Accounting Policies of F Mec International Financial Services Ltd. Company

Mar 31, 2024

2 Significant Accounting Policies

2.1 Basis of Preparation

These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Tnd AS’) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 along with other relevant provisions of the Act and the Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 (‘the NBFC Master Directions’) issued by RBI.

Historical Cost Convention

The financial statements have been prepared on a historical cost basis, except for the following:

1) certain financial assets and liabilities that are measured at fair value;

2) defined benefit plans - plan assets measured at fair value.

Current and non-current classification

The financial statements have been prepared on accrual and going concern basis. All assets and liabilities have been classified as current or non current as per the Company’s normal operating cycle and other criteria as set out in the Division III of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities

2.2 Use of estimates and judgements

The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/ materialised.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existina as at the renortina date.

2.3 Revenue Recognition

(a) Interest income

The Company recognises interest income using Effective Interest Rate (EIR) on all financial assets subsequently measured at amortised cost or fair value through other comprehensive income (FVOC1). F.IR is calculated by considering ail 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 amortised cost of a financial liability.

The Company recognises 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. 2.17( a)] regarded as ‘stage 3’, the Company recognises interest income on the amortised cost net of impairment loss of the financial asset at EIR If the financial asset is no longer credit-impaired [as outlined in note no. 2 17(a)], 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 cashflows is recognised on realisation.

Interest on financial assets subsequently measured at fair value through profit or loss (FVTPL) is recognised at the contractual rate of interest.

(b) Other revenue from operations

The Company recognises revenue from contracts with customers (other than financial assets to which hid 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 recognises rewgjje only on satisfactory completion ot performance obligations. Revenue is measured at fair value of the considerajfirtjfjfgJtrJd^r rpeeivable. -

Fees and commission

The Company recognises 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 recognised 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 recognised 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 recognised on realisation.

Net gain on fair value changes

Financial assets are subsequently measured at fair value through profit or loss (FVTPL) or fair value through other comprehensi\e income (FVOC1), as applicable. The Company recognises gains/losses on fair value change of financial FVOC]^{meaSUre 8ains/1°sses on derecognition of financial asset measured at FVTPL and}

Sale of services

The Company , on de-recognition of financial assets where a right to service the derecognised financial assets for a fee is retained, recognises 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 recognised as service income and any decrease is recognised as an expense in the period in which it occurs. The embedded interest component in the service asset is recognised as interest income in line with Ind AS 109 "Financial instruments''.

Other revenues on sale of services are recognised as per Ind AS 115 "Revenue From Contracts with Customers'' as articulated above in ‘other revenue from operations’.

Recoveries of financial assets written off

The Company recognises income on recoveries of financial assets written off on realisation or when the right to receive the same without any uncertainties of recovery is established.

2.4 Property, Plant and Equipment

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognised in the Statement of Profit and Loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress”.

Depreciation is provided on a pro-rata basis on the written down value method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013 with the exception of the following:

• Depreciation on assets costing ^ 5,000 or less is provided @100% over a period of one year.

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

2.5 Intangible Assets

Separately purchased intangible assets are initially measured at cost. Intangible assets acquired in a business combination are recognised at fair value at the acquisition date. Subsequently, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any. Finite-life intangible assets are amortised on a straight-line basis over the period of their expected useful lives. Estimated useful life by major class of finite-life intangible asset is as follows:

Computer software - 5 years

2.6 Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of Assets. Qualifying Asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are treated as period cost and charged to the statement of profit and loss in the year in which it was incurred.

2.7 Impairment of non-financial assets

The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.

An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset’s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use Value in use is based Lgr.thc^estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects curreq^n%^dffl$af^tjte''nts of the time value of money and risk specific to the assets

2.8 Investments in subsidiaries

Investment in subsidiaries is recognised at cost and are not adjusted to fair value at the end of each reporting period. Cost of investment represents amount paid for acquisition of the said investment.

