Purshottam Investofin Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1 Corporate Information

Purshottam Investofin Limited ("the Company") was incorporated on November 04, 1988 under the Companies Act, 1956 and domiciled in India. The Company has its registered office at L-7, Menz. Floor, Green Park Extension, Delhi. The shares of the Company are listed on the Bombay Stock Exchange (BSE). The Company is primarily engaged in the lending business. It also engages in trading of securities.

The Company is a non-deposit taking non-systemically important Non-Banking Financial Company vide certificate No. B-14.01044 dated May 14, 2003. The Company has been classified as Base Layer as per Master Direction Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated 19 October 2023, as amended.

2 Basis of Preparation2.1 Statement of compliance

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (''Ind AS'') prescribed under Section 133 of the Companies Act, 2013 (the ''Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

2.2 Basis of measurement and presentation of the financial statements

The financial statements have been prepared on a historical basis except for certain financial instruments - measured at fair value at the end of each reporting period, as explained in the accounting policies below.

The financial statements are presented in Indian Rupees (K) which is the currency of the primary economic environment in which the Company operates (the ''functional currency''). The values are rounded to the nearest lakhs upto two decimals thereof except when otherwise indicated.

The Company presents the Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity in the order of liquidity as per the format prescribed under Division III of Schedule III to the Companies Act, 2013. The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the Financial Statements along with the other notes required to be disclosed under the notified Accounting Standards and regulations issued by the RBI.

Financial assets and financial liabilities are generally reported gross in the balance sheet. They are only offset and reported net when, in addition to having an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event, the parties also intend to settle on a net basis in all of the circumstances of the normal course of business or in the event of default.

2.3 Use of estimates, judgements and assumptions

The preparation of the standalone financial statements in conformity with Ind AS requires management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Actual results may differ from the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Following are the areas that involved a higher degree of estimates and judgement or complexity in determining the carrying amount of some assets and liabilities.

(a) Fair value of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. For further details about determination of fair value refer note 42.2 and note 42.3.

(b) Impairment of financial instruments

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.

Elements of the ECL models that are considered accounting judgements and estimates include:

- Bifurcation of the financial assets into different portfolios when ECL is assessed on collective basis.

- Company''s criteria for assessing if there has been a significant increase in credit risk

- Development of ECL models, including choice of inputs / assumptions used.

(c) Provisions and contingent liabilities

Provisions and contingencies are recognised in the period when they become probable that there will be an outflow of funds resulting from past operations or events that can be reasonably estimated. The timing of recognition requires judgment to existing facts and circumstances which may be subject to change.

3 Summary of Material Accounting Policies3.1 Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured and there exists reasonable certainty of its recovery.

A. Interest Income

Interest income on financial instruments measured at amortized cost/Fair value through other comprehensive income is recognized on a time proportion basis taking into account the amount outstanding and the effective interest rate ("EIR") applicable.

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.

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. Dividend Income

Dividend income is recognised in the statement of profit or loss on the date that the Company''s right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of dividend can be reliably measured. This is generally when the Board of Directors/shareholders approve the dividend and company holds shares on the dividend record date.

C. Fees and charges

Fees and charges include fees other than those that are an integral part of EIR. The fees included in this part of the Company''s Statement of Profit and Loss include, among other things, fees charged for servicing a loan. Fees and charges are recognized as income only when revenue is virtually certain which generally coincides with receipts.

D. Income from financial instruments at FVTPL

Income from financial instruments at FVTPL includes all gains and losses from changes in the fair value of financial assets and financial liabilities at FVTPL.

E. Other Income

Other income represents income earned from the activities incidental to the business and is recognized when the right to receive the income is established as per the terms of the contract.

3.2 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 written down value 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.

The estimated useful lives are, as follows:

(i) Vehicles - 8 years

(ii) Computer - 3 years

(iii) Office Equipment - 5 years

Depreciation is provided on a pro-rata basis from the date on which such asset is ready for its intended use. 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.

3.3 Impairment of assets other than financial assets -Property, Plant and Equipments

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.

