(n) Contingent Liabilities & Assets
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non¬
occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in
extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does
not recognize a contingent liability but discloses its existence in the financial statements.
A Contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the entity. The Company does not have any
contingent assets in the financial statements.
(o) Earning per share (EPS)
The Company report basic and diluted earnings per share in accordance with Ind AS 33 "Earning per Share". The Basic EPS is
computed by dividing the profit after taxes by the weighted number of equity shares outstanding during the accounting period. The
diluted EPS is computed using the weighted average number of the aggregate of equity shares outstanding at the end of the year and
those that may be possible issued in the near future.
(p) Provisions
A provision is recognized when the Company has a present obligation Legal or Constructive that is reasonably estimatable and it is
probable that an outflow of economic benefits will be required to settle the obligation. These estimates are reviewed at each Balance
Sheet date and adjusted to reflect the current best estimates.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is
(q) Provision for Doubtful Debts and Written-off of bad debts
Provision are recognized 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. The
amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the
reporting period, taking into account the risks and uncertainties surrounding the obligation. When provision is measured using the
cash flow estimated to settle the present obligation, its carrying amount is the present value of these cash flows (when the effect of
the time value of money is material).
Debts specifically considered fully or partially irrecoverable are written-off and provision against sub-standard and doubtful asset is
made in accordance with the guidelines issued by RBI under the Non-Systemically Important Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015. Sums recovered against debts earlier written
off and provision no longer considered necessary in the context of the current status of the borrower are written back.
3 Use of Judgment's, Estimates and Assumptions
The Preparation of Company's financial Statements requires management to make judgements, estimates and assumptions that
affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustments to the carrying amount of assets or
liabilities affected in next financial years.
a. Determination of the estimated useful lives of Property, Plant and Equipment and Intangible Assets:
capable of operating in the manner intended by the management. Property, Plant and Equipment/Intangible Assets are depreciated/
amortised over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated
useful life and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded
during any reporting period. The useful life and residual values are based on the Company's historical experience with similar assets
and take into account anticipated technological changes. The depreciation/ amortisation for further period is revised if there are
significant changes from previous estimates.
b. Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting
from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification
of the liability requires the application of judgements to existing facts and circumstances, which can be subject to change. The
carrying amount of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances..
c. Current versus non-current classification:
All the assets and liabilities have been classified as current or non-current as per the company's normal operating cycle of twelve
months and other criteria set out in Schedule III to the Companies Act, 2013.
d. Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The
Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's
e. Impairment of non-financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The
Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's
past history, existing market conditions as well as forward looking estimates at the end of each reporting period. The impairment
provision for of non-financial assets company estimates asset's recoverable amount, which is higher of an asset's or Cash Generating
Units (CGU's) fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no
f. Effective Interest Rate (EIR) Method:
The company recognize interest income/ expense using a rate of return that represents the best estimate of a cons t ant rate of return
over the expected life of the loans given / taken. This estimation, by nature, requires an element of judgment regarding the expected
behavior and life-cycle of the instruments, as well as expected changes to other fee income/expense that are integral parts of the
instrument.
g. Recognition of Deferred Tax Assets and Liabilities:
Deferred tax assets and liabilities are recognised for deductible temporary differences and unused tax losses for which there is
probability of utilisation against the future taxable profit. The Company uses judgement to determine the amount of deferred tax that
can be recognised, based upon the likely timing and the level of future taxable profits and business developments.
h. Recent pronouncements
Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2025, MCA has notified Ind AS - 117
Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company
w.e.f. April 1, 2024. The Company has reviewed the new pronouncements and based on its evaluation has determined that it does not
have any significant impact in its financial statements.
i. Collateral Repossessed
Based on operational requirements, the Company's policy is to determine whether a repossessed asset can be best used for its
internal operations or should be sold. Assets determined to be useful for the internal operations are transferred to their relevant
asset category for capitalization at their fair market value.
In the normal course of business, the Company does not physically repossess assets/properties in its loan portfolio, but engages
external agents to repossess and recover funds, to settle outstanding debt. Any surplus funds are returned to the customers/obligors.
Financial assets held as collaterals are shown as current assets as well as current liabilities.
j. Write-Offs
The gross carrying amount of a financial asset is written off when there is no realistic prospect of further recovery. This is generally
the case when the Company determines that the debtor/borrower does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject
to enforcement activities under the Company's recovery procedures, taking into account legal advice where appropriate. Any
recoveries made from written off assets are netted off against the amount of financial assets written off during the year under bad
k. Finance Cost
Finance costs include interest expense computed by applying the effective interest rate on respective financial instruments measured
at amortized cost. Financial instruments include bank/FI borrowings, broker facilities to the extent they are regarded as an
adjustment to the interest cost. Finance costs are charged to the statement of profit and loss.
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