Notes to Accounts of Step Two Corporation Ltd.

Mar 31, 2025

h. Provisions, Contingent Liabilities, and Contingent Assets
I) Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows (representing the best estimate of the
expenditure required to settle the present obligation at the balance sheet date) at a pretax
rate that reflects current market assessments of the time value of money and the risks
specific to the liability. The unwinding of the discount is recognised as finance cost.
Expected future operating losses are not provided for.

ii) Contingent Liabilities

Whenever there is possible obligation that arises from past events and whose existence will
be confirmed only by the occurance or non-occurance of one or more uncertain future
events not wholly within the control of the entity or a present obligation that arises from
past events but is not recognised because (a) it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation; or (b) the amount of
the obligation cannot be measured with sufficient reliability are considered as contingent
liability..

iii) Contingent Assets

The Company does not recognise contingent assets. These are assessed continually to
ensure that the developments are appropriately disclosed in the standalone financial
statements.

Basic earnings per share are 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. The weighted average number of equity shares outstanding
during the period is adjusted for events including a bonus issue, bonus elements in a rights
issue to existing shareholders, share split and reverse share split (consolidation of shares).

j) Impairement

Impaired loans and receivables are written off, against the related allowance for loan
impairment on completion of the Group’s internal processes and when the Group concludes
that there is no longer any realistic prospect of recovery of part or all of the loan. For loans
that are individually assessed for impairment, the timing of write off is determined on a
case by case basis. A writeoff constitutes a de-recognition event. The Group has a right to
apply enforcement activities to recover such written off financial assets. Subsequent
recoveries of amounts previously written off are credited to the statement of profit and loss.

k) Cash and Cash Equivalent and Cash Flows Statement

Cash and cash equivalents comprise cash on hand and demand deposits, together with other
short term, highly liquid investments maturing within three months from the date of
acquisition and which are readily convertible into cash and which are subject to only an
insignificant risk of changes in value.

Cash flows are reported using the indirect method, whereby profit/(loss) before
extraordnary items and tax is appropriately classified for the effects of transactions of non¬
cash nature and any deferrals or accruals of past or future receipts or payments. In cash
flow statement, cash and cash equivalents include cash in hand, balances with banks in
current accounts and other short-term highly liquid investments with original maturitis of
three months or less.

k) Segment Reporting

The Company’s main business is providing finance by way of loans in India. All other
activities of the Company revolve around the main business. This in the context of Ind AS
108 “Operating Segments” reporting is considered to constitute one reportable segment.

30 Additional Regulatory Requirements

I. The Company does not possess any immovable property whose title deeds are not held in the
name of Company.

ii. The Company has not revalued any of its Property, Plant & Equipment.

iii. No Loans or Advances have been granted to Promoters, Directors, KMPs and the Related
Party, either jointly or severally with any other person.

iv. The Company does not have any Capital-Work-in-Progress.

v. The Company does not have any Intangible Assets under Development.

vi. No Proceedings have been initiated or pending against the Company for holding any Benami
Property under the Benami Transactions (Prohibitions) Act, 1988 and the rules made
thereunder.

vii. The Company has no borrowings from Banks or Financial Institutions on the basis of
Security of Current Assets.

viii. The Company is not declared as a Wilful Defaulter by any Bank or Financial Institutions or
other Lender.

ix. The Company has no transactions with companies Struck off under Section 248 of the
Companies Act, 2013.

x. The Company does not have any Charges/Satisfaction thereof which are yet to be registered
with Registrar of Companies beyond the Statutory Period.

xi. The Company has complied with the number of layers prescribed under clause (87) of
Section 2 ofthe Act read with rules.

xii. Ratios

entities, including foreign entities (’’funding party”), with the understanding, whether
recorded in writing or otherwise, that the Company shall, whether, directly or indirectly lend
or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (”Ultimate Beneficiaries”) or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.

B. No funds have been received by the Company from any persons or entities, including
foreign entities (”Funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(”Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

xv. The Company does not have any transactions not recorded in the Books of Accounts that has
been surrendered or disclosed as income during the year in the Tax Assessments under the
Income Tax Act, 1961. there are no Previously Unrecorded Income and related assets that
have been recorded in the Books of Accounts during the year.

xvi. The Company is not covered under Section 135 of the Companies Act.

xvii. The Company has not traded in Crypto Currency or Virtual Currency during the Financial
Year.

