Notes to Accounts of SI Capital & Financial Services Ltd.

Mar 31, 2025

5.7 Provisions

Provisions are recognised when the enterprise has a present obligation (legal or constructive) as a result of past events, and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.

When the effect of the time value of money is material, the enterprise determines the level of provision by discounting the
expected cash flows at a pre-tax rate reflecting the current rates specific to the liability. The expense relating to any provision
is presented in the statement of profit and loss net of any reimbursement.

5.8 Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non- occurrence of one or more uncertain future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence
in the financial statements.

5.9 Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Ind AS 33 on Earnings per share. Basic EPS
is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after attributable taxes) by
the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders
and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have
been issued at a later date. In computing the dilutive earnings per share, only potential equity shares that are dilutive and
that either reduces the earnings per share or increases loss per share are included.

5.10 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker (CODM).

The Board of Directors (BOD) of the Company assesses the financial performance and position of the Company, and makes
strategic decisions. The BOD, which has been identified as being the chief operating decision maker. The Company is
engaged in the business of

i) Lending finance and ii) Fees & commission income. The said business are aggregated for the purpose of review of
performance by CODM. Accordingly, the Company has concluded that the business of lending finance and fees &
commission income to be the only reportable segment.

5.11 Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to
extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the
expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend
or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any
significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the
importance of the underlying asset to Company''s operations taking into account the location of the underlying asset and the
availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the
current economic circumstances. Since all leases of the Company is for a term less than 12 months, single lessee accounting
model under Ind AS 116 is not applicable.

6 Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with the Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
accompanying disclosure and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimates are revised and future periods are affected.

Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about
these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of
assets or liabilities in future periods.

7 Impairment of loans portfolio

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

It has been the Company’s policy to regularly review its models in the context of actual loss experience and adjust when
necessary. The impairment loss on loans and advances is disclosed in more detail in Note 5.1(vi) Overview of ECL
principles.

In case, higher provisions are to be considered as per the prudential norms of the Reserve Bank of India, they are considered.

8 Effective Interest Rate (EIR) method

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

This estimation, by nature, requires an element of judgement regarding the expected behaviour and life-cycle of the
instruments, as well expected changes to India’s base rate and other fee income/expense that are integral parts of the
instrument.

Investment designated at FVTPL is a portfolio of equity instruments. Equity instruments have been classified at Fair value through
profit and loss since cash flows from equity instruments does not represent solely payment of principal and interest.

During the FY 2023-24, Certain investments as mentioned below is recognised as Prior period errors due to omissions from, and
misstatements in the entity''s financial statements of earliest prior periods as per paragraph 42 subject to paragraph 43 of Ind As 8
''Accounting Policies,changes in Accounting Estimates and Errors''.As per the said standard,the entity shall correct material prior
period errors retrospectively except to the extent that it is impracticable to determine either the period -specific effects or the
cumulative effect of the error in the first set of financial statements approved for issue after their discovery by:

(a) restating the comparative amounts for the prior period(s) presented in which the error occurred;or

(b) if the error occurrred before the earliest prior period presented,restating the opening balance of assets,liabilities and equity
for the earliest prior period presented

During the financial year 2023-24, while undergoing the procedures and processes in the shifting of registered office of the company
from the jurisdiction of RoC-Chennai to RoC- Coimbatore, the company discovered physical share certificates of some investments
made in the past. Those shares were dematerialised and brought to the demat account of the company.The prior periods errors were
not retrospectively restated by adjusting opening balances, as the amounts involved were deemed immaterial.

The company has issued Secured Unlisted Redeemable Non-Convertible Debentures (the“Debentures”)
during the year aiming to increase the fund inflow in trenches,and in dematerialized form to the proposed
Person(s) belonging to Promoter Category and or to Person(s) belonging to Non-promoter category, by way
of Private Placement (“Debenture issue”) .

During the year 2024-25, for meeting the prospective financial needs directing towards its growth and
expansion, the company has raised Rs.34.5 Lakhs from 8 persons through issuance of Secured unlisted
Redeemable Non- Convertible Debentures by way of private placement in dematerialized form. The
Company has allotted 3,450 Secured unlisted Redeemable Non-Convertible Debentures at the rate of
Rs.1000 each. The Company has redeemed 6,150 Secured unlisted Redeemable Non-Convertible
Debentures at the rate of Rs.1000 each.

Debenture Redemption Reserve

Pursuant to notification issued by Ministry of Corporate Affairs on 16th August, 2019 in exercise of the
powers conferred by sub- sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the
Central Government amended the Companies (Share Capital and Debentures) Rules, 2014. In the principal
rules, in rule 18, for sub-rule (7), the limits with respect to adequacy of Debenture Redemption Reserve and
investment or deposits for listed companies (other than All India Financial Institutions and Banking
Companies as specified in sub-clause (i)), Debenture Redemption Reserve is not required to maintain in case
of public issue of debentures as well as privately placed debentures for NBFCs registered with Reserve Bank
of India under section 45-IA of the RBI Act, 1934.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed
by the Board of Directors (if any) is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of
the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.

