estimation is required in establishing fair values. For
further details about determination of fair value refer
note 3.8 and note 46.

ii) Effective interest rate (''EIR'') method

The Company’s EIR methodology, as explained in
Note 3.1(A), recognises interest income/expense using
a rate of return that represents the best estimate of a
constant rate of return over the expected behavioral
life of loans given/taken and recognises the effect of
potentially different interest rates at various stages and
other characteristics of the product life cycle (including
prepayments and penalty interest and charges).

This estimation, by nature, requires an element of
judgement regarding the expected behavior and life¬
cycle of the instruments, as well as expected changes
to interest rates and other fee income/expense that are
integral parts of the instrument.

iii) Impairment of financial asset

The measurement of impairment losses across all
categories of financial assets requires judgement, in
particular, the estimation of the amount and timing of
future cash flows and collateral values when determining
impairment losses and the assessment of a significant
increase in credit risk. These estimates are driven by
a number of factors, changes in which can result in
different levels of allowances.

The Company’s expected credit loss (''ECL'') calculations
are outputs of complex models with a number of
underlying assumptions regarding the choice of variable
inputs and their interdependencies. Elements of the ECL
models that are considered accounting judgements and
estimates include:

a) The Company’s criteria for assessing if there has
been a significant increase in credit risk and so
allowances for financial assets should be measured
on a life time expected credit loss (''LTECL'') basis.

b) Development of ECL models, including the various
formulas and the choice of inputs.

c) Determination of associations between
macroeconomic scenarios and economic inputs
as gross domestic products, and the effect on
probability of default (''PD''), exposure at default
(''EAD'') and loss given default (''LGD'').

d) Selection of forward-looking macroeconomic
scenarios and their probability weightings, to derive
the economic inputs into ECL models.

iv) Provisions and other contingent liabilities

The Company operates in a regulatory and legal
environment that, by nature, has a heightened element
of litigation risk inherent to its operations.

When the Company can reliably measure the outflow
of economic benefits in relation to a specific case and
considers such outflows to be probable, the Company

records a provision against the case. Where the outflow
is considered to be probable, but a reliable estimate
cannot be made, a contingent liability is disclosed.

Given the subjectivity and uncertainty of determining
the probability and amount of losses, the Company
takes into account a number of factors including legal
advice, the stage of the matter and historical evidence
from similar incidents. Significant judgement is required
to conclude on these estimates.

For further details on provisions and other contingencies
refer note 3.16.

These estimates and judgements are based on historical
experience and other factors, including expectations
of future events that may have a financial impact on
the Company and that are believed to be reasonable
under the circumstances. Management believes that the
estimates used in preparation of the standalone financial
statements are prudent and reasonable.

2.5 Presentation of the standalone financial
statements

The financial statements of the Company are presented
as per Schedule III (Division III) of the Companies
Act, 2013 applicable to NBFCs, as notified by the MCA.
The Statement of Cash Flows is presented as per the
requirements of Ind AS 7-Statement of Cash Flows. The
Company classifies its assets and liabilities as financial
and non-financial and presents them in the order of
liquidity. An analysis regarding expected recovery or
settlement within 12 months after the reporting date
and more than 12 months after the reporting date is
presented in notes to the financial statements. Financial
assets and financial liabilities are generally reported on
a gross basis except when, there is an unconditional
legally enforceable right to offset the recognised
amounts without being contingent on a future event and
the parties intend to settle on a net basis in the following
circumstances:

i) The normal course of business

ii) The event of default

iii) The event of insolvency or bankruptcy of the
Company and/or its counterparties

3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES3.1 Recognition of interest income

A. EIR method

Under Ind AS 109, interest income is recorded using
the effective interest rate method for all financial
instruments measured at amortised cost and financial
instrument measured at Fair Value through other
comprehensive income (''FVOCI''). The EIR is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial instrument or,
when appropriate, a shorter period, to the net carrying
amount of the financial asset.

The EIR (and therefore, the amortised cost of the asset)
is calculated by taking into account any discount or
premium on acquisition, fees and costs that are an
integral part of the EIR. The Company recognises interest
income using a rate of return that represents the best
estimate of a constant rate of return over the expected
life of the financial instrument.

If expectations regarding the cash flows on the
financial asset are revised for reasons other than
credit risk, the adjustment is booked as a positive
or negative adjustment to the carrying amount
of the asset in the balance sheet with an increase
or reduction in interest income. The adjustment is
subsequently amortised through Interest income in
the statement of profit and loss.

B. Interest income

The Company calculates interest income by applying EIR
to the gross carrying amount of financial assets other
than credit impaired assets.

When a financial asset becomes credit impaired and is,
therefore, regarded as ''stage 3'', the Company calculates
interest income on the net basis. If the financial asset
cures and is no longer credit impaired, the Company
reverts to calculating interest income on a gross basis.

3.2 Financial instrument-initial recognition

A. Date of recognition

Debt securities issued are initially recognised when they
are originated. All other financial assets and financial
liabilities are initially recognised when the Company
becomes a party to the contractual provisions of the
instrument.

B. Initial measurement of financial instruments

The classification of financial instruments at initial
recognition depends on their contractual terms and the
business model for managing the instruments (Refer
note 3.3(A)). Financial instruments are initially measured
at their fair value (as defined in Note 3.8). Transaction
costs are added to, or subtracted from this amount at
initial recognition except in the case of financial assets
and financial liabilities recorded at Fair Value Through
Profit & Loss (''FVTPL'').

Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at FVTPL are
recognised immediately in Statement of profit and loss.

C. Measurement categories of financial assets and
liabilities

The Company classifies all of its financial assets based
on the business model for managing the assets and the
asset’s contractual terms, measured at either:

i) Amortised cost

ii) FVOCI

iii) FVTPL

3.3 Financial assets and liabilities

A. Financial assets
Business model assessment

The Company determines its business model at the level
that best reflects how it manages groups of financial
assets to achieve its business objective.

The Company''s business model is not assessed on an
instrument-by-instrument basis, but at a higher level
of aggregated portfolios and is based on observable
factors such as:

a) How the performance of the business model and
the financial assets held within that business model
are evaluated and reported to the Company''s key
management personnel.

b) The risks that affect the performance of the business
model (and the financial assets held within that
business model) and, in particular, the way those
risks are managed.

c) The expected frequency, value and timing of sales
are also important aspects of the Company’s
assessment.

The business model assessment is based on reasonably
expected scenarios without taking ''worst case'' or ''stress
case’ scenarios into account. If cash flows after initial
recognition are realised in a way that is different from
the Company''s original expectations, the Company does
not change the classification of the remaining financial
assets held in that business model, but incorporates such
information when assessing newly originated or newly
purchased financial assets going forward.

At initial recognition of a financial asset, the Company
determines whether newly recognised financial assets
are part of an existing business model or whether they
reflect the commencement of a new business model. The
Company reassesses its business models each reporting
period to determine whether the business models have
changed since the preceding period. For the current and
prior reporting periods, the Company has not identified
a change in its business model.

Solely payments of principal and interest (SPPI)
test

As a second step of its classification process, the
Company assesses the contractual terms of financial to
identify whether they meet SPPI test.

‘Principal’ for the purpose of this test is defined as the
fair value of the financial asset at initial recognition and
may change over the life of financial asset (for example,
if there are repayments of principal or amortisation of
the premium/discount).

The most significant elements of interest within a
lending arrangement are typically the consideration for
the time value of money and credit risk. To make the

SPPI assessment, the Company applies judgement and
considers relevant factors such as the period for which
the interest rate is set.

In contrast, contractual terms that introduce a more
than de minimis exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic
lending arrangement do not give rise to contractual cash
flows that are solely payments of principal and interest
on the amount outstanding. In such cases, the financial
asset is required to be measured at FVTPL.

Accordingly, financial assets are measured as follows:

i) Financial assets carried at amortised cost (''AC'')

A financial asset is measured at amortised 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 measured at FVOCI

A financial asset is measured at FVOCI 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.

iii) Financial assets measured at FVTPL

A financial asset which is not classified in any of the
above categories are measured at FVTPL.

iv) Investment in subsidiaries

The Company has accounted for its investments in
subsidiaries at cost less impairment, if any.

B. Financial liabilities

i) Subsequent measurement

Financial liabilities are carried at amortized cost using
the effective interest method.

3.4 Reclassification of financial assets and
liabilities

The Company does not reclassify its financial assets
subsequent to their initial recognition, apart from
the exceptional circumstances in which the Company
acquires, disposes of, or terminates a business line.
Financial liabilities are never reclassified. The Company
did not reclassify any of its financial assets or liabilities
in the year ended 31 March 2026 and 31 March 2025.

