Accounting Policies of Emkay Global Financial Services Ltd. Company

Mar 31, 2025

3. Material accounting policies

3.1 Revenue from operations

Revenue (other than for those items to which Ind AS 109
Financial Instruments are applicable) is measured at fair
value of the consideration received or receivable.

The Company recognises revenue from contracts with
customers based on a five-step model as set out in Ind
AS115:

Step 1: Identify contract(s) with a customer: A contract is
defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the
criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A
performance obligation is a promise in a contract with a
customer to transfer a good or a service to the customer.

Step 3: Determine the transaction price: The transaction
price is the amount of consideration to which the Company
expects to be entitled in exchange for transferring promised
goods or services to a customer, excluding amounts
collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance
obligations in the contract: For a contract that has more
than one performance obligation, the Company allocates
the transaction price to each performance obligation in
an amount that depicts the amount of consideration to
which the Company expects to be entitled in exchange for
satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company
satisfies a performance obligation.

Revenue includes the following:

(i) Brokerage fee income

Revenue from contracts with customers is recognised at
a point in time when performance obligation is satisfied
(when the trade is executed i.e., trade date). This includes
brokerage fees which is charged per transaction executed
on behalf of the customers.

(ii) Fee & commission income

This includes:

a) Income from investment banking activities, research,
and other fees:

Income from investment banking activities and other fees
is recognized as and when such services are completed /
performed and as per terms of agreement with the client (i.e.
when the performance obligation is completed). Research
fees income is recognised when the entity satisfies the
performance obligation by providing the service to the
client.

b) Income from depository operations:

Revenue from depository services on account of annual
maintenance charges have been accounted for over
the period of the performance obligation. Revenue from

depository services on account of transaction charges
is recognised at a point in time when the performance
obligation is completed.

c) Income from wealth management services:

Commission income (net of taxes and other statutory
charges) from distribution of financial products is recognized
based on mobilization and intimation received from clients/
intermediaries or over the period of service after deducting
claw back as per the agreed terms.

(iii) Interest income

Interest income on a financial asset at amortised cost
is recognised on a time proportion basis taking into
account the amount outstanding and the effective interest
rate (‘EIR’). The EIR is the rate that exactly discounts
estimated future cash flows of the financial assets
through the expected life of the financial asset or, where
appropriate, a shorter period, to the net carrying amount
of the financial instrument. The internal rate of return on
financial assets after netting off the fees received, and cost
incurred approximates the effective interest rate method
of return for the financial asset. The future cash flows are
estimated taking into account all the contractual terms of
the instrument.

The interest income is calculated by applying the EIR to
the gross carrying amount of non-credit impaired financial
assets (i.e. at the amortised cost of the financial asset
before adjusting for any expected credit loss allowance).
For credit-impaired financial assets the interest income
is calculated by applying the EIR to the amortised cost of
the credit-impaired financial assets (i.e. the gross carrying
amount less the allowance for ECLs).

(iv) Dividend income

Dividend income is recognized when the right to receive
the payment is established, it is probable that the economic
benefits associated with the dividend will flow to the entity
and the amount of the dividend can be measured reliably.
This is generally when the shareholders approves the
dividend.

(v) Net gain on fair value changes

Any realised gain or loss on sale of financial assets
(including investments, derivatives and stock in trade)
being classified as fair value through profit or loss
(“FVTPL”) is recognised as “Net gain or loss on fair value
changes” under “Revenue from operations” or “Expenses”
respectively in the statement of profit and loss.

Similarly, any differences between the fair values of
financial assets (including investments, derivatives and
stock in trade) being classified as fair value through profit or
loss (“FVTPL”), held by the Company on the balance sheet
date is recognised as an unrealised gain / loss. In cases
there is a net gain in the aggregate, the same is recognised
as “Net gain on fair value changes” under “Revenue from
operations” and if there is a net loss the same is disclosed
as “Net loss on fair value changes” under “Expenses” in the
statement of Profit and Loss.

(vi) Delayed payment charges

The same are accounted at a point in time of default.

(vii) Other income

In respect of other heads of Income it is accounted to the
extent it is probable that the economic benefits will flow
and the revenue can be reliably measured, regardless of
when the payment is being made. An entity shall recognise
a refund liability if the entity receives consideration from
a customer and expects to refund some or all of that
consideration to the customer.

3.2 Financial instruments

(i) Initial measurement of financial instruments

The classification of financial instruments at initial
recognition depends on their contractual terms and the
business model for managing the instruments, as described
in Note 4.1. Financial instruments are initially measured at
their fair value (as defined in Note 4.3), except in the case of
financial assets and financial liabilities recorded at FVTPL,
transaction costs are added to, or subtracted from, this
amount. Trade receivables are measured at the transaction
price. When the fair value of financial instruments at initial
recognition differs from the transaction price, the company
accounts for the Day 1 profit or loss, as described below.

When the transaction price of the instrument differs from
the fair value at origination and the fair value is based on a
valuation technique using only inputs observable in market
transactions, the company recognizes the difference
between the transaction price and fair value in net gain on
fair value changes.

(ii) Classification of financial instruments

The Company classifies its financial assets into the
following measurement categories:

1. Financial assets to be measured at amortised cost

2. Financial assets to be measured at fair value through
other comprehensive income (FVOCI)

3. Financial assets to be measured at fair value through
statement of profit and loss (FVTPL)

The classification depends on the contractual terms of the
financial assets'' cash flows and the Company''s business
model for managing financial assets.

The Company determines its business model at the level
that best reflects how it manages groups of financial assets
to achieve its business objective. The business model is
assessed on the basis of aggregated portfolios based on
observable factors. These factors include:

• Reports reviewed by the entity''s key management
personnel on the performance of the financial assets

• The risks impacting the performance of the business
model (and the financial assets held within that
business model) and its management thereof

• The compensation of the managing teams (for
example, whether the compensation is based on the
fair value of the assets managed or on the contractual
cash flows collected)

• The expected frequency, value and timing of trades.