Nature and purpose of Reserves

Statutory reserve (Statutory Reserve pursuant to Section 45-IC of The RBI Act, 1934): Section 45IC
of Reserve Bank of India Act, 1934 ("RBI Act, 1934") defines that every non banking finance institution
which is a Company shall create a reserve fund and transfer therein a sum not less than twenty percent of
its net profit every year as disclosed in the statement of profit and loss before any dividend is declared. The
Company has not created any special reserve (20% of Profit) under Section 45-IC of RBI Act, 1934 for
Financial year FY 2023-24 since, the Company has incurred losses.

Note 37: Retirement Benefit Plan
Defined Contribution Plan

The Company makes Provident Fund contribution which is defined contribution plan for qualifying employees.
Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the
benefits. The Company recognized Rs. 3.85 lakhs (31 March 2024: Rs. 4.27 Lakhs) for Provident Fund
contribution in the Statement of Profit and Loss. The contribution payable to these plans by the Company are at
rates specified in the rules of the Scheme.

Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of
service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

Note 38: Convertible Warrants

During the year the company has allotted 4,50,000 equity shares each against the conversion of 4,50,000
Convertible Warrants each held by Mr.Mekkattukulam Anto Jayson & Mr Jyothish A R on 16.04.2024 and
alloted 2,00,000 & 1,50,000 equity shares against conversion of 2,00,000 & 1,50,000 Convertible Warrants held
by Mr.Mekkattukulam Anto Jayson & Sharewealth secuirities Ltd.

Note:

a) Related parties have been identified on the basis of the declaration received by the management and other
records

b) Loans given to related parties are repayable on demand.

c) The remuneration to the key managerial personnel does not include the provisions made for gratuity.

Note 40: Maturity analysis of assets and liabilities

The table below shows an analysis of assets and liabilities analysed according to when they are expected to be
recovered or settled.

Note 41: Contingent liabilities, commitments and leasing arrangements

Note 41 (i): Contingent Liabilities

The Company is not exposed to any contingent liabilities during the current and previous year.

Note 41 (ii): Commitments

The Company does not have any irrevocable commitments as at 31st March 2025 and 31st March 2024.

Note 41 (iii): Lease Disclosures (entity as a lessee)

The Company has not recognised ROU asset and lease liability for all lease contracts since, all such leases are
either low value leases or short term leases (lease term of twelve months or less).

Note 42: Fair Value Measurement

42.1 Valuation principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction in the principal (or most advantageous) market at the measurement date under current market
conditions , regardless of whether that price is directly observable or estimated using a valuation technique.

In order to show how fair values have been derived, financial instruments are classified based on a hierarchy
of valuation techniques.

42.2 Valuation governance

The Company''s process to determine fair values is part of its periodic financial close process. The Audit
Committee exercises the overall supervision over the methodology and models to determine the fair value
as part of its overall monitoring of financial close process and controls. The responsibility of ongoing
measurement resides with business units . Once submitted, fair value estimates are also reviewed and
challenged by the Risk and Finance functions.

42.3 Assets and liabilities by fair value hierarchy

The following table shows an analysis of financial instruments recorded at fair value by level of the fair value
hierarchy:

42.4 Valuation techniques Equity instruments

The majority of equity instruments are actively traded on public stock exchanges with readily available active
prices on a regular basis. Such instruments are classified as Level 1. Units held in funds are measured based
on their published net asset value (NAV), taking into account redemption and/or other restrictions. Such
instruments are generally Level 2. Equity instruments in non-listed entities included investment in private
equity funds are initially recognised at transaction price and re measured (to the extent information is
available) and valued on a case-by-case and classified as Level 3.

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments
which are not recorded and measured at fair value in the Group’s financial statements. These fair values were
calculated for disclosure purposes only.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying
amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include:
cash and balances, balances other than cash and cash equivalents, trade payables and other financial liabilities
without a specific maturity. Such amounts have been classified as Level 2 on the basis that no adjustments have been
made to the balances in the balance sheet.

Loans and advances to customers

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate
assumptions for credit risks, foreign exchange risk, probability of default and loss given default estimates.

Note 43: Risk Management

Risk is an integral part of the Company''s business and sound risk management is critical to the success. As a financial
intermediary, the Company is exposed to risks that are particular to its lending and the environment within which it
operates and primarily includes credit, liquidity and market risks. The Company has a risk management policy which
covers risk associated with the financial assets and liabilities. The Board of Directors of the company are responsible
for the overall risk management approach, approving risk management strategies and principles. The company have
a risk management policy which covers all the risk associated with its assets and liabilities.

The Company has implemented comprehensive policies and procedures to assess, monitor and manage risk
throughout the Company. The risk management process is continuously reviewed, improved and adapted in the
changing risk scenario and the agility of the risk management process is monitored and reviewed for its
appropriateness in the changing risk landscape. The process of continuous evaluation of risks includes taking stock
of the risk landscape on an event-driven basis.

The Company has an elaborate process for risk management. Major risks identified by the businesses and functions
are systematically addressed through mitigating actions on a continuing basis.

Credit Risk

Credit risk is the risk that a customer or counterparty will default on its contractual obligations resulting in financial
loss to the Company. The Company’s main income generating activity is lending to customers and therefore credit
risk is a principal risk. Credit risk mainly arises from loans and advances.