3.5 Recognition & Derecognition of financial
assets and liabilities

I Recognition:

A financial asset or a financial liability is recognised in
the Balance Sheet when the Company becomes a party
to the contractual provisions of the instrument, which is
generally on the trade date. Loans and receivables are
recognised when cash is advanced (or settled) to the
borrowers. Financial assets at fair value through profit
or loss are recognised initially at fair value. All other
financial assets are recognised initially at fair value plus
directly attributable transaction costs.

Recognition of FA and FL

(1) Loans and advances are initially recognised when
the funds are transferred to the customer’s account
or delivery of assets by the dealer, whichever is
earlier.

(2) Investments are initially recognised on the
settlement date.

(3) Debt securities, deposits and borrowings are initially
recognised when funds reach the Company.

Other financial assets and liabilities are initially
recognised on the trade date, i.e. the date that the
Company becomes a party to the contractual provisions
of the instrument. This includes regular way trades:
purchases or sales of financial assets that require delivery
of assets within the time frame generally established by
regulation or convention in the market place.

II Derecognition:
i) Financial assets

A. Derecognition of financial assets due to substantial
modification of terms and conditions

The Company derecognises a financial asset, such as
a loan to a customer, when the terms and conditions
have been renegotiated to the extent that, substantially,
it becomes a new loan, with the difference recognised
as a derecognition gain or loss, to the extent that an
impairment loss has not already been recorded. The
newly recognised loans are classified as Stage 1 for ECL
measurement purposes, unless the new loan is deemed
to be Purchased or Originated as Credit Impaired
(POCI). If the modification does not result in cash flows
that are substantially different, the modification does
not result in derecognition. Based on the change in
cash flows discounted at the original EIR, the Company
records a modification gain or loss, to the extent that an
impairment loss has not already been recorded.

B. Derecognition of financial assets other than due to
substantial modification

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is derecognised when the contractual rights
to the cash flows from the financial asset expires or it

transfers the rights to receive the contractual cash flows
in a transaction in which substantially all of the risks
and rewards of ownership of the financial asset are
transferred or in which the Company neither transfers
nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial
asset.

On derecognition of a financial asset in its entirety, the
difference between the carrying amount (measured
at the date of derecognition) and the consideration
received (including any new asset obtained less any new
liability assumed) is recognised in the statement of profit
and loss.

ii) Financial liabilities

A financial liability is derecognised when the obligation
under the liability is discharged, cancelled or expires.
Where an existing financial liability is replaced by another
from the same lender on substantially different terms,
or the terms of an existing liability are substantially
modified, such an exchange or modification is treated
as a derecognition of the original liability and the
recognition of a new liability. The difference between
the carrying value of the original financial liability and
the consideration paid is recognised in the statement of
profit and loss.

3.6 Impairment of financial assets

A. Overview of ECL principles

In accordance with Ind AS 109, the Company uses ECL
model, for evaluating impairment of financial assets
other than those measured at FVTPL.

Expected credit losses are measured through a loss
allowance at an amount equal to:

i. ) The 12-months expected credit losses (expected

credit losses that result from those default events
on the financial instrument that are possible within
12 months after the reporting date); or

ii. ) Full lifetime expected credit losses (‘LTECL’)

(expected credit losses that result from all possible
default events over the life of the financial
instrument).

Both LTECLs and 12 months ECLs are calculated on
collective basis.

Based on the above, the Company categorizes its loans
into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1: When loans are first recognised, the Company
recognises an allowance based on 12 months
ECL. Stage 1 loans includes those loans where
there is no significant credit risk observed
and also includes facilities where the credit
risk has been improved and the loan has
been reclassified from stage 2 or stage 3. The
Company classifies all standard advances
and advances upto 30 days default under this
category.

Stage 2: When a loan has shown a significant increase
in credit risk since origination, the Company
records an allowance for the life time ECL. 30
Days Past Due is considered as significant
increase in credit risk. Stage 2 loans also
includes facilities where the credit risk has
improved and the loan has been reclassified
from stage 3.

Stage 3: Loans considered credit impaired are the loans
which are past due for more than 90 days. The
Company records an allowance for life time
ECL.

Based on the above, the Company categorizes its

investments and balances with banks into Stage 1, Stage

2 and Stage 3, as described below:

Stage 1: When investments and balances with banks are
first recognised, it is categorised as Stage 1.
Stage 1 would include all investments and
balances with bank, not impaired or, have not
experienced a significant increase in credit risk
since initial recognition.

Stage 2:

• For facilities with rating grade AAA to B, three notch
downgrades (without modifiers) shall be taken as
stage 2.

• Any financial instrument with rating grade CCC or
below classified as Stage 2 at origination.

Stage 3: All the investments and balances with banks
will be considered as credit impaired which are
past due for more than 90 days.

B. Calculation of ECLs

The mechanics of ECL calculations are outlined below

and the key elements are, as follows:

PD Probability of Default (‘PD’) is an estimate of the
likelihood of default over a given time horizon. A
default may only happen at a certain time over
the assessed period, if the facility has not been
previously derecognised and is still in the portfolio.
For investments and balances with banks, the
Company uses external ratings for determining
the PD of respective instruments.

EAD Exposure at Default (‘EAD’) is an estimate of the
amount outstanding when the borrower defaults.
It is the total amount of an asset the entity is
exposed to at the time of default. It is defined
based on characteristics of the asset.

LGD Loss Given Default (‘LGD’) is an estimate of the
loss arising in the case where a default occurs at a
given time. It is based on the difference between
the contractual cash flows due and those that the
lender would expect to receive, including from the
realisation of any collateral. It is usually expressed
as a percentage of the EAD.

The Company has calculated PD, EAD and LGD to
determine impairment loss on the portfolio of loans. At
every reporting date, the above calculated PDs, EAD and
LGDs are reviewed and changes in the forward looking
estimates are analysed.

The mechanics of the ECL method are summarised
below:

Stage 1: The 12 months ECL is calculated as the portion
of LTECLs that represent the ECLs that result
from default events on a financial instrument
that are possible within the 12 months after
the reporting date. The Company calculates
the 12 months ECL allowance based on the
expectation of a default occurring in the 12
months following the reporting date. These
expected 12-months default probabilities
are applied to a EAD and multiplied by the
expected LGD.

Stage 2: When a loan has shown a significant increase
in credit risk since origination, the Company
records an allowance for the LTECLs. The
mechanics are similar to those explained
above, but PDs and LGDs are estimated over
the lifetime of the instrument.

Stage 3: For loans considered credit-impaired, the
Company recognises the lifetime expected
credit losses for these loans. The method is
similar to that for stage 2 assets, with the PD
set at 100%.

Simplified approach for trade/other receivables and
contract assets

The Company follows ‘simplified approach’ for
recognition of impairment loss allowance on trade/other
receivables that do not contain a significant financing
component. The application of simplified approach
does not require the Company to track changes in credit
risk. It recognises impairment loss allowance based
on lifetime ECL s at each reporting date, right from its
initial recognition. At every reporting date, the historical
observed default rates are updated for changes in the
forward-looking estimates. For trade receivables that
contain a significant financing component a general
approach is followed.

C. Forward looking information

In its ECL models, the Company relies on a broad range
of forward looking macro parameters and estimated the
impact on the default at a given point of time.

D. Restructured loans

The Company is permitted to restructure customer
accounts. Restructuring would normally involve
modification of terms of the advances/securities,
which would generally include, among others, alteration
of payment period/payable amount/the amount of
instalments/rate of interest, sanction of additional
credit facility/release of additional funds for a customer
account. The Company considers the modification of the

loan only before the loans gets credit impaired. In case of
restructuring, the accounts classified as ‘standard’ shall
be immediately downgraded as non-performing assets/
Stage 3 unless and other wise explicitly stated in the
Circulars and Directions issued by Reserve Bank of India
from time to time. Once an asset has been classified as
restructured, it will remain restructured for a period of
year from the date on which it has been restructured
until the customer account demonstrates satisfactory
performance during the specified period.

For upgradation of accounts classified as Non¬
Performing Assets due to restructuring, the instructions
as specified for such cases as per the said RBI guidelines
shall continue to be applicable.

One time restructuring (OTR) of loan accounts allowed
by RBI vide circular resolution framework for COVID-19
related stress, all borrowers, wherein resolution plan has
been invoked and completed within 90 days shall be
continued to be classified as Stage 1.

3.7 Write-offs

Financial assets are written off when there are no
prospects of recovery which are subject to management
decision . If the amount to be written off is greater
than the accumulated loss allowance, the difference
is first treated as an addition to the allowance that is
then applied against the gross carrying amount. Any
subsequent recoveries are credited to other income in
the statement of profit and loss.

3.8 Determination of fair value

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,
regardless of whether that price is directly observable
or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, the
Company has taken into account the characteristics of
the asset or liability if market participants would take
those characteristics into account when pricing the asset
or liability at the measurement date.

