Accounting Policies of Golechha Global Finance Ltd. Company

Mar 31, 2024

3. Summary of significant accounting policies

This note provides a list of the material accounting policies adopted in the preparation of these financial
statements. These policies have been consistently applied to all the years presented, unless otherwise
stated.

3.1 Revenue Recognition
(i) Interest income

Interest income is calculated by applying effective interest rate.

3.2 Expenditures

(i) Finance costs

Borrowing costs on financial liabilities are recognised using the Effective interest rate.

(ii) Other Expenses

Other expenses which are not directly linked to the sourcing of financial assets are recognised in the
Statement of Profit and Loss on an accrual basis.

3.3 Cash and cash equivalents

Cash and cash equivalents include cash on hand, other short term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.

3.4 Inventories

Since inventory of shares and securities acquired for trading are financial instruments, they are
recognised at fair value through statement of profit and loss account (FVTPL) as per IND AS 109

3.5 Financial instruments

A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity. Trade receivables and payables, loan receivables,
investments in securities and subsidiaries, debt securities and other borrowings, preferential and
equity capital etc. are some examples of financial instruments. All the financial instruments are
recognised on the date when the Company becomes party to the contractual provisions of the financial
instruments. For tradable securities, the Company recognises the financial instruments on settlement
date.

3.6 Financial assets

Financial assets include cash, or an equity instrument of another entity, or a contractual right to
receive cash or another financial asset from another entity. Few examples of financial assets are loan
receivables, investment in equity and debt instruments, trade receivables and cash and cash
equivalents.

3.6.1 Classification and subsequent measurement.

The Company has applied Ind As 109 and classifies its financial assets in the following measurement
categories: - Fair value through profit or loss (FVTPL)

- Fair value through other comprehensive income (FVOCI); or

- Amortised cost

Fair value through profit or loss; Assets that do not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss; A gain or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is not part of a hedging relationship is recognised in
statement of profit and loss in the period in which it arise, unless it arises from debt instruments that
were designated at fair value or which are not held for trading. Interest income from these financial
assets is included in ''interest income'' using the effective interest rate method.

Fair value option for financial assets; The Company may also irrevocably designate financial assets
at fair value through profit or loss if doing so significantly reduces or eliminates an accounting mismatch
created by assets and liabilities being measured on different bases.

Amortised Cost; Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest (''SPPI,), and that are not designated at FVTPL,
are measured at amortised cost. The carrying amount of these assets

Is adjusted by any expected credit loss allowance recognise and measured .Interest income from
these financial assets is recognised using the effective interest rate method.

However, the loans granted by the company are in the nature of repayable on demand and the time
period of the same is uncertain and as a result, amortised cost of loans has not been taken.

3.6.2 Interest Income

Interest income is calculated by applying the effective interest rate to the gross carrying amount of
financial assets, except for:

a) Purchased or originated credit impaired (POCI) financial assets, for which the original credit
-adjusted effective interest rate is applied to the amortised cost of that financial assets.

b) Financial assets that are not ''POCI'' but have subsequently become credit-impaired (or ''stage
3''), for which interest revenue is calculated by applying the effective interest rate to their
amortised cost (i,e net of the expected credit loss provision).

The effective interest rate is the exactly discounts estimated future cash payments or receipts through
the expected life of the financial assets or liability to the gross carrying amount of a financial assets
(i,e, its amortised cost before any impairment allowance) or to the amortised cost of a financial liability.
The calculation does not consider expected credit losses and includes transaction cost, premiums or
discounts and fees and points paid or received that are integral to the effective interest rate, such as
origination fees. For FVOCI financial assets -assets that are credit impared at intial recognition- the
company calculates the credit-adjusted effective interest rate, which is calculated based on the
amortised cost of the financial assets instead of its gross carrying amount and incorporates the impact
of expected credit losses in estimated future cash flows.

