h Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the
Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. If the effect of the time
value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre¬
tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
A present obligation that arises from past events, where it is either not probable that an outflow of resources will be required to settle or a reliable
estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible
obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the Company. Claims against the Company, where the possibility of any outflow of resources in
settlement is remote, are not disclosed as contingent liabilities.
Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.
However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised.
i Income Tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to items recognised
directly in Other Comprehensive Income.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and
liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the recognised amounts; and
b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
ii. Deferred tax
Deferred tax is provided using the liability method on temporary differences arising between the tax base of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax is determined using tax rates that have been enacted or substantially enacted by the
end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts
will be available to utilise those temporary differences.
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 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.
j Cash and cash equivalent
Cash and cash equivalents comprise cash on hand, cash at bank and short-term deposits with an original maturity of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
k Leases
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.
Company as a lessee
The Company assesses if a contract is or contains a lease at inception of the contract. A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period time in exchange for consideration.
The Company recognizes a right-of-use asset and a lease liability at the commencement date, except for short-term leases of twelve months or
less and leases for which the underlying asset is of low value, which are expensed in the statement of operations on a straight-line basis over the
lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using
the interest rate implicit in the lease, or, if not readily determinable, the incremental borrowing rate specific to the country, term and currency of
the contract.
Lease payments can include fixed payments, variable payments that depend on an index or rate known at the commencement date, as well as any
extension or purchase options, if the Company is reasonably certain to exercise these options. The lease liability is subsequently measured at
amortized cost using the effective interest method and remeasured with a corresponding adjustment to the related right-of-use asset when there
is a change in future lease payments in case of renegotiation, changes of an index or rate or in case of reassessments of options.
The right-of-use asset comprises, at inception, the initial lease liability, any initial direct costs and, when applicable, the obligations to refurbish the
asset, less any incentives granted by the lessors. The right-of-use asset is subsequently depreciated, on a straight-line basis, over the lease term, if
the lease transfers the ownership of the underlying asset to the Company at the end of the lease term or, if the cost of the right-of-use asset
reflects that the lessee will exercise a purchase option, over the estimated useful life of the underlying asset. Right-of-use assets are also subject to
testing for impairment if there is an indicator for impairment. Variable lease payments not included in the measurement of the lease liabilities are
expensed to the statement of operations in the period in which the events or conditions which trigger those payments occur. In the statement of
financial position right-of-use assets and lease liabilities are classified on the face of the Balance Sheet.
l Segment Reporting
According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making
decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one business
segment viz. “Financing Activities”.
m Earning per equity share
The basic EPS is computed by dividing the profit after tax for the year attributable to the equity shareholders by the weighted average number of
equity shares outstanding during the year.
For the purpose of calculating diluted EPS, profit after tax for the year attributable to the equity shareholders and the weighted average number
of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are
deemed converted as of the beginning of the period, unless they have been issued at a later date. In computing the dilutive earnings per share,
only potential equity shares that are dilutive and that either reduces the earnings per share or increases loss per share are included.
n Upfront servicers fees booked on direct assignment
Servicer fees payable for servicing loan contracts under direct assignment are discounted at the applicable rate entered into with the assignee and
recognised upfront in the balance sheet and amortised on a straight line basis over the remaining contractual maturity of the underlying loans.
Fair value of cash and bank, loans, other receivables, other financial assets, trade payables and other financial liabilities approximate their carrying
amounts largely due to the short-term maturities of these instruments.
(ii) Fair value hierarchy
The fair value of financial instruments as referred (i) above has been classified into three categories depending on the inputs used in the valuation
technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities [Level 1 measurements] and
lowest priority to unobservable inputs [Level 3 measurements].
The categories used are as follows:-
Level 1: Quoted prices / net assets value for identical instruments in an active market;
Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and
Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset
value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same
instrument nor are they based on available market data.
(a) Financial Assets and liabilities measured at fair value — recurring fair value measurements
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into
the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
(b) Fair value of instruments measured at amortised cost
For the purpose of disclosing fair values of financial instruments measured at amortised cost, the management assessed that fair values of short term
financial assets and liabilities approximate their respective carrying amounts largely due to the short-term maturities of these instruments. Further, the
fair value of long term financial assets and financial liabilities is included at the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale.