The credit risk management policy of the Company seeks to have following controls and key metrics that allows
credit risks to be identified, assessed, monitored and reported in a timely and efficient manner in compliance with
regulatory requirements.

- Standardize the process of identifying new risks and designing appropriate controls for these risks

- Maintain an appropriate credit administration and loan review system

- Establish metrics for portfolio monitoring

- Minimize losses due to defaults or untimely payments by borrowers

- Design appropriate credit risk mitigation techniques

In order to mitigate the impact of credit risk in the future profitability, the company makes reserves basis the expected
credit loss (ECL) model for the outstanding loans as balance sheet date.

The below discussion describes the Company''s approach for assessing impairment as stated in the significant
accounting policies.

The Company considers a financial instrument defaulted and therefore Stage 3 (credit impaired) for ECL
calculations in all cases when the borrower becomes 120 days past due on its contractual payments.

As a part of a qualitative assessment of whether a customer is in default, the Company also considers a variety of
instances that may indicate unlikeness to pay. When such events occur, the Company carefully considers whether the
event should result in treating the customer as defaulted and therefore assessed as Stage 3 for ECL calculations or
whether Stage 2 is appropriate.

Exposure at Default (EAD)

The outstanding balance at the reporting date is considered as EAD by the Company. Considering that the PD
determined above factors in amount at default, there is no separate requirement to estimate EAD.

The Company don''t have historical information and hence uses the PD default rates stated by external
reporting agencies. Considering the different products and schemes, the Company has bifurcated its loan portfolio
into various pools.

LGD Rates have been considered based on proxy FIRB rates for all loans.

The provision computed under ECL is higher when compared with the provision prescribed as per RBI norms
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 sub¬
standard assets, doubtful assets and loss assets as provided by RBI norms.Hence provisioning is considered as
per expected credit loss model.

The entity shall after taking into account the degree of well defined credit weaknesses and extent of dependence
on collateral security for realisation, classify its lease/hire purchase assets, loans and advances and any other
forms of credit into the following classes namely,standard,substandard,doubtful assets and Loss assets.

For Loss assets,the entire asset shall be written off. If the assets are permitted to remain in the books for any
reason, 100% of the outstandings is provided.

And for Doubtful assets,100% provision to be created to the extent to which the advance is not covered by the
realisable value of the security to which the entity has a valid recourse shall be made. The realisable value is
estimated on a realistic basis.

Period for which the asset has and the percentage of provision to be created are as followed:

Asset & Liability management

Asset and Liability Management (ALM) is defined as the practice of managing risks arising due to mismatches in
the asset and liabilities. Company’s funding consist long term source with different maturity patterns and varying
interest rates. On the other hand, the asset book also comprises of loans of different duration and interest rates.
Maturity mismatches are therefore common and has an impact on the liquidity and profitability of the company.
It is necessary for Company’s to monitor and manage the assets and liabilities in such a manner to minimize
mismatches and keep them within reasonable limits.

The objective of this policy is to create an institutional mechanism to compute and monitor periodically the
maturity pattern of the various liabilities and assets of Company to (a) ascertain in percentage terms the nature
and extent of mismatch in different maturity buckets, especially the 1-30/31days bucket, which would indicate
the structural liquidity (b) the extent and nature of cumulative mismatch in different buckets indicative of short
term dynamic liquidity and (c) the residual maturity pattern of repricing of assets and liabilities which would
show the likely impact of movement of interest rate in either direction on profitability. This policy will guide
the ALM system in Company.

The scope of ALM function can be described as follows:

- Liquidity risk management

- Management of market risks

- Others

Liquidity risk refers to the risk that the Company may not meet its financial obligations. Liquidity risk arises due
to the unavailability of adequate funds at an appropriate cost or tenure. The objective of liquidity risk
management, is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company consistently generates sufficient cash flows from operating and financial activities to meet its
financial obligations as and when they fall due. Our resource mobilisation team sources funds from multiple
sources. The resource mobilisation team is responsible for diversifying fund raising sources, managing interest
rate risks and maintaining a strong relationship with banks, financial institutions, mutual funds, insurance
companies, other domestic and foreign financial institutions and rating agencies to ensure the liquidity risk is well
addressed.

The table below provide details regarding the contractual maturities of significant financial assets and liabilities
as on:-

Market Risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of
changes in market factor. Such changes in the values of financial instruments may result from changes in the interest
rates, credit, liquidity, and other market changes. The Company is exposed to two types of market risk as follows:

Interest Rate Risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in
market interest rates.

We are not subject to interest rate risk, because we lend to clients at fixed interest rates and for periods that may differ
from our funding sources and our borrowings i.e. subordinated debts are at fixed interest rate for different periods.

Price Risk

The Company''s exposure to price risk is not material.

Operational and business risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls
fail to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or
lead to financial loss. The Company cannot expect to eliminate all operational risks, but it endeavours to manage these
risks through a control framework and by monitoring and responding to potential risks. Controls include effective
segregation of duties, access, authorisation and reconciliation procedures, staff education and assessment processes,
such as the use of internal audit.

