The following discussion is intended to convey managements perspective on our financial condition and results of operations for the Fiscals ended March 31, 2023, 2022 and 2021. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our Restated Financial Statements, including the schedules, notes and significant accounting policies thereto, and the sections entitled
"Summary of Restated Financial Statements" and "Financial Information" on pages 63 and 272, respectively. Our Restated Financial Statements have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the ICAI Guidance Note. Our financial statements are prepared in accordance with Ind AS, notified under the Companies (Indian Accounting Standards) Rules, 2015, and read with Section 133 of the Companies Act, 2013 to the extent applicable. Ind AS differs in certain material respects from IFRS and U.S. GAAP and other accounting principles with which prospective investors may be familiar. Accordingly, the degree to which the financial statements prepared in accordance with Ind AS included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Ind AS accounting policies. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial information included in this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial information to IFRS or U.S. GAAP. Any reliance by persons not familiar with Ind AS accounting policies on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.
Unless the context otherwise requires, in this section, references to "we", "us" or "our" refers to our Company, Acme Fintrade (India) Limited. Unless the context otherwise requires, references to our "customer" or "customers" shall be deemed to include affiliates or group entities of our customers, as applicable.
This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 30. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward-looking statements, kindly refer to the section entitled "Forward-Looking Statements" on page 18. Unless otherwise stated or unless the context otherwise requires, the financial information of our Company used in this section has been derived from the Restated Financial Statements.
Our fiscal year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular fiscal year are to the 12-month period ended March 31 of that year.
Overview
We are a non-banking finance company ("NBFC") incorporated in the year 1996 registered with the Reserve Bank of India as a Non-systemically important non-deposit taking company with over two decades of lending experience in rural and semi-urban geographies in India. We are primarily engaged in rural and semi-urban centric lending solutions to look after the needs and aspirations of rural and semi-urban populace. Our portfolio includes Vehicle Finance and Business Finance Products to small business owners. We have a long history of serving rural and semi-urban markets with high growth potential and have maintained a track record of financial performance and operational efficiency through consistently high rates of customer acquisition and retention and low cost expansion into underpenetrated areas. Therefore, we strategically focus on clients in the rural and semi-urban sector.
Our digital lending platform www.aasaanloans.com is currently under development and will be rolled out in a phased manner. Initially the vehicle loans would be launched and the Business Finance would be rolled out for making the operational process easier and faster. We have taken a baby step towards the same by launching a website aasaanloans.com. This differentiated approach aids in the identification of businesses with low risk and high promise, thereby providing opportunities for those who previously had no access to long or short-term financing.
We have our footprints in rural and semi-urban geographies in 4 Indian states Rajasthan, Maharashtra, Madhya Pradesh and Gujarat through registered office located at Udaipur, Rajasthan, 9 branches and 23 points of presence including digital and physical branches having served over 200,000 customers till date.
We are primarily engaged in rural and semi-urban centric lending solutions to look after the needs and aspirations of rural and semi-urban populace. Our portfolio includes Vehicle Finance and Business Finance Products to small business owners.
Statewise revenue of our Company is mentioned below:
(Rs in lakhs)
| State | For the The March 2021 | For the The March 2022 | For the The March 31, 2023 | |||
| Interest Income | % | Interest Income | % | Interest Income | % | |
| Gujarat | 677.25 | 8.05% | 566.35 | 8.73% | 345.06 | 5.47% |
| Madhya Pradesh | 489.55 | 5.82% | 370.78 | 5.72% | 394.11 | 6.24% |
| Maharashtra | 218.58 | 2.60% | 119.27 | 1.84% | 246.18 | 3.90% |
| Rajasthan | 7,031.48 | 83.55% | 5,430.54 | 83.72% | 5,325.64 | 84.39% |
| Grand Total | 8,416.86 | 100.00% | 6,486.94 | 100.00% | 6,310.99 | 100.00% |
For further details, see "Our Business" beginning on page 207.
Our Key Borrowers
1. Individuals
2. Small business owners
As on March 31, 2023, the Company reported an AUM of approximately 35,416.11 lakhs and Net Worth at
20,478.11 lakhs respectively. The registered GNPA and NNPA were 4.57 % and 3.45 % and the PAT for the period ended March 31, 2023 is 1,580.27 lakhs.
Significant Factors Affecting Our Results of Operations
Our results of operations have been, and will be, affected by many factors, some of which are beyond our control. The following is a discussion of certain factors that have had, and will continue to have, a significant effect on our financial condition and results of operations:
Interest rate volatility
Our results of operations depend substantially on our Net Interest Income and our ability to maintain and improve our Net Interest Margin. Any adverse change to Net Interest Margins, yield or cost of borrowing will have a significant impact on our results of operations. Interest earned is the largest component of our total income, of our total income in Fiscal 2021, 2022 and 2023. Changes in RBI repo rates could affect the interest charged on interest-earning assets and the interest rates paid on interest-bearing liabilities. Adverse conditions in the global and Indian economy resulting from economic dislocations or liquidity disruptions may adversely affect availability of credit, and decreased liquidity may lead to an increase in interest rates. Interest rates have a substantial effect on our cost of funding, our business volumes and our profit margins. Declining interest rates may lead to increased prepayments and repricing of our loans as borrowers seek to take advantage of the more attractive interest rate environment to reduce their borrowing costs. Declining interest rates may also lead to a greater demand for additional borrowings as business owners seek to take advantage of lower interest rates, resulting in an increase in volume of financing business. Conversely, when interest rates rise, there are typically less prepayments and less pressure to reprice loans; there is also less demand for new funds, resulting in a decrease in volume of our financing activities. In a rising interest rate scenario, our profit margins are therefore primarily dependent on our ability to attract new business, either through existing customers or new customers, than it is in a declining interest rate scenario. In addition, changes in interest rates also affect the interest rates we pay on our interest-bearing liabilities. Varying maturity periods applicable to our interest bearing assets and interest-bearing liabilities and a consequent change in interest rates may result in an increase in interest expense relative to interest income leading to a reduction in our interest income from financing activities.
See "Risk Factors - We are affected by volatility in interest rates for both our lending and treasury operations, which could cause our net interest income to vary and consequently affect our profitability" on page 46.
Availability of cost effective funding sources
The availability of cost-effective funding sources significantly affects our results of operations. Our funding requirements are predominantly sourced through term loans (short term and long term) from banks and other financial institutions. We have established long term relationships with various banks and financial institutions which provide ease of access to funding from such institutions. Our loan portfolio, credit appraisal and risk management processes and stable credit history have resulted in improved credit status with our lenders over the years, thereby enabling us to reduce our cost of borrowings from banks and other financial institutions. Our credit status with our lenders is determined primarily by our NPAs. For further information, see "Our Business" on page 207. In addition to debt funding, we also support our funding requirements from internal accruals.
Our finance costs are dependent on various external factors, including Indian and global credit markets and, in particular, interest rate movements and adequate liquidity in the debt markets. Our ability to continue to meet customer demand for new loans will depend primarily on our ability to borrow from various external sources on suitable terms and in a timely manner. Our funding sources are varied, as we believe that a diversified debt profile ensures that we are not overly dependent on any one type or source for funding. For further information in relation to our borrowings, see "Financial Indebtedness" on page 334.
We believe that we have been able to maintain relatively stable finance costs as a result of our effective fund raising. Our ability to maintain our finance costs at optimum levels will continue to have a direct impact on our profitability, results of operations and financial condition.
Geographic reach and distribution network
Due to us charging interest rates on per loan basis, the volume of loans that we approve and disburse is a primary driver of our revenue. The volume of loans we approve and disburse depend upon a number of factors that are, in part, within our control, which can include the number of and availability of branches and field officers. Our growth has historically been driven by a combination of expansion of our operational network as well as an increase in loans extended. We have our footprints in rural and semi-urban geographies in 4 states including Rajasthan, Maharashtra, Madhya Pradesh and Gujarat including 9 branches and 23 points of presence including digital and physical branches. Our ability to maintain and expand our operational network in a cost effective and efficient manner and serve as a preferred finance provider to small business owners and self-employed individuals will have a direct impact on our results of operations and financial condition.