3.4 Fair Value Measurement

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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

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.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

3.5 Recognition of other expenses - Borrowing Costs

All borrowing costs are charged to the Statement of Profit and Loss as incurred basis the effective interest rate method. Borrowing costs consists of interest and other cost that the Company incurred in connection with the borrowing of funds.

3.6 Financial Instruments

Financial assets and financial liabilities can be termed as financial instruments. Financial instruments are recognised when the Company becomes a party to the contractual terms of the instruments.

A. Recognition and Initial Measurement

Recognised financial assets and financial liabilities are initially measured at fair value. Transaction costs and revenues that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs and revenues directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Statement of Profit and Loss. Financial assets and financial liabilities are offset and the net amount is reported in the Balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business.

B. Classification and Subsequent measurement

The Company classifies its financial assets into the following measurement categories:

(i) Financial assets to be measured at amortised cost.

(ii) Financial assets to be measured at fair value through comprehensive income.

(iii) Financial assets to be measured at fair value through profit or loss.

All recognised financial assets that are within the scope of Ind AS 109 are required to be subsequently measured at amortised cost or fair value on the basis of the entity''s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Accordingly, the financial assets are measured as follows:

(a) Financial assets carried at amortised cost

Financial assets that meet the following criteria are measured at amortised cost:

- the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

For the purpose of SPPI test, principal is the fair value of the financial asset at initial recognition. The principal amount may change over the life of the financial asset (e.g. if there are repayments of principal). Interest consists of consideration for the time value of money, for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin. The SPPI assessment is made in the currency in which the financial asset is denominated.

Contractual cash flows that are SPPI are consistent with a basic lending arrangement. Contractual terms that introduce exposure to risks or volatility in the contractual cash flows that are unrelated to a basic lending arrangement, such as exposure to changes in equity prices or commodity prices, do not give rise to contractual cash flows that are SPPI. An originated or an acquired financial asset can be a basic lending arrangement irrespective of whether it is a loan in its legal form.

An assessment of business models for managing financial assets is fundamental to the classification of a financial asset. The Company determines the business models at a level that reflects how financial assets are managed together to achieve a particular business objective. The Company''s business model does not depend on management''s intentions for an individual instrument, therefore the business model assessment is performed at a higher level of aggregation rather than on an instrument by-instrument basis.

Debt instruments that are subsequently measured at amortised cost are subject to impairment.

(b) Financial assets measured at fair value through other comprehensive income (FVTOCI)

Financial Assets that meet the following criteria are measured at fair value through other comprehensive income:

- the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

- the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Interest income is recognised in Statement of profit and loss for FVTOCI financial assets. Other changes in fair value of FVTOCI financial assets are recognised in other comprehensive income. When the asset is disposed of, the cumulative gain or loss previously accumulated in reserve is transferred to Statement of Profit and Loss.

(c) Financial assets measured at fair value through profit or loss (FVTPL)

Instruments that do not meet the amortised cost or FVTOCI criteria are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement recognised in the Statement of Profit and Loss. The gain or loss on disposal is recognised in the Statement of Profit and Loss.

(d) Equity investments

All equity investments in scope of Ind AS 109, Financial Instruments are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103, Business Combination Acquisition Method applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognised in OCI. There is no recycling of the amounts from OCI to the Statement of Profit or Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. For equity instruments which are classified as FVTPL all subsequent fair value changes are recognised in the Statement of Profit and Loss.

(e) Impairment of financial assets

Company recognizes loss allowances using the Expected Credit Loss ("ECL") model for the financial assets which are not measured at fair valued through profit and loss. ECL is calculated using a model which captures portfolio performance over a period of time. ECL is a probability weighted estimate of credit losses. A credit loss is the difference between the cash flows that are due to an entity in accordance with the contract and the cash flows that the entity expects to receive discounted at the original EIR.

ECL is required to be measured through a loss allowance at an amount equal to:

- 12-month ECL, i.e. ECL that result from those default events on the financial instrument that are possible within 12 months after the reporting date (referred to as Stage 1); or

- full lifetime ECL, i.e. lifetime ECL that result from all possible default events over the life of the financial instrument (referred to as Stage 2 and Stage 3).