3.6.3 Equity instruments

Equity instruments are instruments that meet the definition of equity from the issuer''s perspective;
that is, instruments that do not contain a contractual obligation to pay and that do not contain a
contractual obligation to pay and that evidence a residual interest in the issuer''s net assets. The
Company subsequently measures all equity investments at fair value. Where the company''s
management has elected to present fair value gains and losses on equity investments in other
comprehensive income, there is no subsequent reclassification of fair values gains and losses to
profit or loss following the derecognition of the investment. Changes in the fair value of financial
assets at fair value through profit or loss are recognised in net gain/loss on fair value changes in the
statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOIC are not reported separately from other changes in fair value.

Gains and losses on equity investments at FVTPL are included in the statement of Profit and Loss.

3.6.4 Impairment

The Company assesses on a forward looking basis the expected credit losses (ECL)associated with
its debit instruments carried at amortised cost and FVOCI and with the exposure arising from loan
commitments and financial guarantee contracts. The Company recognizes a loss allowance for such
losses at each reporting date.

The measurements of ECL reflects:

- An unbiased probability-weighted amount that is determined by evaluating a range of possible
outcome;

- The time value of money; and

- Reasonable and supportable information that is available without undue cost or effort at
the reporting date about pat events, current conditions and forecasts of future economic
conditions.

The measurement of the ECL allowance is an area that requires the use of complex models and
significant assumptions about future economic condition and credit behaviour (e.g. the likelihood of
customers defaulting and the resulting losses.)

3.6.5 Write-off policy

The Company writes off financial assets, in whole or in part, when it has exhausted all practical
recovery efforts and has concluded there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include (i) ceasing enforcement activity and (ii) where
the company''s recovery method is foreclosing on collateral and the value of the collateral is such that
there is no reasonable expectation of recovering in full.

3.6.6 Derecognition other than on a modification

Financial assets, or a portion thereof, are derecognised when the contractual rights to receive the
cash flows from the assets have expired, or when they have been transferred and either (i) the Company
transfers substantially all the risk and rewards of ownership, or (ii) the Company neither transfer nor
retains substantially all the risks and rewards of ownership and the company has not retained control.
The company directly reduces the gross carrying amount of a financial assets when there is no
reasonable expectation of recovering a financial assets in its entirely or a portion thereof.

3.7 Borrowing costs

Borrowing costs, which are directly attributable to the acquisition/ construction of property plant and
equipment, till the time such assets are ready for intended use, are capitalised as part of the assets.
Other borrowing costs are recognised as an expenses in the year in which they are incurred. Brokerage
costs directly attributable to a borrowing are expensed over the tenure of the borrowing.

3.8 Financial liabilities

Financial liabilities include liabilities that represent a contractual obligation to deliver cash or another
financial assets to another entity, or a contract that may or will be settled in the entities own equity
instruments. Few examples of financial liabilities are trade payables, debt securities and other
borrowings and subordinated debts.

3.9.1 Initial measurement

All financial liabilities are recognised initially at fair value and, in the case of borrowings and payables,
net of directly attributable transaction costs. The Company''s financial liabilities include trade payables,
other payables, debt securities and other borrowings.

3.9.2 Subsequent measurement

After initial recognition, all financial liabilities are subsequently measured at amortised cost using the
EIR [Refer note no. 3.1 (i)]. Any gains or losses arising on derecognition of liabilities are recognised in
the Statement of Profit and Loss.

3.9.3 Derecognition

The Company derecognises a financial liability when the obligation under the liability is discharged,
cancelled or expired.

3.10 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet
only if there is an enforceable legal right to offset the recognised amounts with an intention to settle on
a net basis or to realise the assets and settle the liabilities simultaneously.

3.10.1 Taxes
(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities, in accordance with the Income Tax Act, 1961 and the Income Computation
and Disclosure Standards (ICDS) prescribed therein. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted, at the reporting date. Current tax relating
to items recognised outside profit or loss is recognised in correlation to the underlying transaction
either in OCI or directly in other equity. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.

3.10.2 Deferred tax

Deferred tax is provided using the Balance Sheet approach on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting
date. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax
assets are recognised for deductible temporary differences to the extent that it is probable that taxable
profits will be available against which the deductible temporary differences can be utilised. The carrying
amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets, if any, are reassessed at each reporting date
and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised either in OCI or in other
equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to
set off current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.