Our branches are staffed with persons who are familiar with the local area, with each branch servicing an area with a limited radius, resulting in branch staff being able to quickly attend a customers location as issues arise.
We strategically focus on accessing underbanked customers. Our ability to maintain an extensive geographic reach and distribution network will continue to have an impact on our financial condition and results of operations.
Asset quality, NPAs and provisioning requirements
Our ability to manage the credit quality of our loans, which we measure in part through NPAs, is a key driver of our results of operations. Credit quality is the outcome of the credit appraisal mechanism and recovery system followed by us. We classify NPAs in accordance with regulatory guidelines. As the number of our loans that become NPAs increase, the quality of our loan portfolio decreases. In accordance with RBI norms and our policy on NPA classification, we are required to classify loans that are over 90 days past due as an NPA. The following table illustrates our asset quality ratios as of the dates indicated:
| Particulars | March 31, 2021 | March 31, 2022 | March 31, 2023 |
| Gross NPA ratio (%) | 3.57% | 4.90% | 4.57% |
| Net NPA ratio (%) | 2.97% | 4.06% | 3.45% |
(1) Gross NPA ratio (%) represents the Gross NPA to the Gross Loan Book as of the last day of the relevant period. (2) Net NPA ratio (%) represents the Net NPA to the Gross Loan Book as of the last day of the relevant period.
Our asset quality is dependent upon our credit appraisal processes and recovery mechanisms. With the growth of our business, our ability to manage the quality of our loans will be a key driver to our results of operations, as quality loans help reduce the risk of losses from loan impairment and write-offs.
In our experience, direct sourcing allows for complete control over the quality of customers and processes involved for disbursement, which leads to better asset quality, compared to other methods of customer acquisition.
We believe that the quality of our credit function, resulting in effective credit evaluation measures, as well as our systematic processes such as verification of borrower risk profile, source of repayment, underlying collateral and disbursement and collection processes, effective portfolio monitoring and timely corrective interventions have enabled us to maintain relatively low levels of NPAs. Our ability to reduce or contain the level of our NPAs is also dependent on a number of factors beyond our control, such as increased competition, adverse effect on the business and results of operations of our borrowers, a rise in unemployment, a sharp and sustained rise in interest rate, slow industrial and business growth, changes in customer behavior and demographic patterns, central and state government decisions and changes in regulations. Additionally, certain provisioning norms are applicable to NBFCs, under applicable accounting standards and directions issued by the RBI. NBFCs are required to, after taking into account the time lag between an account becoming non performing, its recognition as such, the realisation of the security and the erosion over time in the value of security charged, make provision against substandard assets, doubtful assets and loss assets, as stipulate.
General economic conditions in India and competition
As an NBFC operating in India, our financial performance is dependent on the overall economic condition in India, including the GDP growth rate, the economic cycle and the condition of the securities markets, and perception of these conditions and future economic prospects. Our financial results are influenced by macroeconomic factors relating to growth of the Indian economy in general, which may lead to an increase in demand for retail loans. Conversely, a slowdown in the Indian economy could adversely affect our business and our borrowers, especially if such a slowdown were to be continued and prolonged. Several factors beyond our control, such as developments in the Indian economy including the regulatory landscape and domestic employment levels, conditions in the world economy, pandemics such as COVID-19, fluctuations in interest rates, movements in global commodity markets and exchange rates could have either a positive or an adverse impact on the quality of our loan portfolio.
The competitive pressures and economic environment of India will play a role in determining whether we are able to successfully execute our growth strategy and offer products and services at reasonable returns.
Regulatory developments
We operate in a highly regulated industry and we have to adhere to various laws, rules and regulations. Our financial condition, results of operations and continued growth also depend on stable government policies and regulations. We are required to comply with, among others, limits on borrowings, investments and interest rates, prudential norms for income recognition, asset classification, and norms for creation of special reserves as well as minimum capital adequacy requirements. As an NBFC, we have to mandatorily obtain a certificate of registration issued by the RBI. We are also required to have minimum net owned funds of 1000.00 lakhs.
The regulations applicable to us also address issues such as our conduct with customers and recovery practices, market conduct and foreign investment. Any change in the regulatory framework affecting NBFCs, and in particular those requiring us to maintain certain financial ratios, placement restrictions on accessing funds, among others, would affect our results of operations and growth. For further information, see "Key Regulations and Policies in India" on page 227.
Basis of Preparation
Statement of compliance
The Restated Statement of Assets and Liabilities of the Company as at March 31, 2023, March 31, 2022 and March 31, 2021 and the Restated Statement of Profit and Loss (including Other Comprehensive Income), the Restated Statement of Changes in Equity and the Restated Statement of Cash flows for each of the years ended March 31, 2023, March 31, 2022 and March 31, 2021 and the Summary of Significant Accounting Policies and other explanatory information (together referred to as ‘Restated Financial Statements).
The Restated Financial Statements have been compiled by the management from:
a) Audited financial statements of the Company as at and for the years ended March 31, 2023, March 31, 2022 and March 31, 2021 which were prepared in accordance with the Indian Accounting Standards as prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as amended, and other accounting principles generally accepted in India (referred to as "Ind AS"), which have been approved by the Board of Directors at their meetings held on May 29, 2023, May 30, 2022 and August 14, 2021 respectively.
Significant Accounting Policies
Significant accounting policies adopted in the preparation of these financial statements are provided below. These policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Revenue Recognition
The Company earns revenue primarily from giving loans. Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
(i) Interest Income
The Company recognizes interest income using Effective Interest Rate (EIR) on all financial assets subsequently measured at amortized cost or fair value through other comprehensive income (FVOCI). EIR is calculated by considering all costs and incomes attributable to acquisition of a financial asset or assumption of a financial liability and it represents a rate that exactly discounts estimated future cash payments/receipts through the expected life of the financial asset/financial liability to the gross carrying amount of a financial asset or to the amortized cost of a financial liability.
The Company recognizes interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets. In case of credit-impaired financial assets (as set out in note no. 3.4(i)) regarded as ‘stage 3, the Company stops recognizing interest income on these accounts till the account is credit impaired. If the financial asset is no longer credit-impaired (as outlined in note no. 3.4(i)), the Company reverts to calculating interest income on a gross basis.
Delayed payment interest (penal interest) levied on customers for delay in repayments/non-payment of contractual cash flows is recognized on realization.
Interest on financial assets subsequently measured at fair value through profit or loss (FVTPL) is recognized at the contractual rate of interest.
(ii) Dividend Income
Dividend income on equity shares is recognized when the Companys right to receive the payment is established and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividend can be measured reliably, which is generally when shareholders approve the dividend.
(iii) Other Revenue from Operations
The Company recognizes revenue from contracts with customers (other than financial assets to which Ind AS 109 ‘Financial Instruments is applicable) based on a comprehensive assessment model as set out in Ind AS 115 ‘Revenue from contracts with customers. The Company identifies contract(s) with a customer and its performance obligations under the contract, determines the transaction price and its allocation to the performance obligations in the contract and recognizes revenue only on satisfactory completion of performance obligations. Revenue is measured at fair value of the consideration received or receivable.
(a) Fees and Commission
The Company recognizes service and administration charges towards rendering of additional services to its loan customers on satisfactory completion of service delivery.
Fees on value added services and products are recognized on rendering of services and products to the customer.
Distribution income is earned by selling of services and products of other entities under distribution arrangements. The income so earned is recognized on successful sales on behalf of other entities subject to there being no significant uncertainty of its recovery.
Foreclosure charges are collected from loan customers for early payment/closure of loan and are recognized on realization.
(b) Net Gain on Fair Value Changes
The Company designates certain financial assets for subsequent measurement at fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI), as applicable. The Company recognizes gains/losses on fair value change of financial assets measured as FVTPL and realized gains/losses on derecognition of financial asset measured at FVTPL and FVOCI.
