Note 3.2 : Right-of-use assets (ROU)
The Company has entered into lease contracts for its registered office building at Hyderabad and office space at Mumbai (vacated) used for its operations.
(iv) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
(v) The incremental borrowing rate used for the measurement of lease liability is 6.25% per annum which is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
(C) Terms/Rights attached to equity shares
The company has only one class of equity shares having a face value of Rs. 5/- each (P.Y Rs. 10/- each). Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(D) During the year ended 31st March 2025, the company has made sub-division of its equity shares of Rs. 10/-, each into the new nominal value of Rs. 5/- each. Necessary approvals were received from members through e-voting closed on 31st December 2024 and relevant information was filed including with the Registrar of Companies, BSE, NSDL, CDSL and share transfer agent. The split will take effect from record date January 24, 2025 under the same ISIN INE710D01028.
(E) BNRSL Employee Stock Option Scheme:
The Company has granted 5,00,000 Options to employees on 11 August, 2023 under the Employees Stock Option scheme 2022, in accordance with the guidelines issued by Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, at ?20 per option. Pursuant to the shareholders approval dated 31 December 2024, the Company's Equity shares of ?10 each were split into Equity shares of ?5 each fully paid up and consequently the above options with face value of ?10 were converted to face value of ?5 each.
Nature and purpose of other reserves
(i) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provision of the Companies Act, 2013.
(ii) Capital reserve
This represents surplus amount on forfeiture of shares and premium on issue of shares.
(iii) General reserve
General reserve is used for strengthening the financial position and meeting future contingencies and losses.
(iv) Share options outstanding account
This reserve represents the excess of the fair value of the options on the grant date over the exercise price which is accumulated by the Company in respect of all options that have been granted. The Company transfers the proportionate amounts outstanding in this account in relation to options exercised to securities premium account on the date of exercise of such options.
(v) Retained earnings
This Reserve represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This Reserve can be utilised in accordance with the provisions of the Companies Act, 2013.
(vi) Equity instruments through other comprehensive income
This reserve represents the cumulative gains/loss (net) arising on fair valuation of Equity Instruments, net of amounts reclassified, if any, to retained earnings when those instruments are disposed off.
Note 30: Employee benefits
(i) Leave obligations
The leave obligation covers the company's liability for earned leave which is unfunded.
(ii) Defined contribution plans
The company has defined contribution plans namely provident fund. Contributions are made to provident fund at the rate of 12% of basic salary plus DA as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contributions plan is as follows:
(iii) Post- employment obligations a) Gratuity
The company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The company operates post retirement gratuity plan with LIC of India. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The above sensitivity analysis is based on a change in each assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
v) Risk exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most
significant of which are detailed below:
Interest rate risk:
The defined benefit obligation calculated uses a discount rate based on government
bonds. If bond yields fall, the defined benefit obligation will tend to increase.
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
Note 35: Financial instruments and risk management Fair values
1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current),trade receivables, cash and cash equivalents and other bank balances are considered to be the same as fair value due to their short term nature.
2. Borrowings (non-current) consists of loans from banks.
The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Set out below, is a comparison by class of the carrying amounts and fair value of the Company's financial instruments, other than those with carrying amounts that are reasonable approximation of fair values:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instruments are included in Level 3.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.
The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
(A) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect the company's income or the value of our income or the value of our portfolios. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
(i) Interest rate risk
Interest rate risk 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 has exposure only to financial instruments at fixed interest rates. Hence, the company is not exposed to significant interest rate risk. Additionally, since there are no external borrowings, the Company is not exposed to interest rate risk in with respect to borrowings.
(ii) Price risk
The company's exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. The company has majorly invested in Alternate Investment Funds and Equity Securities under various schemes and exposures.
(B) Credit risk
Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to financial assets of the Company include trade receivables, security deposits held with government authorities and bank deposits which represents Company's maximum exposure to the credit risk.
(C) Liquidity risk
Liquidity risk arises from the Company's inability to meet its cash flow commitments on time. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company's treasury maintains flexibility in funding by maintaining availability under deposits in banks.
Management monitors cash and cash equivalents on the basis of expected cash flows.
(i) Financing arrangements: The company had access to the following undrawn borrowing facilities at the end of the reporting period.
Note 36: Capital management
A. Capital management and gearing ratio
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares. Total capital is the equity as shown in the statement of financial position. Currently, the Company primarily monitors its capital structure on the basis of gearing ratio. Management is continuously evolving strategies to optimize the returns and reduce the risks. It includes plans to optimize the financial leverage of the Company.
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2025 and March 31,2024.
Note 37: Segment information:
The company is operating in financial service sector in India. Thus, there are no reportable segments as defined in Ind AS 108 “Operating Segments”. The company earns its entire “revenue from external customers” in India, being company's country of domicile. All non current assets other than financials instruments and deferred tax assets are located in India. There are no single major customers on whom the company's revenue is dependent upon and revenue from none of the single customer is more than or equal to 10% of the company's revenue.