In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2, or 3
based on the degree to which the inputs to the fair value
measurements are observable and the significance of
the inputs to the fair value measurement in its entirety,
which are described as follows:

• Level 1 financial instruments: Those where the
inputs used in the valuation are unadjusted quoted
prices from active markets for identical assets
or liabilities that the Company has access to at
the measurement date. The Company considers
markets as active only if there are sufficient trading
activities with regards to the volume and liquidity of
the identical assets or liabilities and when there are
binding and exercisable price quotes available on
the balance sheet date.

• Level 2 financial instruments: Those where
the inputs that are used for valuation and are
significant, are derived from directly or indirectly
observable market data available over the entire
period of the instrument’s life. Such inputs include
quoted prices for similar assets or liabilities in active
markets, quoted prices for identical instruments
in inactive markets and observable inputs other
than quoted prices such as interest rates and yield
curves, implied volatilities, and credit spreads; and
market-corroborated inputs.

• Level 3 financial instruments: Those that include
one or more unobservable input that is significant
to the measurement as whole.

Difference between transaction price and fair value at
initial recognition: The best evidence of the fair value
of a financial instrument at initial recognition is the
transaction price (i.e. the fair value of the consideration
given or received) unless the fair value of that instrument
is evidenced by comparison with other observable
current market transactions in the same instrument (i.e.
without modification or repackaging) or based on a
valuation technique whose variables include only data
from observable markets. When such evidence exists,
the Company recognises the difference between the
transaction price and the fair value in profit or loss on
initial recognition (i.e. on day one). When the transaction
price of the instrument differs from the fair value at
origination and the fair value is based on a valuation
technique using only inputs observable in market
transactions, the Company recognises the difference
between the transaction price and fair value in net gain
on fair value changes. In those cases where fair value is
based on models for which some of the inputs are not
observable, the difference between the transaction price
and the fair value is deferred and is only recognised in
the statement of profit and loss when the inputs become
observable, or when the instrument is derecognised.

3.9

(I) Recognition of other income

Revenue (other than for those items to which Ind AS
109-Financial Instruments are applicable) is measured
at fair value of the consideration received or receivable.
Ind AS 115-Revenue from contracts with customers
outlines a single comprehensive model of accounting
for revenue arising from contracts with customers and
supersedes current revenue recognition guidance found
within Ind ASs.

The Company recognises revenue from contracts with
customers based on a five step model as set out in Ind
AS 115:

Step 1: Identify contract(s) with a customer: A contract
is defined as an agreement between two or
more parties that creates enforceable rights and
obligations and sets out the criteria for every
contract that must be met.

Step 2: Identify performance obligations in the contract:
A performance obligation is a promise in a
contract with a customer to transfer a good or
service to the customer.

Step 3: Determine the transaction price: The transaction
price is the amount of consideration to which
the Company expects to be entitled in exchange
for transferring promised goods or services to
a customer, excluding amounts collected on
behalf of third parties.

Step 4: Allocate the transaction price to the performance
obligations in the contract: For a contract that
has more than one performance obligation,
the Company allocates the transaction price to
each performance obligation in an amount that
depicts the amount of consideration to which
the Company expects to be entitled in exchange
for satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company
satisfies a performance obligation.

Other interest income

Interest income on security deposits and FD is recognised
on a time proportionate basis.

Net gain on fair value changes

Any differences between the fair values of financial
assets classified at FVTPL (refer note 23), held by the
Company on the balance sheet date is recognised as an
gain/loss. In cases there is a net gain in the aggregate,
the same is recognised in net gain 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. Net gains are further bifurcated into
realised and unrealised.

Fees and other income

Processing fees not considered in EIR , service income,
bounce charges, penal charges and foreclosure charges
etc. are recognised on point in time basis.

(II) Recognition of other expense
Borrowing costs

Borrowing costs are the interest and other costs that
the Company incurs in connection with the borrowing of
funds. Borrowing costs that are directly attributable to
the acquisition or construction of qualifying assets are
capitalised as part of the cost of such assets. A qualifying
asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale.

Interest expense on borrowed funds is calculated using
the effective interest rate (EIR) on respective financial
instruments measured at amortised cost. The EIR is the
rate that exactly discounts estimated future cash flows
through the expected life of the financial instrument
to the gross carrying amount of the financial liability.
Interest expense includes issue costs that are initially
recognised as part of the carrying value of the financial
liability and amortised over the expected life using
the effective interest method. These include fees and
commissions payable to advisers and other expenses
such as external legal costs, rating fee etc., provided
these are incremental costs that are directly related to
the issue of a financial liability.

Calculation of the EIR includes all fees, transaction costs
paid that are incremental and directly attributable to the
issue of the financial liability and all other premiums and
discounts.

3.10 Cash and cash equivalents

Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from
the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash
and which are subject to insignificant risk of changes in
value. They are held for the purposes of meeting short¬
term cash commitments (rather than for investment or
other purposes).

3.11 Property, plant and equipment

Property, plant and equipment (‘PPE’) are carried at
cost, less accumulated depreciation and impairment
losses, if any. The cost of PPE comprises its purchase
price net of any trade discounts and rebates, any import
duties and other taxes (other than those subsequently
recoverable from the tax authorities), any directly
attributable expenditure on making the asset ready
for its intended use and other incidental expenses.
Subsequent expenditure on PPE after its purchase is
capitalized only if it is probable that the future economic
benefits will flow to the enterprise and the cost of the
item can be measured reliably.

Depreciation is calculated using the straight line method
to write down the cost of property and equipment to
their residual values over their estimated useful lives
as specified under schedule II of the Act. Land is not
depreciated.

The estimated useful lives are, as follows:

i) Computer Equipments- 3 years

ii) Office equipment-5 years

iii) Furniture and fixtures-10 years

Depreciation is provided on a pro-rata basis from the
date on which such asset is ready for its intended use
and residual value is considered as Nil.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

PPE is derecognised on disposal or when no future
economic benefits are expected from its use. Any gain
or loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds and
the carrying amount of the asset) is recognised in other
income/expense in the statement of profit and loss in
the year the asset is derecognised.

3.12 Intangible assets

The Company’s intangible assets include the value of
software. An intangible asset is recognised only when its
cost can be measured reliably and it is probable that the
expected future economic benefits that are attributable
to it will flow to the Company.

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.

Amortisation is calculated to write off the cost of
intangible assets less their estimated residual values
(Nil) over their estimated useful lives (three years) using
the straight-line method, and is included in depreciation
and amortisation in the statement of profit and loss.

3.13 Impairment of non financial assets-
property, plant and equipments and
intangible assets

The carrying values of assets/cash generating units at
the each balance sheet date are reviewed for impairment.
If any indication of impairment exists, the recoverable
amount of such assets is estimated and if the carrying
amount of these assets exceeds their recoverable
amount, impairment loss is recognised in the statement
of profit and loss as an expense, for such excess amount.
The recoverable amount is the greater of the net selling
price and value in use. Value in use is arrived at by
discounting the future cash flows to their present value
based on an appropriate discount factor. When there
is indication that an impairment loss recognised for an
asset in earlier accounting periods no longer exists or
may have decreased, such reversal of impairment loss is
recognised in the statement of profit and loss.

3.14 Leases

Ind AS 116-Leases sets out the principles for the
recognition, measurement, presentation and disclosure
of leases and requires lessees to account for all leases
under a single on-balance sheet model similar to the
accounting for finance leases under Ind AS 17. The
company has opted for two recognition exemptions for
lessees:

- leases of ‘low-value’ assets (e.g., personal
computers).

- and short-term leases (i.e., leases with a lease term
of 12 months or less).

At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e. the
lease liability) and an asset representing the right to use
the underlying asset during the lease term (i.e. the right-
of-use asset).

The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at or

before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received. The right-of-use asset
is subsequently depreciated using the straight line
method from the commencement date to the end of
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
Company’s incremental borrowing rate as on the date of
lease commencement date.

The Company has Lease agreements for taking office
premises along with furniture and fixtures as applicable
and premises on rental basis range of 36 months to 60
months wherein the Company is a lessee.

3.15 Retirement and other employee benefits

Defined contribution plans

The Company’s contribution to provident fund and
employee state insurance scheme are considered as
defined contribution plans and are charged as an expense
based on the amount of contribution required to be made
and when services are rendered by the employees. The
Company has no liability for future benefits other than its
annual contribution and recognises such contributions
as an expense in the period in which employee renders
the related service.

Defined benefit plans

The Company pays gratuity to the employees whoever
has completed five years of service with the Company at
the time of resignation/retirement. The gratuity is paid
@15 days salary for every completed year of service as
per the Code on Social Security, 2020.

The present value of the obligation under such defined
benefit plan is determined based on actuarial valuation,
carried out by an independent actuary at each balance
sheet date, using the Projected Unit Credit Method,
which recognises each period of service as giving rise
to an additional unit of employee benefit entitlement
and measures each unit separately to build up the final
obligation. The obligation is measured at the present
value of the estimated future cash flows. The discount
rates used for determining the present value of the
obligation under defined benefit plan are based on the
market yields on government securities as at the balance
sheet date.