(c) Sale of Services
The Company, on de-recognition of financial assets where a right to service the derecognized financial assets for a fee is retained, recognizes the fair value of future service fee income over service obligations cost on net basis as service fee income in the statement of profit or loss and, correspondingly creates a service asset in Balance Sheet. Any subsequent increase in the fair value of service assets is recognized as service income and any decrease is recognized as an expense in the period in which it occurs. The embedded interest component in the service asset is recognized as interest income in line with Ind AS 109 ‘Financial instruments.
Other revenues on sale of services are recognized as per Ind AS 115 ‘Revenue from Contracts with Customers as articulated above in ‘other revenue from operations.
(d) Recoveries of financial assets written off
The Company recognizes income on recoveries of financial assets written off on realization or when the right to receive the same without any uncertainties of recovery is established.
(iv) Taxes
Incomes are recognized net of the Goods and Services Tax, wherever applicable.
1.2 Expenditures
(i) Borrowing Costs
Borrowing costs are interest and other costs incurred in connection with the borrowings of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as part of the cost of the asset. Other borrowings costs are recognized as an expense in the statement of profit and loss account on an accrual basis using the effective interest method. (Refer note no. 3.1(i)). (ii) Fees and Commission Expenses Fees and commission expenses which are not directly linked to the sourcing of financial assets, such as commission/incentive incurred on value added services and products distribution, recovery charges and fees payable for management of portfolio etc., are recognized in the Statement of Profit and Loss on an accrual basis. (iii) Taxes Expenses are recognized net of the Goods and Services Tax/Service Tax, except where credit for the input tax is not statutorily permitted.
1.3 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
1.4 Financial Instruments
A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Trade receivables and payables, loan receivables, investments in securities and subsidiaries, debt securities and other borrowings, preferential and equity capital etc. are some examples of financial instruments. Loans are recognized when funds are transferred to the customer account. Debt securities issued are initially recognized when they are originated. All the other financial instruments are recognized on the date when the Company becomes party to the contractual provisions of the financial instruments. For tradable securities, the Company recognizes the financial instruments on settlement date. The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments. Financial instruments are initially measured at their fair value, except in the case of financial assets and financial liabilities recorded at fair value through profit and loss (FVTPL), transaction costs are added to, or subtracted from this amount. (i) Financial Assets Financial assets include cash, or an equity instrument of another entity, or a contractual right to receive cash or another financial asset from another entity. Few examples of financial assets are loan receivables, investment in equity and debt instruments, trade receivables and cash and cash equivalents.
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 Companys 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 Companys 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) How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected). d) The expected frequency, value and timing of sales are also important aspects of the Companys 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 Companys 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.
SPPI test
As a second step of its classification process, the Company assesses the contractual terms of financial assets 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 the minimum 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 based on the existing business model: (a) Financial Assets carried at amortized cost
The Company measures its financial assets at amortized cost if both the following conditions are met:
? The asset is held within a business model of collecting contractual cash flows; and
? Contractual terms of the asset give rise on specified dates to cash flows that are sole Payments of Principal and Interest (SPPI) on the principal amount outstanding.
Bank balances, Loans, Trade receivables and other financial investments that meet the above conditions are measured at amortised cost.
The business model of the Company for assets subsequently measured at amortized cost category is to hold and collect contractual cash flows. However, considering the economic viability of carrying the delinquent portfolios in the books of the Company, it may sell these portfolios to banks and/or asset reconstruction companies.
After initial measurement, such financial assets are subsequently measured at amortized cost on effective interest rate (EIR). For further details, refer note no. 3.1(i). The expected credit loss (ECL) calculation for financial assets at amortized cost is explained in subsequent notes in this section.
(b) Financial Assets at FVOCI
The Company subsequently classifies its financial assets as FVOCI, only if both of the following criteria are met:
? The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets; and
? Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (SPPI) on the principal amount outstanding.
Financial Assets included within the FVOCI category are measured at each reporting date at fair value with such changes being recognized in other comprehensive income (OCI). The interest income on these assets is recognized in profit or loss. The ECL calculation for debt instruments at
FVOCI is explained in subsequent notes in this section.
Debt instruments such as long-term investments in Government securities to meet regulatory liquid asset requirement of the Companys deposit program and mortgage loans portfolio where the Company periodically resorts to partially selling the loans by way of assignment to willing buyers are classified as FVOCI.
On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified to profit or loss.
(c) Financial Assets at FVTPL
The Company classifies financial assets which are held for trading under FVTPL category. Held for trading assets are recorded and measured in the Balance Sheet at fair value. Interest and dividend incomes are recorded in interest income and dividend income, respectively according to the terms of the contract, or when the right to receive the same has been established. Gains and losses on changes in fair value of debt instruments are recognized on net basis through profit or loss.
The Companys investments into mutual funds, Government securities (trading portfolio) and certificate of deposits for trading and short term cash flow management have been classified under this category.
(d) Equity investment designated under FVOCI
All equity investments in scope of Ind AS 109 ‘Financial Instruments are measured at fair value.
The Company has strategic investments in equity for which it has elected to present subsequent changes in the fair value in other comprehensive income. The classification is made on initial recognition and is irrevocable.
All fair value changes of the equity instruments, excluding dividends, are recognized in OCI and are available for reclassification to profit or loss on derecognition of investments. Equity instruments at FVOCI are not subject to an impairment assessment.
Derecognition of Financial Assets
The Company derecognizes a financial asset (or, where applicable, a part of a financial asset) when:
? The right to receive cash flows from the asset have expired; or
? The Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under an assignment arrangement and the Company has transferred substantially all the risks and rewards of the asset. Once the asset is derecognized, the Company does not have any continuing involvement in the same.
The Company transfers its financial assets through the partial assignment route and accordingly derecognizes the transferred portion as it neither has any continuing involvement in the same nor does it retain any control. If the Company retains the right to service the financial asset for a fee, it recognizes either a servicing asset or a servicing liability for that servicing contract. A service liability in respect of a service is recognized at fair value if the fee to be received is not expected to compensate the Company adequately for performing the service. If the fees to be received is expected to be more than adequate compensation for the servicing, a service asset is recognized for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger 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 recognized in profit or loss.
Impairment of Financial Assets
In accordance with Ind AS 109, the Company uses ECL model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL). ECL are recognized for financial assets held under amortized cost, debt instruments measured at FVOCI, and certain loan commitments.
Financial assets where no significant increase in credit risk has been observed are considered to be in ‘stage 1 and for which a 12 month ECL is recognized. Financial assets that are considered to have significant increase in credit risk are considered to be in ‘stage 2 and those which are in default or for which there is an objective evidence of impairment are considered to be in ‘stage 3. Lifetime ECL is recognized for stage 2 and stage 3 financial assets.
At initial recognition, allowance (or provision in the case of loan commitments) is required for ECL towards default events that are possible in the next 12 months, or less, where the remaining life is less than 12 months.
In the event of a significant increase in credit risk, allowance (or provision) is required for ECL towards all possible default events over the expected life of the financial instrument (‘lifetime ECL).
Financial assets (and the related impairment loss allowances) are written off in full, when there is no realistic prospect of recovery.
Treatment of the different stages of financial assets and the methodology of determination of ECL (a) Credit Impaired (Stage 3)
The Company recognizes a financial asset to be credit impaired and in stage 3 by considering relevant objective evidence, primarily whether: ? Contractual payments of either principal or interest are past due for more than 90 days; ? The loan is otherwise considered to be in default.