31. Segment Reporting

The Company’s main business is providing finance by way of loans in India. All other activities of
the Company revolve around the main business. As such, there are no separate reportable
segments, as per the Indian Accounting Standard (Ind AS) 108 on “Segment Reporting”.

32. Financial Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. In order to
minimise any adverse effects on the financial performance of the Company, the company has risk
management policies as described below :-

I) Credit Risk

Credit risk is the risk of loss that may occure from the failure of any party to abide by the
terms and conditions of any contract, principally the failure to make required payments of
amounts due to the Company. In it’s lending operations, the Company is principally exposed
to credit risk.

The Board of Directors periodically review its Credit Risks and oversee the Loan Sanction
Process to eliminate the risk of loss due to Credit Risk

ii) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the
obligations associated with financial liabilities that are settled by delivering cash or another
financial asset. Management monitors rolling forecasts of the Company’s liquidity position
on the basis of expected cash flows. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows, and by matching the maturity profiles of financial
assets and liabilities.

iii) Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may
result from a change in the price of a financial instrument. The value of a financial
instrument may change as a result of changes in the interest rates, foreign currency
exchange rates, commodity prices, equity prices and other market changes that effect
market risk sensitive instruments. Market risk is attributable to all market risk sensitive
financial instruments including investments and deposits, foreign currency receivables,
payables and borrowings. The Group is exposed to market risk through its use of financial
instruments and specifically to interest rate risk and certain other price risks, which result
from both its operating and investing activities.

- Interest rate risk: Interest rate is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest rates. The
Company does not have significant exposure to Long Term Borrowings, so the Company
does not have a significant cash flow interest rate risk.

Foreign Currency Risk: Foreign Currency risk is the risk that the fair value or future cash
flows of an exposure will fluctuate because of changes in foreign exchange rates. The
Company does not face any Foreign Currency Risk.

- Equity Price Risk: The Company generally invests in listed and unlisted equity
instruments. All investments in equity portfolio are reviewed and approved by the Board of
Directors. As at the reporting date, the exposure to listed equity securities at fair value was
Rs.2,35,812,50 (March 31,2024: Rs. 2,96,640.40) ( Rs.in ‘00)

- Other Price Risk : The risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices (other than those arising from interest rate
risk or currency risk), whether those changes are caused by factors specific to the individual
financial instrument or its issuer or by factors affecting all similar financial instruments
traded in the market. All exposures in derivative portfolio are reviewed and approved by the
board of directors. As at the reporting date, the exposure in derivative instruments at fair
value was Rs 0 (March 31,2024: Rs 0)

33. Fair Value Measurement

Accounting classification and F air Values

Carrying amounts and fair values of financial assets and liabilities, including their levels in fair
value hierarchy, are as follows:

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Mar 31, 2024

h. Provisions, Contingent Liabilities, and Contingent Assets
I) Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows (representing the best estimate of the
expenditure required to settle the present obligation at the balance sheet date) at a pretax
rate that reflects current market assessments of the time value of money and the risks
specific to the liability. The unwinding of the discount is recognised as finance cost.
Expected future operating losses are not provided for.

ii) Contingent Liabilities

Whenever there is possible obligation that arises from past events and whose existence will
be confirmed only by the occurance or non-occurance of one or more uncertain future
events not wholly within the control of the entity or a present obligation that arises from
past events but is not recognised because (a) it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation; or (b) the amount of
the obligation cannot be measured with sufficient reliability are considered as contingent
liability..

iii) Contingent Assets

The Company does not recognise contingent assets. These are assessed continually to
ensure that the developments are appropriately disclosed in the standalone financial
statements.

Basic earnings per share are 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. The weighted average number of equity shares outstanding
during the period is adjusted for events including a bonus issue, bonus elements in a rights
issue to existing shareholders, share split and reverse share split (consolidation of shares).

j) Impairement

Impaired loans and receivables are written off, against the related allowance for loan
impairment on completion of the Group’s internal processes and when the Group concludes
that there is no longer any realistic prospect of recovery of part or all of the loan. For loans
that are individually assessed for impairment, the timing of write off is determined on a
case by case basis. A writeoff constitutes a de-recognition event. The Group has a right to
apply enforcement activities to recover such written off financial assets. Subsequent
recoveries of amounts previously written off are credited to the statement of profit and loss.

k) Cash and Cash Equivalent and Cash Flows Statement

Cash and cash equivalents comprise cash on hand and demand deposits, together with other
short term, highly liquid investments maturing within three months from the date of
acquisition and which are readily convertible into cash and which are subject to only an
insignificant risk of changes in value.