The Company assesses at the end of each reporting period, if there are any indications that the said investment may be impaired. If so, the Company estimates the recoverable value/amount of the investment and provides for impairment, if any i.e. the deficit in the recoverable value over cost.

2.9 Foreign Exchange Transaction

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transactions.

Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract. Any profit or loss arising on cancellation or renewal of forward exchange contracts are recognized as income Non-monetary items are carried at cost.

Any income or expense on account of exchange difference either on settlement or on translation is recognized and is reflected separately in the Statement of Profit & Loss.

In respect of foreign branch, the company has adopted integral foreign operation approach as per lnd AS 21 and accordingly revenue items have been converted at date of transaction date. Monetary Assets and Liabilities are converted at the year-end exchange rate. Exchange gain or loss arising out of above is charged to Statement of Profit & Loss.

2.10 Tax expenses

The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in the comprehensive income or in equity. In which case, the tax is also recognised in other comprehensive income or equity.

Current Tax:

Provision for 1 axation is ascertained on the basis of assessable profit computed in accordance with the provisions of Income Tax Act, 1961.

Minimum Alternate Tax (MAT) Credit:

Minimum Alternate Tax credit is recognized, as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit and Loss Account and shown as MAT Credit Entitlement under Loans & Advances. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

Deferred Tax:

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.

2.11 Employee benefits

Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and the undiscounted amount of such employee benefits are recognised in Statement of Profit and Loss in the period in which the employee renders the related services. These benefits include salaries, wages, bonus, performance incentives etc.

Defined Benefit Plan

Gratuity and long-term compensated absences are provided for based on actuarial valuation carried out at the close of each period. The actuarial valuation is done by an Independent Actuary as per projected unit credit method.

For defined benefit plans, the amount recognised as ‘Employee benefit expenses’ in the Statement of Profit and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of individual events such as past/future service benefit changes and settlements (such events are recognised immediately in the Statement of Profit and Loss). The amount of net interest expense calculated by applying the liability discount rate to the net defined benefit liability or asset is charged to ‘Employee benefits expense’ in the Statement of Profit and Loss. Any differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in jfituapal assumptions or experience adjustments within the plans, are recognised immediately in ‘Other comprehensjj^j^MfljfjSttd subsequently not reclassified to the Statement of Profit and Loss.

Defined Contribution Plan

Contributions to defined contribution schemes such as employee provident fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company’s provident fund contribution, in respect of certain employees is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.

2.12 Segment reporting Identification of segments

As defined m lnd AS 108, the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments. The accounting principles used in the preparation of financial statements are consistently applied to record revenue and expenditure in individual segment and are as set out in the significant accounting policies

Allocation of common costs

Common allocable costs are allocated to each segment on reasonable basis.

Unallocated items

Include general corporate income and expense items which are not allocable to any business segment Segment policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

2.13 Cash Flow Statement

Cash flows are reported using the indirect method in accordance with lnd AS 7, whereby a profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows front operating, financing and investing activities of the Company are segregated.

2.14 Earning Per Share

Earning Per Share (EPS) is calculated by dividing the Net Profit or Loss for the period attributable to equity shareholders by the Weighted Average Number of equity shares outstanding during the period.

For the purpose of calculating Diluted Earning Per share, the Net Profit or Loss for the period attributable to equity shareholders is divided by the Weighted Average Number of shares outstanding during the period after adjusting for the effects of all dilutive potential equity shares.

2.15 Miscellaneous Expenditure

Share issue expenses are adjusted from Securities Premium Account at the time of issue of respective Shares.