Restructured loans (Except loan restructured under the RBI Covid 2.0 framework), where repayment terms are renegotiated as compared to the original contracted terms due to significant credit distress of the borrower, are classified as credit impaired. Such loans continue to be in stage 3 until they exhibit regular payment of renegotiated principal and interest over a minimum observation period, typically 12 months post renegotiation, and there are no other indicators of impairment. Having satisfied the conditions of timely payment over the observation period these loans could be transferred to stage 1 or 2 and a fresh assessment of the risk of default be done for such loans. (b) Significant Increase in Credit Risk (Stage 2) An assessment of whether credit risk has increased significantly since initial recognition is performed at each reporting period by considering the change in the risk of default of the loan exposure. Considering the market in which company is primarily operating and the class of customers which primarily comes from rural background where financial literacy is very poor and banking and collection facilities are not present at all places, management considers that unless identified at an earlier stage, 60 days past due is considered as an indication of financial assets to have suffered a significant increase in credit risk. Based on other indications such as borrowers frequently delaying payments beyond due dates though not 60 days past due are included in stage 2 for mortgage loans. The measurement of risk of defaults under stage 2 is computed on homogenous portfolios, generally by nature of loans, tenors, underlying collateral, geographies and borrower profiles. The default risk is assessed using PD (probability of default) derived from past behavioral trends of default across the identified homogenous portfolios. These past trends factor in the past customer behavioral trends, credit transition probabilities and macroeconomic conditions. The assessed PDs are then aligned considering future economic conditions that are determined to have a bearing on ECL. (c) Without Significant Increase in Credit Risk since Initial Recognition (Stage 1) ECL resulting from default events that are possible in the next 12 months are recognized for financial instruments in stage 1. The Company has ascertained default possibilities on past behavioral trends witnessed for each homogenous portfolio using application/behavioral score cards and other performance indicators, determined statistically. (d) Measurement of ECL The assessment of credit risk and estimation of ECL are unbiased and probability weighted. It incorporates all information that is relevant including information about past events, current conditions and reasonable forecasts of future events and economic conditions at the reporting date. In addition, the estimation of ECL takes into account the time value of money. Forward looking economic scenarios determined with reference to external forecasts of economic parameters that have demonstrated a linkage to the performance of our portfolios over a period of time have been applied to determine impact of macro-economic factors. The Company has calculated ECL using three main components: a probability of default (PD), a loss given default (LGD) and the exposure at default (EAD). ECL is calculated by multiplying the PD, LGD and EAD and adjusted for time value of money using a rate which is a reasonable approximation of EIR. ? Determination of PD is covered above for each stage of ECL. ? EAD represents the expected balance at default, taking into account the repayment of principal and interest from the Balance Sheet date to the date of default together with any expected drawdowns of committed facilities. ? LGD represents expected losses on the EAD given the event of default, taking into account, among other attributes, the mitigating effect of collateral value at the time it is expected to be realized and the time value of money. The inputs and models used for calculating ECLs may not always capture all characteristics of the market at the date of the financial statements. To reflect this, qualitative adjustments or management overlays are occasionally made as temporary adjustments when such differences are significantly material A more detailed description of the methodology used for ECL is covered in the ‘credit risk section of note no. 35. (e) Write-offs Financial assets are written off when there is a significant doubt on recoverability in the medium term. 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 the statement of profit and loss. (ii) Financial Liabilities Financial liabilities include liabilities that represent a contractual obligation to deliver cash or another financial asset to another entity, or a contract that may or will be settled in the entities own equity instruments. Few examples of financial liabilities are trade payables, debt securities and other borrowings and subordinated debts. Initial measurement All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs. The Companys financial liabilities include trade payables, other payables, debt securities and other borrowings. Subsequent measurement After initial recognition, all financial liabilities are subsequently measured at amortized cost using the EIR (Refer note no. 3.1(i)). Any gains or losses arising on derecognition of liabilities are recognized in the Statement of Profit and Loss. Embedded derivatives An embedded derivative is a component of a hybrid instrument that also includes a non-derivative host contract with the effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index or prices or rates, credit rating or credit index, or other variable, provided that, in the case of a non-financial variable, it is not specific to a party to the contract. A derivative that is attached to a financial instrument, but is contractually transferable independently of that instrument, or has a different counterparty from that instrument, is not an embedded derivative, but a separate financial instrument. Derivatives embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss, unless designated as effective hedging instruments. Derecognition measurement The Company derecognizes a financial liability when the obligation under the liability is discharged, cancelled or expired. (iii) 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 significant financial assets or liabilities in the year ended March 31, 2023, March 31, 2022 and March 31, 2021. (iv) Offsetting of Financial Instruments Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet only if there is an enforceable legal right to offset the recognized amounts with an intention to settle on a net basis or to realize the assets and settle the liabilities simultaneously.
1.5 Investment in Subsidiaries
The Company does not have any Subsidiary.
1.6 Taxes
(i) Current Tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, in accordance with the Income Tax Act, 1961 and the Income Computation and Disclosure Standards (ICDS) prescribed therein. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current tax relating to items recognized outside profit or loss is recognized in correlation to the underlying transaction either in OCI or directly in other equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. (ii) Deferred Tax Deferred tax is provided using the Balance Sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets, if any, are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized either in OCI or in other equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
1.7 Property, Plant and Equipment
Property, plant and equipment are carried at historical cost of acquisition less accumulated depreciation and impairment losses, consistent with the criteria specified in Ind AS 16 ‘Property, Plant and Equipment.
Depreciation on property, plant and equipment
(a) Depreciation is provided on a pro-rata basis for all tangible assets on straight line method over the useful life of assets. (b) Useful lives of assets are determined by the Management by an internal technical assessment except where such assessment suggests a life significantly different from those prescribed by Schedule II Part C of the Companies Act, 2013 where the useful life is as assessed and certified by a technical expert. (c) Depreciation on leasehold improvements is provided on straight line method over the primary period of lease of premises or 5 years whichever is less.
(d) Depreciation on addition to assets and assets sold during the year is being provided for on a pro rata basis with reference to the month in which such asset is added or sold as the case may be.
(e) Assets having unit value up to 5,000 is depreciated fully in the financial year of purchase of asset.
(f) An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. 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 included under other income in the Statement of Profit and Loss when the asset is derecognized.
(g) 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.
1.8 Intangible assets and amortization thereof
Intangible assets, representing softwares are initially recognized at cost and subsequently carried at cost less accumulated amortization and accumulated impairment. The intangible assets are amortized using the straight-line method over a period of five years, which is the Managements estimate of its useful life. The useful lives of intangible assets are reviewed at each financial year end and adjusted prospectively, if appropriate.
1.9 Impairment of non-financial assets
An assessment is done at each Balance Sheet date to ascertain whether there is any indication that an asset may be impaired. If any such indication exists, an estimate of the recoverable amount of asset is determined. If the carrying value of relevant asset is higher than the recoverable amount, the carrying value is written down accordingly.
1.10 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. The Company also discloses present obligations for which a reliable estimate cannot be made. 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.
1.11 Foreign Currency Translation
The Companys financial statements are presented in Indian Rupee, which is also the Companys functional currency. Initial recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are re-translated using the exchange rate prevailing at the reporting date. Non- monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
Exchange differences
All exchange differences are accounted in the Statement of Profit and Loss.
1.12 Employee benefits i. Post-employment benefits
Defined Contribution plan
The Companys contribution to provident fund is considered as defined contribution plan and is charged as an expense as they fall due based on the amount of contribution required to be made and when the services are rendered by the employees.
Defined benefit plans
Gratuity
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Companys net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling),if any. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost or ‘past service gain) or the gain or loss on curtailment is recognised immediately in profit or loss on the earlier of:
The date of the plan amendment or curtailment, and
The date that the Company recognises related restructuring costs
The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
ii. Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
1.13 Lease
Company has applied Ind AS 116 "Leases" for all lease contracts covered by the Ind AS. Under Ind AS 116 a contract is, or contains a lease, if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company undertook an assessment of all applicable contracts to determine if a lease exists as defined in Ind AS 116. This assessment will also be completed for each new contract or change. Measurement of Lease Liability At the time of initial recognition, the Company measures lease liability as present value of all lease payment discounted using the Companys incremental cost of borrowing rate. Subsequently, the lease liability is i) Increase by interest on lease liability ii) Reduce by lease payments made Measurement of Right-of-Use asset
At the time of initial recognition, the Group measures ‘Right-of-Use assets as present value of all lease payment discounted using the Groups incremental cost of borrowing rate w.r.t said lease contract. Subsequently, ‘Right-of-Use assets is measured using cost model i.e. at cost less any accumulated depreciation and any accumulated impairment losses adjusted for any re-measurement of the lease liability specified in Ind AS 116 ‘Leases. Depreciation on ‘Right-of-Use assets is provided on straight line basis over the lease period. In contract going forward. The Company has further elected not to recognize ROU assets and lease liabilities for leases of low value assets and for short-term leases (less than 12 months).
