit risk.
Financial assets in default represent those that are at least 90 DPD in respect of principal or interest and/or where the assets are otherwise considered
to be unlikely to pay, including those that are credit-impaired, which is aligned to the definition of default given by the Reserve Bank of India.
ECL allowance for financial assets measured at amortized cost are shown as a deduction from the gross carrying amount of the assets.
Write off
Impaired loans and receivables are written off, against the related allowance for loan impairment on completion of the company's internal processes
and when the company concludes that there is no longer any realistic prospect of recovery of part or all the loan. For loans that are individually
assessed for impairment, the timing of write off is determined on a case-by-case basis. A write-off constitutes a de-recognition event. The company
has a right to apply enforcement activities to recover such written off financial assets. Subsequent recoveries of amounts previously written off are
credited to the income statement.
3.7.2. Non-financial assets
Tangible and intangible assets
The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists the company
estimates the asset's recoverable amount.
An asset's recoverable amount is the higher of an assets net selling price and its value in use. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. The impairment loss is recognised in the statement of profit and loss.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an
appropriate valuation model is used.
3.8. Borrowing costs
Borrowing cost includes interest and other costs that company has incurred in connection with the borrowing of funds.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalized as part of the cost of the respective asset.
All other borrowing costs are expensed in the year they occur.
Investment income earned on temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalization.
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