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Mar 31, 2023

2 Significant Accounting Policies

2.1 Hants of Preparation

TIksc financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to ov the I rid AS'') as notified by Ministry of Corporate Audits pursuant to section 133 of tile Companies Act. 3(11t read with Itule 3 of the Companies (Indian Accounting Standards) Rules, 201S anJ Companies (Indian Accounting Standards) Amendment Rules, 2016 along with other relevant provisions of the Act arid the Muster Direction - Nun-Hanking Financial Company - System icnlly important Non-Deposit taking Company and Dc|,i.n taking Company i Reserve Dank) Directions. 2016 (''the NBFC Master Directions'') issued by RBI

Historical Cost Contention

I he financial statements have been prepared on a historical cost basis, except Jar the following

1) certain financial assets and liabilities tlitii are measured at fair value:

2) defined benefit plnn* - plan asset* measured nt lair value.

Current and non-currrnl classification

n*o financial statcjneiit, have been prepared on accrual and going concern basis All assets and liabilities have ken classified as current or non current as per the Company’s normal operating cycle and other criteria u> wt out in the Division III ol Schedule Hi to the Companies Act, 2013, Based on the nature of products und Ik time between acquisition of assets Tor unJ ihcir realisation in cask and cash equivalents, the Company tuts ascertained its operating cycle as 12 month* for the purpose of current or non-current classification of assets and liabilities

2.2 Use of estimates mid judgement*

Ibe estimates and judgment* used in ilif preparation of the financial statements are continuously evaluated In the Company and are based on historical experience and various other assumptions and factor* (Including expectations it luture events) tlmt the Company believes to be reasonable under die existing circumstances. DUVcicikc* between actual results and esTiunitcs arc recognised in the period in which the results arc known/ materialised.

I he said estimates ore based on the facts and events, Lluil existed as at the reporting date, or that occ urred alter that date but provide oddibonal c\ idence about conditions cxixtme as at the reporting dute.

13 Kiw''nut'' RMognirion (i) Intercit i atonic

Tlw Company recognises interest income using Effective interest Rate (HR) on all liumcul axsei* subsequently measured at amortised cost or fair value through other comprehensive income (FVOC1) | fK Is calculated by considering all costs und (iconic* attribuiablc to acquisition of a financial astet or assumption of a (in, me ul liabilih uni it represents a rate that exactly discount* estimated future cash pnymcnts.heceipts through tire jxpeeted life of die financial assct/fiuaticiul l.nbility to the gross currying umouiu of fl fuiunctal asset or to the amortised cost of a financial liability.

Tire Company recognises interest income by applying the E1R to die gross carrying amount of financial asset* utlier than credit-impaired assets In ease of credit-impaired financial asset* fa* *d out In note no. 2.17<;n| regard. « ''stage 3’, the Company recognises interest income on the amortised cost net of Impairment toss of the tlnnnns: nv>c id EIR It the financial asset is no longer credit-impaired fas outlined in note no, 2.l7(a)|, tire Company rev cm to tui (.touting interest income on a gross basis.

Delayed payment in terra (penal interest I levied on customers lot dolov in repayments’iion paymciji of contractual cashflow* is recognised on realisation.

Interest on financial asset subsequently measured w fair value through profit or loss (hVTPi ) is recognised at Lhc contractual rate of interest,

(b) Other revenue from operations

Tlie Company recognises revenue front contracts with customers (other than financial asset* to which |»U AS 109 ''Financial Instruments'' is applicable) based on a comprehensive assessment mode] as set out tn Inn AS 115 ''ilevwiue Itom contracts with customers''. The Company Identifies contract!*) with a customer and its performance obligations under the contract, determines the Iraiisueiinn price and its allocation to the performance obligations in the contract anti recognises revenue only on satisfactory'' completion uf performance obligations, Revenue is measured at fair value of live cuu.sidci.it ion received or receivable.

I''ves and commission

The Company recognises service and administration charges towards rendering of additional services to its loan customers on satisfactory completion of service delivery

Few on value added services and products arc recognised on rendering of services and products to rite customer.

Distribution income is earned by selling of services and products uf other entities!; under distribution arrangements The income so earned is recognised on successful sides on hchaif of other entities subject to there hemg no significant uncertainty of it* recovery. Foreclosure charges arc collected from loan customers for early psyitwnl/closure of loan iuid are recognised on reulisuiion.