39 Financial Risk Management
The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial
performance. The financial risks are managed in accordance with the Company's risk management policy. The Company's Board of Directors has
overall responsibility for managing the risk profile of the Company. The purpose of risk management is to identify potential problems before they
occur, so that risk-handling activities may be planned and invoked as needed to manage adverse impacts on achieving objectives.
The Audit Committee of the Company reviews the development and implementation of the risk management policy of the Company on periodic
basis. The Audit Committee provides guidance on the risk management activities, review the results of the risk management process and reports to
the Board of Directors on the status of the risk management initiatives. The Company has exposure to the following risks arising from Financial
Instruments:
In order to avoid excessive concentration of risk, the Company's policies and procedures include specific guidelines to focus on maintaining a
diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
a Credit Risk
Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. The
Company's exposure to credit risk is influenced mainly by cash and cash equivalents, other bank balances, investments, loan assets and other
financial assets. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit
risk controls.
Cash and Cash Equivalents
The Company holds cash and cash equivalents and other bank balances as per note 4 and 5. The credit worthiness of such bank is evaluated by the
management on an ongoing basis and is considered to be high.
Loans
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each client. However, management also considers the
factors that may influence the credit risk of its client base, including the default risk of the industry and locations in which clients operate. The
Company Management has established a credit policy under which each new client is analysed individually for creditworthiness through internal
systems and appraisal process to assess the credit risk. The Company's review includes client's income and indebtness levels including economic
activity which ensures regular and assured income. The Company establishes an allowance for impairment that represents its expected credit losses in
respect of trade and other receivables. The management uses a three stage model approach for the purpose of computation of expected credit loss
for Loan portfolio.
Forward-looking economic information (including management overlay) is included in determining the 12-month and lifetime expected credit loss
(ECL). The assumptions underlying the ECL are monitored and reviewed on an ongoing basis. Gross carrying value and associated allowances for
ECL stage wise for loan portfolio is as follows :
Loans secured against collateral
The Company's secured portfolio pertains to Secured Enterprise loans (SEL), which are secured against tangible assets. The Company does not
physically possesses properties or other assets in its normal course of business but makes efforts toward recovery of outstanding amounts on
delinquent loans. Once contractual loan repayments are overdue, the Company initiate the legal proceedings against the defaulted customers. The
exposure to credit risk is Nil as on March 31, 2025 (March 31, 2024 f Nil).
Other financial assets measured at amortised cost
Other financial assets measured at amortised cost includes loans and advances to employees, security deposits and other recoverables. Credit risk
related to these other financial assets is managed by monitoring the recoverability of such amounts continuously.
b Liquidity Risk
Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are
settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Company might be unable to meet its
payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such
scenarios could occur when funding needed for illiquid asset positions is not available to the Company on acceptable terms. To limit this risk,
management has adopted a policy of managing assets with liquidity in mind and monitoring future cash flows and liquidity on a regular basis. The
Company has developed internal control processes for managing liquidity risk.
The Company maintains a portfolio of highly marketable and diverse assets that are assumed to be easily liquidated in the event of an unforeseen
interruption in cash flow. The Company assesses the liquidity position under a variety of scenarios, giving due consideration to stress factors relating
to both the market in general and specifically to the Company.
40 Capital Management
The Company's policy is to maintain a strong capital base so as to maintain investor, lender and market confidence and to sustain future
development of the business. The Company's objective to manage its capital is to ensure continuity of business while at the same time provide
reasonable returns to its various stakeholders but keep associated costs under control. In order to achieve this, requirement of capital is reviewed
periodically with reference to operating and business plans that take into account of portfolio and strategic Investments. Management monitors the
return on capital as well as the level of dividends to ordinary shareholders. Sourcing of capital is done through judicious combination of
equity/internal accruals and borrowings. The following table summarises the capital of the Company.
43 Contingent liabilities not provided for
Claims against the Company not acknowledged as debts - -
44 Segment Information
According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making
decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one
business segment viz. “financing activities”. Hence, the disclosure requirement of Ind AS 108 of ‘Segment Reporting’ is not considered
applicable.