Cash flows are reported using the indirect method, whereby profit/(loss) before
extraordnary items and tax is appropriately classified for the effects of transactions of non¬
cash nature and any deferrals or accruals of past or future receipts or payments. In cash
flow statement, cash and cash equivalents include cash in hand, balances with banks in
current accounts and other short-term highly liquid investments with original maturitis of
three months or less.

k) Segment Reporting

The Company’s main business is providing finance by way of loans in India. All other
activities of the Company revolve around the main business. This in the context of Ind AS
108 “Operating Segments” reporting is considered to constitute one reportable segment.

entities, including foreign entities (’’Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company (”Ultimate Beneficiaries”) or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.

B. No funds have been received by the Company from any persons or entities, including
foreign entities (”Funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(”Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

xv. The Company does not have any transactions not recorded in the Books of Accounts that has
been surrendered or disclosed as income during the year in the Tax Assessments under the
Income Tax Act, 1961. there are no Previously Unrecorded Income and related assets that
have been recorded in the Books of Accounts during the year.

xvi. The Company is not covered under Section 135 of the Companies Act.

xvii. The Company has not traded in Crypto Currency or Virtual Currency during the Financial
Year.

32. Segment Reporting

The Company’s main business is providing finance by way of loans in India. All other activities of
the Company revolve around the main business. As such, there are no separate reportable
segments, as per the Indian Accounting Standard (Ind AS) 108 on “Segment Reporting”.

33. Financial Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. In order to
minimise any adverse effects on the financial performance of the Company, the company has risk
management policies as described below :-

I) Credit Risk

Credit risk is the risk of loss that may occure from the failure of any party to abide by the
terms and conditions of any contract, principally the failure to make required payments of
amounts due to the Company. In it’s lending operations, the Company is principally exposed
to credit risk.

The Board of Directors periodically review its Credit Risks and oversee the Loan Sanction
Process to eliminate the risk of loss due to Credit Risk

ii) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the
obligations associated with financial liabilities that are settled by delivering cash or another
financial asset. Management monitors rolling forecasts of the Company’s liquidity position
on the basis of expected cash flows. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows, and by matching the maturity profiles of financial
assets and liabilities.

iii) Market Risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may
result from a change in the price of a financial instrument. The value of a financial
instrument may change as a result of changes in the interest rates, foreign currency
exchange rates, commodity prices, equity prices and other market changes that effect
market risk sensitive instruments. Market risk is attributable to all market risk sensitive
financial instruments including investments and deposits, foreign currency receivables,
payables and borrowings. The Group is exposed to market risk through its use of financial
instruments and specifically to interest rate risk and certain other price risks, which result
from both its operating and investing activities.

- Interest rate risk: Interest rate is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest rates. The
Company does not have significant exposure to Long Term Borrowings. So the Company
does not have a significant cash flow interest rate risk.

Foreign Currency Risk: Foreign Currency risk is the risk that the fair value or future cash
flows of an exposure will fluctuate because of changes in foreign exchange rates. The
Company does not face any Foreign Currency Risk.

- Equity Price Risk: The Company generally invests in listed and unlisted equity
instruments. All investments in equity portfolio are reviewed and approved by the Board of
Directors. As at the reporting date, the exposure to listed equity securities at fair value was
Rs.2,96,640.40 (March 31,2023: Rs.in ‘00)
- Other Price Risk : The risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices (other than those arising from interest rate
risk or currency risk), whether those changes are caused by factors specific to the individual
financial instrument or its issuer or by factors affecting all similar financial instruments
traded in the market. All exposures in derivative portfolio are reviewed and approved by the
board of directors. As at the reporting date, the exposure in derivative instruments at fair
value was Rs 0 (March 31,2023: Rs 0)

34. Fair Value Measurement

Accounting classification and F air Values

Carrying amounts and fair values of financial assets and liabilities, including their levels in fair
value hierarchy, are as follows:

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Mar 31, 2015

1. Related Party disclosure

Key Management Personnel Bholanath Manna Sanjay Agarwal Keshav Kumar Saraf Mamta Sharma Basant Kumar Agarwal

Enterprise Controlled by Key Management personnel & their relatives Step Two Infrastructure Pvt. Ltd.