The business model assessment is based on reasonably
expected scenarios without taking ''worst case'' or ''stress
case'' scenarios into account.

The Company also assesses the contractual terms of
financial assets on the basis of its contractual cash flow
characteristics that are solely for the payments of principal
and interest on the principal amount outstanding.

''Principal'' is defined as the fair value of the financial asset
at initial recognition and may change over the life of the
financial asset (for example, if there are repayments of
principal or amortisation of the premium/discount).

In making this assessment, the Company considers
whether the contractual cash flows are consistent with
a basic lending arrangement i.e. interest includes only
consideration for the time value of money, credit risk, other
basic lending risks and a profit margin that is consistent with
a basic lending arrangement. Where the contractual terms
introduce exposure to risk or volatility that are inconsistent
with a basic lending arrangement, the related financial
asset is classified and measured at fair value through profit
or loss.

iii) Financial Assets and Liabilities

(a) Financial assets measured at amortized cost

These financial assets comprise bank balances, loans,
trade receivables and other financial assets.

Financial Assets with contractual terms that give rise to cash
flows on specified dates, and represent solely payments
of principal and interest (SPPI) on the principal amount
outstanding; and are held within a business model whose
objective is achieved by holding to collect contractual cash
flows are measured at amortized cost.

These financial assets are initially recognised at fair
value plus directly attributable transaction costs and
subsequently measured at amortized cost. Transaction
costs are incremental costs that are directly attributable to
the acquisition, issue or disposal of a financial asset or a
financial liability.

(b) Financial assets measured at fair value through
other comprehensive income (FVOCI)

Debt instruments

Investments in debt instruments are measured at fair value
through other comprehensive income where they have:

a) contractual terms that give rise to cash flows on
specified dates, that represent solely payments
of principal and interest on the principal amount
outstanding; and

b) are held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets.

These debt instruments are initially recognised at fair
value plus directly attributable transaction costs and
subsequently measured at fair value. Gains and losses
arising from changes in fair value are included in other
comprehensive income(OCI) (a separate component of
equity). Impairment losses or reversals, interest revenue
and foreign exchange gains and losses are recognised in
statement of profit and loss. Upon disposal, the cumulative
gain or loss previously recognised in other comprehensive
income is reclassified from equity to the statement of profit
and loss. As at the reporting date the Company does not
have any financial instruments measured at fair value
through other comprehensive income.

Equity instruments

Investment in equity instruments are generally accounted
for as at fair value through the statement of profit and loss
account unless an irrevocable election has been made
by management to account for at fair value through other
comprehensive income such classification is determined
on an instrument-by-instrument basis.

Amounts presented in other comprehensive income for
equity instruments are not subsequently transferred to

statement of profit and loss. Dividends on such investments
are recognised in statement of profit and loss.

(c) Financial assets measured through statement of
profit and loss

The financial assets are classified as FVTPL if these do not
meet the criteria for classifying at amortized cost or FVOCI.

Items at fair value through statement of profit and loss
comprise:

• Investments (including equity shares) and stock in
trade held for trading;

• Items specifically designated as fair value through profit
or loss on initial recognition;

• Debt instruments with contractual terms that do not
represent solely payments of principal and interest; and

• Derivative transactions

Financial instruments held at fair value through profit or
loss are initially recognised at fair value, with transaction
costs recognised in the statement of profit and loss as
incurred. Subsequently, they are measured at fair value
and any gains or losses are recognised in the statement of
profit and loss as they arise.

Financial instruments held for trading

A financial instrument is classified as held for trading if it is
acquired or incurred principally for selling or repurchasing
in the near term, or forms part of a portfolio of financial
instruments that are managed together and for which there
is evidence of short-term profit taking, or it is a derivative
not designated in a qualifying hedge relationship.

The profit/(loss) earned on sale of investments and
securities held for trading are recognised on trade date
basis. Profit or loss on sale of investments is determined
on the basis of the weighted average cost method and
securities held for trading on FIFO method. On disposal
of an investment, the difference between carrying amount
and net disposal proceeds is charged to or credited to
statement of profit and loss.

Trading derivatives and trading securities are classified as
held for trading and recognised at fair value.

(d) Financial liabilities

The Company classifies its financial liabilities at amortized
costs unless it has designated liabilities at fair value through
the statement of profit and loss such as derivative liabilities.

Debt securities and other borrowed funds

After initial measurement, debt issued and other borrowed
funds are subsequently measured at amortized cost.
Amortized cost is calculated by taking into account any
discount or premium on issue funds, and costs that are an
integral part of the EIR.

(e) Undrawn loan commitments

Undrawn loan commitments are commitments under
which, over the duration of the commitment, the
Company is required to provide a loan with pre-specified
terms to the customer. Undrawn loan commitments are
in the scope of the ECL requirements.

The nominal contractual value of undrawn loan
commitments, where the loan agreed to be provided is
on market terms, are not recorded in the balance sheet.
The nominal values of these instruments together with the
corresponding ECLs are disclosed in Note 7.

(f) Derivatives

The Company enters into derivative transactions being
equity derivative transactions in the nature of Futures and
Options in Equity Stock/Index and currency derivative
transactions in the nature of Futures and Options in
foreign currencies both entered into for trading purposes.
Derivatives are recorded at fair value and carried as assets
when their fair value is positive and as liabilities when their
fair value is negative. The notional amount and fair value
of such derivatives are disclosed separately. Changes in
the fair value of derivatives are included in net gain on fair
value changes.

(g) Recognition and derecognition of financial assets
and liabilities

A financial assets or financial liabilities are recognised in
the balance sheet when the Company becomes a party
to the contractual provisions of the instruments, which
are generally on trade date. Loans and receivables are
recognised when cash is advanced (or settled) to the
borrowers. Financial assets at fair value through statement
of profit or loss are recognised initially at fair value. All other
financial assets are recognised initially at fair value plus
directly attributable transaction costs.