A loss allowance for full lifetime ECL is required for a financial instrument if the credit risk on that financial instrument has increased significantly since initial recognition. For all other financial instruments, ECLs are measured at an amount equal to the 12-month ECL.

The company has established a policy to perform an assessment at the end of each reporting period whether a financial instrument''s credit risk has increased significantly since initial recognition by considering the change in the risk of default occurring over the life of the financial instruments. Based on the above process, the company categorises 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 month ECL. Stage 1 loans also include facilities where the credit risk has improved and the loan has been reclassified from Stage 2/ Stage 3 to Stage 1.

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

Stage 3: When loans shows significant increase in credit risk and are considered credit-impaired, the company records an allowance for the life time expected credit losses.

The Company measures ECL on an individual basis, or on a collective basis for portfolios of loans that share similar economic risk characteristics. This expected credit loss is computed as EAD*PD*LGD which takes into account historical credit loss experience and forward looking information. Key elements of ECL computation are outlined below:

- Exposure at Default (EAD) is the maximum exposure as on the reporting date. It includes principal, interest and sanctioned but undisbursed amount (with certain exceptions for Stage 3 & SICR cases). Interest also includes interest accrued but not due.

- Probability of default ("PD") is an estimate of the likelihood that customer will 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 de-recognised and is still in the portfolio. PD is calculated based on historical default rate summary of past years using historical analysis.

Loss given default ("LGD") estimates the loss which Company incurs post customer default. It is computed using historical loss, recovery experience and value of collateral. It is usually expressed as a percentage of the Exposure at default ("EAD").

Definition of Default

Critical to the determination of ECL is the definition of default. The definition of default is used in measuring the amount of ECL and in the determination of whether the loss allowance is based on 12-month or lifetime ECL, as default is a component of the probability of default ("PD") which affects both the measurement of ECLs and the identification of a significant increase in credit risk.

The Company considers a financial instrument as defaulted when the borrower becomes 120 days past due on its contractual payments. Such instruments are considered as Stage 3 (credit-impaired) for ECL calculations and upgraded to Stage 1 only on the event of clearance of all overdue amounts of the customer.

As per RBI''s Scale-Based Regulation framework dated October 22 2021, NBFCs in the Base Layer were provided a glide path for implementing revised NPA classification norms. Accordingly, the Company has adopted these norms in a phased manner and will align with the 90 days NPA recognition norm by March 31, 2026.

(f) Financial Liabilities

All financial liabilities are recognised initially at fair value net of transaction fees or costs that are directly attributable and incremental to the origination/acquisition of the financial liabilities except fair value in the case of financial liabilities recorded at fair value through profit or loss. Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortised cost. The carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

(g) Derecognition of financial assets and financial liabilities Financial assets

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. 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.

(h ) Assignment Transactions

Transfer of loans through assignment transaction can be made only after continuing involvement in loans i.e. retaining a minimum specific percentage of loan but without retaining any substantial risk and reward in the loan assigned. The assigned portion of loans is derecognised and gains/losses are accounted for, only if the company transfers substantially all risks and rewards specified in the underlying assigned loan contracts. Gain/loss arising on such assignment transactions is recorded upfront in the Statement of Profit and Loss and the corresponding loan is derecognised from the Balance Sheet immediately. Further, if the transfer of loan qualifies for derecognition, entire interest spread at its present value (discounted over the estimated life of the asset) is recognised on the date of derecognition itself as interest strip receivable (interest strip on assignment) and correspondingly presented as gain/loss on derecognition of financial asset.

(i) Derivative financial instruments

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and the nature of the hedged item.

(j) Undrawn loan commitments

Undrawn loan commitments are commitments under which, over the duration of the commitment, the Company is required to provide a loan with pre-specified terms to the customer. Undrawn loan commitments are in the scope of the ECL requirements.