Note 46: Segment Reporting:

The Principal business of the company is financing long and medium term loans and dealing in foreign currency.
Though the company has earned income from other sources in the form of dividend on investments, interest and
profit on redemption of mutual funds, the percentage of other business income does not exceed 10% of the gross
turnover of the principal business, and as such no segment reporting has been made.

i) Capital to risk-weighted assets ratio,TIER I and TIER II has been computed on a standalone basis as
per relevant RBI guidelines.

ii) Liquidity Coverage Ratio(Highly Liquid Asset Amount(HQLA)/T otal Net Cashflow)

For Ayyar & Cherian For and on behalf of the Board of Directors

Chartered Accountants

FRN:000284S

Sd/- Sd/- Sd/-

Dijo Philip Mathew Anto Mekkattukulam Jayson T. B. Ramakrishnan

Partner Managing Director ^Director

Membership No.224930 DIN: 10528274 DIN: 10528274

>IN: 25224930BMINT G9226 _{Sd/- Sd/-}

Sujith K Ravindranath Jayasree V

Company Secretary Chief Financial Officer

Membership No.:A39757

Place: Ernakulam Place: Thrissur

Date: 27-05-2025 Date: 27-05-2025

---

Mar 31, 2024

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Ounnj the h-«n

The compi/iy lv»s issued Secured Jrilistec Redeemable Nonconvertible Debenttres

for meeting One prospective financial needs directing towards ''ts growth and expansion, your company has raised Ks. 1.07b crcres trem 31 persons belonging to promote'' and non promote* category through issuance of Seared unlisted Redeemable Non-Convertibte Debentures by way of private placement In dematerlallzed form In the las: ijuatw. The Company has allotted 10750 Secured unisled Redeemable Non-Conveitible Debentures at the rate of Rs.lCOO each.

Terms/ rights attached to equity shares

The Company has only or>e class of equity shares having a per value of Rs. 10/- pc- share. Faeh holder o'' equity shares is entitled to cne vote per share. The Company declares and pays dividends in Indian rupees. Tne dividend proposed by the Board of Directors (if anyi is subject to the app''oval of the shareho.ders in the ensuing Annual General Meeting

lr the event o'' liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after clstrlbutson of all preferential amounts. The distribution wi.l be m proportion to the number o'' equity shares held by the shareholders. Consequent upon the approval of shareholders of the Company accorded for preferential issue through postal ballot on March 17. 2022 and In-prMc''pte approval accorded by the BSC Limited on March 23. 2022.alloted ol 2.CO.OOO (Two Lakh only) Equity Shares of face value Rs. 10/- (Rupees Ten only) each, at a price of Rs.25/- (Rupees Twenty five only) each, including a premium of Rs.15/- (Rupees Fifteen only)each to Mr Anu T Chertyanla non promoter i. Additionally in Octctier 2022 . 2 lakns equity shares were issued as a result of conversion of 2 lakh converaiale warrants of face value Rs. 10/- iRupees Ten only) each, at a price of Rs.25/- (Rupees Twenty five only) each, including a premium of Rs.15/- (Rupees Fifteen onlyieach to Share wea.th Securities Limited (a promoter).

As per the records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial intc-est. the above shareho.dirg represents both lega. and beneficial ownership of shares.

Nature and purpose of Reserves

Statutory reserve (Statutory Reserve pursuant to Section 45-IC of The RBI Act, 1934): Section 45IC of Reserve Bank of India Act, 1934 ("RBI Act, 1934") defines that every non banking finance institution which is a Company shall create a reserve fund and transfer therein a sum not less than twenty percent of its net profit every year as disclosed in the statement of profit and loss before any dividend is declared. The Company has not created any special reserve (20% of Profit) under Section 45-IC of RBI Act, 1934 for Current year (FY 2022-23) and Previous year (FY 2021-22) since, the Company has incurred lossess._

Mote 37: Retirement Benefit Plan Defined Contribution Plan

The Company makes Provident Fund contribution which is defined contribution plan for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs. 4.27 lakhs (31 March 2023: Rs. 1.74 Lakhs) for Provident Fund contribution in the Statement of Profit and Loss. The contribution payable to these plans by the Company are at rates specified in the rules of the scheme.

Defined Benefit Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets s gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

Mote 38: Convertible Warrants

During the year the company has allotted 2,00,000 equity shares against the conversion of 2,00,000 Convertible Warrants held by Mr.Anu T Cheriyan on 05.10.2023.

Note 41 H): Contingent Liabilities

The Company is not exposed to any contingent liabilities during the current and previous year.

11.. (ii)i .Cflmmitnwnto.

The Company does not have any irrevocable commitments as at 31st March 2023 and 31st March 2022.

Note 41 (iii).l.,Lease Discloairgsientity as a lessee)

The Company has not recognised ROU asset and lease liability for all lease contracts since, all such

leases are either low value leases or short term leases (lease term of twelve months or less)._

Note 42: Fair Value Measurement

42.1 Valuation principles

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions , regardless of whether that price is directly observable or estimated using a valuation technique. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques.