The Company derecognises its financial assets when the
contractual cash flows from the asset expire or it transfers
its rights to receive contractual cash flows on the financial
assets in a transaction in which substantially all the risks
and rewards of ownership are transferred. Any interest in

transferred financial assets that is created or retained by
the Company is recognised as a separate asset or liability.
A financial liabilities are derecognised from the balance
sheet when the Company has discharged its obligation or
the contract is cancelled or expires.

(h) Impairment of financial assets
Overview of the ECL principles

The Company recognises loss allowances (provisions) for
expected credit losses on its financial assets (including
non-fund exposures) that are measured at amortised costs.

The Company applies a three-stage approach to measuring
expected credit losses (ECLs) for the following categories
of financial assets that are not measured at fair value
through statement of profit and loss:

• debt instruments measured at amortised cost

• loan commitments; and

• financial guarantee contracts.

Equity instruments are not subject to impairment under Ind
AS 109.

The ECL allowance provision is based on the credit losses
expected to arise over the life of the asset (the lifetime
expected credit loss), unless there has been no significant
increase in credit risk since origination, in which case,
the allowance is based on the 12 months expected credit
loss. Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is the portion
of Lifetime ECL that represent the ECLs that result from
default events on a financial instrument that are possible
within the 12 months after the reporting date.

Both Lifetime ECLs and 12-month ECLs are calculated on
either an individual basis or a collective basis, depending
on the nature of the underlying portfolio of financial
instruments. The Company has classified its loan portfolio
into Corporates / Firms, Individuals (HNIs) and Individuals
(Retail).

The Company has established a policy to perform an
assessment, at the end of each reporting period, of
whether a financial instrument''s credit risk has increased
significantly since initial recognition, by considering the
change in the risk of default occurring over the remaining
life of the financial instrument. The Company does the
assessment of significant increase in credit risk at a
borrower level. If a borrower has various facilities having
different past due status, then the highest days past due

(DPD) is considered to be applicable for all the facilities of
that borrower.

Based on the above, the Company categorises its loans
into Stage 1, Stage 2 and Stage 3 as described below:

Stage 1

All exposures where there has not been a significant
increase in credit risk since initial recognition or that
has low credit risk at the reporting date and that are not
credit impaired upon origination are classified under this
stage. The Company classifies all standard advances and
advances upto 30 days default under this category. Stage
1 loans also include facilities where the credit risk has
improved and the loan has been reclassified from Stage 2.

Stage 2

All exposures where there has been a significant increase
in credit risk since initial recognition but are not credit
impaired are classified under this stage. 30 Days Past Due
is considered as significant increase in credit risk.

Stage 3

All exposures assessed as credit impaired when one
or more events that have a detrimental impact on the
estimated future cash flows of that asset have occurred are
classified in this stage. For exposures that have become
credit impaired, a lifetime ECL is recognised and interest
revenue is calculated by applying the effective interest
rate to the amortised cost (net of provision) rather than the
gross carrying amount. 90 Days Past Due is considered
as default for classifying a financial instrument as credit
impaired.

Credit-impaired financial assets

At each reporting date, the Company assesses whether
financial assets carried at amortised cost and debt financial
assets carried at FVOCI are credit-impaired. A financial
asset is ''credit-impaired'' when one or more events that
have a detrimental impact on the estimated future cash
flows of the financial assets have occurred.

Evidence that a financial asset is credit-impaired includes
the following observable data:

a) Significant financial difficulty of the borrower or issuer;

b) A breach of contract such as a default or past due
event;

c) The restructuring of a loan or advance by the Company
on terms that the Company would not consider
otherwise;

d) It is becoming probable that the borrower will enter
bankruptcy or other financial reorganisation; or

e) The disappearance of an active market for a security
because of financial difficulties.

Loan Commitments

When estimating lifetime ECL, for undrawn loan
commitments, the Company estimates the expected portion
of the loan commitment that will be drawn down over its
expected life. The ECL is then based on the present value
of the expected shortfalls in cash flows if the loan is drawn
down.

For margin funding facilities that include both a loan and an
undrawn commitment, ECL are calculated and presented
together with the loan. For loan commitments, the ECL is
recognised within Provisions. Margin trading facilities are
secured by collaterals. As per policy of the Company,
margin trading facilities to the extent covered by collateral
and servicing interest on a regular basis is not considered
as due/default.

Financial guarantee contracts

The Company''s liability under financial guarantee is
measured at the higher of the amount initially recognised
less cumulative amortisation recognised in the statement
of profit and loss.

The mechanics of ECL

The Company calculates ECLs based on probability-
weighted scenarios to measure the expected cash
shortfalls, discounted at an approximation to the EIR.
A cash shortfall is the difference between the cash flows
that are due to the Company in accordance with the
contract and the cash flows that the Company expects to
receive.

The mechanics of the ECL calculations are outlined below
and the key elements are, as follows:

Probability of default (PD) - The Probability of Default is
an estimate of the likelihood of default over a given time
horizon. A default may only happen at a certain time over
the assessed period, if the facility has not been previously
derecognised and is still in the portfolio.

Exposure at default (EAD)- The Exposure at Default is an
estimate of the exposure at a future default date.

Loss given default (LGD) - The Loss Given Default is an
estimate of the loss arising in the case where a default

occurs at a given time. It is based on the difference between
the contractual cash flows due and those that the Company
would expect to receive, including from the realisation of
any collateral. It is usually expressed as a percentage of
the EAD.

Trade Receivables

The Company follows the Ind AS109 ''simplified approach''
for recognition of impairment loss allowance on trade
receivables. The application of simplified approach does
not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based
on lifetime ECLs at each reporting date, right from its
initial recognition. The Company uses a provision matrix
to determine impairment loss allowance on portfolio of
its trade receivables. The provision matrix is based on its
historically observed default rates over the expected life of
the trade receivables and is adjusted for forward-looking
estimates. At every reporting date, the historical observed
default rates are updated for changes in the forward¬
looking estimates.

Company also writes off balances that are due generally
for more than one year and are not likely to be recovered.

