L. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized, when there is a present legal or constructive obligation as a result of past events, where it is probable that
there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value
of those cash flows. Where the effect is material, the provision is discounted to net present value using an appropriate current market-
based pre-tax discount rate and the unwinding of the discount is included in fi nance costs. Contingent liabilities are recognised only
when there is a possible obligation arising from past events, due to occurrence or non-occurrence of one or more uncertain future
events, not wholly within the control of the Company, or where any present obligation cannot be measured in terms of future outfl
ow of resources, or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only
those having a largely probable outflow of resources are provided for. Contingent assets are not disclosed in the financial statements
unless an inflow of economic benefits is probable.
M. Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions as
described below that affect the reported amounts and the accompanying disclosures. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.
Assumptions
The cost of the defined benefit plans and the present value of the defined benefit obligations are determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future.
Estimates
The estimates used by the company to present the amount in accordance with Ind AS reflect conditions as at the March 31, 2024.
29. Segment Reporting
The Company has only one segment i.e. Merchant Banking and financial services, therefore segment wise reporting has not been given as
required by Indian Accounting Standard (IND AS 108).
30. Adoption of New Income Tax Provision ie. Section 115BAA of Income Tax Act
The Company has elected an option of reduced income tax rate of 22% plus surcharge and cess available under section 115BAA which is
made effective vide Taxation Laws (Amendment) Ordinance 2019 from assessment year beginning on or after the April 1,2020.
31. Financial Risk Management
Financial risk factors
The Company's principal financial liabilities, comprises of trade and other payables and other financial liabilities. The main purpose of these
financial liabilities is to finance the Company's operations The Company's principal financial assets include trade and other receivables, cash
and cash equivalent, investments and short-term deposits that derive directly from its operations. The Company's activities expose it to a
variety of financial risks: market risk, credit risk and liquidity risk. 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 Company's senior management overseas the management of these risks. Company's financial risk activities are governed by
appropriate policies and procedures laid out by the senior management and financial risks are identified, measured and managed in
accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these
risks, which are summarised below.
Foreign currency risk
Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is
not a company's functional currency. Impact of the rate fluctuation is accounted in profit and loss.
Credit risk analysis
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial
loss. The Company is exposed to credit risk arising from cash and cash equivalent deposits with banks, trade receivables, investments and
other financial assets. Credit risk has been managed by the company by establishing credit limits and creditworthiness of customers to
which the company grants credit terms in the normal course of business. For banks and financial institutions, only high rated banks/
institutions are accepted.
Customer credit risk is managed by each customer group subject to the Company's established policy, procedures and control relating to
customer credit risk management. Trade Receivable has been managed by the Company by establishing credit limits and credit worthiness
of customers to which the Company grants credit terms in the normal course of business.
Provision on Trade receivable is calculated as per expected credit loss method (ECL) as per IND AS. ECL is calculated on the basis of
average bad debts on turnover of 3 years i.e from 2015-16 to 2017-18. Such average % is moderated to align with current and future
business, customers and risk profile. The provision determined as per policy for the year 2016-17 amounts to Rs.17,50,592/-. As there is
adequate provision pre-existing in the books, it is not required to make any additional provision for the year. Further, it is also proposed to
continue the same till the provision under IND AS exceeds the pre-existing provision in the books.
Liquidity risk analysis
Risk assessment
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate
amount of committed credit facilities to meet obligations when due and to close out market positions. The Company has assets which are expected
to be realised within 12 months Rs.110.00 lakhs as on March 2024 (as on March 2023 is Rs84.99 lakhs). The Company has liabilities which are
expected to mature within 12 months Rs.66.91 lakhs as on March 2024 (as on March 2023 is Rs.52.93 lakhs). Hence Company had a working
capital of Rs.43.09 lakhs as on March 2024 (as on March 2023 is Rs.32.06 lakhs).
Risk Management
Whenever working capital is required Company's Executive Directors provides funding to the Company.
Fair value hierarchy
Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds
and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is
valued using the closing price as at the reporting period.
Level 2 - The fair value of financial instruments that are not traded in active market (for example, counter derivatives) is determined using
valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant
inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 - If one or more of the significant Inputs is not based on observable market data (unobservable inputs), the instrument is included in level
3. This is case of the unlisted equity instruments included in level 3.
Capital management policies
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves
attributable to the equity holders of the company. The primary objective of the Company's capital management is to maximise the shareholder
value and maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital on the basis of the gearing ratio; Net
debt (total borrowing net of cash and cash equivalents)/Total equity.
32. Transactions with Strike off companies
During the year, the Company does not have any transaction with the Strike off Companies, by the Ministry of Corporate Affairs.
33. Additional disclosure as required under schedule III of the Companies Act, 2013 is either NIL or Not Applicable. Accordingly, it is not reported.
|