As per Ind AS 19, the service cost and the net interest
cost are charged to the statement of profit and loss.
Remeasurement of the net defined benefit liability, which
comprise actuarial gains and losses, the return on plan
assets (excluding interest) and the effect of the asset
ceiling (if any, excluding interest), are recognised in OCI.

Short-term employee benefits

All employee benefits payable wholly within twelve
months of rendering the service are classified as short¬
term employee benefits. Benefits such as salaries, wages
etc. and the expected cost of ex-gratia are recognised

in the period in which the employee renders the related
service. A liability is recognised for the undiscounted
amount expected to be paid when there is 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.

Employee Stock Option Plans

Employee stock options have time and performance
based vesting conditions. The fair value determined
at the grant date of the options is expensed over the
vesting period, based on the Company’s estimate of
equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each
reporting period, the Company revises its estimate of the
number of options expected to vest. The impact of the
revision of the original estimates, if any, is recognised in
profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment
to the employee stock options plan reserve.

The Company grants equity-settled stock options to
employees of the subsidiary company. In accordance
with Ind AS 102, the Company recognizes the fair value
of the options granted as investment over the vesting
period, with a corresponding credit to other equity. The
fair value is determined at the grant date and is adjusted
for expected and actual forfeitures.

3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

3.1 Recognition of interest income

A. EIR method

Under Ind AS 109, interest income is recorded using the
effective interest rate method for all financial instruments
measured at amortised cost and financial instrument
measured at Fair Value through other comprehensive income
(''FVOCI''). The EIR is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
instrument or, when appropriate, a shorter period, to the net
carrying amount of the financial asset.

The EIR (and therefore, the amortised cost of the asset) is
calculated by taking into account any discount or premium
on acquisition, fees and costs that are an integral part of the
EIR. The Company recognises interest income using a rate of
return that represents the best estimate of a constant rate of
return over the expected life of the financial instrument.

If expectations regarding the cash flows on the financial asset
are revised for reasons other than credit risk, the adjustment
is booked as a positive or negative adjustment to the carrying
amount of the asset in the balance sheet with an increase or
reduction in interest income. The adjustment is subsequently
amortised through Interest income in the statement of profit
and loss.

B. Interest income

The Company calculates interest income by applying EIR to
the gross carrying amount of financial assets other than credit
impaired assets.

When a financial asset becomes credit impaired and is,
therefore, regarded as ''stage 3'', the Company calculates
interest income on the net basis. If the financial asset cures
and is no longer credit impaired, the Company reverts to
calculating interest income on a gross basis.

3.2 Financial instrument - initial recognition

A. Date of recognition

Debt securities issued are initially recognised when they are
originated. All other financial assets and financial liabilities are
initially recognised when the Company becomes a party to
the contractual provisions of the instrument.

B. Initial measurement of financial instruments

The classification of financial instruments at initial recognition
depends on their contractual terms and the business model
for managing the instruments (Refer note 3.3(A)). Financial
instruments are initially measured at their fair value (as defined
in Note 3.8). Transaction costs are added to, or subtracted
from this amount at initial recognition except in the case of
financial assets and financial liabilities recorded at FVTPL.

Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at FVTPL are recognised
immediately in Statement of profit and loss.

C. Measurement categories of financial assets and
liabilities

The Company classifies all of its financial assets based on
the business model for managing the assets and the asset''s
contractual terms, measured at either:

i) Amortised cost

ii) FVOCI

iii) FVTPL

3.3 Financial assets and liabilities
A. Financial assets

Business model assessment

The Company determines its business model at the level that
best reflects how it manages groups of financial assets to
achieve its business objective.

The Company''s business model is not assessed on an
instrument-by-instrument basis, but at a higher level of
aggregated portfolios and is based on observable factors
such as:

a) How the performance of the business model and
the financial assets held within that business model
are evaluated and reported to the Company''s key
management personnel.

b) The risks that affect the performance of the business
model (and the financial assets held within that business
model) and, in particular, the way those risks are
managed.

c) The expected frequency, value and timing of sales are
also important aspects of the Company''s assessment.

The business model assessment is based on reasonably
expected scenarios without taking ''worst case'' or ''stress case''
scenarios into account. If cash flows after initial recognition are
realised in a way that is different from the Company''s original
expectations, the Company does not change the classification
of the remaining financial assets held in that business model,
but incorporates such information when assessing newly
originated or newly purchased financial assets going forward.

Solely payments of principal and interest (SPPI) test

As a second step of its classification process, the Company
assesses the contractual terms of financial to identify whether
they meet SPPI test.

’Principal'' for the purpose of this test is defined as the fair value
of the financial asset at initial recognition and may change over
the life of financial asset (for example, if there are repayments
of principal or amortisation of the premium/discount).

The most significant elements of interest within a lending
arrangement are typically the consideration for the time value
of money and credit risk. To make the SPPI assessment, the
Company applies judgement and considers relevant factors
such as the period for which the interest rate is set.

In contrast, contractual terms that introduce a more than de
minimis exposure to risks or volatility in the contractual cash
flows that are unrelated to a basic lending arrangement do
not give rise to contractual cash flows that are solely payments
of principal and interest on the amount outstanding. In such
cases, the financial asset is required to be measured at FVTPL.

Accordingly, financial assets are measured as follows:

i) Financial assets carried at amortised cost (''AC'')

A financial asset is measured at amortised 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 measured at FVOCI

A financial asset is measured at FVOCI 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.

iii) Financial assets measured at FVTPL

A financial asset which is not classified in any of the above
categories are measured at FVTPL.

iv) Investment in subsidiaries

The Company has accounted for its investments in subsidiaries
at cost less impairment, if any.

B. Financial liabilities

i) Subsequent measurement

Financial liabilities are carried at amortized cost using the
effective interest method.

3.4 Reclassification of financial assets and liabilities

The Company does not reclassify its financial assets
subsequent to their initial recognition, apart from the
exceptional circumstances in which the Company acquires,
disposes of, or terminates a business line. Financial liabilities
are never reclassified. The Company did not reclassify any of
its financial assets or liabilities in the year ended 31 March 2025
and 31 March 2024.

3.5 Derecognition of financial assets and liabilities

i) Financial assets

A. Derecognition of financial assets due to substantial
modification of terms and conditions

The Company derecognises a financial asset, such as a loan
to a customer, when the terms and conditions have been
renegotiated to the extent that, substantially, it becomes a
new loan, with the difference recognised as a derecognition
gain or loss, to the extent that an impairment loss has not
already been recorded. The newly recognised loans are
classified as Stage 1 for ECL measurement purposes.

B. Derecognition of financial assets other than due to
substantial modification

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
derecognised when the contractual rights to the cash flows
from the financial asset expires or it transfers the rights to
receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of
the financial asset are transferred or in which the Company
neither transfers nor retains substantially all of the risks and
rewards of ownership and it does not retain control of the
financial asset.

On derecognition of a financial asset in its entirety, the
difference between the carrying amount (measured at
the date of derecognition) and the consideration received
(including any new asset obtained less any new liability
assumed) is recognised in the statement of profit and loss.

ii) Financial liabilities

A financial liability is derecognised when the obligation under
the liability is discharged, cancelled or expires. Where an
existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original
liability and the recognition of a new liability. The difference
between the carrying value of the original financial liability and
the consideration paid is recognised in the statement of profit
and loss.

3.6 Impairment of financial assets
A. Overview of ECL principles

In accordance with Ind AS 109, the Company uses ECL model,
for evaluating impairment of financial assets other than those
measured at FVTPL.

Expected credit losses are measured through a loss allowance
at an amount equal to:

i. ) The 12-months expected credit losses (expected credit

losses that result from those default events on the
financial instrument that are possible within 12 months
after the reporting date); or

ii. ) Full lifetime expected credit losses (''LTECL'') (expected

credit losses that result from all possible default events
over the life of the financial instrument).

Both LTECLs and 12 months ECLs are calculated on collective
basis.

Based on the above, the Company categorizes its loans into
Stage 1, Stage 2 and Stage 3, as described below:

Stage 1: When loans are first recognised, the Company
recognises an allowance based on 12 months ECL.
Stage 1 loans includes those loans where there is
no significant credit risk observed and also includes
facilities where the credit risk has been improved
and the loan has been reclassified from stage 2 or
stage 3.

Stage 2: When a loan has shown a significant increase in
credit risk since origination, the Company records
an allowance for the life time ECL. Stage 2 loans
also includes facilities where the credit risk has
improved and the loan has been reclassified from
stage 3.

Stage 3: Loans considered credit impaired are the loans
which are past due for more than 90 days. The
Company records an allowance for life time ECL.