Forward looking information

While estimating the expected credit losses, the Company
reviews macro-economic developments occurring in
the economy and market it operates in. On a periodic
basis, the Company analyses if there is any relationship
between key economic trends like GDP, unemployment
rates, benchmark rates set by the Reserve Bank of India,
inflation etc. with the estimate of PD, LGD determined by
the Company based on its internal data. While the internal
estimates of PD, LGD rates by the Company may not be
always reflective of such relationships, temporary overlays,
if any, are embedded in the methodology to reflect such
macro-economic trends reasonably.

Collateral Valuation

To mitigate its credit risks on financial assets, the Company
seeks to use collateral, wherever possible. The collateral
comes in various forms, such as equity shares, fixed
deposits, etc. However, the fair value of collateral affects the
calculation of ECLs. To the extent possible, the Company
uses active market data for valuing financial assets held as
collateral. Other financial assets which do not have readily
determinable market values are valued using models.

(i) Write-offs

The Company reduces the gross carrying amount of a
financial asset when the Company has no reasonable
expectations of recovering a financial asset in its entirety
or a portion thereof. This is generally the case when the
Company determines that the client or borrower does not
have assets or sources of income that could generate
sufficient cash flows to repay the amounts subjected to
write-offs. Any subsequent recoveries against such loans
are credited to the statement of profit and loss.

(j) Determination of fair value

On initial recognition, all the financial instruments are
measured at fair value. For subsequent measurement,
the Company measures certain categories of financial
instruments as explained in note 57 at fair value on each
balance sheet date.

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most
advantageous market for the asset or liability

The principal or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into
account a market participant''s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the use
of unobservable inputs.

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

Level 1 financial instruments - Those where the inputs
used in the valuation are unadjusted quoted prices from
active markets for identical assets or liabilities that the
Company has access to at the measurement date. The
Company considers markets as active only if there are
sufficient trading activities with regards to the volume and
liquidity of the identical assets or liabilities and when there
are binding and exercisable price quotes available on the
balance sheet date.

Level 2 financial instruments - Those where the inputs
that are used for valuation and are significant, are derived
from directly or indirectly observable market data available
over the entire period of the instrument''s life. Such inputs
include quoted prices for similar assets or liabilities in
active markets, quoted prices for identical instruments in
inactive markets and observable inputs other than quoted
prices such as interest rates and yield curves, implied
volatilities, and credit spreads. In addition, adjustments
may be required for the condition or location of the asset or
the extent to which it relates to items that are comparable
to the valued instrument. However, if such adjustments
are based on unobservable inputs which are significant
to the entire measurement, the Company will classify the
instruments as Level 3.

Level 3 financial instruments - Those that include one
or more unobservable input that is significant to the
measurement as whole.

The Company recognises transfers between levels of the
fair value hierarchy at the end of the reporting period during
which the change has occurred.

Difference between transaction price and fair value at initial
recognition:

The best evidence of the fair value of a financial instrument
at initial recognition is the transaction price (i.e. the fair
value of the consideration given or received) unless the
fair value of that instrument is evidenced by comparison
with other observable current market transactions in the
same instrument (i.e. without modification or repackaging)
or based on a valuation technique whose variables include
only data from observable markets. When such evidence
exists, the Company recognises the difference between
the transaction price and the fair value in profit or loss on
initial recognition (i.e. on day one).

When the transaction price of the instrument differs from
the fair value at origination and the fair value is based on a
valuation technique using only inputs observable in market
transactions, the Company recognises the difference
between the transaction price and fair value in net gain on

fair value changes. In those cases where fair value is based
on models for which some of the inputs are not observable,
the difference between the transaction price and the fair
value is deferred and is only recognised in statement of
profit and loss when the inputs become observable, or
when the instrument is derecognised.

3.3 Expenses

(i) Borrowing / finance costs
Borrowing costs

Expenses related to borrowing cost are accounted using
effective interest rate. Borrowing costs are interest and
other costs (including exchange differences relating to
foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs) incurred in
connection with the borrowing of funds. Borrowing costs
directly attributable to acquisition or construction of an
asset which necessarily take a substantial period of time
to get ready for their intended use are capitalised as part of
the cost of that asset. Other borrowing costs are recognised
as an expense in the period in which they are incurred.

Finance costs

Finance costs represents Interest expense recognised
by applying the Effective Interest Rate (EIR) to the gross
carrying amount of financial liabilities other than financial
liabilities classified as FVTPL.

The EIR in case of a financial liability is computed

a. As the rate that exactly discounts estimated future cash
payments through the expected life of the financial
liability to the gross carrying amount of the amortised
cost of a financial liability.

b. By considering all the contractual terms of the financial
instrument in estimating the cash flows

c. Including all fees paid between parties to the contract
that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future
cash flows is recognised in in the statement of profit and
loss with the corresponding adjustment to the carrying
amount of the assets.

Interest expense includes issue costs that are initially
recognized as part of the carrying value of the financial
liability and amortized over the expected life using
the effective interest method. These include fees and

commissions payable to advisers and other expenses such
as external legal costs, rating fee etc, provided these are
incremental costs that are directly related to the issue of a
financial liability

(ii) Retirement and other employee benefits
Short term employee benefit

All employee benefits including statutory bonus /
performance bonus / incentives payable wholly within
twelve months of rendering the service are classified
as short term employee benefits and are charged to the
statement of profit and loss of the year.

Post-employment employee benefits

a) Defined contribution schemes

Retirement / Employee benefits in the form of Provident
Fund, Employees State Insurance Scheme and Labour
Welfare Fund are considered as defined contribution plan
and contributions to the respective funds administered by
the Government are charged to the statement of profit and
loss of the year when the contribution to the respective
funds are due

b) Defined benefit schemes

Retirement benefits in the form of gratuity is considered
as defined benefit obligation. The scheme is formed by
the Company and fund is managed by insurers to which
the Company makes periodic contributions. The present
value of the obligation under such defined benefit plan
is determined based on actuarial valuation, carried out
by an independent actuary at each Balance Sheet date,
using the Projected Unit Credit Method, which recognizes
each period of service as giving rise to an additional unit
of employee benefit entitlement and measures each unit
separately to build up the final obligation.