3.7 Employee Benefits

A. Short-term employee benefits

Employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

B. Retirement benefit and other employee benefits

The Company has not made any provision for gratuity liability in the current or previous financial years, as the number of employees remains below the threshold of applicability of the Payment of Gratuity Act, 1972. Consequently, no actuarial valuation has been obtained. Further, in the opinion of the management, the potential liability, if any, is not expected to be material to the financial statements. And, no provision has been made for leave encashment benefits, as the Company does not have a policy for encashment of unutilized leave by employees.

3.8 Leases

The Company has elected not to apply the recognition requirements of Ind AS 116 to short-term leases (lease term of 12 months or less). Lease payments associated with these leases are recognized as an expense on either a straight-line basis over the lease term or another systematic basis.

3.9 Provisions, contingent liabilities and contingent assetsA. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. When the effect of the time value of money is material, the Company determines the level of provision by discounting the expected cash flows at a pre-tax rate reflecting the current rates specific to the liability. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

B. Contingent liabilities

A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or; present obligation that arises from past events where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability are disclosed as contingent liability and not provided for.

C. Contingent assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are neither recognised nor disclosed in the financial statements.

3.10 Income Taxes

A. Current tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from, or paid to, the taxation authorities. Current tax is the amount of tax payable on the taxable income for the period as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

B. Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary difference can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

A deferred tax asset is recognised for the carry forward of unused tax losses and accumulated depreciation to the extent that it is probable that future taxable profit will be available against which the unused tax losses and accumulated depreciation can be utilised.

3.11 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. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents.

3.12 Earning per share

The Company presents basic and diluted earnings per share ("EPS") data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.

3.13 Dividend

Final dividend on equity shares are recorded as a liability on the date of the approval by the shareholders and interim dividend are recorded as liability on the date of declaration by the Company''s Board of Directors. A corresponding amount is recognised directly in Other Equity.

3.14 Statement of Cash Flows

Cash flows are reported using the indirect method as prescribed under Ind AS 7, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

3.15 Recent Accounting Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2025, MCA has notified Ind AS 117 - Insurance Contracts and amendments to Ind As 116 - Leases, relating to sale and lease back transactions, applicable from April 1, 2024. The Company has assessed that there is no impact on its financial statements.

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Mar 31, 2024

2. SIGNIFICANT ACCOUNTING POLICIES

a. Basis of preparation of financial statements

The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the
Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as
amended from time to time) issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section
133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered
Accountants of India (ICAI) are also applied along with compliance with other statutory promulgations which require a
different treatment. Any directions issued by the RBI or other regulators are implemented as and when they become
applicable.

b. Presentation of Financial Statement

The Financial Statement are prepared and presented in the format prescribed in the Division III to Schedule III to the
Companies Act, 2013 ("the Act") applicable for Non-Banking Financial Companies ("NBFC"). The Statement of Cash
Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure
requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule
III to the Act, are presented by way of notes forming part of the financial statements along with the other notes
required to be disclosed under the notified accounting Standards and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

c. Functional and presentation currency

These financial statements are presented in Indian rupees in lakhs (INR or Rs.) which is also the Company''s functional
currency. All values are rounded-off to the nearest lakhs with two decimals, unless otherwise stated.

d. Use of estimates

The preparation of financial statements in conformity with Ind AS requires management to make estimates,
judgements and assumptions that affect the application of accounting policies and the reported amounts of assets and
liabilities (including contingent liabilities) and disclosures as of the date of the financial statements and the reported
amounts of revenue and expenses for the reporting period. Actual results could differ from these estimates. Accounting
estimates and underlying assumptions are reviewed on an ongoing basis and could change from period to period.
Appropriate changes in estimates are recognized in the periods in which the Company becomes aware of the changes
in circumstances surrounding the estimates. Any revisions to accounting estimates are recognized prospectively in the
period in which the estimate is revised and future periods and, if material, their effect are disclosed in the notes to the
financial statements.

e. Income and Expenditure

Income and Expenditure are accounted for on accrual basis except bank charges and interest Income on bad & doubtful
debts which is recognized as per IRAC norms of RBI guidelines.

f. Property Plant & Equipment

Property Plant & Equipment are stated at cost of acquisition less accumulated depreciation and impairment losses, if
any. The cost of property, Plant and Equipments comprises purchase price and any attributable cost of bringing the

asset to its working condition for its intended use.