42.2 Valuation governance

The Company''s process to determine fair values is part of its periodic financial close process. The Audit Committee exercises the overall supervision over the methodology and models to determine the fair value as part of its overall monitoring of financial close process and controls. The responsibility of ongoing measurement resides with business units . Once submitted, fair value estimates are also reviewed and challenged by the Risk and Finance functions.

42.4 Valuation techniques Equity instruments

The majority of equity instruments are actively traded on public stock exchanges with readily available active prices on a regular basis. Such instruments arc classilicd as Level 1. Units held in funds arc measured based on their published net asset value (NAV), taking into account redemption and/or other restrictions. Such instruments are generally Level 2. Equity instruments in non listed entities included investment in private equity funds are initially recognised at transaction price and re-measured (to the extent information is available) and valued on a case-by-case and classified as Level 3.

Valuation methodologies of financial instruments not measured at fair value

Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the Group’s financial statements. These fair values were calculated for disclosure purposes only.

Short-term financial assets and liabilities

For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts, which are net of impairment, are a reasonable approximation of their fair value. Such instruments include: cash and balances, balances other than cash and cash equivalents, trade payables and other financial liabilities without a specific maturity. Such amounts have been classified as Level 2 on the basis that no ad)ustments have been made to the balances In the balance sheet.

Loans and advances to customers

The fair values of loans and receivables are estimated by discounted cash flow models that incorporate assumptions for credit risks, foreign exchange risk, probability of default and loss given default estimates.

tisk is an integral part of the Company''s business and sound risk management is critical to the success. As a financial intermediary, :he Company is exposed to risks that are particular to its lending and the environment within which it operates and primarily ncludes credit, liquidity and market risks. The Company has a risk management policy which covers risk associated with the financial issets and liabilities. The Board of Directors of the company are responsible for the overall risk management approach, approving isk management strategies and principles. The company have a risk management policy which covers all the nsk associated with its assets and liabilities.

The Company has Implemented comprehensive policies and procedures to assess, monitor and manage risk throughout the Company, rhe risk management process Is continuously reviewed, improved and adapted in the changing risk scenario and the agility of the risk nanagement process is monitored and reviewed for its appropriateness in the changing risk landscape. The process of continuous evaluation of risks includes taking stock of the risk landscape on an event-driven basis.

Hie Company has an elaborate process for risk management. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

Credit Risk

Credit risk is the risk that a customer or counterparty will default on its contractual obligations resulting In financial loss to the Company. The Company''s main income generating activity is lending to customers and therefore credit risk Is a principal risk. Credit isk mainly arises from loans and advances.

rhe credit risk management policy of the Company seeks to have following controls and key metrics that allows credit risks to be dentified, assessed, monitored and reported in a timely and efficient manner in compliance with regulatory requirements.

- Standardize the process of identifying new risks and designing appropriate controls for these risks

- Maintain an appropriate credit administration and loan review system

• Establish metrics for portfolio monitoring

- Minimize losses due to defaults or untimely payments by borrowers

• Design appropriate credit risk mitigation techniques

n order to mitigate the impact of credit risk in the future profitability, the company makes reserves basis the expected credit loss [ECU model for the outstanding loans as balance sheet date.

Fhe below discussion describes the Company’s approach for assessing impairment as stated in the significant accounting policies.

rhe Company considers a financial instrument defaulted and therefore Stage 3 (credit impaired) for ECL calculations In all cases vhen the borrower becomes 180 days past due on its contractual payments.

Vs a part of a qualitative assessment of whether a customer is in default, the Company also considers a variety of instances that may ndicate unlikeness to pay. When such events occur, the Company carefully considers whether the event should result in treating the :ustomer as defaulted and therefore assessed as Stage 3 for ECL calculations or whether Stage 2 is appropriate.

Exposure at Default (EAD)

The outstanding balance at the reporting date is considered as EAD by the Company. Considering that the PD determined above factors in amount at default, there is no separate requirement to estimate EAD.

The Company don''t have historical information and hence uses the PD default rates stated by external reporting agencies. Considering the different products and schemes, the Company has bifurcated Its loan portfolio Into various pools.

Loss Given Default

The Company determines its recovery rates by analysing the recovery trends over different periods of time after a loan has defaulted. Based on its analysis of historical trends, the Company has assessed that significant recoveries happen in the year in which default has occurred.

LGD Rates have been considered based on proxy FIRB rates for all loans.

The Company has applied management overlays to the ECL Model to consider the impact of the Covid 19 pandemic on the provision. The adjustment to the probability of default has been assessed considering the likelihood of increased credit risk and consequential default due to the pandemic.

The provision computed under ECL is lower when compared with the provision prescribed as per RBI norms 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 sub standard assets, doubtful assets and loss assets as provided by RBI norms. Hence provisioning is considered as per RBI guidelines.

The entity shall after taking into account the degree of well defined credit weaknesses and extent of dependence on collateral security for realisation, classify its lease/hire purchase assets, loans and advances and any other forms of credit into the following classes namely.standard.substandard.doubtful assets and Loss assets.

For Loss assets,the entire asset shall be written off. If the assets are permitted to remain In the books for any reason, 100* of the outstandings is provided.

The company has decided to write off the unrecovcred Nonperforming Assets worth Rs. 14.27 Lakhs and group under other expenses to give a true and fair view of the accounts.