The obligation is measured at the present value of the
estimated future cash flows. The discount rates used
for determining the present value of the obligation under
defined benefit plan are based on the market yields on
Government Securities as at the Balance Sheet date.

Re-measurement, comprising of actuarial gains and
losses and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability),
are recognized immediately in the balance sheet with a
corresponding debit or credit to retained earnings through
Other Comprehensive Income in the period in which they
occur. Re-measurements are not reclassified to profit and
loss in subsequent periods.

Other Long Term Benefits
Compensated absences

The employees can carry forward a portion of the
unutilized accrued compensated absences and utilize
it in future service periods. The Company records an
obligation for such compensated absences in the period
in which the employee renders the services that increase
the entitlement. The obligation is measured based on
independent actuarial valuation using the projected unit
credit method.

(iii) Share-based payments

Equity-settled share-based payments to employees that
are granted are measured by reference to the fair value
of the equity instruments at the grant date. The fair value
determined at the grant date of the equity-settled share-
based payments is expensed on a straight-line basis over
the vesting period, based on the Company''s estimate
of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each period,
the entity revises its estimates of the number of options that
are expected to vest based on the vesting conditions. It
recognises the impact of the revision to original estimates,
if any, in statement of profit and loss, with a corresponding
adjustment to equity.

In respect of options granted to the employees of the
subsidiary companies, the amount equal to the expense
for the grant date fair value of the award is recognized as
a debit to investment in subsidiary as a capital contribution
and a credit to equity.

(iv) Other expenses

All other expenses are recognized in the period they
accrue/occur.

(v) Impairment of non financial assets

Intangible assets and property, plant and equipment are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost
to sell and the value in- use) is determined on an individual
asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the
Cash Generating Unit to which the asset belongs.

The carrying amount of assets is reviewed at each balance
sheet date whether there is any indication that an asset

may be impaired. If such assets are considered to be
impaired, the impairment to be recognized in the Statement
of Profit and Loss is measured by the amount by which
the carrying value of the assets exceeds the estimated
recoverable amount of the asset. An impairment loss is
reversed in the statement of profit and loss if there has
been a change in the estimates used to determine the
recoverable amount. The carrying amount of the asset
is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount
that would have been determined (net of any accumulated
amortization or depreciation) had no impairment loss been
recognised for the asset in prior years.

(vi) Taxes
Current Tax

Current tax assets and liabilities for the current and prior
years are measured in accordance with Income Tax Act,
1961 at the amount expected to be recovered from, or
paid to, the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted,
or substantively enacted, by the reporting date in the
countries where the Company operates and generates
taxable income.

Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either
in other comprehensive income or in equity). Current
tax items are recognised in correlation to the underlying
transaction either in OCI or directly in 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.

Deferred tax

Deferred tax assets and liabilities are recognised for
temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts. Deferred
income tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the
reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred
income tax liability is settled.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

- Where the deferred tax liability arises from the initial
recognition of goodwill or of an asset or liability in a

transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss

- In respect of taxable temporary differences associated
with investments in subsidiaries, where the timing of the
reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not
reverse in the foreseeable future

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and
unused tax losses can be utilised, except:

- When the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss

- In respect of deductible temporary differences
associated with investments in subsidiaries, associates
and interests in joint ventures, deferred tax assets are
recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable
future and taxable profit will be available against which
the 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 are re-assessed
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 relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity.

Deferred tax assets and liabilities are offset where there
is a legally enforceable right to offset current tax assets
and liabilities and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and
liabilities are realised simultaneously.

Minimum Alternate Tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the
statement of profit and loss as current tax. The Company
recognizes MAT credit available as a deferred tax asset
only to the extent that it is probable that the Company will
pay normal income tax during the specified period, i.e., the
period for which MAT credit is allowed to be carried forward.
In the year in which the Company recognizes MAT credit
as a deferred tax asset in accordance with the Guidance
Note on Accounting for Credit Available in respect of
Minimum Alternative Tax under the Income-tax Act, 1961,
the said deferred tax asset is created by way of credit to the
statement of profit and loss and shown as “Deferred Tax
Assets.” in the Balance Sheet. The Company reviews such
deferred tax asset at each reporting date and writes down
the deferred tax asset to the extent the Company does not
have convincing evidence that it will pay normal tax during
the specified period.

Goods and services tax paid on acquisition of assets
or on incurring expenses

Expenses and assets are recognised net of the goods and
services tax paid, except:

i. When the tax incurred on a purchase of assets or
services is not recoverable from the taxation authority,
in which case, the tax paid is recognised as part of
the cost of acquisition of the asset or as part of the
expense item, as applicable

ii. When receivables and payables are stated with the
amount of tax included

The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the balance sheet.

3.4 Foreign currency translation
Initial recognition:

Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions.

Conversion:

Monetary assets and liabilities denominated in foreign
currency, which are outstanding as at the reporting date,
are translated at the reporting date at the closing exchange
rate and the resultant exchange differences are recognised
in the Statement of Profit and Loss.

Non-monetary items that are measured at historical cost in

a foreign currency are translated using the spot exchange
rates as at the date of recognition.

3.5 Cash and cash equivalents

Cash and cash equivalents comprise the net amount
of short-term, highly liquid investments that are readily
convertible to known amounts of cash (short-term deposits
with an original maturity of three months or less) and are
subject to an insignificant risk of change in value, cheques
on hand and balances with banks. They are held for the
purposes of meeting short-term cash commitments (rather
than for investment or other purposes).

For the purpose of the statement of cash flows, cash and
cash equivalents are as defined above.