Met gain an fair value changes

Financial assets urc subsequently measured nt fair value through profit or loss (PVTPL) or lair vuW through other comprehensive income (FVOCI), as applicable The Company recognises gains/fosscs oil fair value change of financial assets measured as FVTTl and realised gums/losscs on derecognition of tlnnncinl asset tneusured at FVTFl •> id F''VOCL

SaIc uf services

The Company, on ile-recognition offuuutcial assets where n right to service tlve derecognised financiai asset- for a tire is retained, recognises tho fair value uf future service fee income over service obligations oust on net basis a. service fee income in the statement of profit or loss and. correspondingly creates a service asset in Balance Sheet. Any subsequent increase in die fair value of service asset* I* recognised as service income and any decrease is recognised tvs an expense in the period in which it occur*. The embedded interest component in tlve *erv ice asset is recognised as interest in, imc in line with Ind AS 109 ''Fimuiciul instruments''.

Other revenue* on *ale uf services arc recognised as per Ind AS 115 ''Revenue l-rom Contract* with C ustomciV as articulated above in "other revenue from operations'',

Recoveries nt''financial assets written ufT

Tile Company HtOOjptiMU Sgoutt cm recoveries of financial asset* written nit on rwnli«rWi _uf when the right to receive the same without any uncertainties of recovery is established.

2.4 Property. Plant and Equipment

Property, plant and equipment is slated nt acquisition cost net of accumulated depreciation and accumulated impairment losses, if titty, Subsequent costs are included in the asset''s carry ing amount or recognised . n separate usset. i, appropriate, only when it is probable tlut future economic benefits assoc luted with the item will (low to die Cumpony and the cost o) the item tan lie measured reliably All other repair* and maintenance arc charged to U . Statement '' Profit and laws during tl*c period in which they urc incurred.

Cain* iir losses arising on reTtrcuietil ur disposal nf properry, plant and equipment are recognise j in Uie Statement nt Pm fit and Loss

Property, plum und equipment which ure not ready for intended use as on the date of Balance Sheet ui-e disclosed a, “Capital wofk-ht-pnigrcs s''".

Depreciation is provided on a pro-ratu basis on the written down value method based on estimated useful life ptescrlbed under Schedule tl to the tom panics Act, 2013 with the exception of the foil (twang

• Depreciation on assets costing ? 5.000 or less is provided % 100% over a period of one you

lhc residual values, useful lives und method oI depreciation of property, plan* mid equipment is reviewed at cueh fmaucial yew end end ml, listed prospectively, if appropriate.

2.5 Intangible Asset*

Separately purchased intangible assets e6> any accumulated unionisation and necum alutcd impairment losses. if any. Finite-life intangible asset, an.- amortr«d on « strainlu-linc basts (Mt the period of their expected useful lives, Estimated useful life by major clan of finite-life intangible asset is us follows:

Computer software - 5 years

2.6 Borrowing Coils

Borrowing costs dial art: attributable in the acquisition or construction of qualifying assets me capitalized os part of tbs cost of Assets Qualifying Assci is one dial necessarily takes substantial period of time to Ret ready for intended use. All other borrowing costs are treated ns period cost and charged to die statement of profit and loss in the vear in wbici it was incurred

2.7 Impairment of non-nniiiK-iat assets

i''he Company assesses at each reporting dare as to whether there is any indication tluU any property, plant and equipment and intangible assets or gruup of assets, called cash generating units (CGU) may be impaired If an* such indication exists Ihe recoverable amount of an asset or CUU is estimated to determine the extent of impairment, if any When it if not possible to estimate Ihe recoverable amount or nr individual asset the Company estimates the recoverable amount of the CGU to w hich the asset belongs.

