1.13 Provisions, Contingent Liabilities and Contingent Assets
Provisions
A provision is recognized in the statement of profit and loss if, as a result of a
past event, the Company has a present legal or constructive obligation that
can be estimated reliably and it is probable that an outflow of economic benefits
will be required to settle the obligation. If the effect of the time value of money
is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. Where discounting is
used, the increase in the provision due to the passage of time is recognized as
a finance cost.
Contingent liabilities and contingent assets
A disclosure for a contingent liability is made when there is a possible obligation
or a present obligation that may, but probably will not, require an outflow of
resources. Where there is a possible obligation or a present obligation in
respect of which the likelihood of outflow of resources is remote, no provision
or disclosure is made.
Contingent assets are not recognized in the financial statements. However,
contingent assets are assessed continually and if it is virtually certain that an
inflow of economic benefits will arise, the asset and related income are
recognized in the period in which the change occurs.
Onerous contracts
A provision for onerous contracts is recognised in the statement of profit and
loss when the expected benefits to be derived by the Company from a contract
are lower than the unavoidable cost of meeting its obligations under the contract.
The provision is measured at the present value of the lower of the expected
cost of terminating the contract and the expected net cost of continuing with the
contract. Before a provision is established, the Company recognises any
impairment loss on the assets associated with that contract.
Reimbursement rights
Expected reimbursements for expenditures required to settle a provision are
recognised in the statement of profit and loss only when receipt of such
reimbursements is virtually certain. Such reimbursements are recognised as
a separate asset in the balance sheet, with a corresponding credit to the
specific expense for which the provision has been made.
1.14 Revenue from contracts with customers
Revenue is measured based on transaction price, which is the fair value of the
consideration received or receivable, stated net of discounts and returns.
Transaction price is recognised based on the price specified in the contract,
net of the estimated sales incentives/discounts. Accumulated experience is
used to estimate and provide for the discounts/right of return, using the
expected value method.
As per Ind AS 109, Financial Instruments, Interest income from financial assets
is recognised on accrual basis, other than non performing/Credit Impaired
assets, using effective interest rate method (EIR). Interest income from a
financial asset is recognised when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably.
Interest income is accrued on time proportionate basis, by reference to the
principle outstanding and at the effective interest rate applicable. Interest
Income on Fixed Deposits is recognized on time proportionate basis taking
into account the amount outstanding and the applicable interest rate.
Dividend income from investments is recognized when the Company's right to
receive payment has been established (provided that it is probable that the
economic benefits will flow to the Company and the amount of income can be
measured reliably).
Net gain/loss on fair value changes
Any differences between the fair values of financial assets classified as fair
value through the profit or loss 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 in the statement of Profit and Loss.
However, net gain/loss on derecognition of financial instruments classified as
amortised cost is presented separately under the respective head in the
Statement of Profit and Loss.
1.15 Tax Expenses
Income tax expense comprises current and deferred tax. It is recognised in
profit or loss except to the extent that it relates to a business combination, or
items recognised directly in equity or in Other comprehensive income.
Current tax
Current Tax expenses are accounted in the same period to which the revenue
and expenses relate. Provision for current income tax is made for the tax liability
payable on taxable income after considering tax allowances, deductions and
exemptions determined in accordance with the applicable tax rates and the
prevailing tax laws.
Current tax assets and current tax liabilities are offset when there is a legally
enforceable right to set off the recognized amounts and there is an intention to
settle the asset and the liability on a net basis.
Deferred tax
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities and assets are recognized for all taxable temporary
differences and deductible temporary differences.
Deferred tax assets are recognised 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 utilized.
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 liabilities are measured at the tax rates that are
expected to apply in the period 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 reporting date.
Deferred tax relating to items recognised outside the statement of profit and
loss is recognised outside the statement of profit and loss (either in OCI or in
equity in correlation to the underlying transaction).
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.
Minimum Alternate Tax (MAT) is not applicable to the Company, it has chosen
an option to pay corporate tax under section 115BAA at the rate of 22% plus
applicable surcharge and cess subject to compliance with certain conditions.
1.16 Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profit before
tax is adjusted for the effects of transactions of non-cash nature, tax and any
deferrals or accruals of past or future cash receipts or payments. The cash
flows are prepared for the operating, investing and financing activities of the
Company.
1.17 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the
year attributable to equity shareholders (after deducting preference dividends
and attributable taxes) by the weighted average number of equity shares
outstanding during the year.
The weighted average number of equity shares outstanding during the year is
adjusted for events such as bonus issue, bonus element in a rights issue,
share split and reverse share split (consolidation of shares) that have changed
the number of equity shares outstanding, without a corresponding change in
resources.
Diluted earnings per share
Diluted earnings per share is computed by dividing the profit (considered in
determination of basic earnings per share) after considering the effect of interest
and other financing costs or income (net of attributable taxes) associated with
dilutive potential equity shares by the weighted average number of equity shares
considered for deriving basic earnings per share adjusted for the weighted
average number of equity shares that would have been issued upon conversion
of all dilutive potential equity shares.