1.14 Fair Value Measurement
The Company measures its qualifying financial instruments at fair value on each Balance Sheet date. Fair value is the price that would be received against sale of 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 in the accessible principal market or the most advantageous accessible market as applicable. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant to the fair value measurement as a whole. For a detailed information on the fair value hierarchy, refer note no. 34. For assets and liabilities that are fair valued in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.
1.15 Segment reporting- Identification of segments:
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Companys Chief Operating Decision Maker (CODM) to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108 Operating Segments, the CODM evaluates the Companys performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.
1.16 Earnings per share
The Company reports basic and diluted earnings per equity share in accordance with Ind AS 33, Earnings Per Share. Basic earnings per equity share is computed by dividing net profit / loss after tax attributable to the equity share holders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed and disclosed by dividing the net profit/ loss after tax attributable to the equity share holders for the year after giving impact of dilutive potential equity shares for the year by the weighted average number of equity shares and dilutive potential equity shares outstanding during the year, except where the results are anti-dilutive. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period.
1.17 Cash flow statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the Company are segregated. Cash flows in foreign currencies are accounted at the actual rates of exchange prevailing at the dates of the transactions
1.18 Standards issued but not yet effective
Ministry of Corporate Affairs has issued Companies (Indian Accounting Standards) Amendment Rules, 2022 on March 23, 2022, which contains various amendments to Ind AS. Management has evaluated these and have concluded that there is no material impact on the Companys financial statements.
Results of Operations
The following table sets forth certain information with respect to our results of operations for Fiscals 2023, 2022 and 2021:
| Particulars | March 31, 2023 | March 31, 2022 | March 31, 2021 | |||
| in lakhs | % of total income | in lakhs | % of total income | in lakhs | % of total income | |
| Revenue from operations | ||||||
| Interest income | 6310.99 | 90.72% | 6,486.94 | 96.10% | 8,416.86 | 96.98% |
| Fees and commission Income | 209.78 | 3.02% | 227.97 | 3.38% | 148.52 | 1.71% |
| Gain / Loss on derecognized financial assets | -6.52 | -0.09% | -6.30 | -0.09% | 0.00 | 0.00% |
| Other Operating Income | 437.12 | 6.28% | 35.53 | 0.53% | 52.33 | 0.60% |
| Total revenue from operations | 6,951.37 | 99.92% | 6,744.13 | 99.91% | 8,617.72 | 99.29% |
| Other income | 5.45 | 0.08% | 6.08 | 0.09% | 61.66 | 0.71% |
| Total Income | 6,956.82 | 100.00% | 6,750.21 | 100.00% | 8,679.38 | 100.00% |
| Particulars | March 31, 2023 | March 31, 2022 | March 31, 2021 | |||
| in lakhs | % of total income | in lakhs | % of total income | in lakhs | % of total income | |
| Expenses | ||||||
| Finance costs | 2,765.08 | 39.75% | 3,500.04 | 51.85% | 4,804.47 | 55.35% |
| Impairment on financial | 359.12 | 5.16% | 1,062.80 | 15.74% | 771.47 | 8.89% |
| instruments | ||||||
| Employee benefits expense | 654.48 | 9.41% | 730.40 | 10.82% | 840.43 | 9.68% |
| Depreciation and amortization expense | 58.19 | 0.84% | 69.48 | 1.03% | 65.27 | 0.75% |
| Other expenses | 1,115.24 | 16.03% | 628.58 | 9.31% | 276.95 | 3.19% |
| Total Expenses | 4,952.11 | 71.18% | 5,991.30 | 88.76% | 6,758.58 | 77.87% |
| Profit before tax | 2,004.71 | 28.82% | 758.91 | 11.24% | 1,920.80 | 22.13% |
| Tax expense | ||||||
| Current tax | 478.82 | 6.88% | 252.59 | 3.74% | 434.09 | 5.00% |
| Deferred tax (net) | -54.38 | -0.78% | 94.25 | 1.40% | -143.79 | -1.66% |
| Tax Expense | 424.44 | 6.10% | 346.84 | 5.14% | 290.30 | 3.34% |
| Profit for the period / year | 1,580.27 | 22.72% | 412.07 | 6.10% | 1,630.49 | 18.79% |
| Other comprehensive income | ||||||
| (i) Items that will not be reclassified to profit or loss | ||||||
| Re-measurements of the defined benefit plan (Net of Tax) | 11.04 | 0.16% | 17.53 | 0.26% | 3.49 | 0.04% |
| (ii) Items that will be reclassified subsequently to profit or loss | ||||||
| Fair value gain/(loss) on equity instruments (Net of Tax) | - | - | ||||
| Other comprehensive income / (deficit) for the period / year, net of Income tax | 11.04 | 0.16% | 17.53 | 0.26% | 3.49 | 0.04% |
| Total comprehensive income | 1591.32 | 22.87% | 429.60 | 6.36% | 1,634.00 | 18.83% |
Fiscal 2023 compared to Fiscal 2022
Revenue from operations
Our revenue from operations increased by 3.07% from 6,744.13 lakhs in Fiscal 2022 to 6,951.37 lakhs in Fiscal 2023, primarily due to a increase in other operating revenue from 35.53 lakhs in Fiscal 2022 to 437.12 lakhs in Fiscal 2023. This was primarily attributable to increase in other operating income which increased from 35.53 lakhs as of March 31, 2022 to 437.12 lakhs of March 31, 2023 on account of higher recovery in bad debts accounts;
Other income
Our other income decreased by 10.37% from 6.08 lakhs in Fiscal 2022 to 5.45 lakhs in Fiscal 2023, primarily due to a decrease in sale of assets from 6.08 lakhs in Fiscal 2022 to 5.45 in Fiscal 2023.
Expenses
Total expenses decreased by 17.34% from 5,991.30 lakhs in Fiscal 2022 to 4,952.11 lakhs in Fiscal 2023.
Finance costs
Our finance costs decreased by 21.00% from 3,500.04 lakhs in Fiscal 2022 to 2,765.08 lakhs in Fiscal 2023, primarily due to a decrease in interest on term loans from 2,693.62 lakhs in Fiscal 2022 to 1,978.65 lakhs in Fiscal 2023.
Impairment on financial instruments
The impairment on financial instruments decreased by 66.21% from 1,062.80 lakhs in Fiscal 2022 to 359.12 lakhs in Fiscal 2023. This was primarily due to an decrease in our loans written off (net of recovery) from 974.63 lakhs in Fiscal 2022 to 310.59 lakhs in Fiscal 2023, as the impact of COVID- 19 reduces.
Employee benefits expense
Our employee benefits expense decreased by 10.39% from 730.40 lakhs in Fiscal 2022 to 654.48 lakhs in Fiscal 2023.
Depreciation and amortization expense
Our depreciation and amortization expense decreased by 16.25% from 69.48 lakhs in Fiscal 2022 to 58.19 lakhs in Fiscal 2023, primarily due to decrease in the depreciation on property, plant and equipment.
Other expenses
Our other expenses increased by 77.42% from 628.58 lakhs in Fiscal 2022 to 1115.24 lakhs in Fiscal 2023, primarily due to an increase in foreign exchange loss/ (Gain) from 200.37 lakhs in Fiscal 2022 to 457.63 lakhs in Fiscal 2023.
Profit before Tax
For the reasons discussed above, profit before tax was 2004.71 lakhs in Fiscal 2023 compared to profit before tax of 758.91 lakhs in Fiscal 2022.