Based on the above, the Company categorizes its investments
and balances with banks into Stage 1, Stage 2 and Stage 3, as
described below:

Stage 1: When investments and balances with banks are
first recognised, it is categorised as Stage 1. Stage
1 would include all investments and balances
with bank, not impaired or, have not experienced
a significant increase in credit risk since initial
recognition.

Stage 2:

• For facilities with rating grade AAA to B, three notch
downgrades (without modifiers) shall be taken as stage 2.

• Any financial instrument with rating grade CCC or below
classified as Stage 2 at origination.

Stage 3: All the investments and balances with banks will be
considered as credit impaired which are past due
for more than 90 days.

B. Calculation of ECLs

The mechanics of ECL calculations are outlined below and the
key elements are, as follows:

PD Probability of Default (''PD'') is an estimate of the likelihood

of default over a given time horizon. A default may only
happen at a certain time over the assessed period, if
the facility has not been previously derecognised and
is still in the portfolio. For investments and balances
with banks, the Company uses external ratings for
determining the PD of respective instruments.

EAD Exposure at Default (''EAD'') is an estimate of the amount
outstanding when the borrower defaults.It is the total
amount of an asset the entity is exposed to at the time
of default. It is defined based on characteristics of the
asset.

LGD Loss Given Default (''LGD'') is an estimate of the loss
arising in the case where a default occurs at a given
time. It is based on the difference between the
contractual cash flows due and those that the lender
would expect to receive, including from the realisation
of any collateral. It is usually expressed as a percentage
of the EAD.

The Company has calculated PD, EAD and LGD to determine
impairment loss on the portfolio of loans. At every reporting
date, the above calculated PDs, EAD and LGDs are reviewed
and changes in the forward looking estimates are analysed.

The mechanics of the ECL method are summarised below:

Stage 1: The 12 months ECL is calculated as the portion of
LTECLs that represent the ECLs that result from
default events on a financial instrument that are
possible within the 12 months after the reporting
date. The Company calculates the 12 months
ECL allowance based on the expectation of a
default occurring in the 12 months following the
reporting date. These expected 12-months default
probabilities are applied to a EAD and multiplied by
the expected LGD.

Stage 2: When a loan has shown a significant increase in
credit risk since origination, the Company records
an allowance for the LTECLs. The mechanics are
similar to those explained above, but PDs and LGDs
are estimated over the lifetime of the instrument.

Stage 3: For loans considered credit-impaired, the Company
recognises the lifetime expected credit losses for
these loans. The method is similar to that for stage
2 assets, with the PD set at 100%.

Simplified approach for trade/other receivables and
contract assets

The Company follows ''simplified approach'' for recognition of
impairment loss allowance on trade/other receivables that do
not contain a significant financing component. The application

of simplified approach does not require the Company to
track changes in credit risk. It recognises impairment loss
allowance based on lifetime ECL s at each reporting date,
right from its initial recognition. At every reporting date, the
historical observed default rates are updated for changes
in the forward-looking estimates. For trade receivables that
contain a significant financing component a general approach
is followed.

C. Forward looking information

In its ECL models, the Company relies on a broad range of
forward looking macro parameters and estimated the impact
on the default at a given point of time.

D. Restructured loans

The Company is permitted to restructure customer accounts.
Restructuring would normally involve modification of terms
of the advances/securities, which would generally include,
among others, alteration of payment period/payable
amount/the amount of instalments/rate of interest, sanction
of additional credit facility/release of additional funds for a
customer account. The Company considers the modification
of the loan only before the loans gets credit impaired. In case
of restructuring, the accounts classified as ''standard'' shall be
immediately downgraded as non-performing assets/Stage
3 unless and other wise explicitly stated in the Circulars and
Directions issued by Reserve Bank of India from time to time.
Once an asset has been classified as restructured, it will remain
restructured for a period of year from the date on which it has
been restructured until the customer account demonstrates
satisfactory performance during the specified period.

For upgradation of accounts classified as Non-Performing
Assets due to restructuring, the instructions as specified for
such cases as per the said RBI guidelines shall continue to be
applicable.

One time restructuring (OTR) of loan accounts allowed by RBI
vide circular resolution framework for COVID-19 related stress,
all borrowers, wherein resolution plan has been invoked and
completed within 90 days shall be continued to be classified
as Stage 1.

3.7 Write-offs

Financial assets are written off when there are no prospects
of recovery which are subject to management decision. If the
amount to be written off is greater than the accumulated
loss allowance, the difference is first treated as an addition to
the allowance that is then applied against the gross carrying
amount. Any subsequent recoveries are credited to other
income in the statement of profit and loss.

3.8 Determination of fair value

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, regardless of
whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an
asset or a liability, the Company has taken into account the
characteristics of the asset or liability if market participants
would take those characteristics into account when pricing
the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2, or 3 based on
the degree to which the inputs to the fair value measurements
are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as
follows:

• Level 1 financial instruments: Those where the inputs
used in the valuation are unadjusted quoted prices from
active markets for identical assets or liabilities that the
Company has access to at the measurement date. The
Company considers markets as active only if there are
sufficient trading activities with regards to the volume
and liquidity of the identical assets or liabilities and when
there are binding and exercisable price quotes available
on the balance sheet date.

• Level 2 financial instruments: Those where the inputs
that are used for valuation and are significant, are
derived from directly or indirectly observable market
data available over the entire period of the instrument''s
life. Such inputs include quoted prices for similar assets
or liabilities in active markets, quoted prices for identical
instruments in inactive markets and observable inputs
other than quoted prices such as interest rates and
yield curves, implied volatilities, and credit spreads; and
market-corroborated inputs.

• Level 3 financial instruments: Those that include one
or more unobservable input that is signifcant to the
measurement as whole.

3.9

(I) Recognition of other income

Revenue (other than for those items to which Ind AS 109 -
Financial Instruments are applicable) is measured at fair
value of the consideration received or receivable. Ind AS 115
- Revenue from contracts with customers outlines a single
comprehensive model of accounting for revenue arising from
contracts with customers and supersedes current revenue
recognition guidance found within Ind ASs.

The Company recognises revenue from contracts with
customers based on a five step model as set out in Ind AS 115:

Step 1: Identify contract(s) with a customer: A contract
is defined as an agreement between two or
more parties that creates enforceable rights
and obligations and sets out the criteria for every
contract that must be met.

Step 2: Identify performance obligations in the contract: A
performance obligation is a promise in a contract
with a customer to transfer a good or service to the
customer.

Step 3: Determine the transaction price: The transaction
price is the amount of consideration to which the
Company expects to be entitled in exchange
for transferring promised goods or services to a
customer, excluding amounts collected on behalf of
third parties.

Step 4: Allocate the transaction price to the performance
obligations in the contract: For a contract that
has more than one performance obligation, the
Company allocates the transaction price to each
performance obligation in an amount that depicts
the amount of consideration to which the Company
expects to be entitled in exchange for satisfying
each performance obligation.

Step 5: Recognise revenue when (or as) the Company
satisfies a performance obligation.

Other interest income

Interest income on security deposits and FD is recognised on a
time proportionate basis.

Fees and other income

Processing fees not considered in EIR, service income, bounce
charges, penal charges and foreclosure charges etc. are
recognised on point in time basis.

(II) Recognition of other expense

Borrowing costs

Borrowing costs are the interest and other costs that the
Company incurs in connection with the borrowing of funds.
Borrowing costs that are directly attributable to the acquisition
or construction of qualifying assets are capitalised as part of
the cost of such assets. A qualifying asset is an asset that
necessarily takes a substantial period of time to get ready for
its intended use or sale.

Interest expense on borrowed funds is calculated using the
effective interest rate (EIR) on respective financial instruments
measured at amortised cost. The EIR is the rate that exactly
discounts estimated future cash flows through the expected
life of the financial instrument to the gross carrying amount of
the financial liability.

Calculation of the EIR includes all fees paid that are incremental
and directly attributable to the issue of the financial liability.

3.10 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with
banks. Cash equivalents are short-term balances (with
an original maturity of three months or less from the date
of acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are subject
to insignificant risk of changes in value.

3.11 Property, plant and equipment

Property, plant and equipment (''PPE'') are carried at cost, less
accumulated depreciation and impairment losses, if any. The
cost of PPE comprises its purchase price net of any trade
discounts and rebates, any import duties and other taxes
(other than those subsequently recoverable from the tax
authorities), any directly attributable expenditure on making
the asset ready for its intended use and other incidental
expenses. Subsequent expenditure on PPE after its purchase
is capitalized only if it is probable that the future economic

benefits will flow to the enterprise and the cost of the item
can be measured reliably.

Depreciation is calculated using the straight line method
to write down the cost of property and equipment to their
residual values over their estimated useful lives as specified
under schedule II of the Act. Land is not depreciated.

The estimated useful lives are, as follows:

i) Computer Equipments: 3 years

ii) Office equipment: 5 years

iii) Furniture and fixtures: 10 years

Depreciation is provided on a pro-rata basis from the date
on which such asset is ready for its intended use and residual
value is considered as Nil.