The Company has not acquired any Property, Plant and Equipment in a businesscombination. The Company has not
revalued its Property, Plant and Equipment.

g. Intangible Assets

Company doesn''t have any intangible assets during the year 2023-24.

h. Depreciation

Depreciation is provided on a written down value on the basis useful life specified in Schedule II to the Companies Act,
2013. Depreciation is charged on a pro-rata basis for assets purchased/ sold during the year. Depreciation is charged
from the date the asset is ready to use or put to use, whichever is earlier. In respect of assets sold, depreciation is
provided up to the date of disposal.

i. Finance Costs

Finance costs include interest and other ancillary borrowing costs. Ancillary costs include issue costs such as loan
processing fee, arranger fee and stamping expense etc. Finance costs are charged to the Statement of Profit and Loss.

j. Investments

Investment has been valued and bifurcated in accordance with the Indian Accounting Standards (Ind''AS). However, No
provision is required on account of permanent diminution in the value of investment held.

k. Inventories

Inventories are valued at fair market value through comprehensive income in accordance with Ind-AS. Changes in
inventory recognized in profit and loss account is based on cost. The cost of inventories includes all purchase costs and
other expenses incurred to acquire the inventories. Additionally, inventories are valued using the FIFO (First-In, First-
Out) method.

l. Income Tax Expense

Provision for Income tax expense is determined as the amount of tax payable in respect of taxable income for the year
and in accordance with the Income-tax Act, 1961.

m. Taxation

i) Provision for current tax is made with reference to taxable income computed for the accounting period for which the
financial statements are prepared by applying the tax rates and laws that are enacted or substantively enacted at the
Balance sheet date. The tax is recognized in statement of profit and loss, except to the extent that it related to items
recognized in the other comprehensive income (OCI) or in other equity.

ii) Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit.

n. Employee Benefits

i) Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering service are classified as short term employee
benefits. Benefits such as salaries, allowances, short term compensated absences and expected cost of other benefits
is recognised in the period in which the employee renders the related service.

ii) Post-employment benefits:

Company has not made any Provision for liability of future payment of gratuity in the current year as well as in previous
year and has not obtained actuarial valuation report as the number of employees is less than 10. Further, no provision
has been made for leave encashment benefits, as the company does not have a policy of encasing leaves of employees.

o. Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased asset are
classified as operating leases. Operating lease charges are recognised as an expense in the Statement of Profit and Loss
in the financial year to which it relates.

p. Earnings per share

The basic earnings per share are computed by dividing the net profit/ (loss) after tax attributable to equity shareholders
for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share
are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding
during the year, except where the results would be anti-dilutive.

q. Impairment of non-financial Assets:

The carrying amount of any property, plant and equipment with finite lives are reviewed at each balance sheet date, if
there is any indication of impairment based on internal / external factors. An asset is impaired when the carrying
amount of the asset exceeds the recoverable amount. There are no indicators for impairment of any property, plant
and equipment during the year.

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Mar 31, 2015

1. BACKGROUND

M/S Purshottam Invest of in Limited ("The Company") was incorporated in India on 04TH day of November 1988 under the company's act 1956. The company is registered with Reserve Bank of India (RBI) as a Non-Banking Financial Company vide certificate No.B-14-01044 dated 14th May 2003. The company is primarily engaged in the business of NBFC (Non-Accepting Public Deposits).

a. Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention method, on the accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles ("GAAP") in India, and Accounting Standards Specified under Section 133 of the companies act 2013 (the 'act'), read with rule 7 of the companies (Accounts) Rules ,2014 (as amended). The accounting policies have been consistently applied by the company.