3.11 Impairment of non-financial assets

An assessment is done at each Balance Sheet date to ascertain whether there is any indication that
an asset may be impaired. If any such indication exists, an estimate of the recoverable amount of
asset is determined. If the carrying value of relevant asset is higher than the recoverable amount, the
carrying value is written down accordingly.

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Mar 31, 2014

GOLECHHA GLOBAL FINANCE LIMITED was incorporated in India, and is engaged primarily into financing activities .

A. BASIS OF PREPARATION OF FINANCIAL STATEMENT:

1. The financial statements of the company have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under Section 211 (3C) of the Companies Act, 19S6, other pronouncements of Institute of Chartered Accountants of India, the provisions of Companies Act, 19S6 and guidelines issued by Securities Exchange Board of India.

2. The company is a RBI Registered Non Banking Finance Company and it has followed the guidelines issued by RBI relating to Income Recognition, Asset Classification & Provisioning for N.B.F.C. Companies.

3. The company has prepared these financial statements as per the format prescribed by Revised Schedule VI to the Companies Act, 19S6(''the schedule'') issued by Ministry of Corporate Affairs.

B. USE OF ESTIMATES

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

C. DUES TO SME''S: Management has determined that there are no balances outstanding as at the beginning of the year and there are no transactions entered with micro, small and medium enterprises as defined under Micro, Small and Medium enterprises development Act,2006 during the current year, based on the information available with the company as at 31st March, 2014.

D. REVENUE RECOGNITION

In respect of income from accrual system of accounting has been followed by the Company. The other incomes are recorded on the definitive accrual of the same.

E. EARNING PER SHARE (EPS): The basic earning per share is computed by dividing the net profit after tax for the period by the weighted average number of equity shares outstanding during the period. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period except when the results would be anti- dilutive.

F. INCOME TAX:

a. Tax on income for the current period is determined on the basis of Taxable Income computed in accordance with the provisions of the Income Tax act.1961.

b. Deferred Tax on timing difference between the accounting income and taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date as per the Accounting Standard (AS 22) laid down by the Institute of Chartered Accountants of India (ICAI).

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Mar 31, 2013

A. BASIS OF PREPARATION OF FINANCIAL STATEMENT:

1. The financial statements of the company have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under Section 211 (3C) of the Companies Act, 1956, other pronouncements of Institute of Chartered Accountants of India, the provisions of Companies Act, 1956 and guidelines issued by Securities Exchange Board of India.

2. The company is a RBI Registered Non Banking Finance Company and it has followed the guidelines issued by RBI relating to Income Recognition, Asset Classification & Provisioning for N.B.F.C. Companies.

3. The company has prepared these financial statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956(''the schedule'') issued by Ministry of CorporateAffairs.

B. USE OF ESTIMATES

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

C. OUESTOSME''S:

Management has determined that there no balances outstanding as at the beginning of the year and no transactions entered with micro, small and medium enterprises as defined under Micro, Small and Medium enterprises development Act,2006 during the current year, based on the information available with the company as at March,2012.

D. REVENUE RECOGNITION

In respect of income from accrual system of accounting has been followed by the Company. The other incomes are recorded on the definitive accrual of the same.

E. EARNING PER SHARE (EPS):

The basic earning per share is computed by dividing the net profit after tax for the period by the weighted average number of equity shares outstanding during the period. Diluted earning per share, if any is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period except when the results would be anti- dilutive.

F. INCOME TAX:

a. Tax on income for the current period is determined on the basis of Taxable Income computed in accordance with the provisions of the Income Tax act. 1961.

b. Deferred Tax on timing difference between the accounting income and taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date as per the Accounting Standard (AS 22) laid down by the Institute of Chartered Accountants of India (ICAI).

G. RETIREMENT BENEFITS:

Contribution of Provident fund, Gratuity and Leave encashment benefits wherever applicable is being accounted on actual liability basis as and when arises. However the above referred provisions are not applicable to the company as it does not fall with in the purview of the same in the year under review.

H. SEGMENTAL REPORTING:

The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments as per the accounting standard 17 (Segmental Reporting) issue by the Institute of Chartered Accountants of India.