The residual values, useful lives and methods of depreciation
of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.

PPE is derecognised on disposal or when no future economic
benefits are expected from its use. Any gain or loss arising
on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is recognised in other income/expense
in the statement of profit and loss in the year the asset is
derecognised.

3.12 Intangible assets

The Company''s intangible assets include the value of
software. An intangible asset is recognised only when its cost
can be measured reliably and it is probable that the expected
future economic benefits that are attributable to it will flow to
the Company.

Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation
and any accumulated impairment losses.

Amortisation is calculated to write off the cost of intangible
assets less their estimated residual values (Nil) over their
estimated useful lives (three years) using the straight-line
method, and is included in depreciation and amortisation in
the statement of profit and loss.

3.13 Impairment of non financial assets - property,
plant and equipments and intangible assets

The carrying values of assets/cash generating units at the
each balance sheet date are reviewed for impairment. If any
indication of impairment exists, the recoverable amount of
such assets is estimated and if the carrying amount of these
assets exceeds their recoverable amount, impairment loss is
recognised in the statement of profit and loss as an expense,
for such excess amount. The recoverable amount is the
greater of the net selling price and value in use. Value in use is
arrived at by discounting the future cash flows to their present
value based on an appropriate discount factor. When there
is indication that an impairment loss recognised for an asset
in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognised in
the statement of profit and loss.

3.14 Leases

Ind AS 116 - Leases sets out the principles for the recognition,
measurement, presentation and disclosure of leases and
requires lessees to account for all leases under a single on-
balance sheet model similar to the accounting for finance
leases under Ind AS 17. The Company has opted for two
recognition exemptions for lessees:

- leases of ’low-value'' assets (e.g., personal computers)

- and short-term leases (i.e., leases with a lease term of 12
months or less).

At the commencement date of a lease, a lessee will recognise
a liability to make lease payments (i.e. the lease liability) and
an asset representing the right to use the underlying asset
during the lease term (i.e. the right-of-use asset). Lessees will
be required to separately recognise the interest expense on
the lease liability and the depreciation expense on the right-
of-use asset (cost model).

The Company has Lease agreements for taking office
premises along with furniture and fixtures as applicable and
premises on rental basis range of 36 months to 60 months
wherein the Company is a lessee.

3.15 Retirement and other employee benefits
Defined contribution plans

The Company''s contribution to provident fund and employee
state insurance scheme are considered as defined contribution
plans and are charged as an expense based on the amount
of contribution required to be made and when services are
rendered by the employees.

Defined benefit plans

The Company pays gratuity to the employees whoever has
completed five years of service with the Company at the time
of resignation/retirement. The gratuity is paid @15 days salary
for every completed year of service as per the Payment of
Gratuity Act, 1972.

The liability in respect of gratuity and other post-employment
benefits is calculated using the Projected Unit Credit Method
and spread over the period during which the benefit is
expected to be derived from employee''s services.

As per Ind AS 19, the service cost and the net interest cost are
charged to the statement of profit and loss. Remeasurement
of the net defined benefit liability, which comprise actuarial
gains and losses, the return on plan assets (excluding interest)
and the effect of the asset ceiling (if any, excluding interest),
are recognised in OCI.

Short-term employee benefits

All employee benefits payable wholly within twelve months of
rendering the service are classified as short-term employee
benefits. Benefits such as salaries, wages etc. and the
expected cost of ex-gratia are recognised in the period in
which the employee renders the related service. A liability is
recognised for the amount expected to be paid when there is
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.

Employee Stock Option Plans

Employee stock options have time and performance based
vesting conditions. The fair value determined at the grant
date of the options is expensed over the vesting period, based
on the Company''s estimate of equity instruments that will
eventually vest, with a corresponding increase in equity. At the
end of each reporting period, the Company revises its estimate
of the number of options expected to vest. The impact of the
revision of the original estimates, if any, is recognised in profit
or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to the employee
stock options plan reserve.

The Company grants equity-settled stock options to
employees of the subsidiary Company. In accordance with
Ind AS 102, the Company recognizes the fair value of the
options granted as investment over the vesting period,
with a corresponding credit to other equity. The fair value is
determined at the grant date and is adjusted for expected
and actual forfeitures.

3. SUMMARY OF MATERIAL ACCOUNTING POLICIES

3.1 Recognition of interest income

A. EIR method

Under Ind AS 109, interest income is recorded using the effective interest rate method for all financial instruments measured at amortised cost and financial instrument measured at Fair Value through other comprehensive income (''FVOCI''). The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset.

The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account any discount or premium on acquisition, fees and costs that are an integral part of the EIR. The Company recognises interest income using a rate of return that represents the best estimate of a constant rate of return over the expected life of the financial instrument.

If expectations regarding the cash flows on the financial asset are revised for reasons other than credit risk, the adjustment is booked as a positive or negative adjustment to the carrying amount of the asset in the balance sheet with an increase or reduction in interest income. The adjustment is subsequently amortised through Interest income in the statement of profit and loss.

B. Interest income

The Company calculates interest income by applying EIR to the gross carrying amount of financial assets other than credit impaired assets.

When a financial asset becomes credit impaired and is, therefore, regarded as ''stage 3'', the Company calculates interest income on the net basis. If the financial asset cures and is no longer credit impaired, the Company reverts to calculating interest income on a gross basis.

3.2 Financial instrument - initial recognition

A. Date of recognition

Debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

B. Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments (Refer note 3.3(A)). Financial instruments are initially measured at their fair value (as defined in Note 3.8). Transaction costs are added to, or subtracted from this amount at initial recognition except in the case of financial assets and financial liabilities recorded at FVTPL.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Statement of profit and loss.

C. Measurement categories of financial assets and liabilities

The Company classifies all of its financial assets based on the business model for managing the assets and the asset''s contractual terms, measured at either:

i) Amortised cost

ii) FVOCI

iii) FVTPL

3.3 Financial assets and liabilities

A. Financial assets Business model assessment

The Company determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business objective.

The Company''s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios and is based on observable factors such as:

a) How the performance of the business model and the financial assets held within that business model are evaluated and reported to the Company''s key management personnel.

b) The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed.

c) The expected frequency, value and timing of sales are also important aspects of the Company''s assessment.

The business model assessment is based on reasonably expected scenarios without taking ''worst case'' or ''stress case'' scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.

Solely payments of principal and interest (SPPI) test

As a second step of its classification process, the Company assesses the contractual terms of financial to identify whether they meet SPPI test.

''Principal'' for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over the life of financial asset (for example, if there are repayments of principal or amortisation of the premium/discount).

The most significant elements of interest within a lending arrangement are typically the consideration for the time value of money and credit risk. To make the SPPI assessment, the Company applies judgement and considers relevant factors such as the period for which the interest rate is set.

In contrast, contractual terms that introduce a more than de minimis exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to be measured at FVTPL.

Accordingly, financial assets are measured as follows:

i) Financial assets carried at amortised cost (‘AC’)

A financial asset is measured at amortised 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 measured at FVOCI

A financial asset is measured at FVOCI 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.

iii) Financial assets measured at FVTPL

A financial asset which is not classified in any of the above categories are measured at FVTPL.

iv) Investment in subsidiaries

The Company has accounted for its investments in subsidiaries at cost less impairment, if any.

B. Financial liabilities

i) Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method.

3.4 Reclassification of financial assets and liabilities

The Company does not reclassify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances in which the Company acquires, disposes of, or terminates a business line. Financial liabilities are never reclassified. The Company did not reclassify any of its financial assets or liabilities in the year ended 31 March 2024 and 31 March 2023.

3.5 Derecognition of financial assets and liabilities

i) Financial assets

A. Derecognition of financial assets due to substantial modification of terms and conditions

The Company derecognises a financial asset, such as a loan to a customer, when the terms and conditions have been renegotiated to the extent that, substantially, it becomes a new loan, with the difference recognised as a derecognition gain or loss, to the extent that an impairment loss has not already been recorded. The newly recognised loans are classified as Stage 1 for ECL measurement purposes.

B. Derecognition of financial assets other than due to substantial modification

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the contractual rights to the cash flows from the financial asset expires or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount (measured at the date of derecognition) and the consideration received (including any new asset obtained less any new liability assumed) is recognised in the statement of profit and loss.

ii) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in the statement of profit and loss.

3.6 Impairment of financial assets A. Overview of ECL principles

In accordance with Ind AS 109, the Company uses ECL model, for evaluating impairment of financial assets other than those measured at FVTPL.

Expected credit losses are measured through a loss allowance at an amount equal to:

i) The 12 months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

ii) Full lifetime expected credit losses (''LTECL'') (expected credit losses that result from all possible default events over the life of the financial instrument)

Both LTECLs and 12 months ECLs are calculated on collective basis.