3.6 Property, plant and equipment

Property, plant and equipment (PPE) are measured at
cost less accumulated depreciation and accumulated
impairment, (if any). The total cost of assets comprises
its purchase price, freight, duties, taxes and any other
incidental expenses directly attributable to bringing the
asset to the location and condition necessary for it to
be capable of operating in the manner intended by the
management. Changes in the expected useful life are
accounted for by changing the amortisation period or
methodology, as appropriate, and treated as changes in
accounting estimates.

Subsequent costs are included in the asset''s carrying
amount or recognized 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. The carrying
amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs and
maintenance are charged to the Statement of Profit and
Loss during the reporting period in which they are incurred.

Depreciation :

Depreciation is calculated using the WDV method to write
down the cost of property, plant and equipment to their
residual values over their estimated useful lives which is in
line with the estimated useful life as specified in Schedule
II of the Companies Act, 2013 except for Leasehold
Improvements which are amortised on a straight-line basis
over the period of lease or estimated period of useful life
of such improvement, subject to a maximum period of 36
months. Leasehold improvements include all expenditure
incurred on the leasehold premises that have future
economic benefits.

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

Property plant and equipment is derecognised on disposal
or when no future economic benefits are expected from
its use. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is
recognised in other income / expense in the statement of
profit and loss in the year the asset is derecognised. The
date of disposal of an item of property, plant and equipment
is the date the recipient obtains control of that item in
accordance with the requirements for determining when a
performance obligation is satisfied in Ind AS 115.

3.7 Intangible assets

An intangible asset is recognised only when its cost can
be measured reliably and it is probable that the expected
future economic benefits that are attributable to it will flow
to the Company.

Intangible assets acquired separately are measured on
initial recognition at cost. The cost of an intangible asset
comprises its purchase price and any directly attributable
expenditure on making the asset ready for its intended
use and net of any trade discounts and rebates. Following
initial recognition, intangible assets are carried at cost
less any accumulated amortisation and any accumulated
impairment losses.

The useful lives of intangible assets are assessed to be
either finite or indefinite. Intangible assets with finite
lives are amortised over the useful economic life. The
amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at
least at each financial year-end. Changes in the expected
useful life, or the expected pattern of consumption of future
economic benefits embodied in the asset, are accounted
for by changing the amortisation period or methodology,
as appropriate, which are then treated as changes in
accounting estimates. The amortisation expense on
intangible assets with finite lives is presented as a separate
line item in the statement of profit and loss. Amortisation
on assets acquired/sold during the year is recognised on
a pro-rata basis to the Statement of Profit and Loss from /
upto the date of acquisition/sale.

Amortisation is calculated using the straight-line method
to write down the cost of intangible assets to their residual
values over their estimated useful lives. Intangible assets
comprising of software are amortised on a straight-line
basis over a period of 3 years from the start of the year of
acquisition irrespective of the date of acquisition, unless it
has a shorter useful life.

The Company''s intangible assets consist of computer
software with finite life.

Gains or losses from derecognition of intangible assets
are measured as the difference between the net disposal
proceeds and the carrying amount of the asset are
recognised in the Statement of Profit and Loss when the
asset is derecognised.

3.8 Leases (As a lessee)

(i) Identifying a lease

At the inception of the contract, the Company assesses
whether a contract is, or contain, a lease. A contract is,
or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time
in exchange for consideration. The Company assesses
whether:

- The contract involves the use of an identified asset, this
may be specified explicitly or implicitly.

- The Company has the right to obtain substantially all of
the economic benefits from use of the asset throughout
the period of use; and

- The Company has right to direct the use of the asset.

(ii) Recognition of right of use asset

The Company recognises a right of use asset at the lease
commencement date of lease and comprises of the initial
lease liability amount, plus any indirect costs incurred
and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or site
on which it is located, less any lease incentives received.

(iii) Subsequent measurement of right of use asset

The right of use asset is subsequently amortized using the
straight-line method from the commencement date to the
earlier of the end of the useful life of the right of use asset or
the end of the lease term, whichever is lesser. In addition,
the right of use asset is periodically reduced by impairment
losses, if any, and adjusted for certain re-measurement of
the lease liability.

(iv) Recognition of lease liability

The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the
Company''s incremental borrowing rate. Lease payments
included in the measurement of the lease liability comprise
the fixed payments, including in-substance fixed payments
and lease payments in an optional renewal period if the
Company is reasonably certain to exercise an extension
option.

(v) Subsequent measurement of lease liability

The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is
a change in future lease payments arising from a change
in rate, Whenever the lease liability is remeasured, a
corresponding adjustment is made to the carrying amount
of the ROU

---

Mar 31, 2024

1. Corporate information

Emkay Global Financial Services Limited (''the Company'') is a public limited company domiciled in India and was incorporated under the provisions of the Companies Act, 1956 vide Certificate of Incorporation (CIN) : L67120MH1995PLC084899 dated 24 January 1995 and got listed in 2006. The Company is a member of National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE), National Commodities and Derivatives Exchange Limited (NCDEX), Multi Commodity Exchange of India Limited (MCX), Metropolitan Stock Exchange of India Limited (MSEI) and depository participant with Central Depository Services (India) Limited (CDSL). The Company is engaged in the business of providing Equity, Currency and Commodity Broking Services, Investment Banking, Depository Participant Services and Wealth Management Services including distribution of third-party financial products. The Company''s registered office is at The Ruby, 7th Floor, Senapati Bapat Marg, Dadar (West), Mumbai-400028.

2. Basis of preparation and presentation and Material accounting policies

These financial statements have been prepared in all material aspects in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind As'') as prescribed under section 133 of the Companies Act, 2013 (“the Act”) read with Companies (Indian Accounting standards) Rule 2015 as amended and other relevant provisions of the Act.

Accounting policies have been consistently applied to all the financial year presented in the standalone financial statements except where a newly issued accounting standard is initially adopted or revision to the existing accounting standard requires a change in the accounting policy hitherto in use.