1.18 Segment reporting
The Company is engaged in “investments and financing” and the same
constitutes a single reportable business segment as per Ind AS 108.
1.19 Determination of fair value
The Company's accounting policies and disclosures require the determination
of fair value, for certain financial and non-financial assets and liabilities. Fair
values have been determined for measurement and/or disclosure purposes
based on the following methods. When applicable, further information about
the assumptions made in determining fair values is disclosed in the notes
specific to that asset or liability. A fair value measurement of a non-financial
asset takes into account a market participant's ability to generate economic
benefits 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.
Investments in equity and debt securities and units of mutual funds
The fair value of marketable equity and debt securities is determined by
reference to their quoted market price at the reporting date. For debt securities
where quoted market prices are not available, fair value is determined using
pricing techniques such as discounted cash flow analysis.
In respect of investments in mutual funds, the fair values represent net asset
value as stated by the issuers of these mutual fund units in the published
statements. Net asset values represent the price at which the issuer will issue
further units in the mutual fund and the price at which issuers will redeem
such units from the investors.
Accordingly, such net asset values are analogous to fair market value with
respect to these investments, as transactions of these mutual funds are carried
out at such prices between investors and the issuers of these units of mutual
funds.
1.20 New Accounting pronouncements
The Ministry of Corporate Affairs (“MCA”) notifies new standards or amendment
to the existing standards under Companies (Indian Accounting Standards)
Rules as issued from time to time. For the year ended March 31, 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 based on its evaluation has determined that it does not have
any significant impact in its financial statements.
b) Terms/Rights attached
The Company has issued only one class of shares having par value of Rs.10/- per share.
Each holder of equity shares who has paid total amount of Rs.10/- per share is entitled
to one vote per share. In the event of Liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company, after distribution
of preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
Aggregate number of equity shares issued for consideration other than cash/Bonus shares
during the period of five years immediately preceding the reporting date: Nil
The company has not bought back any shares during the period of five years immediately
preceeding the reporting date: Nil
Note 32: Employee benefits
Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A
liability is recognised for the amount expected to be paid if the Company has a
present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
The Company is not having any defined contribution plans and defined benefit
plans at present.
Valuation Methodologies of Financial Instruments measured at fair value:
Mutual Funds
The fair values of investments in mutual fund units is based on the net asset value ('NAV') as stated
by the issuers ofthese mutual fund units in the published statements as at Balance Sheet date. NAV
represents the price at which the issuer will issue further units of mutual fund and the price at which
issuers will redeem such units from the investors. Such instruments are classified as Level 1.
Equity Shares
Equity shares are fair valued based on their quoted market prices at the end of reporting period. The
quoted market price used for financial asset held by the Company is the current bid price. Such
instruments are classified as Level 1 and unlisted shares are classified as Level 3.
Note 35: Financial Instruments
Set out below, is a comparison by class of the carrying amounts and fair value of the financial
instruments, with carrying amounts that are reasonable approximations of fair values.
Fair value hierarchy of financial assets and financial liabilities measured at amortised cost.
For financial assets and financial liabilities that have a short-term maturity (less
than twelve months), the carrying amounts are a reasonable approximation of
their fair value. Such instruments include: cash and cash equivalents, bank
balances other than cash and cash equivalents, trade receivables, deposits
and other financial liabilities.
Credit risk is the risk of financial loss to the Company, if a customer or counter
party to a financial instrument fails to meet its contractual obligations that arises
principally from the Company's trade and other receivables, loans given, cash
and cash equivalents, other bank balances and financial assets measured at
amortised cost.
Exposure to credit risk is mitigated through regular monitoring of collections,
counterparty's credit worthiness and diversification in exposure.
Exposure to Credit Risk
The carrying amount of financial assets represents maximum amount of credit
exposure. The maximum exposure to credit risk is as per the table below, it
being total of carrying amount of cash and cash equivalents, other bank
balances, trade and other receivables, loans given and financial assets
measured at amortised cost.
The Company continuously monitors all financial assets subject to ECL. In
order to determine whether an instrument is subject to 12 month ECL or life
time ECL (LTECL), the Company assesses whether there has been a
significant increase in credit risk or the asset has become credit impaired
since initial recognition. The Company applies following quantitative and
qualitative criteria to assess whether there is significant increase in credit
risk or the asset has been credit impaired:
- Historical trend of collection from counterparty
- Company's contractual rights with respect to recovery of dues from
counterparty
- Credit rating of counterparty and any relevant information available in public
domain
ECL is a probability weighted estimate of credit losses. It is measured as the
present value of cash shortfalls (i.e., the difference between the cash flows
due to the Company in accordance with contract and the cash flows that the
Company expects to receive).
The Company has following types of financial assets that are subject to
the expected credit loss:
(i) Trade and other receivables
Exposures to customers' loan outstanding at the end of each reporting period
are reviewed by the Company to determine incurred and expected credit
losses. Historical trends of collection from counterparties on timely basis
reflect low level of credit risk. As the Company has a contractual right to such
receivables as well as the control over such funds due from customers, the
Company does not estimate any credit risk in relation to such receivables.