Based on the above, the Company categorizes its loans into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1: When loans are first recognised, the Company recognises an allowance based on 12 months ECL. Stage 1 loans includes those loans where there is no significant credit risk observed and also includes facilities where the credit risk has been improved and the loan has been reclassified from stage 2 or stage 3.

Stage 2: When a loan has shown a significant increase in credit risk since origination, the Company records an allowance for the life time ECL. Stage 2 loans also includes facilities where the credit risk has improved and the loan has been reclassified from stage 3.

Stage 3: Loans considered credit impaired are the loans which are past due for more than 90 days. The Company records an allowance for life time ECL.

Based on the above, the Company categorizes its investments and balances with banks into Stage 1, Stage 2 and Stage 3, as described below:

Stage 1: When investments and balances with banks are first recognised, it is categorised as Stage 1.Stage 1 would include all investments and balances with bank, not impaired or, have not experienced a significant increase in credit risk since initial recognition.

Stage 2:

• For facilities with rating grade AAA to B, three notch downgrades (without modifiers) shall be taken as stage 2.

• Any financial instrument with rating grade CCC or below classified as Stage 2 at origination.

Stage 3: All the investments and balances with banks will be considered as credit impaired which are past due for more than 90 days.

B. Calculation of ECLs

The mechanics of ECL calculations are outlined below and the key elements are, as follows:

PD Probability of Default (''PD'') is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio. For investments and balances with banks, the Company uses external ratings for determining the PD of respective instruments.

EAD Exposure at Default (''EAD'') is an estimate of the amount outstanding when the borrower defaults.It is the total amount of an asset the entity is exposed to at the time of default. It is defined based on characteristics of the asset.

LGD Loss Given Default (''LGD'') is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD.

The Company has calculated PD, EAD and LGD to determine impairment loss on the portfolio of loans. At every reporting date, the above calculated PDs, EAD and LGDs are reviewed and changes in the forward looking estimates are analysed.

The mechanics of the ECL method are summarised below:

Stage 1: The 12 months ECL is calculated as the portion of LTECLs that represent the ECLs that result from default events on a financial instrument that are possible within the 12 months after the reporting date. The Company calculates the 12 months ECL allowance based on the expectation of a default occurring in the 12 months following the reporting date. These expected 12 months default probabilities are applied to a EAD and multiplied by the expected LGD.

Stage 2: When a loan has shown a significant increase in credit risk since origination, the Company records an allowance for the LTECLs. The

mechanics are similar to those explained above, but PDs and LGDs are estimated over the lifetime of the instrument.

Stage 3: For loans considered credit-impaired, the Company recognises the lifetime expected credit losses for these loans. The method is similar to that for stage 2 assets, with the PD set at 100%.

Simplified approach for trade/other receivables and contract assets

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade/ other receivables that do not contain a significant financing component. The application of simplified approach does not require the Company to track changes in credit risk. It recognises impairment loss allowance based on lifetime ECL s at each reporting date, right from its initial recognition. At every reporting date, the historical observed default rates are updated for changes in the forward-looking estimates. For trade receivables that contain a significant financing component a general approach is followed.

C. Forward looking information

In its ECL models, the Company relies on a broad range of forward looking macro parameters and estimated the impact on the default at a given point of time.

D. Restructured loans

The Company is permitted to restructure customer accounts. Restructuring would normally involve modification of terms of the advances/securities, which would generally include, among others, alteration of payment period/payable amount/the amount of instalments/rate of interest, sanction of additional credit facility/release of additional funds for a customer account. The Company considers the modification of the loan only before the loans gets credit impaired. In case of restructuring, the accounts classified as ''standard'' shall be immediately downgraded as non-performing assets/Stage 3 unless and other wise explicitly stated in the Circulars and Directions issued by Reserve Bank of India from time to time. Once an asset has been classified as restructured, it will remain restructured for a period of year from the date on which it has been restructured until the customer account demonstrates satisfactory performance during the specified period.

For upgradation of accounts classified as NonPerforming Assets due to restructuring, the instructions as specified for such cases as per the said RBI guidelines shall continue to be applicable.

One time restructuring (OTR) of loan accounts allowed by RBI vide circular resolution framework for COVID-19 related stress, all borrowers, wherein resolution plan has been invoked and completed within 90 days shall be continued to be classified as Stage 1.

3.7 Write-offs

Financial assets are written off when there are no prospects of recovery which are subject to management decision. If the amount to be written off is greater than the accumulated loss allowance, the difference is first treated as an addition to the allowance that is then applied against the gross carrying amount. Any subsequent recoveries are credited to other income in the statement of profit and loss.

3.8 Determination of fair value

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company has taken into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the measurement date. The Company considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date;

• Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument''s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads; and market-corroborated inputs.

• Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole.

3.9

(I) Recognition of other income

Revenue (other than for those items to which Ind AS 109 - Financial Instruments are applicable) is measured at fair value of the consideration

received or receivable. Ind AS 115 - Revenue from contracts with customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance found within Ind ASs.

The Company recognises revenue from contracts with customers based on a five step model as set out in Ind AS 115:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

Other interest income

Interest income on security deposits and FD is recognised on a time proportionate basis.

Fees and other income

Processing fees not considered in EIR, service income, bounce charges, penal charges and foreclosure charges etc. are recognised on point in time basis.

(II) Recognition of other expense

Borrowing costs

Borrowing costs are the interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

Interest expense on borrowed funds is calculated using the effictive interest rate (EIR) on respective financial instruments measured at amortised cost. The EIR is the rate that exactly discounts estimated future cash flows through the expected life of the financial instrument to the gross carrying amount of the financial liability.

Calculation of the EIR includes all fees paid that are incremental and directly attributable to the issue of the financial liability.

3.10 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3.11 Property, plant and equipment

Property, plant and equipment (''PPE'') are carried at cost, less accumulated depreciation and impairment losses, if any. The cost of PPE comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use and other incidental expenses. Subsequent expenditure on PPE after its purchase is capitalized only if it is probable that the future economic benefits will flow to the enterprise and the cost of the item can be measured reliably.

Depreciation is calculated using the straight line method to write down the cost of property and equipment to their residual values over their estimated useful lives as specified under schedule II of the Act. Land is not depreciated.

The estimated useful lives are, as follows:

i) Computer equipments - 3 years

ii) Office equipment - 5 years

iii) Furniture and fixtures - 10 years

Depreciation is provided on a pro-rata basis from the date on which such asset is ready for its intended use and residual value is considered as Nil.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

PPE is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income/expense in the statement of profit and loss in the year the asset is derecognised.

3.12 Intangible assets

The Company''s intangible assets include the value of software. An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to it will flow to the Company.

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values (Nil) over their estimated useful lives (three years) using the straight-line method, and is included in depreciation and amortisation in the statement of profit and loss.

3.13 Impairment of non-financial assets -property, plant and equipments and intangible assets

The carrying values of assets/cash generating units at the each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and if the carrying amount of these assets exceeds their recoverable amount, impairment loss is recognised in the statement of profit and loss as an expense, for such excess amount. The recoverable amount is the greater of the net selling price and value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the statement of profit and loss.

3.14 Leases

Ind AS 116 - Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The Company has opted for two recognition exemptions for lessees:

- leases of ''low-value'' assets (e.g., personal computers);

- and short-term leases (i.e., leases with a lease term of 12 months or less).

At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e. the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset (cost model).

The Company has Lease agreements for taking office premises along with furniture and fixtures as applicable and premises on rental basis range of 36 months to 60 months wherein the Company is a lessee.

3.15 Retirement and other employee benefits

Defined contribution plans

The Company''s contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

Defined benefit plans

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/retirement. The gratuity is paid @ 15 days salary for every completed year of service as per the Payment of Gratuity Act, 1972.

The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employee''s services.

As per Ind AS 19, the service cost and the net interest cost are charged to the statement of profit and loss. Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI.

Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia are recognised in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is 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.

Employee Stock Option Plans

Employee stock options have time and performance based vesting conditions. The fair value determined at the grant date of the options is expensed over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of options expected to vest.

The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the employee stock options plan reserve.

1. SIGNIFICANTACCOUNTING POLICIES

i. BASIS OF PREPARATION

The financial statements are prepared and presented in accordance with Indian Generally Accepted Accounting Principles (‘GAAP’) under the historical cost convention, on the accrual basis of accounting, unless otherwise stated, and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (the ‘Act’), the provisions of Schedule III to the Act and circulars and guidelines issued by RBI for NBFCs. The financial statements are presented in Indian rupees and rounded off to nearest lac.

II. USE OF ESTIMATES

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amount of assets, liabilities, expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to the accounting estimates is recognised prospectively in current and future periods.

iii. CURRENT - NON-CURRENT

classification

All assets and liabilities are classified into current or non-current.

Assets - An asset is classified as current when it satisfies any of the following criteria:

a. It is expected to be realised in the Company’s normal cycle:

b. It is expected to be realised within 12 months after the reporting date: or

c. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.