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Mar 31, 2014

1. Related Party disclosure

Key Management Personnel

Bholanath Manna

Sanjay Agarwal

Keshav Kumar Saraf

Enterprise controlled by Key Management personnel & their relatives

Step Two Infrastructure Pvt. Ltd.

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Mar 31, 2013

1. As defined in Paragraph 2( 1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998.

3. 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 should be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2012

1. As defined in Paragraph 2(l)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998.

3. 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 should be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2011

1.1 Particulars in respect of opening stock, purchases, sales & closing stock of shares, Mutual Funds etc.

1.2. In terms of the Reserve Bank of India guidelines issued to Non-Banking Financial Companies, all investments in securities are bifurcated into current investments & long term investments. Investments which are acquired with the intention of short term holding are considered as Stock- in-trade and classified as current assets and others are considered as long term investments. Long term investments are valued at cost, whereas current investments are valued at cost or market price whichever is lower.

1.3. During the financial) year 1997-98, a sum of Rs.25,00,000/- (Rupees Twenty Five Lacs only) had been fraudulently withdrawn from Punjab & Sind Bank Ltd., New Targri Road Branch, Kolkata. The matter is under litigation. The closing balance of this account as appearing in the balance sheet under the head "Cash & Bank Balances" isRs.25,02,195/-.

(ii) Name and description of relationship with the related parties: Associates of Key Managerial Personnel: M/s. Raj Bhavna & Associates & M/s.Asra Abasan Pvt. Ltd.

1.4 Related party disclosures as per Accounting Standard-18 are given below:

(i) Details of transactions with related parties: (Amount in Rs.)

1.5 No employee is eligible for gratuity benefits, hence, the same has not been provided in the books. 2.10There is no outstanding amount payable to small scale industrial undertaking, which is outstanding for more than 30 days.

1.6 As per provisions of Macro Small and Medium Enterprises Development Act, 2006, there are no such enterprises to whom the company over due which are outstanding for more than 45 days at the Balance Sheet date to the extent such enterprises have been identified on the basis of information available with the company.

1.7 Previous years figures have been re-grouped & re-arranged wherever considered necessary.

Notes:

1. As defined in Paragraph 2(l)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2- Provisioning norms shall be applicable 'as-prescribed in the-Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions. 1998.

3. All Accounting Standards and Guidance Notes issued by ICA1 are applicable including for valuation of investments .and other asset»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 should be disclosed irrespective of whether they are classified as long term or current in column (5) above.

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Mar 31, 2010

1.1. In terms of the Reserve Bank of India guidelines issued to Non-Banking Financial Companies, all investments in securities are bifurcated into current investments & long term investments. Investments which are acquired with the intention of short term holding are considered as Stock-in- trade and classified as current assets and others are considered as long term investments. Long term investments are valued at cost, whereas current investments are valued at cost or market price whichever is lower.

1.2. During the financial year 1997-98, a sum of Rs.25,00,000/- (Rupees Twenty Five Lacs only) had been fraudulently With drawn from Punjab & Sind Bank Ltd., New Targri Road Branch, Kolkata. The matter is under litigation. The closing balance of this account as appearing in the balance sheet under the head "cash &bank balances" is Rs.25,02,195/-.

1.3 No employee is eligible for gratuity benefits, hence, the same has not been provided in the books.

1.4 There is no outstanding amount payable to small scale industrial undertaking, which is outstanding for more than 30 days.

1.5 As per provisions of Macro Small and Medium Enterprises Development Act, 2006, there are no such enterprises to whom the company over due which are outstanding for more than 45 days at the Balance Sheet date to the extent such enterprises have been identified on the basis of information available with the company.

1.6 Previous years figures have been re-grouped & re-arranged wherever considered necessary.

2 The opening as well as the closing balance of Cash & Cash Equivalents as shown in the Cash Row Statement include an amount of Rs. 25,00,000/- which was fraudulently withdrawn from the Punjab & Sind Bank in the financial year 1996-97. The closing Balance of this account as appearing in Balance Sheet under the head "Cash & Bank Balances" is Rs. 25,02,195/- as on 31.03.2009. The entire amount is not available for use by the Company.

3 The Cash Flow Statement has been prepared using Indirect Method set out in Accounting Standard 3 issued by the Institute of Chartered Accountants of India.

This is the Cash Flow Statement referred to in our report of even date.