Note 38: Code on Social Security
The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
Note 39: Dividend
The final dividends on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income Tax consequences of dividends on financial instruments classifies as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits. The Company declares and pay the dividends in Indian rupee. Companies are required to pay/distribute dividend after deducting applicable withholding income taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates. The amount of per share dividend recognized as distribution to equity shareholders in accordance with Companies Act 2013 is as follows:
During the year ended March 31, 2025 on account of the final dividend for FY 2023-24 and interim for Fy 2024-25 the Company has incurred net cash outflow of Rs. 153.75 Lakhs. The Board of Directors in their meeting on May 13, 2025 recommend a final dividend of Rs. 0.50/- per equity share for the financial year ended March 31,2025. This pay-out is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company and if approved would result in a net cash outflow of approximately Rs. 207.50 Lakhs.
Note 42: During the year, the Company has reclassified and regrouped certain items in the financial statements for better presentation and alignment with the current year's classifications. These reclassifications have been made to enhance clarity, improve disclosure, and provide more relevant information to the users of the financial statements. The comparative figures for the previous year have been regrouped/reclassified wherever necessary to conform to the current year's presentation. The nature and impact of such regroupings and reclassifications are as follows:
(I) Profit and Loss Statement:
a. Profit from sale of investments has been presented as a separate line item in the notes to accounts, instead of being grouped under other operating income.
b. Training and education expenses have been reclassified from Other Expenses to Employee Benefit Expenses.
c. Club membership expenses have been regrouped from Other Expenses to Employee Benefit Expenses.
d. BINS IGST and BINS Stamp Duty have been reduced from Revenue from Operations instead of being shown as part of expenditure.
e. Registrations and renewals previously presented under General Expenses have been reclassified under Rates and Taxes.
f. Registrar & Share Transfer Agency Charges have been reclassified from General Expenses to Rates and Taxes.
(II) Balance Sheet:
a. Right-of-use assets have been presented as a separate line item under Non-Current Assets rather than under Other Non-Current Financial Assets.
b. Lease liabilities have been shown as a separate line item under Non-Current and Current Liabilities and not included under Current Financial Liabilities.
c. Plan assets (LIC Fund) have been netted off against the Gratuity Liability, rather than being shown seperately under Other Current Assets.
d. Investments in Pro Account have been reclassified from Securities in Trade to Current Investments.
e. Investments in Mahesh Vidya Bhavan Ltd. and Sevenhills Co-operative Bank Ltd. have been regrouped from Current Investments to Non-Current Investments.
f. Security deposits related to long-term loans have been regrouped under Non-Current Financial Assets (Loans) instead of Other Current Financial Assets.
g. Fixed deposits (FDs) with an original maturity exceeding 12 months are now shown under Other Non-Current Financial Assets, instead of Bank Balances Other Than Cash and Cash Equivalents. Previously, remaining maturity was considered rather than original maturity.
h. Staff advances have been regrouped from Other Current Financial Assets to Other Current Assets.
i. Income Taxes (Net) have been reclassified to Current Tax Liabilities, aligning with the expected mode of settlement.
j. Investment in Magnifiq Capital Trust has been presented under Non-Current Investments.
k. Unpaid dividends have been regrouped from Other Current Liabilities to Other Current Financial Liabilities.
l. Client margin deposits have been reclassified from Other Current Liabilities to Other Current Financial Liabilities.
m. Credit balances of customers, previously shown under Trade Payables, have been regrouped under Customer Balances under Other Current Financial Liabilities.
n. Salaries payable have been reclassified from Trade Payables to Other Current Financial Liabilities.
These changes are of a presentational nature only and do not impact the reported profit or equity for the current or previous year.
Note 43: During FY 2012-13, company entered into an agreement for sale of land with Mrs. Hari Gayathri, wife of Mr. Venkata Appa Rao Yeleswarapu, client of the company. Mr. Venkata Appa is liable to pay Rs. 34.43 lakhs to the company as on January 31,2013. In the process of recovery, the company entered into an agreement for sale of land on February 01,2013 with his wife for a consideration of Rs. 14.75 lakhs. The consideration is to be treated as advance receivable by her from the company against the amount payable by her husband. The registration of land in favour of the company is pending. The company has decided to disclose the consideration under the head “Other non current assets” as capital advance as ‘Property pending for
registration & possession.' The company has filed a suit for specific performance for the same. The status of the case is ‘pending' and recovery of the same is doubtful.
Note 44: No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Note 45: Event occurred after the Balance Sheet Date
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of financial statements to determine the necessity for recognition and/or reporting of subsequent events and transactions in the financial statements. As of May 13, 2025, there were no subsequent events and transactions to be recognized or reported that are not already disclosed.
Note 46: The financial statements were approved for issue by the Board of Directors on May 13, 2025.
Note 47: The company has used an accounting software for maintaining its books of account which has the feature of recording audit trail (edit log) facility. The same has operated throughout the year for all relevant transactions recorded in the software. Also the audit trail is not disabled/tampered with. Further, the audit trail (edit log) is preserved as per the provisions of the Companies Act. However, the feature of recording audit trail (edit log) facility at database level is not enabled.
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