2.6 Provisions, Contingent Liabilities and Contingent Assets, legal or constructive
Provisions are recognised when there is a present obligation as a result of a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at
the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market
assessments of the time value of money and the risk specific to the liability. The increase in the provision due to the passage of time is
recognised as interest expense.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate,
the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance
cost.
Present obligations arising under onerous contracts are recognised and measured as provisions.
A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, 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
a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a
reliable estimate of the amount cannot be made. When there is a possible obligation or a present obligation and the likelihood of outflow of
resources is remote, no provision or disclosure for contingent liability is made.
Contingent Assets are not recognised but are disclosed when an inflow of economic benefits is probable
2.7 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks and on hand, which are subject to an insignificant risk of change in value.
2.8 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another
entity.
(a) Financial assets
Classification
The Company classifies its financial assets in the following measurement categories:
a) those to be measured subsequently at fair value (either through other comprehensive income (FVOCI), or through profit or loss (FVTPL)),
and
b) those measured at amortised cost.
c) Equity Instruments through Other Comprehensive Income(OCI)
The classification depends on the Company’s business model for managing the financial assets and the contractual terms of cash flows.
For assets measured at fair value, gains and losses is either recorded in the statement of profit and loss or other comprehensive income. For
investments in debt instruments, this depends on the business model in which the investment is held. For investments in equity instruments,
this depends on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income. The Company reclassifies the debt investments when and only when the
business model for managing those assets changes.
Initial recognition and Measurement
At initial recognition, the Company measures a financial asset at its fair value through profit or loss and through OCI or at amortised
cost(cost). Transaction costs of financial assets carried at fair value through profit or loss are expensed in the statement of profit and loss.
Subsequent measurement:
Measured at FVTOCI: A debt instrument is measured at the FVTOCI if both the following conditions are met:
- the objective of the business model is achieved by both collecting contractual cash flows and selling the financial assets; and
- the asset’s contractual cash flows represent SPPI.
Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair
value with any gains or losses arising on remeasurement recognized in other comprehensive income, except for impairment gains or losses
and foreign exchange gains or losses. Interest calculated using the effective interest method is recognized in the statement of profit and loss
in investment income.
Measured at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as FVTPL. In addition, the company may elect to designate a debt instrument,
which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. Debt instruments included within the FVTPL category are measured at
fair value with all changes recognized in the statement of profit and loss.
Measured at Amortized Cost: A debt instrument is measured at the amortized cost if both the following conditions are met:
- the asset is held within a business model whose objective is achieved by collecting 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
(SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.
Measured at cost: Investment in Associate is measured at cost.
Equity Instruments measured at FVTOCI: All equity investments in scope of Ind AS - 109 are measured at fair value. Equity instruments which
are, held for trading 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. In case the company decides to classify an equity instrument as at FVTOCI,
then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI
to P&L, even on sale of investment.
Derecognition of financial assets
A financial asset is derecognised only when
• The Company has transferred the rights to receive cash flows from the financial asset or
• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to
one or more recipients.
On derecognition of investments measured through OCI, cumulative gain/(loss) is transferred to retained earnings
Fair value of Financial Instruments
In determining the fair value of financial instruments, the Company uses a variety of method and assumptions that are based on market
conditions and risk existing at each reporting date. The methods used to determine fair value includes discounted cash flow analysis and
available quoted market prices. All method of assessing fair value result in general approximation of fair value and such value may never
actually be realised.
Impairment of financial assets
The Company assesses impairment based on expected credit loss (ECL) model to the following:
ia) Financial assets at amortised cost
ib) Financial assets measured at fair value through Other Comprehensive income
The company follows ‘simplified approach’ for recognition of impairment loss allowance. The application of simplified approach does not
require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting
date, right from its initial recognition.
Historical loss experience used to determine the impairment loss allowance on the portfolio of trade receivables. At every reporting date, the
historical observed default rates are updated and changes in the forward looking estimates are analysed.
For recognition of impairment loss on financial assets and risk exposure, the company determines that whether there has been a significant
increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the
instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to
recognising impairment loss allowance based on 12-month ECL.
Write-off policy
The Company writes off financial assets, in whole or part, when it has exhausted all practical recovery efforts and has concluded that there is
no reasonable expectation of recovery.
(b) Financial liabilities
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction
costs.
Initial Recognition and Measurement:
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly
recognised in Statement of Profit or Loss as finance cost.
Subsequent Measurement:
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year
from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
Offsetting financial instruments
Financial assets and 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 and in the
event of default, insolvency or bankruptcy of the Company or the counterparty.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost
using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised
in the statement of profit and loss over the period of the borrowings using the effective interest method. Fees paid on loan facilities are
recognised as transaction costs of the borrowings to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.
2.9 Earnings Per Share
Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted
average number of equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity
holders adjusted for the effects of potential equity shares by the weighted average number of equity shares outstanding during the year plus
the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity
shares.
2.10 Impairment of non-financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher on an asset’s fair value less costs of disposal and value in use. For the purpose of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows which are largely independent of the cash flows from other assets or
group of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
2.11 Critical estimates and judgements
The Company makes estimates and assumptions that affect the amounts recognised in the Ind AS financial statements, and the carrying
amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on
management’s experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. Management also makes certain judgements, apart from those involving estimations, in the process of applying the accounting
policies. Judgements that have most significant effect on the amount recognised in the Ind AS financial statements and estimates that can
cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include the following;
Estimation of fair value of unlisted investment
The fair value of financial instrument that are not traded in an active market is determined using valuation techniques. The Company uses its
judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each
reporting period and also for, details of key assumptions used and the impact of changes to these assumptions.