45 Leases disclosures
As a Lessee
a) The Company incurred ? 376.28 Lakhs for the year ended March 31, 2025 (Previous year ? 318.64 Lakhs) towards expenses relating to short¬
term leases and leases of low-value assets.
b) There are no subleasing of right-of-use assets during the year ended March 31, 2025 and March 31, 2024.
c) There are no variable lease payments for the year ended March 31, 2025 and March 31, 2024.
d) Total cash outflow on right to use assets for the year ended March 31, 2025 of Rs. ? Nil and March 31, 2024 ? 0.81 Lakhs.
46 Employee Benefits
a) Defined Contribution Plan :
The Company makes contributions towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Under
the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. The
company has been recognized following amounts in statement of Profit & Loss for the year:
b) Defined benefit plan
The Company made provision for gratuity as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of
5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is employee's last drawn basic salary per month
computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity liability is being contributed to the gratuity
fund formed by the company.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31
March 2025. The present value of the defined benefit obligations and the related current service cost and past service cost, was measured
using the Projected Unit Credit Method.
(i) Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts
recognised in the Company’s financial statements as at balance sheet date:
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation
of the sensitivity of the assumptions shown.
(vii) Description of Risk Exposure:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks
as follow -
Salary Increases - Higher than expected increase in salary will increase the defined benefit obligation.
Investment Risk - Assets / liabilities mismatch and actual investment return on assets lower than the discount rate assumed at the last
valuation date can impact the liability / Assets.
Discount Rate - Reduction in discount rate in subsequent valuations can increase the plan’s liability.
Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that includes mortality, withdrawals,
disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends on the
combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis
the employee benefit of a short career employee typically costs less per year as compared to a long service employee.
(viii) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards
Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on
November 13, 2020. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give
appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the
financial impact are published.
47 Other Disclosures
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any
Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(ii) The Company has not advanced or loaned or invested funds during the year to any other person(s) or entity(is), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lendor invest in other persons or entities identified
in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries.
The Company has not received any fund during the year from any person(s) or entity(is), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period except following
charges which are appearing on the website of the MCA against which the Company has no loan outstanding as at reporting date. The
Company is taking with MCA to remove these charges from its website:
Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented
mutual funds the corpus of which is not exclusively invested in corporate debt; (Refer Note 8)
Advances against shares/ bonds / debentures or other securities or on clean basis to individuals for investment
in shares (including IPOs / ESOPs), convertible bonds, convertible debentures and units of equity-oriented
mutual funds;
Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity-
oriented mutual funds are taken as primary security;
Advances for any other purposes to the extent secured by the collateral security of shares of convertible bonds
or convertible debentures or units of equity-oriented mutual funds, i.e., where the primary security other than
shares / convertible bonds / convertible debentures / units of equity-oriented mutual funds does not fully cover
the advances;
Secured and unsecured advances to stockholders and guarantees issued in behalf of stockbrokers and market
makers;
Loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or other
securities or on clean basis for meeting promoter's contribution to the equity of new companies in anticipation
of raising resources;
Bridge loans to companies against expected equity flows / issues.
All exposures to Venture Capital Funds (both registered and unregistered)
(c) Details of financing of parent company products
The company does not have a parent company and accordingly no disclosure required.
(d) Details of single borrower limit (SGL) / group borrower limit (GBL) exceeded by the applicable NBFC
The company does not exceed any limit related to SGL and GBL in the current and previous year.
(e) Unsecured advances
All advances given by the company are unsecured advances to its customers except mentioned in note 7.
As per our report of even date attached
For JKVS & Co. For and on behalf of the Board of Directors
Chartered Accountants
Firm Reg. No. 318086E
B. L. Choraria Yogen Khosla Vahin Khosla
Partner Managing Director Executive Director
Membership No. 022973 DIN: 00203165 DIN: 07656894
Place: Noida Vinod Raina Tanya Sethi
Date: May 27, 2025 Chief Financial Officer Company Secretary
M. No. A31566
Place: New Delhi
Date: May 27, 2025
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