Tax expenses
Our tax expenses increased by 22.37% from 346.84 lakhs in Fiscal 2022 to 424.44 lakhs in Fiscal 2023. Current tax expense increased from 252.59 lakhs in Fiscal 2022 to 478.82 lakhs in Fiscal 2023, primarily due to a corresponding increase in profit before tax. Our deferred tax credit increased from 94.25 lakhs in Fiscal 2022 to 54.38 lakhs in Fiscal 2023.
Profit after tax
Our profit after tax increased by 283.49% from 412.07 lakhs in Fiscal 2022 to 1,580.27 lakhs in Fiscal 2023. Fiscal 2022 compared to Fiscal 2021
Revenue from operations
Our revenue from operations decreased by 21.74% from 8,617.72 lakhs in Fiscal 2021 to 6,744.13 lakhs in Fiscal 2022, primarily due to a decrease in interest income from 8,416.86 lakhs in Fiscal 2021 to 6,486.94 lakhs in Fiscal 2022. This was primarily attributable to decrease in AUM which decreased by 16.55% from 42,100.78 lakhs as of March 31, 2021 to 35,131.79 lakhs of March 31, 2022 and the "second wave" of the COVID-19 pandemic and associated lockdowns imposed to various extents in India which adversely affected our disbursements during that period;
Other income
Our other income decreased by 90.14% from 61.66 lakhs in Fiscal 2021 to 6.08 lakhs in Fiscal 2022, primarily due to a decrease in sale of investment from 52.56 lakhs in Fiscal 2021 to Nil in Fiscal 2022.
Expenses
Total expenses decreased by 11.35% from 6,758.58 lakhs in Fiscal 2021 to 5,991.30 lakhs in Fiscal 2022.
Finance costs
Our finance costs decreased by 27.15% from 4,804.47 lakhs in Fiscal 2021 to 3,500.04 lakhs in Fiscal 2022, primarily due to a decrease in interest on term loans from 4,081.88 lakhs in Fiscal 2021 to 2,693.62 lakhs in Fiscal 2022.
Impairment on financial instruments
The impairment on financial instruments increased by 37.76% from 771.47 lakhs in Fiscal 2021 to 1,062.80 lakhs in Fiscal 2022. This was primarily due to an increase in our loans written off (net of recovery) from 612.03 lakhs in Fiscal 2021 to 974.63 lakhs in Fiscal 2022, owing to the impact of COVID- 19.
Employee benefits expense
Our employee benefits expense decreased by 13.09% from 840.43 lakhs in Fiscal 2021 to 730.40 lakhs in Fiscal 2022.
Depreciation and amortization expense
Our depreciation and amortization expense increased by 6.45% from 65.27 lakhs in Fiscal 2021 to 69.48 lakhs in Fiscal 2022, primarily due to increase in the depreciation on property, plant and equipment. The increase was primarily attributable to the increase in various other assets acquired.
Other expenses
Our other expenses increased by 126.97% from 276.95 lakhs in Fiscal 2021 to 628.58 lakhs in Fiscal 2022, primarily due to an increase in foreign exchange loss/ (Gain) from (158.40) lakhs in Fiscal 2021 to 200.37 lakhs in Fiscal 2022,.
Profit before Tax
For the reasons discussed above, profit before tax was 758.91 lakhs in Fiscal 2022 compared to profit before tax of 1,920.79 lakhs in Fiscal 2021.
Tax expenses
Our tax expenses increased by 19.48% from 290.30 lakhs in Fiscal 2021 to 346.84 lakhs in Fiscal 2022. Current tax expense decreased from 434.09 lakhs in Fiscal 2021 to 252.59 lakhs in Fiscal 2022, primarily due to a corresponding decrease in profit before tax. Our deferred tax credit decreased from 143.79 lakhs in Fiscal 2021 to -94.25 lakhs in Fiscal 2022.
Profit after tax
Our profit after tax decreased by 74.73% from 1,630.50 lakhs in Fiscal 2021 to 412.07 lakhs in Fiscal 2022.
Financial Condition
Assets
The table below sets out the principal components of our assets as of the dates indicated:
| As at | |||
| Particulars | March 31, 2023 | March 31, 2022 | March 31, 2021 |
| ASSETS | |||
| I. Financial assets | |||
| Cash and cash equivalents | 737.39 | 74.07 | 1,060.03 |
| Bank balances other than cash and cash equivalents | 294.77 | 117.73 | 271.56 |
| Loans | 34,556.66 | 34,287.11 | 41,283.87 |
| Investments | 20.40 | 20.34 | 20.34 |
| Other financial assets | 1,365.70 | 2,157.87 | 1,993.97 |
| Total Financial Assets | 36,974.92 | 36,657.13 | 44,629.77 |
| II. Non-financial assets | |||
| Deferred tax assets (net) | 149.41 | 98.74 | 198.89 |
| Property, plant and equipment | 1,782.76 | 549.13 | 606.96 |
| Right of use asset | 0.00 | 39.22 | 53.06 |
| Other intangible assets | 111.24 | 38.15 | 34.99 |
| Other non-financial assets | 31.69 | 18.98 | 16.15 |
| Total Non-Financial Assets | 2,075.09 | 744.22 | 910.04 |
| Total assets | 39,050.02 | 37,401.35 | 45,539.81 |
As of March 31, 2023, we had total assets of 39,050.02 lakhs, compared to 37,401.35 lakhs as of March 31, 2022 and 45,539.81 lakhs as of March 31, 2021. The increase in our total assets was primarily on account of addition in our disbursals and loan portfolio.
Financial Assets
Cash and cash equivalents
Our cash and cash equivalents decreased from 1,060.03 lakhs as of March 31, 2021 to 74.07 lakhs as of March 31, 2022 primarily due to loan disbursed to the customers. It subsequently increased to 737.39 lakhs as of March 31, 2023 primarily due to equity infusion in this year.
Bank balances other than cash and cash equivalents
Our bank balances other than cash and cash equivalents decreased from 271.56 lakhs as of March 31, 2021 to 117.73 lakhs as of March 31, 2022. It subsequently increased from 117.73 lakhs as of March 31, 2022 to 294.77 lakhs as of March 31, 2023.
Loans
Our loans decreased from 41,283.87 lakhs as of March 31, 2021 to 34,287.11 lakhs as of March 31, 2022, primarily on account of reduction in our loan portfolio. Our loans further increased to 34,556.66 as of March 31, 2023, on account of increase in our loan portfolio.
Investments
Our investments are on the same level and stable to 20.34 lakhs as of March 31, 2021, March 31, 2022 and 20.40 lakhs as of March 31, 2023, primarily owing to increase in the amount of investment in Equity Shares (Quoted).
Other Financial Assets
Other financial assets increased from 1,993.97 lakhs as of March 31, 2021 to 2,157.87 lakhs as of March 31, 2022, primarily on account increase in current advances. Other financial assets decreased to 1,365.70 lakhs as of March 31, 2023, primarily on account of an decrease in current advances by 776.38 lakhs.
Non-Financial Assets
Deferred tax assets (net)
Deferred tax assets (net) decreased from 198.89 lakhs as of March 31, 2021 to 98.74 lakhs as of March 31, 2022. There was a increase to 149.41 lakhs as of March 31, 2023, deferred tax assets on impairment of financial assets.
Property, plant and equipment
Our property, plant and equipment decreased from 606.96 lakhs as of March 31, 2021 to 549.13 lakhs as of March 31, 2022, primarily due to the depreciation. As of March 31, 2023, we had property, plant and equipment of 1,782.76 lakhs.
Right to use assets
We had right to use assets of 53.06 lakhs as of March 31, 2021, which marginally decreased to 39.22 lakhs as of March 31, 2022 This decreased further to Nil lakhs as of March 31, 2023.
Other intangible assets
We had other intangible assets of 34.99 lakhs as of March 31, 2021, which increased to 38.15 lakhs as of March 31, 2022 primarily due to purchase of accounting software. This increased further to 111.24 lakhs as of March 31, 2023, primarily on account further purchase of accounting software.