Historical cost convention

The financial statements have been prepared on a historical cost convention on accrual basis of accounting except for the following:

• certain financial instruments which are measured at fair value

• defined benefit plan assets measured at fair value

• share-based payment obligations

Use of estimates and judgments

The preparation of financial statements requires the management to make judgments, accounting estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Areas involving a higher degree of judgment or complexity, or areas where assumptions are significant to the Company are discussed in Note 4 - Significant accounting judgments, estimates and assumptions.

Functional and presentation currency These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency, and all values are rounded to the nearest lac with two decimals except when otherwise indicated. 0.00 indicates the amount are below rounding off threshold.

Daily backup of books of accounts and accounting records is taken on servers physically located in India.

The financial statements of the Company are presented in order of liquidity and in accordance with Schedule III (Division III) of the Companies Act, 2013 applicable to NBFCs, as notified by the Ministry of Corporate Affairs (MCA).

An analysis regarding recovery or settlement within 12 months after the reporting date (current) and more than 12 months after the reporting date (non-current) is presented in Note 51.

Financial assets and financial liabilities are generally reported on a gross basis except when, there is an unconditional legally enforceable right to offset the

recognised amounts without being contingent on a future event and the parties intend to settle on a net basis in the following circumstances:

i. The normal course of business

ii. The event of default

iii. The event of insolvency or bankruptcy of the Company and/or its counterparties

3. Material accounting policies

3.1 Revenue from operations

Revenue (other than for those items to which Ind AS 109 Financial Instruments are applicable) is measured at fair value of the consideration received or receivable.

The Company recognises revenue from contracts with customers based on a five-step model as set out in Ind AS115:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or a service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company satisfies a performance obligation.

Revenue includes the following:

(i) Brokerage fee income

Revenue from contracts with customers is recognised at a point in time when performance obligation is satisfied (when the trade is executed i.e., trade date). This includes brokerage fees which is charged per transaction executed on behalf of the customers.

(ii) Fee & commission income This includes:

a) Income from investment banking activities, research, and other fees:

Income from investment banking activities and other fees is recognized as and when such services are completed / performed and as per terms of agreement with the client (i.e. when the performance obligation is completed). Research fees income is recognised when the entity satisfies the performance obligation by providing the service to the client.

b) Income from depository operations:

Revenue from depository services on account of annual maintenance charges have been accounted for over the period of the performance obligation. Revenue from depository services on account of transaction charges is recognised at a point in time when the performance obligation is completed.

c) Income from wealth management services:

Commission income (net of taxes and other statutory charges) from distribution of financial products is recognized based on mobilization and intimation received from clients/ intermediaries or over the period of service after deducting claw back as per the agreed terms.

(iii) Interest income

Interest income on a financial asset at amortised cost is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate (‘EIR’). The EIR is the rate that exactly discounts estimated future cash flows of the financial assets through the expected life of the financial asset or, where appropriate, a shorter period, to the net carrying amount of the financial instrument.

The internal rate of return on financial assets after netting off the fees received, and cost incurred approximates the effective interest rate method of return for the financial asset. The future cash flows are estimated taking into account all the contractual terms of the instrument.

The interest income is calculated by applying the EIR to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortised cost of the financial asset before adjusting for any expected credit loss allowance). For credit-impaired financial assets the interest income is calculated by applying the EIR to the amortised cost of the credit-impaired financial assets (i.e. the gross carrying amount less the allowance for ECLs).

(iv) Dividend income

Dividend income is recognized when the right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured reliably. This is generally when the shareholders approves the dividend.

(v) Net gain on fair value changes

Any realised gain or loss on sale of financial assets (including investments, derivatives and stock in trade) being classified as fair value through profit or loss (“FVTPL”) is recognised as “Net gain or loss on fair value changes” under “Revenue from operations” or “Expenses” respectively in the statement of profit and loss.

Similarly, any differences between the fair values of financial assets (including investments, derivatives and stock in trade) being classified as fair value through profit or loss (“FVTPL”), held by the Company on the balance sheet date is recognised as an unrealised gain / loss. In cases there is a net gain in the aggregate, the same is recognised as “Net gain on fair value changes” under “Revenue from operations” and if there is a net loss the same is disclosed as “Net loss on fair value changes” under “Expenses” in the statement of Profit and Loss.

(vi) Delayed payment charges

The same are accounted at a point in time of default.

(vii) Other income

In respect of other heads of Income it is accounted to the extent it is probable that the economic benefits will flow and the revenue can be reliably measured, regardless of when the payment is being made. An entity shall recognise a refund liability if the entity receives consideration from a customer and expects to refund some or all of that consideration to the customer.

3.2 Financial instruments

(i) Initial measurement of financial instruments

The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments, as described in Note 4.1. Financial instruments are initially measured at their fair value (as defined in Note 4.3), except in the case of financial assets and financial liabilities recorded at FVTPL, transaction costs are added to, or subtracted from, this amount. Trade receivables are measured at the transaction price. When the fair value of financial instruments at initial recognition differs from the transaction price, the company accounts for the Day 1 profit or loss, as described below. When the transaction price of the instrument differs from the fair value at origination and the fair value is based on a valuation technique using only inputs observable in market transactions, the company recognizes the difference between the transaction price and fair value in net gain on fair value changes.

(ii) Classification of financial instruments

The Company classifies its financial assets into the following measurement categories:

1. Financial assets to be measured at amortised cost

2. Financial assets to be measured at fair value through other comprehensive income (FVOCI)

3. Financial assets to be measured at fair value through statement of profit and loss (FVTPL)

The classification depends on the contractual terms of the financial assets'' cash flows and the Company''s business model for managing financial assets.

The Company determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business objective. The business model is assessed on the basis of aggregated portfolios based on observable factors. These factors include:

• Reports reviewed by the entity''s key management personnel on the performance of the financial assets

• The risks impacting the performance of the business model (and the financial assets held within that business model) and its management thereof

• The compensation of the managing teams (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)

• The expected frequency, value and timing of trades.

The business model assessment is based on reasonably expected scenarios without taking ''worst case'' or ''stress case'' scenarios into account.