And for Doubtful aastes.100% provision to be created to the extent to which the advance is not covered by the realisable value of the searlty to which the entity has a valid recourse shall be made. The realisable value Is estimated on a realistic basis.

Asset 6 Liability management

Asset and Liability Management (AIM) is defined as the practice of managing risks arising due to mismatches in the asset and liabilities. Company''s funding consist long term source with different maturity patterns and varying interest rates. On the other hand, the asset book also comprises of loans of different duration and interest rates. Maturity mismatches are therefore common and has an impact on the liquidity and profitability of the company. It is necessary for Company’s to monitor and manage the assets and liabilities In such a manner to minimize mismatches and keep them within reasonable limits.

The objective of this potky is to create an institutional mechanism to compute and monitor periodically the maturity pattern of the various liabilities and assets of Company to (a) ascertain in percentage terms the nature and extent of mismatch In different maturity buckets, especially the 1-30/31 days bucket, which would indicate the structural liquidity (b) the extent and nature of cumulative mismatch In different buckets indicative of short term dynamic liquidity and (c) the residual maturity pattern of repricing of assets and liabilities which would show the likely impact of movement of interest rate in either direction on profitability. This policy will guide the ALM system In Company.

The scope of ALM function can be described as follows:

- Liquidity risk management

• Management of market risks

- Others

Liquidity Risk

Liquidity risk refers to the risk that the Company may not meet Its financial obligations. Liquidity risk arises due to the unavailability of adequate funds at an appropriate cost or tenure. The objective of liquidity risk management, is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company consistently generates sufficient cash flows from operating and financial activities to meet its financial obligations as and when they fall due. Our resource mobilisation team sources funds from multiple sources. The resource mobilisation team is responsible for diversifying fund raising sources, managing Interest rate risks and maintaining a strong relationship with banks, financial institutions, mutual funds, insurance companies, other domestic and foreign financial institutions and rating agencies to ensure the liquidity risk is well addressed.

Market Risk

Aarket Risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in narket factor. Such changes in the values of financial instruments may result from changes 1n the interest rates, credit, liquidity, ind other market changes. The Company is exposed to two types of market risk as follows:

nterest Rate Risk

ntcrcst rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest ates.

tie are not subject to interest rate risk, because we lend to clients at fixed interest rates and for periods that may differ from our ''unding sources and our borrowings i.e. subordinated debts are at fixed interest rate for different periods.

’rice Risk

The Company’s exposure to price risk is not material.

Operational and business risk

Operational risk is the risk of loss arising from systems failure, human error, fraud or external events. When controls fail to operate effectively, operational risks can cause damage to reputation, have legal or regulatory implications, or lead to financial loss. The lompany cannot expect to eliminate all operational risks, but it endeavours to manage these risks through a control framework anc jy monitoring arid responding to potential risks. Controls include effective segregation of duties, access, authorisation anc econciliation procedures, staff education and assessment processes, such as the use of internal audit.

1 IAs defined

2 _Provisioning norms shall bo applicable as prescribed In these Directions_

All Accounting Standards and Guidance Notes issued By ICAI are applicable Including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/ fair value/ NAV In respect of unquoted investments shall be disclosed Irrespective of whether they are classified as long term or current in (5) above.

The Principal business of the company is financing tong and medium term loans and dealing in foreign currency. Though the company has earned income from other sources in the form of dividend on investments, interest and profit on redemption of mutual funds, the percentage of other business income does not exceed 10% of the gross turnover of the principal business, and as such no segment reporting has been made.

Note 49: Events after reporting date

There have been no events after the reporting date that require disclosure in these financial statements.

Note 50:Previous year figures

Previous year figures have been regrouped /reclassified, where necessary, to conform current year''s classification.

i) Capital to risk-weighted assets ratio,TIER I and TIER II has been computed on a standalone basis as per relevant RBI guidelines.

ii) Liquidity Coverage RatiolHighly Liquid Asset Amount(HQLA)/Total Net Cashflow}

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Mar 31, 2014

CORPORATE INFORMATION

S.I. Capital & Financial Services Limited is a public company incorporated in the State of Tamilnadu, India and regulated by the Reserve Bank of India as money changer company, Non Banking Finance Company (NBFC). The company has been engaged mainly in the following businesses :

a. Money Changer

b. Long/Medium Term Loans

c. Lease Finance

d. Hire Purchase and dealing in stock and securities

1 Land shown in fixed assets is at Thevara, Cochin is on co-ownership basis with M/s. Green Meadows Holiday Resorts Pvt. Ltd on equal co-ownership.

2 The balance in various accounts in Trade receivable and Current / Non Current liabilities are subject to confirmation and reconciliation. They have been shown as per values appearing in the books of accounts. 3 Current / Non Current Loans and Advances are subject to confirmation.The secured loans are sufficiently covered by securities. In spite of best efforts taken by the management, the Un-secured loans for which provision for doubtful debts had been created in earlier years could not be realised and the same is written off.

4 Advances for Land as stated in the schedules to accounts is for the purchase of lands at Thenkasi. The registration of the land having not been finalised, the amounts advanced towards the purchase of these lands remain as advances and is stated as such in the schedules to the accounts.