Current Tax
Current tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the applicable tax
rates and the provisions of the Income Tax Act, 1961.
Deferred Tax
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be
available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits,
reference is made to the latest available profit forecasts. Where the temporary differences are related to losses, relevant tax law is
considered to determine the availability of the losses to offset against the future taxable profits. Recognition therefore involves judgement
regarding the future financial performance of the Company.
Provisions and Contingencies
Provisions and contingencies are based on Management’s best estimate of the liabilities based on the facts known at the balance sheet date.
2.12 Recent Pronouncements
New and revised standards adopted by the Company
Effective 1st April, 2023, the Company has adopted the amendments vide Companies (Indian Accounting Standards) Amendment Rules, 2023
notifying amendment to existing Indian Accounting Standards. These amendments to the extent relevant to the Company's operations include
amendment to Ind AS 1 “Presentation of Financial Statements” which requires the entities to disclose their material accounting policies
rather than their significant accounting policies, Ind AS 8 “Accounting Policies, Changes in Accounting Estimates and Errors” which has
introduced a definition of ‘accounting estimates’ and include amendments to help entities distinguish changes in accounting policies from
changes in accounting estimates. Further, consequential amendments with respect to the concept of material accounting policies have also
been made in Ind AS 107 "Financial Instruments: Disclosures" and Ind AS 34 “Interim Financial Reporting”. There are other amendments in
various standards including Ind AS 101 "First-time Adoption of Indian Accounting Standards", Ind AS 103 "Business Combinations, Ind AS 109
"Financial Instruments " Ind AS 115 “Revenue from Contracts with Customers”, Ind AS 12 “Income Taxes” which has narrowed the scope of the
initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences and Ind AS
102 “Share-based Payment” which have not been listed herein above since these are either not material or relevant to the Company.
Standards issued but not yet effective:
Ministry of Corporate Affairs("MCA") notifies new standards or amendments to the existing standards under Companies(Indian Accounting
Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to
the existing standards applicable to the Company.
2.13 Rounding off amounts
All the amounts disclosed in the Financial Statements and notes have been rounded off to the nearest lakhs (with two places of decimal) as
per requirement of Schedule III, unless otherwise stated).
Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price including within level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which
maximize the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to
fair value an instrument are observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is determined using generally accepted
pricing models based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit
risk of counterparty. This is the case with listed instruments where market is not liquid and for unlisted instruments.
The management consider that the carrying amounts of financial assets (other than those measured at fair values) and liabilities
recognized in the financial statements approximate their fair value as on March 31, 2024 and March 31, 2023.
There has been no change in the valuation methodology for Level 3 inputs during the year. There were no transfers between Level 1
and Level 2 during the year.
C. Financial risk management objectives and policies
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company
continues to focus on a system-based approach to business risk management. The Company’s financial risk management process seeks
to enable the early identification, evaluation and effective management of key risks facing the business. Backed by strong internal
control systems, the current Risk Management System rests on policies and procedures issued by appropriate authorities; process of
regular reviews / audits to set appropriate risk limits and controls; monitoring of such risks and compliance confirmation for the same.
(i) Market risk
Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of changes in
market conditions. Market risk broadly comprises three types of risks namely currency risk, interest rate risk and price risk
(for commodities). The above risks may affect the Company’s income and expenses and / or value of its investments. The
Company’s exposure to and management of these risks are explained below-
(a) Interest rate risk
There is no floating rate borrowing availed by the Company during the year as well as in previous year, hence no interest
rate risk arrise relating to financial liabilities.
(b) Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate due to changes in
foreign exchange rates. Currently the Company does not have any foreign currency exposure.
(c) Price Risk :
Price risk is the risk of changes in price due to market condition. The Company does not have any financial asset which have
price risk.
(ii) Credit risk
Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to the contractual
terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of credit worthiness
as well as concentration risks.
Financial instruments that are subject to credit risk and concentration thereof principally consist of Interest receivables,
loans receivables, investments in preference share and other financial assets. None of the financial instruments of the
Company result in material concentration of credit risk.
(iii) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The
Company's principal sources of liquidity are cash and cash equivalents, working capital borrowings, the cash flow that is
generated from operations and proceeds of maturing financial assets. The Company manages its liquidity risk by ensuring, as
far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Accordingly, no liquidity risk is
perceived.
20 Contingent Liabilities and Commitments
Claim against the Company not acknowledged as debts is Rs. Nil (31.03.2023 Nil)
21 Segment Reporting:
The Company is engaged in single business segment & is operating within single geographical area in India.
22 The Company is not having any dues (including interest) to Micro, Small and Medium Enterprises as on the reporting
date.
23 As per terms of employment, leave salary and other retiral benefits are not payable to the employees of the Company,
accordingly no disclosure is required under Indian Accounting Standard 19 on " Employees Benefits".
24 The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
25 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
26 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
27 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
28 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
29 The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey
or any other relevant provisions of the Income Tax Act, 1961).
30 The Company does not have any transactions with companies struck off by the Registrar of Companies.
31 The Company does have any subsidiary or associate, therefore clause (87) of section 2 of the Act read with Companies
(Restriction on number of Layers) Rules, 2017 is not applicable to the Company.
32 Previous year figures have been reclassified/regrouped wherever necessary.
For RAY & RAY For and on behalf of the Board of Directors of
Chartered Accountants Easy Fincorp Limited
Firm Registration No.301072E
Amitava Chowdhury Atul Lakhotia Akhilanand Joshi
Partner Director Director
Membership No. 056060 DIN:00442901 DIN:07041418
Subir Das Asish Kumar Chaudhuri
Chief Financial Officer Chief Executive Officer
Place: Kolkata Giriraj Ratan Kothari
Date: 22nd May 2024 Company Secretary
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