Other non-financial assets
Other non-financial assets increased from 16.15 lakhs as of March 31, 2021 to 18.98 lakhs as of March 31, 2022 due to increase in duties and taxes paid. This increased further to 31.69 lakhs as of March 31, 2023 on account of increase in duties and taxes paid.
Liabilities
The following table sets forth the principal components of our liabilities as of the dates indicated:
(Rs in lakhs) |
|||
| As at | |||
| Particulars | March 31, 2023 | March 31, 2022 | March 31, 2022 |
| LIABILITIES AND EQUITY | |||
| LIABILITIES | |||
| I. Financial liabilities | |||
| Trade payables | 26.67 | 22.19 | 33.17 |
| Debt securities | 1000.00 | 1,000.00 | 1,000.00 |
| Borrowings (other than debt securities) | 14,778.00 | 20,006.03 | 28,782.23 |
| Subordinated Liabilities | 1,998.30 | 2,000.00 | 2,000.00 |
| Other financial liabilities | 182.08 | 256.33 | 177.62 |
| Total Financial Liabilities | 17,985.06 | 23,284.56 | 31,993.02 |
| II. Non-financial liabilities | |||
| Current tax liabilities (net) | 440.41 | 227.52 | 363.49 |
| Provisions | 106.90 | 101.46 | 103.91 |
| Other non-financial liabilities | 39.55 | 103.37 | 53.03 |
| Total Non-Financial Liabilities | 586.86 | 432.35 | 520.43 |
| Total Liabilities | 18,571.92 | 23,716.91 | 32,213.45 |
| EQUITY | |||
| Equity share capital | 3,167.50 | 2,181.65 | 2,181.65 |
| Other equity | 17,310.61 | 11,502.79 | 10,844.71 |
| Total Equity | 20,478.11 | 13,684.44 | 13,026.36 |
| Total liabilities and equity | 39,050.02 | 37,401.35 | 45,539.81 |
As of March 31, 2023, we had total liabilities of 39,050.02 lakhs, compared to 37,401.35 lakhs as of March 31, 2022 and 45,539.81 lakhs as of March 31, 2021.
Financial liabilities
Payables
As of March 31, 2023, we had payables, comprising trade payable and other payables, of 26.67 lakhs, compared to 22.19 lakhs as of March 31, 2022 and 33.17 lakhs as of March 31, 2021. The slight movements in trade payables attributed to consistent scale of operations.
Debt securities
As of March 31, 2023, we had debt securities of 1,000.00 lakhs, compared to 1,000.00 lakhs as of March 31, 2022, 1,000.00 lakhs as of March 31, 2021.
Borrowings (other than debt securities)
As of March 31, 2023, we had borrowings (other than debt securities) of 14,778.00 lakhs, compared to 20,006.03 lakhs as of March 31, 2022 and 28,782.23 lakhs as of March 31, 2021. Overall decrease in borrowing of our Company has been a result of conscious efforts made by us to maintain efficiency in our business and keep in check of our leverage in light of decreased AUM and impact of COVD 19 on overcall business.
Subordinated Liabilities
As of March 31, 2023, we had subordinated liabilities of 1,998.30 lakhs, compared to 2000.00 lakhs as of March 31, 2022 and 2000.00 lakhs as of March 31, 2021.
Other financial liabilities
As of March 31, 2023, we had other financial liabilities of 182.08 lakhs, compared to 256.33 lakhs as of March 31, 2022 and 177.62 lakhs as of March 31, 2021. The movements in other financial liability are not material and has been consistent in line with overall operations.
Non-financial liabilities
Current tax liabilities (net)
As of March 31, 2023, we had current tax liabilities (net) of 440.41 lakhs, compared to 227.52 lakhs as of March 31, 2022 and 363.49 lakhs as of March 31, 2021. The increase in current tax liabilities correspond directly to increase in the profitability of the Company.
Other non-financial liabilities
As of March 31, 2023, we had other non-financial liabilities of 39.55 lakhs, compared to 103.37 lakhs as of March 31, 2022 and 53.03 lakhs as of March 31, 2021. The changes in our non-financial liabilities from March 31, 2021 to March 31, 2023 was owing change in statutory dues payables.
Equity
As of March 31, 2023, our total equity was 20,478.11 lakhs, representing 52.44% of our total assets. As of March 31, 2022, our total equity was 13,684.44 lakhs, representing 36.59% of our total assets. As of March 31, 2021, our total equity was 13,026.36 lakhs, representing 28.60% of our total assets. The increase in our total equity from March 31, 2021 to March 31, 2023 was primarily due to a combination of equity infusion, increase in statutory reserves and securities premium and an increase in our retained earnings.
Liquidity and Capital Resources
We have historically secured financing from diversified sources, including term loans and debt securities. As of March 31, 2021, March 31, 2022 and March 31, 2023, our total borrowings were 31,782.23 lakhs, 23,006.03 lakhs and 17,776.31 lakhs, respectively.
We actively manage our liquidity and capital position by raising funds periodically. We regularly monitor our capital levels to ensure that we are able to satisfy the requirements for loan disbursements and maturity of our liabilities. All our loan agreements contain a number of covenants including financial covenants. For further information, see "Financial Indebtedness" and "Risk Factors Our inability to meet our obligations, including financial and other covenants under our debt financing arrangements could adversely affect our business, results of operations and financial condition" on pages 334 and 43, respectively.
Cash Flows
The following table sets forth certain information relating to our cash flows in the periods indicated:
| Particulars | For the Period/Year ended | ||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Net Cash from/ (used in) Operating | 2,361.30 | 6,310.24 | 8,508.68 |
| Activities | |||
| Net Cash from / (used in) Investing | -1,496.34 | 159.66 | 262.63 |
| Activities | |||
| Particulars | For the Period/Year ended | ||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Net Cash from/(used in) Financing | -201.64 | -7,455.85 | -8,410.89 |
| Activities | |||
| Net increase / (decrease) in Cash and Cash Equivalents | 663.32 | -985.96 | 360.42 |
| Cash and Cash Equivalents at the beginning of the period/ year | 74.07 | 1,060.03 | 699.61 |
| Cash and Cash Equivalents at the end of the period/ year | 737.39 | 74.07 | 1,060.03 |
Operating Activities
Fiscal 2023
Net cash flows generated in operating activities was 2,361.30 lakhs for the year ended March 31, 2023. While our profit before tax was 2,004.71 lakhs, we had an operating profit before working capital changes of 2,415.59 lakhs. Our changes in working capital for the year ended March 31, 2023 primarily consisted of a decrease in financial assets of 792.17 lakhs on accounts of recoveries made from the customers and decrease in loans advanced.
Fiscal 2022
Net cash flows generated in operating activities was 6,310.24 lakhs for Fiscal 2022. While our profit before tax was 758.91 lakhs, we had an operating profit before working capital changes of 1,884.39 lakhs. Our changes in working capital for Fiscal 2022 primarily consisted of an decrease in loans and advances of 5,933.96 lakhs on accounts of decreased loan disbursals to our customers.
Fiscal 2021
Net cash flows generated in operating activities was 8,508.68 lakhs for Fiscal 2021. While our profit before tax was 1,920.80 lakhs, we had an operating profit before working capital changes of 2,748.92 lakhs. Our changes in working capital for Fiscal 2021 primarily consisted of an decrease in loans and advances of 5,230.51 lakhs on accounts of decreased loan disbursals to our customers.
Investing Activities
Fiscal 2023
Net cash used in investing activities was 1,496.34 lakhs in the year ended March 31, 2023, primarily on account of purchase in fixed assets of 1,441.58 lakhs.
Fiscal 2022
Net cash generated from investing activities was 159.66 lakhs in Fiscal 2022, primarily on account of maturity of fixed deposit of 153.82 lakhs.
Fiscal 2021
Net cash generated from investing activities was 262.63 lakhs in Fiscal 2021, primarily on account of sale of investments at fair value through profit and loss of 219.53 lakhs and maturity of FD of 67.51 lakhs.
Financing Activities
Fiscal 2023
Net cash used in financing activities was 201.64 lakhs in the year ended March 31, 2023 on account of repayment of borrowings other than debt securities of 5,415.02 lakhs, partially offset by proceeds from issue of equity shares of 5,202.35 lakhs.