5 Related Parties disclousre as per Accounting Standard 18:

a) List of Parties - Directors, Group concerns and Associates. ii) Southern Warehousing Company Pvt Ltd iii) Mary Rodrigues

b) Related Party Transactions: 31.03.2014 Rent Paid to Mrs. Mary Rodrigues 78,000.00

6 Segment Reporting:

The Principal business of the company is dealing in foreign currency. Though the company has earned income from other sources in the form of dividend on investments, interest and profit on redemption of mutual funds, the percentage of other business income does not exceed 10% of the gross turnover of the principal business, and as such no segment reporting has been made.

7 Taxation

Income Tax:

Provision for current tax is made on the basis of minimum alternate tax provided in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax:

The deferred tax for timing differences is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax asset arising from timing differences are recongnised to the extent there is reasonable certainity that these would be realised in future.Consequently, Deferred tax asset on business loss carried forward has not been created.

8 Since the company has made operating profit during the year, 20% of the profit is transferred to a reserve as per RBI Guide Lines.

9 The Schedule to the Balance Sheet of a non-banking financial company [as required in terms of paragraph 13 of Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank), Directions, 2007 is annexed.

10 Prior year Comparatives Previous year''s figures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifications / disclosures.

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Mar 31, 2013

1. CORPORATE INFORMATION

S.I. Capital & Financial Services Limited is a public company incorporated in the State of Tamilnadu, India and regulated by the Reserve Bank of India as money changer company, Non Banking Finance Company (NBFC).

The company has been engaged mainly in the following businesses :

a. Money Changer

b. Long/Medium Term Loans

c. Lease Finance

d. Hire Purchase and dealing in stock and securities

2 Land shown in fixed assets is at Thevara, Cochin and is on co-ownership basis with M/s. Green Meadows Holiday Resorts Pvt. Ltd on equal co-ownership.

3 The balance in various accounts in Trade receivable and Current / Non Current liabilities are subject to confirmation and reconciliation. They have been shown as per values appearing in the books of accounts.

4 Current / Non Current Loans and Advances are subject to confirmation.The secured loans are sufficiently covered by securities. As regards Un-secured loans, though the management is confident of realising the loans recoverable, and for which necessary efforts are already in process, as a matter of abundant caution provision for doubtful loans have been created for the whole amount on these loans.

5 Advances for Land as stated in the schedules to accounts is for the purchase of lands at Thenkasi. The registration of the land having not been finalised, the amounts advanced towards the purchase of these lands remain as advances and is stated as such in the schedules to the accounts.

6 Segment Reporting:

The Principal business of the company is dealing in foreign currency. Though the company has earned income from other sources in the form of Dividend on investments and capital gain, the percentage ol other business income does not exceed 10% of the gross turnover of the principal business, and as such no Segment Reporting has been made.

7 Taxation

Income Tax:

Provision for current tax is made on the basis of minimum alternate tax provided in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax:

The deferred tax for timing differences is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax asset arising from timing differences are recognised to the extent there is reasonable certainity that these would be realised in future. Consequently, Deferred tax asset on business loss carried forward has not been created.

8 Since the company has made operating profit during the year, 20% of the profit is transferred to a reserve as per RBI Guide Lines.

9 Prior year Comparatives

Previous year''s figures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifications / disclosures.

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Mar 31, 2012

1. CORPORATE INFORMATION

S.I. Capital & Financial Services Limited is a public company incorporated in the State of Tamilnadu, India and regulated by the Reserve Bank of India as money changer company, Non Banking Finance Company (NBFC). The company has been engaged mainly in the following businesses :

a. Money Changer|

b. Long/Medium Term Loans

c. Lease Finance

d. Hire Purchase and dealing in stock and securities

2 Land shown in fixed assets is at Thevara, Cochin and is on co-owership basis with M/s. SSF Ltd. While 46.184 cents of land is jointly held by SI Capital and Financial Services Ltd, and SSF Ltd. 57.500 cents is individualy held by SI Capital & Financial Services Ltd., for the sake of convenience to sort-out certain outstanding issues and since the company has a branch office in Cochin. It was considered easier to tackle the day to day issues. However the management of SI Capital and Financial Services Ltd, has confirmed that the entire property is on equal co-ownership with SSF Limited.

3 The balance in various accounts in Trade receivable and Current / Non Current liabilities are subject to confirmation and reconciliation. They have been shown as per values appearing in the books of accounts.

4 Current / Non Current Loans and Advances are subject to confirmation.The secured loans are sufficiently covered by securities. As regards Un-secured loans, though the management is confident of realising the loans recoverable, and for which necessary efforts are already in process, as a matter of abundant caution provision for doubtful loans have been created for the whole amount on these loans.

5 Advances for Land as stated in the schedules to accounts is for the purchase of lands at Thenkasi. The registration of the land having not been finalised, the amounts advanced towards the purchase of these lands remain as advances and is stated as such in the schedules to the accounts.

Advance to SSF Ltd., which is subject to confirmation represents their share of Maintenance charges on Thevera property jointly held by both the companies.