An impairment kiss is recognised in die Statement of Profit and Loss to the extent, asset''s carry mg amount exceeds t recoverable amount I he recoverable amount is higher of an asset’s fair vnluc less cost oi''dispos it < n.J value in u , Value in use it based on the estimated future cash Hows, discounted to their present value using pre-tax discount rate that reflects current market assessments of ihe time value of money and risk .specific to the assets

241 luvcstmcnlv in subsidiaries

Investment in subsidiaries u recognised at cost and arc not adjusted to fair value at the end oleucli reporting period Cost of investment represents amount paid Ibr acquisition of the said investment

I lie t am pony assesses at the end of cacti reporting period, if there arc any indications that the snut investment ntuv hc impatred 11 so, the Company estimates the recoverable valuofemoum of the investment ami provides fur impairment, it any Le. the deficit in tlio recoverable vtiluc over cost.

2.V f oreign Exchange Transaction

Inmsactwas denominated in foreign currencies are recorded at die exchange rate prevailing on the dale of the tnmsnctiooti.

Monetary items denominated in foreign currencies at die year end tire restated at year end rates In case of items which arc covered by forward exchange contracts, the difference between the year end rate urn! rate on the du e ml the contact is recognized os exchange difference and die premium paid on forward contracts is recognizer ova iiv pft _U| _t,. contract. Any profit or loss arising on cancellation or renewal of forward exchange contracts arc re. .igni/ed us income Non-monetary items arc corned at cost.

Any income or expense on account of cxelwnge difference either on settlement nr on translation Is recognized and is reflected separately in The Statement of Profit & Loss.

In respect of foreign branch, the company lias adopted Integral foreign operation approach us per Ind AS 71 and accordingly revenue items have been converted at date of transaction date Monetary \_s*f. mil Liabilities urc converted at the year-end exchange rate. Ixchnnge gam or loss arising out of above is charged to State incut of Profit & Loss.

2.10 Tax expense*

The tux expense for the period comprises current and Jeferred tax. Tax is recognised in Statement ol Profit -md I osx, except to tile extent that ii rciuics in item-, recognised in the comprehensive income nr in equity In which case, die tax is also recognised in other comprehensive income or equity.

Current Tax:

Provision for I luxation is ascertained on the h.i-iis of assessable profit computed in accordance w irli rhe provisions of Income Tax Act. 1961,

Minimum Alternate I ax (MAT) Credit:

Minimum Alternate Tux credit is recognized, as deferred to asset only when tmd Ui the extern there is convincing evidence that the Company will pay normal Income lax during the specified period, in the year in trim h (lie MAT credit hccomes eligible lo be recognized as nn asset in accordance will: the recommendations contained in guidance note issued by die Institute of Chartered Accountants of Indio, die said asset is created by woy or a credit to the Profit and Loss Account and shown us MAT Credit Entitlement under I nans & Advances. The Company reviews the same M each balance sheet date and writes down Uv turning amount of MAT Credit I nth lenient to die extent tlicie is no lunger convincing evidence to the effect that Company will pay normal Income Tax during the specified period

Deferred Ta«:

Deterred tax | red on temporary differences between the carrtinp urootlJJtt of assets and liubiliii. n tl

financial statements and the currexpondinp t ic bases used in the computation of taxable profit

Deferred tax liabilities .ind assets me measured ul the rax rates that ore expected to apply in ibe prrmd in which the liability is settled or the asset realised, hosed on tux rates (and tax laws) dial have been enacted o substantively enacted hy the end of the reporting period. The carrying nmnunt of Deferred lax liabilities and assets ore reviewed ul die end uf each reporting period.

2.11 Employer benefit*

Short I''crm Employee Kcorfits:

All employee benefits payable wholly within twelve months of lendcriiig the service ire cl;, silled as short term employee benefits and the undiscountod amount of such employee benefits are recognised in Statement of Profit and t oss in the period in which tin: employee renders the related services. These benefits include sulanes. wages, bonus, performance incentives etc.

Defined Benefit Flan

(irntmty and long term compensated absences ore provided for based cm actuuruit vuluuiion carried uui at die clov 01 cadi period. The actuarial ml uu Lion i* done by an Independent Actuary as per projected unit credit method.