Previous year figures have been regrouped/ recast to make them comparable with figures of current year.

b. Use of estimates

The preparation of financial statements in conformity with the Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any change in the accounting estimates is recognized prospectively in the current and future periods.

c. Revenue Recognition

Revenue is recognized on accrual basis

d. Fixed assets

Tangible Assets

Fixed assets are stated at cost of acquisition less accumulated depreciation and impairment losses if any. The cost of fixed assets comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Intangible Assets

Internally generated intangible asset arising from development activity are recognized only on demonstration of its feasibility, the intention and ability of the company to complete, use or sell it. The intangible assets (if any) are eroded at cost and are carried at cost less accumulated amortization.

e. Depreciation

Depreciation on fixed assets ought to be in accordance with the enactment of the Companies Act 2013 (the 'Act'), the Company, effective 1st April 2014, had to review the estimated useful lives of its fixed assets, generally in accordance with the provisions of Schedule II to the Act, as follows:

However, depreciation has been charged for the first 9 months of the year according to Schedule XIV of the Companies Act, 1956 in the absence of clarity on the application of Schedule II of Companies Act, 2013 and the fixed assets has been disposed off at scrap value on 01.01.2015 resulting in NIL fixed assets as on 31.03.2015 and NIL depreciation for the 4th quarter of the FY 2014-15.

Moreover, the amount of depreciation charged during the year is not material which could affect the true and fair view of the state of affairs of the company for the current financial year

f. Investments

Investments held for maturity (Long term) are stated at cost & any decline other than temporary, in the value of such investments is charged to the statements of Profit & Loss. The carrying amount for Investment held for trade is the lower of cost and fair value.

g. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost of inventories comprises all cost of purchase, and other costs incurred in acquiring the inventories. Further the inventories are valued on FIFO basis.

h. Income Tax Expense

Provision for Income tax expense is determined as the amount of tax payable in respect of estimated taxable income for the year and in accordance with the Income-tax Act, 1961. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future.

i. Employee Benefits:

Company has not made any Provision for liability of future payment of gratuity as the company does not fulfill the criteria of its provisions.

No provision has been made for leave encashment benefits, as the company does not have a policy of encasing leaves of employees.

j. Leases

Lease rentals (if any) in respect of operating lease arrangements are recognized as an expense in the profit & loss account on accrual basis.

k. Earnings per share

The earnings considered in ascertaining the Company's earnings per equity share comprises the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of equity shares outstanding during the year.

l. Provisions & Contingencies

A provision is recognized when the company has a present obligation as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. Contingent liabilities and contingent assets are neither recognized nor disclosed in the financial statements.

m. Foreign exchange transactions

Foreign currency transactions (if any) are recorded using the exchange rates prevailing on the dates of the respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognised in the Profit and Loss Account. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at year end rates. The resultant exchange differences are recognised in the profit and loss account. Non monetary assets are recorded at the rates prevailing on the date of transaction.

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Mar 31, 2014

1.1. Basis of preparation of Accounts

The financial statements have been prepared under the historical cost convention in accordance with generally accepted accounting policies in India. The accounting standards notified by the Companies Act 1956 and the provisions of the Companies Act 1956, as adopted consistently by the Company.

The company follows the mercantile system of accounting and recognizes items of incomes and expenditure on accrual basis.

1.2. Presentation and disclosure of financial statements

The financials have been prepared and presented as per the revised Schedule VI notified under the companies Act 1956.The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements.

1.3 Use of Estimates

The preparation of financial statements is in conformity with general accepted accounting principles which require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Actual results could differ from those estimates.

1.4. Taxation

Provision for current tax is determined as the amount of tax payable in respect of estimated taxable income for the year and in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized using the enacted tax rates and laws as on the Balance Sheet date, subject to the consideration of prudence in respect of deferred tax assets on all timing differences, between taxable income and accounting income that originate in one period and are capable of reversal in one of more subsequent periods.

1.5. Earnings per share

The earnings considered in ascertaining the Company''s EPS comprises the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period.

1.6. Investments

Investments are stated at cost.

1.7. Revenue Recognition

Revenue is recognized to the extent that it can be reliably measured and is probable that the economic benefits will flow to the company

1.8. Provisions & Contingencies

A provision is recognized when the company has a present obligation as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. Contingent Liabilities and Contingent Assets are neither recognized nor disclosed in the financial statements.