The company does not have any trade receivables as at 31.03.2025 and as at
31.03.2024.
(ii) Cash and cash equivalents and other bank balances
The Company holds cash and cash equivalents and other bank balances.
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 flows. 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.
As of 31st March, 2025 and 2024, the Company had unutilized credit limits from
banks of NIL and NIL respectively.
As of 31st March, 2025, the Company had working capital (current assets less
current liabilities) of Rs.33.43 lakhs including cash and cash equivalents of
Rs.28.89 lakhs as of 31st March, 2024, the Company had working capital of
Rs.29.71 lakhs including cash and cash equivalents of Rs.24.71 lakhs.
Exposure to Liquidity Risk
The table below analyses the Company's financial liabilities into relevant maturity
pattern based on their contractual maturities for all financial liabilities.
(C) Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows
related to financial instruments that may result from adverse changes in market
rates and prices (such as foreign exchange rates, interest rates, other prices).
The Company is exposed to market risk primarily related to currency risk, interest
rate risk and price risk. The Company is not having any exposure to any type of
borrowings.
(i) Currency Risk
The Company does not have any foreign currency denominated assets. Accordingly, the exposure to
currency risk will not arise.
(ii) Interest Rate Risk
The Company is not much exposed to the interest rate risk due to lack of investments in Debt
Securities mainly. The interest rate risk arises due to uncertainties about the future market interest rate
on these investments.
(iii) Price Risk
Price risk is the risk that the value of the financial instruments will fluctuate as a result of changes in
market prices and related market variables including interest rate for investments in debt oriented
mutual funds and debt securities, whether caused by factors specific to an individual investment, its
issuer or the market. The Company's exposure to price risk arises from investments in equity securities,
units of mutual funds which are classified as fi nancial assets at Fair Value through Other Comprehensive
Income and Fair Value through Profit and Loss respectively and is as follows:
d) Operational risk
Operational risk is the risk arising from inadequate or failed internal processes, people or systems, or
from external events. The Company manages operational risks through comprehensive internal control
systems and procedures laid down around various key activities in the Company viz., customer
service, finance function etc.,
Note 37: Capital Management
The Company's objective for capital management is to maximize shareholder wealth, safeguard
business continuity and support the growth of the Company. The funding requirements are met through
equity and operating cash flows. The Company's capital comprises Equity Share Capital, Retained
Earnings and other equity attributable to equity holders.
footnote: No enterprise has been identified as a “supplier” under the micro,
small and medium enterprises Development Act, 2006. The aforesaid
identification has been done on the basis of information, to the extent provided
by the vendors to the company.
Note 42:
The fair value of Investment property as at 31.03.2025 - Rs.9.60 lakhs and
as at 31.03.2024 - Rs.9.60 lakhs.
Note 43: Miscellaneous
(I) Registration obtained from other financial sector regulators : No
registration has been obtained from other financial sector regulators.
(II) Penalties imposed by RBI and other regulators : No penalties have
been imposed by RBI or other regulators during the year: Nil (Previous
Year: Nil).
Note 44: Other statutory Information
a. The Company does not have any Benami property, where any
proceeding has been initiated or pending against the Company for
holding any Benami property.
b. The Company does not have any transactions with struck off
companies.
c. The Company does not have any charges or satisfaction which is yet
to be registered with ROC beyond the statutory period.
d. The Company has not traded or invested in Crypto currency or Virtual
Currency during the financial year.
e. The Company has not advanced or loaned or invested funds to any
other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall
i. directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the company
(Ultimate Beneficiaries) or
ii. provide any guarantee, security or the like to or on behalf of the
Ultimate Beneficiaries.
f. The Company has not received any fund from any person(s) or
entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the
Company shall
i. 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
ii. provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
g. The Company has not entered in to any transaction which is not
recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under
the Income Tax Act, 1961 (such as, search or survey or any other
relevant provisions of the Income Tax Act, 1961).
h. The Company has not been declared as willful defaulter by any bank
or financial institution or other lender.
i. No Scheme of Arrangements has been approved by the Competent
Authority in terms of sections 230 to 237 of the Companies Act, 2013,
during the year.
Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2016.
Note 46: The Financial Statements were approved for issue by the Board of Directors on
29th May, 2025.
Note 47: Previous year's figures have been regrouped/reclassified wherever necessary to
conform to the current year's presentation.
Per our report of even date annexed For and on behalf of the Board
For NSVR & ASSOCIATES LLP
Chartered Accountants ,T ? o ,. , ,T „ ,, n ,
(Firm Regn. No.008801S/S200060) (T R. Se.khar) (T- G°vardhana Rao)
v 3 ' Director Director
DIN: 02943146 DIN: 07162634
(V Gangadhara Rao N)
Partner
Membership No 219486 (Sanjana Jain) (Omprakash Koyalkar)
UDIN:25219486BMIRYA2619 ^mpiany Secretly Manager
Place: Hyderabad (T. Ramesh Babu)
Date : 29th May, 2025 Chief Financial Officer
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