For defined benefit plans, the amount recognised as ''f mploycc benefit expenses'' in the htateni-.nl of Profit und Loss is the cost of accruing employee benefits promised to employees over tile year and the costs nr individual events such as pusd/future service benefit changes and scitlcmciilJi (such events are recognised immediately in the Statement of Profit and Loss), I he amount of net interest expense calcu luted by applying the liability discoum rale lo the net defined benefit liability or asset is charged to ‘Employee benefits expense'' in the Statement of Profit and I ops Any differences between the interest income on ptun assets and the return actually achieved, and any changes in the liabilities Over the year due to changes in actuarial assumptions nr experience adjustments within the plans, are recognised immediately In ’Other comprehensive income'' und subsequently not reclassified to tile Statement of Profit mid laws

Defined f nntrltuition Plan

Contributions lo defined contribution schemes such as employee provideni fund, superannuation scheme. employee pension scheme etc, are charged as an expense based on the amount of contribution required to be made nt and when services ure rendered by the employees Company''s provident fund eimiri button. in respect of certain employees, is made to a government administered fund and charged as an expense to the Statement of Profit and l oss The above benefit* are classifie-i as DctiucJ Contribution Schemes as the Company has no further defined obligations tvs or, J the monthly contributions

2.12 Segment reporting Identification uf segments

As defined in Irtd AS 108. the Chief Operating Decision Muhci (COI)VI) evaluates the Company''• ivilrnmuK . an,: allocates resources based oil nn analysis of various performance indicators by business ; .-giucnu and gcogmptiw segments. I''he accounting principles used in the prepur.ition of financial statements arc consistent];, applied to record revenue and expenditure in >lieliv iduitI segment and arc as set out in the significant accounting policies.

Allocation of common casts

Couunon allocable costs are allocated to each segment on reasonable basis. f kj

11nallocatcd items l "T51,0

Include general corporate income and expense items which me not allocable lo auv business scgmeul.V /

Scemtut policies

The Company prepare* it* segment information in conformity with the accounting policies adopted for preparing ..nil presenting the financial statements of tile Company as a whole.

2.13 Cash How Statement

Cash Hows arc reported using the indirect method in accordance with Ind AS 7, whereby a profit be tote tax L adjusted for the effects of transactions of non-cash nature and any deferrals or necninls of past ot fttlure wish receipts tit payments. Tire ensh flows from operating, financing and investing activities of the Company are segregated

2. I I Fiimiii}! Ppr Shire

faming Per Share (KPS) is calculated by dividing the Not Profit or Loss lot the period attributable to equity shareholders by the Weighted Average Number of equity shares outstanding during (he period.

Fur the purpose of calculating Diluted Faming Per share, the Net Ptutil or Loss for IIk period .ittribolable to equity shareholders is divided by the Weighted Average Number of shores outstanding during the period after adjusting for tire effects of all dilutive potential equity shares.

2.15 Miscellaneous Expenditure

Share issue expenses urc udj listed front Securities Premium Account ut tile time of issue of respective Slime-,

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Mar 31, 2015

I) CHANGE IN ACCOUNTING POLICY

PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS

During the year ended 31st March 2015, the revised Schedule III notified under the Companies Act, 2013, has become applicable to the company for the preparation and presentation of its Financial Statements. The adoption of revised schedule III does not impact recognition and measurement principles followed for preparation of Financial Statements. However it has significant impact on the presentation and disclosures made in Financial Statements.

The company has also reclassified the previous year figures in accordance with requirement as applicable in the current year.

ii) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balance of Assets and Liabilities and disclosures related to the contingent liabilities as at the date of financial statements and reported accounts of revenues and expenses during the period. Actual results could differ from those estimates. Any revision of accounting estimates is recognized in accordance with the requirement of the respective accounting standard.

iii) TANGIBLE ASSETS AND DEPRECIATION

The company has neither acquired any asset nor having any Fixed Assets as on the date of Balance sheet

iv) INVESTMENT

Investments are valued at cost.

v) REVENUE RECOGNITION

Revenue is recognized on mercantile basis to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

vi) TAX EXPENSES

Tax expense comprises of current tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961 enacted in India. The tax rates and tax laws used to compute the amount are those as enacted, at operating date.