Fiscal 2022
Net cash used in financing activities was 7,455.85 lakhs in the Fiscal 2022 on account of repayment of borrowings other than debt securities of 7,701.86 lakhs.
Fiscal 2021
Net cash used in financing activities was 8,410.89 lakhs in the Fiscal 2021 on account of repayment of borrowings other than debt securities of 9,801.37 lakhs, partially offset by proceeds from issue of debentures of 1,000.00 lakhs.
Financial Indebtedness
As of March 31, 2023, our total borrowings were 17,776.31 lakhs. For further information on our borrowings, see "Financial Indebtedness" on page 334. Our Company has issued secured, redeemable, rated and nonconvertible debentures which are listed on the debt segment of BSE. The following table sets forth certain information relating to outstanding indebtedness as of March 31, 2023 and our repayment obligations in the periods indicated:
(Rs in lakhs)
| Particulars | Carrying amount | Payment due period | |||
| < 1 year | 1-3 years | 3-5 years | > 5 years | ||
| Borrowings (Other than Debt | 14,778.00 | 4,506.25 | 6,305.68 | 2,942.35 | 1,023.73 |
| Securities and Subordinated Liabilities) | |||||
| Subordinate Debts | 1,998.30 | 999.62 | 998.68 | - | - |
| Debt Securities | 1,000.00 | 1,000.00 | - | - | - |
Contingent Liabilities and Capital Commitments
The following table sets forth our contingent liabilities and capital commitments as of March 31, 2023:
| Contingent liabilities and commitments | |
| (A) Contingent Liabilities | |
| Corporate Guarantee to financial institution | 2,038.43 |
| (B) Commitments | - |
| Total | 2,038.43 |
? The Companys pending litigations comprise of claims against the Company by the customers and proceedings pending with other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in the financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
Off-Balance Sheet Commitments and Arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Capital to Risk-weighted Assets Ratios ("CRAR")
The following table sets forth certain details of our CRAR derived from our Restated Financial Statements, as of the dates indicated:
| Particulars | March 31, 2023 | March 31, 2022 | March 31, 2021 |
| CRAR % | 51.18 | 36.25 | 30.29 |
| CRAR - Tier I Capital % | 49.26 | 33.09 | 26.78 |
| CRAR - Tier II Capital % | 1.92 | 3.16 | 3.51 |
For further information in relation to CRAR, see "Risk Factors - Our inability to maintain our capital adequacy ratio could adversely affect our business" on page 40.
Debt/ Tangible Equity Ratio
Our debt/equity ratio as of March 31, 2023, March 31, 2022 and March 31, 2021 was 1.29, 1.68 and 2.44 respectively.
| Credit Ratings | ||||||
(Rs in lakhs) |
||||||
| Facility | As at | |||||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | ||||
| Amount | Ratings | Amount | Ratings | Amount | Ratings | |
| Long Term bank facilities | 15,000.00 | ACUITE BBB- /Stable | 15,000.00 | ACUITE BB+ | 24,700.00 | ACUITE BBB- |
| Non - | 2,000.00 | ACUITE BBB- | 1,000.00 | ACUITE | 1,000.00 | ACUITE BBB- |
| Convertible | /Stable | BB+ | ||||
| Debentures | ||||||
*Current Rating Review is under process as on the Balance sheet date.
Related Party Transactions
We enter into various transactions with related parties in the ordinary course of business. For further information relating to our related party transactions, see "Restated Financial Statements" on page 272.
Quantitative and Qualitative Disclosure about Market Risk
Our Companys risk is managed through an integrated risk management framework, including ongoing identification, measurement and monitoring, subject to risk limits and other controls. Our Company is exposed to credit risk, liquidity risk and interest rate risk.
Credit Risk
Credit risk is the risk that our Company will incur a loss because its customers or counterparties fail to discharge their contractual obligations. Our Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties. For instance, our Company has guidelines in place covering the acceptability and valuation of each type of collateral. We also adhere to RBI guidelines in respect of maintenance of adequate LTV ratios.
Liquidity Risk
Liquidity risk is defined as the risk that our Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that our Company might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available to our Company on acceptable terms. To limit this risk, management has arranged for diversified funding sources and adopted a policy of managing assets with liquidity in mind and monitoring future cash flows and liquidity on a daily basis.
Liquidity risk is managed in accordance with our Asset Liability Management Policy. This policy is framed as per the current regulatory guidelines and is approved by the Board of Directors. The Asset Liability Management Policy is reviewed periodically to incorporate changes as required by regulatory stipulation or to realign the policy with changes in the economic landscape. The Asset Liability Committee of our Company formulates and reviews strategies and provides guidance for management of liquidity risk within the framework laid out in the Asset Liability Management Policy.
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The core business of our Company is providing 1. Vehicle financing, comprising of Used Commercial Vehicle, 2 Wheeler Loans, Used 2 Wheeler Loans and Business Finance. Our Company borrows through various financial instruments to finance its core lending activity. These activities expose our Company to interest rate risk. Interest rate risk is measured through earnings at risk from an earnings perspective and through duration of equity from an economic value perspective. The interest rate risk is monitored on a quarterly basis.
Auditors Observations
Except as set out below, there have been no reservations/ qualifications/ adverse remarks/ emphasis of matters highlighted by our Statutory Auditors in their examination report on the Restated Financial Information:
| Period | Emphasis of Matters |
| Financial year March 31, 2023 | ended Nil |
| Financial year March 31, 2022 | ended Emphasis of Matter |
| We draw your attention to Notes to accounts of the Financial Statement which describes to the extent to which the COVID-19 pandemic will impact the Companys results will depend on future developments, which are highly uncertain. Further, such estimates are based on current fads and circumstances and may not necessarily reflect the future uncertainties and events arising from the full impact of the COVID 19 pandemic. | |
| Financial year March 31, 2021 | ended Emphasis of Matter |
| We draw your attention to Notes to accounts of the Financial Statement which describes to the extent to which the COVID-19 pandemic will impact the Companys results will depend on future developments, which are highly uncertain. Further, such estimates are based on current fads and circumstances and may not necessarily reflect the future uncertainties and events arising from the full impact of the COVID 19 pandemic. |
Unusual or infrequent Events or Transactions
Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
Known Trends or Uncertainties
Our business has been subject, and we expect it to continue to be subject, to significant economic changes arising from the trends identified above in "Significant Factors affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" on pages 338 and 30 respectively. To our knowledge, except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on our revenues or income.
Significant economic changes that materially affect or are likely to affect income from continuing operation
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations identified above in "Significant Factors affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" on pages 338 and 30 respectively.
Recent accounting pronouncements
As on the date of this Draft Red Herring Prospectus, there are no recent accounting pronouncements, which we believe would have a material effect on our financial condition or results of operations.
New Products or Business Segments
Except as described in this Draft Red Herring Prospectus, we have not publicly announced any new products or business segments nor have there been any material increases in our revenues due to increased disbursements and the introduction of new products.
Future Relationship between Cost and Income
Other than as described elsewhere in the sections "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 30, 207 and 337, respectively, to our knowledge, there are no known factors that will have a material adverse impact on our operations and financial condition.
Significant Dependence on a Single or Few Customers or Suppliers
Given the nature of our business operations, we do not believe our business is dependent on any single or a few customers.
Competitive Conditions
We operate in a competitive environment. See sections, "Our Business", "Industry Overview", "Risk Factors" on pages 207, 180 and 30 respectively.
Significant Developments after March 31, 2023 that may affect our future results of operations
Other than as disclosed in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since March 31, 2023 that could materially and adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
As a result of having our NCDs listed, our Company is subject to the continuous disclosure obligations under the SEBI Listing Regulations. This requires us to publish our quarterly financial results, subjected to a limited review by our statutory auditors, for every quarter within 45 days from the completion of the previous quarter, as well as submit a copy of the financial results to the debenture trustees on the same day the information is submitted to stock exchanges.
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