6 Related Parties disclousre as per Accounting Standard 18: a) List of Parties - Group concerns and Associates.

i) SSF Ltd. ii) Southern Warehousing Company Pvt Ltd

7 Segment Reporting:

The Principal business of the company is dealing in foreign currency. Though the company has earned income from other sources in the form of Dividend on investments and capital gain, the percentage of other business income does not exceed 10% of the gross turnover of the principal business, and as such no Segment Reporting has been made.

8 Taxation Income Tax:

Provision for current tax is made on the basis of minimum alternate tax provided in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax:

The deferred tax for timing differences is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax asset arising from timing differences are recongnised to the extent there is reasonable certainity that these would be realised in future. Consequently, Deferred tax asset on business loss carried forward has not been created.

9 Since the company has made operating profit during the year, 20% of the profit is transfered to a reserve as per RBI Guide Lines.

10 Prior year Comparatives

Schedule VI to the Companies Act, 1956 is revised effective from 1 April 2011 and has significantly impacted the disclosures and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifications / disclosures.

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Mar 31, 2011

1. Land shown in fixed assets is at Thevara, Cochin and is on co-owership basis with M/s. SSF Ltd. While 46.184 cents of land is jointly held by SI Capital and Financial Services Ltd.,, and SSF Ltd., 57.500 cents is individualy held by Si Capital & Financial Services Ltd., Since the company has a branch office in Cochin . However the management of Si Capital and Financial Services Ltd., has confirmed that the entire property is on equal co-ownership with SSF Ltd.,

2. The balance in various accounts in Sundry Debtors and Sundry Creditors are subject to confirmation and reconciliation. They have been shown as per values appearing in the books of accounts.

3. Loans and Advances are subject to confirmation.The secured loans are sufficiently covered by securites. As regards Un-secured loans, though the management is confident of realising the loans recoverable, for which necessary efforts are already in process, as a matter of abundant caution provision for doubtful loans have been created for the whole amount on these loans.

4. Advances for Land as stated in the schedules to accounts is for the purchase of land at Thenkasi.

The registeration of the land having not been finalised, the amounts advanced towards the purchase of these lands remain as advances and is stated as such in the schedules to the accounts.

Advance to SSF Ltd., which is subject to confirmation represents their share of Maintenance charges on Thevera Property jointly held by both the companies.

5. Related Parties disclousre as per Accounting Standard 18:

a) List of Parties - Group concerns and Associates.

i) Si Cap Insurance Agency (P) Ltd.

ii) SSF Ltd.

iii) Southern Warehousing Co, Pvt Ltd

6. Segment Reporting:

The Principal business of the company is dealing in foreign currency. Though the company has earned income from other sources in the form of Dividend on investments and capital gain, the percentage of other business income does not exceed 10% of the gross turnover of the principal business, and as such no Segment Reporting has been made.

Deferred Tax:

The deferred tax for timing differences is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax asset arising from timing differences are recognised to the extent there is reasonable certainity that these would be realised in future. Consequently, Deferred Tax Liability on Business Loss carried forward has not been created.

7. Since the company has made operating profit during the year, 20% of the profit is transfered to a reserve as per RBI Guide Lines.

8. Previous year''s figures have been regrouped/rearranged wherever necessary to conform with current year presentation.

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Mar 31, 2009

1 Land shown in fixed assets is at Thevara, Cochin and is on equal co-owership basis with M/s. SSF Ltd.

2 The balance in various accounts in Sundry Debtors and Sundry Creditors are subject to confirmation and reconciliation. They have been shown as per values appearing in the books of accounts.

3 Sundry Debtors include Debtor from Company under the same management.

4 Loans and Advances are subject to confirmation. The secured loans are sufficiently covered by securities. As regards Un-secured loans, though the management is confident of realizing the loans recoverable, and for which necessary efforts are already in process, as a matter of abundant caution provision for doubtful loans has been created for the whole amount on these loans.

5 Advances for Land as stated in the schedules to accounts is for the purchase of lands at Thenkasi. The registration of the land having not been finalized, the amounts advanced towards the purchase of these lands remain as advances and is stated as such in the schedules to the accounts.

6 Related Parties disclosure as per Accounting Standard 18: a) List of Parties - Group concerns and Associates.

i) Si Cap Insurance Agency (P) Ltd.

ii) SSF Ltd.

iii) Southern Warehousing Co, Pvt Ltd

c) The maintenance expenses of Rs. 6,000/- has been incured on Thevara property held jointly with SSF Ltd.

7 Segment Reporting:

The Principal business of the company is dealing in foreign currency. Though the company has earned incomefrom other sources in the form of Dividend on investments and capital gain, the percentage of other business income does not exceed 10% of the gross turnover of the principal business, no Segment Reporting has been made.

8 Deferred Tax:

The deferred tax for timing differences is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax asset arising from timing differences are recognised to the extent there is reasonable certainity that these would be realised in future. Consequently, Deferred Tax Asset on Business Loss carried forward has not been created.

9 Since the company has made operating profit during the year, 20% of the profit is transfered to a reserve as per RBI Guide Lines.

10 Previous year's figures have been regrouped/rearranged wherever necessary to conform with current year presentation.