Deferred Taxation is provided using the liability method in respect of the taxation effect arising from all material timing difference between the accounting and tax treatment for Income and Expenditure, which are expected with reasonable probability to crystallize in the foreseeable future.

Deferred Tax benefits are recognized in the financial statements only to the extent of any deferred tax liability or when such benefits are reasonable expected to be realizable in the near future.

Deferred Tax Assets and liabilities are measured at tax rates that have been enacted or substantively enacted by the balance sheet date.

vii) EVENTS OCCURRING AFTER BALANCE SHEET DATE:

No significant events which could affect the financial position as on 31-03-2015 to a material extent have been reported by the assessee, after the balance sheet date till the signing of report.

viii) PRIOR PERIOD AND EXTRAORDINARY ITEMS :

There are no material changes or credits which arise in the current period, on accounts of errors and omission in the preparation of the financial statements for the one or more prior periods.

ix) EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year

x) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS PROVISIONS

A provision is recognized when an enterprise has a present obligation as a result of past event. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

CONTINGENT LIABILITIES

A contingent liability is disclosed where, as a result of past events, there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow or resources is remote, no provision or disclosure is made.

CONTINGENT ASSETS

Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

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Mar 31, 2014

PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS

During the year ended 31st March 2014, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company for the preparation and presentation of its Financial Statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of Financial Statements. However it has significant impact on the presentation and disclosures made in Financial Statements.

The company has also reclassified the previous year figures in accordance with requirement as applicable in the current year.

ii) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balance of Assets and Liabilities and disclosures related to the contingent liabilities as at the date of financial statements and reported accounts of revenues and expenses during the period. Actual results could differ from those estimates. Any revision of accounting estimates is recognized in accordance with the requirement of the respective accounting standard.

ix) EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year

x) PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

PROVISIONS

A provision is recognized when an enterprise has a present obligation as a result of past event. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

CONTINGENT LIABILITIES

A contingent liability is disclosed where, as a result of past events, there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow or resources is remote, no provision or disclosure is made.

CONTINGENT ASSETS

Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

---

Mar 31, 2013

PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS

During the year ended 31st March 2013, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company for the preparation and presentation of its Financial Statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of Financial Statements. However it has significant impact on the presentation and disclosures made in Financial Statements.

The company has also reclassified the previous year figures in accordance with requirement as applicable in the current year.

ii) Principles of Consolidation:

a) The Consolidated Financial Statements (CFS) comprise the financial statements of FMec International Financial Services Limited and its subsidiary - YDS Securities Pvt. Ltd. as on 31st March 2013.

b) The consolidated financial statements have been prepared using uniform accounting policies, in accordance with the generally accepted accounting policies.

c) The effects of intra group transactions are eliminated in consolidated.

iii) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balance of Assets and Liabilities and disclosures related to the contingent liabilities as at the date of financial statements and reported accounts of revenues and expenses during the period. Actual results could differ from those estimates. Any revision of accounting estimates is recognized in accordance with the requirement of the respective accounting standard.

iv) TANGIBLE ASSETS AND DEPRECIATION

The company has neither acquired any asset nor having any Fixed Assets as on the date of Balance sheet

v) INVESTMENT

Investments are valued at cost.

vi) INVENTORIES:

Inventories comprise of shares /securities are valued at lower of cost or net realizable value.

vii) REVENUE RECOGNITION

Revenue is recognized on mercantile basis to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

viii) TAX EXPENSES

Tax expense comprises of current tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961 enacted in India. The tax rates and tax laws used to compute the amount are those as enacted, at operating date.