Liabilities - A liability is classified as current when it satisfies any of the following criteria:

a. It is expected to be settled in the Company’s normal cycle:

b. It is due to be settled within 12 months after the reporting date: or

c. The Company does not have any unconditional right to defer settlement of liability for at least 12 months after the reporting date.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle. Considering nature of the business, operating cycle cannot be determined, hence, the Company has adopted its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.

IV. PROPERTY, PLANT & EQUIPMENT, INTANGIBLE ASSETS, AND DEPRECIATION / AMORTISATION

a. Tangible assets

Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and / or accumulated impairment loss, if any. The cost of an item of tangible fixed asset comprises its purchase price, and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates. Tangible fixed assets under construction are disclosed as capital work-in-progress.

b. Intangible assets

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss. Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates.

c. leasehold improvements

Leasehold improvement includes all expenditure incurred on the leasehold premises that have future economic benefits. Leasehold improvements are written off over the period of lease.

d. Intangibles assets under development

Eligible expenditure incurred for development of intangible assets is carried as intangible assets under development where such assets are not yet ready for their intended use.

e. capital work-in-progress

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

f. depreciation and amortization

Depreciation / amoritisation is provided over the useful life of the assets, pro rata for the period of use, on a straight-line method. The useful life estimates prescribed in Part C of Schedule II to the Act have been considered as useful life for tangible assets. Intangible assets are amortised over a period as per management estimates of their useful life. Pursuant to this policy, the useful life estimates in respect of the following assets are as follows:

g. Impairment of assets

The Company assesses at the each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount is the greater of the net selling price and the value in use of those assets. Value in use is arrived at by discounting the estimated future cash flows to their present value based on an appropriate discount factor. If such recoverable amount of the asset or the recoverable amount of cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of the depreciable historical cost.

V. INVESTMENTS

Investments are classified into long term and current investments at the time of purchase of each investment.

Cost includes purchase cost, brokerage, stamp duty, etc. Discount received or premium paid on purchase of investments, as the case may be, is accreted or amortized, over the residual tenure of the security to give a constant yield to maturity.

Investments are recorded on a trade date and broken period interest is recognised in the balance sheet as interest accrued but not due.

a. Long term investments - Long term investments are investments intended to be held for a period of more than a year. Long term investments are carried individually at cost less provision for diminution, other than temporary, determined on an individual investment basis.

b. Current investments - Current investments are investments intended to be held for a period of less than a year. Current investments are stated at the lower of cost and fair value, determined on an individual investment basis.

Basis of valuation

In case of quoted debt instruments, where the quoted price is not available on the balance sheet date and unquoted debt instruments, fair value is determined based on quotes / market value provided by market intermediaries.

For investments in the schemes of mutual funds, Net Asset value ‘(NAV’) is considered as provided by the fund house.

Commercial papers are valued at carrying cost as per the requirements of RBI prudential norms.

VI. REVENUE RECOGNITION

a. Interest income - Interest income is recognised as it accrues on a time proportion basis taking into account the amount of principal outstanding and the interest rate applicable, except in the case of non-performing assets (‘NPAs’) where it is recognised upon realisation as per RBI Guidelines.

b. Processing fees - Processing fee is recognized upfront, when the amount becomes due.

c. Other finance charges - Cheque bounce charges, overdue interest, foreclosure fees, service charges, finance charges etc. are recognized provided it is not unreasonable to expect ultimate collection.

d. Gain / loss on sale of investments - Profit or loss on sale of investments is recognised on a trade date and determined on the basis of First-In-First-Out (FIFO).

VII. EMPLOYEE BENEFITS

a. Contribution to provident fund – The Company makes specified monthly contributions towards employee provident fund to government administered provident fund scheme which is a defined contribution plan. The Company’s contribution is recognized as an expense in the statement of profit and loss during the period in which the employee renders the related services.

b. Gratuity - The Company provides for the gratuity, which is a defined benefit plan. The plan provides for lumpsum payments to employees upon death while in employment or on separation from employment after serving for the stipulated period mentioned under ‘The Payment of Gratuity Act, 1972’. The Company accounts for liability of future gratuity benefits based on an external actuarial valuation on projected unit credit method carried out for assessing liability as at the reporting date. Actuarial gains / losses are immediately taken to the statement of profit and loss and are not deferred.

VIII. ACCOUNTING FOR LEASES

Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as operating leases. Operating lease rentals are recognized as an expense on a straight-line basis over the lease period.

IX. FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currency are recorded at the exchange rate prevailing on the dates of transaction. Monetary assets and liabilities denominated in foreign currency, remaining unsettled at the balance sheet date are restated at the closing exchange rates. Gain / loss arising on actual payments / realisations and year-end restatements are recognized in the statement of profit and loss.

X. PROVISIONS FOR NPAS AND DOUBTFUL DEBTS

NPAs including loans and advances are identified as sub-standard / doubtful / loss based on the tenor of default. NPA provisions are made based on management’s assessment of the degree of impairment and the level of provisioning and meets prudential norms for asset classification prescribed by RBI for Non Deposit Taking Non Systemically Important NBFCs. These provisioning norms are considered the minimum and additional provision is made based on perceived credit risk where necessary.

All contracts which as per management are not likely to be recovered are considered as loss assets and written-off as bad debts. Recoveries made from previously written off contracts are included in ‘Other Income’.

A general provision has been made on standard assets as prescribed by RBI for Non Deposit Taking Non Systemically Important NBFCs.

XI. OTHER PROVISIONS AND CONTINGENT LIABILITIES

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. 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. When 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.

Provisions are reviewed at the balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

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.

XII. CASH AND CASH EQUIVALENT

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and cash in hand and short term balances with original maturity of three months or less from the date of acquisition, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

XIII. TAXATION

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).

Current taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income-tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred taxes

Deferred tax is recognised in respect of timing differences between taxable income and accounting income i.e. differences that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future: however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets are reviewed as at the each balance sheet date and written down or written-up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realised.

XIV.SHARE ISSUE EXPENSES

Share issue expenses are adjusted against the Securities Premium Account as permissible under Section 52 of the Act to the extent any balance is available for utilisation in the Securities Premium Account. Share issue expenses in excess of the balance in the Securities Premium Account are expensed in the statement of profit and loss.

XV. EARNINGS PER SHARE

The basic earnings per share (‘EPS’) is computed by dividing the net profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the reporting year.

Number of equity shares used in computing diluted EPS comprises the weighted average number of shares considered for deriving basic earnings per share and also weighted average number of equity shares, which would have been issued on the conversion of all dilutive potential shares. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year except where the results would be anti-dilutive.

(a) Basis of Accounting

The financial statements have been prepared under the historical cost convention and on accrual basis of accounting and in accordance with applicable Accounting Standards and relevant presentational requirement of the Companies Act, 1956.

(b) Recognition of Income

(i) Sales of Shares & Securities

Sale of Shares are recognized as per contract note.

Rent Income is recognized as per contract between the parties.

(iii) Other income

(a) Other income is recognised on accrual basis except when realization of such Income is uncertain.

(b) The prudential norms for income recognition and provisioning in respect of Loans and Advances. have been made as per RBI norms for Non-Banking Financial Companies.

(c) Fixed Assets

(ii) These costs exclude Mod vat / Service tax credit if availed, but include The borrowing cost up to the date commercial production, wherever applicable.

(iii) As required by AS 28 on impai rment of Assets issued by ICAI, the Company has Carried out as exercise of identifying the assets that may have been impaired. There were no impaired assets during the year mainly on account of economic performance and alternative viability of such assets.

(d) Depreciation

(i) Depreciation has been provided on W ritten Down Val ue Method basis on all assets at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 and New Schedule II as per Companies Act, 2013.

(e) Investments

Investments are long-term investments and are stated at the cost of their acquisition. Long term investments are stated at cost less provisions, if any, for decline other Than temporary in their value.

Inventories are valued at lower of cost and net realizable value.

(g) Retirement Benefits (i) Gratuity

Gratuity is provided on the basis of actual valuation

(ii) Leave Encashment

The benefit of encashment of leave is given to the employees of the company during Their service and on retirement. The accumulated leave liability as at the end of the Year is provided for on actual valuation.

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent Periods.

*Deferred Tax assets are recognized only if there is a reasonable or virtual certainty That they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

Provisions and Contingent (I) Liability:

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate Can be made of the amount of the obligation.

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 When there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Not Available.

I Basis of Accounting - The Financial Statements are Prepared on Accrual Basis under the Historic Cost Convention and are in accordance with the requirements of the Companies Act 1956.

a) Interest on loans is accounted on annual basis and as per the terms and conditions and wherever receivable.

b) Dividend Income is accounted on receipt basis.

ii. Stock in Trade - The Securities held as stock in trade under current asset are valued at cost or fair value whichever is lower

iii. All expenses are accounted for on accrual basis.