Deferred Taxation is provided using the liability method in respect of the taxation effect arising from all material timing difference between the accounting and tax treatment for Income and Expenditure, which are expected with reasonable probability to crystallize in the foreseeable future.

Deferred Tax benefits are recognized in the financial statements only to the extent of any deferred tax liability or when such benefits are reasonable expected to be realizable in the near future.

Deferred Tax Assets and liabilities are measured at tax rates that have been enacted or substantively enacted by the balance sheet date.

ix) EVENTS OCCURRING AFTER BALANCE SHEET DATE:-

No significant events which could affect the financial position as on 31-03-2013 to a material extent have been reported by the assessee, after the balance sheet date till the signing of report.

x) PRIOR PERIOD AND EXTRAORDINARY ITEMS:-

There are no material changes or credits which arise in the current period, on accounts of errors and omission in the preparation of the financial statements for the one or more prior periods.

xi) EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year

xii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

PROVISIONS

A provision is recognized when an enterprise has a present obligation as a result of past event. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

CONTINGENT LIABILITIES

A contingent liability is disclosed where, as a result of past events, there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow or resources is remote, no provision or disclosure is made.

CONTINGENT ASSETS

Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

---

Mar 31, 2012

PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS

During the year ended 31st March 2013, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company for the preparation and presentation of its Financial Statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of Financial Statements. However it has significant impact on the presentation and disclosures made in Financial Statements.

The company has also reclassified the previous year figures in accordance with requirement as applicable in the current year.

ii) Principles of Consolidation:

a) The Consolidated Financial Statements (CFS) comprise the financial statements of FMec International Financial Services Limited and its subsidiary - YDS Securities Pvt. Ltd. as on 31st March 2013.

b) The consolidated financial statements have been prepared using uniform accounting policies, in accordance with the generally accepted accounting policies.

c) The effects of intra group transactions are eliminated in consolidated.

iii) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balance of Assets and Liabilities and disclosures related to the contingent liabilities as at the date of financial statements and reported accounts of revenues and expenses during the period. Actual results could differ from those estimates. Any revision of accounting estimates is recognized in accordance with the requirement of the respective accounting standard.

iv) TANGIBLE ASSETS AND DEPRECIATION

The company has neither acquired any asset nor having any Fixed Assets as on the date of Balance sheet

v) INVESTMENT

Investments are valued at cost.

vi) INVENTORIES:

Inventories comprise of shares /securities are valued at lower of cost or net realizable value.

vii) REVENUE RECOGNITION

Revenue is recognized on mercantile basis to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

viii) TAX EXPENSES

Tax expense comprises of current tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961 enacted in India. The tax rates and tax laws used to compute the amount are those as enacted, at operating date.

Deferred Taxation is provided using the liability method in respect of the taxation effect arising from all material timing difference between the accounting and tax treatment for Income and Expenditure, which are expected with reasonable probability to crystallize in the foreseeable future.

Deferred Tax benefits are recognized in the financial statements only to the extent of any deferred tax liability or when such benefits are reasonable expected to be realizable in the near future.

Deferred Tax Assets and liabilities are measured at tax rates that have been enacted or substantively enacted by the balance sheet date.

ix) EVENTS OCCURRING AFTER BALANCE SHEET DATE:-

No significant events which could affect the financial position as on 31-03-2013 to a material extent have been reported by the assessee, after the balance sheet date till the signing of report.

x) PRIOR PERIOD AND EXTRAORDINARY ITEMS:-

There are no material changes or credits which arise in the current period, on accounts of errors and omission in the preparation of the financial statements for the one or more prior periods.

xi) EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the year

xii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

PROVISIONS

A provision is recognized when an enterprise has a present obligation as a result of past event. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

CONTINGENT LIABILITIES

A contingent liability is disclosed where, as a result of past events, there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow or resources is remote, no provision or disclosure is made.

CONTINGENT ASSETS

Contingent Assets are neither recognized nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.