The Company also assesses the contractual terms of financial assets on the basis of its contractual cash flow characteristics that are solely for the payments of principal and interest on the principal amount outstanding.

''Principal'' is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset (for example, if there are repayments of principal or amortisation of the premium/discount).

In making this assessment, the Company considers whether the contractual cash flows are consistent with a basic lending arrangement i.e. interest includes only consideration for the time value of money, credit risk, other basic lending risks and a profit margin that is consistent with a basic lending arrangement. Where the contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at fair value through profit or loss.

iii) Financial Assets and Liabilities

(a) Financial assets measured at amortized cost These financial assets comprise bank balances, loans,

trade receivables and other financial assets.

Financial Assets with contractual terms that give rise to cash flows on specified dates, and represent solely payments of principal and interest (SPPI) on the principal amount outstanding; and are held within a business model whose objective is achieved by holding to collect contractual cash flows are measured at amortized cost.

These financial assets are initially recognised at fair value plus directly attributable transaction costs and subsequently measured at amortized cost. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or a financial liability.

(b) Financial assets measured at fair value through other comprehensive income (FVOCI)

Debt instruments

Investments in debt instruments are measured at fair value through other comprehensive income where they have:

a) contractual terms that give rise to cash flows on specified dates, that represent solely payments of principal and interest on the principal amount outstanding; and

b) are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

These debt instruments are initially recognised at fair value plus directly attributable transaction costs and subsequently measured at fair value. Gains and losses arising from changes in fair value are included in other comprehensive income(OCI) (a separate component of equity). Impairment losses or reversals, interest revenue and foreign exchange gains and losses are recognised in statement of profit and loss. Upon disposal, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to the statement of profit and loss. As at the reporting date the Company does not have any financial instruments measured at fair value through other comprehensive income.

Equity instruments

Investment in equity instruments are generally accounted

for as at fair value through the statement of profit and loss account unless an irrevocable election has been made by management to account for at fair value through other comprehensive income such classification is determined on an instrument-by-instrument basis.

Amounts presented in other comprehensive income for equity instruments are not subsequently transferred to statement of profit and loss. Dividends on such investments are recognised in statement of profit and loss.

(c) Financial assets measured through statement of profit and loss

The financial assets are classified as FVTPL if these do not meet the criteria for classifying at amortized cost or FVOCI. Items at fair value through statement of profit and loss comprise:

• Investments (including equity shares) and stock in trade held for trading;

• Items specifically designated as fair value through profit or loss on initial recognition;

• Debt instruments with contractual terms that do not represent solely payments of principal and interest; and

• Derivative transactions

Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction costs recognised in the statement of profit and loss as incurred. Subsequently, they are measured at fair value and any gains or losses are recognised in the statement of profit and loss as they arise.

Financial instruments held for trading A financial instrument is classified as held for trading if it is acquired or incurred principally for selling or repurchasing in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative not designated in a qualifying hedge relationship.

The profit/(loss) earned on sale of investments and securities held for trading are recognised on trade date basis. Profit or loss on sale of investments is determined on the basis of the weighted average cost method and

securities held for trading on FIFO method. On disposal of an investment, the difference between carrying amount and net disposal proceeds is charged to or credited to statement of profit and loss.

Trading derivatives and trading securities are classified as held for trading and recognised at fair value.

d) Financial liabilities

The Company classifies its financial liabilities at amortized costs unless it has designated liabilities at fair value through the statement of profit and loss such as derivative liabilities. Debt securities and other borrowed funds

After initial measurement, debt issued and other borrowed funds are subsequently measured at amortized cost. Amortized cost is calculated by taking into account any discount or premium on issue funds, and costs that are an integral part of the EIR.

(e) Undrawn loan commitments

Undrawn loan commitments are commitments under which, over the duration of the commitment, the Company is required to provide a loan with pre-specified terms to the customer. Undrawn loan commitments are in the scope of the ECL requirements.

The nominal contractual value of undrawn loan commitments, where the loan agreed to be provided is on market terms, are not recorded in the balance sheet. The nominal values of these instruments together with the corresponding ECLs are disclosed in Note 8.

(f) Derivatives

The Company enters into derivative transactions being equity derivative transactions in the nature of Futures and Options in Equity Stock/Index and currency derivative transactions in the nature of Futures and Options in foreign currencies both entered into for trading purposes. Derivatives are recorded at fair value and carried as assets when their fair value is positive and as liabilities when their fair value is negative. The notional amount and fair value of such derivatives are disclosed separately. Changes in the fair value of derivatives are included in net gain on fair value changes.

(g) Recognition and derecognition of financial assets and liabilities

A financial assets or financial liabilities are recognised in the balance sheet when the Company becomes a party to the contractual provisions of the instruments, which are generally on trade date. Loans and receivables are recognised when cash is advanced (or settled) to the borrowers. Financial assets at fair value through statement of profit or loss are recognised initially at fair value. All other financial assets are recognised initially at fair value plus directly attributable transaction costs.

The Company derecognises its financial assets when the contractual cash flows from the asset expire or it transfers its rights to receive contractual cash flows on the financial assets in a transaction in which substantially all the risks and rewards of ownership are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability. A financial liabilities are derecognised from the balance sheet when the Company has discharged its obligation or the contract is cancelled or expires.

(h) Impairment of financial assets

Overview of the ECL principles

The Company recognises loss allowances (provisions) for expected credit losses on its financial assets (including non-fund exposures) that are measured at amortised costs. The Company applies a three-stage approach to measuring expected credit losses (ECLs) for the following categories of financial assets that are not measured at fair value through statement of profit and loss:

• debt instruments measured at amortised cost

• loan commitments; and

• financial guarantee contracts.

Equity instruments are not subject to impairment under Ind AS 109.

The ECL allowance provision is based on the credit losses expected to arise over the life of the asset (the lifetime expected credit loss), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the 12 months expected credit

loss. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is the portion of Lifetime ECL that represent the ECLs that result from default events on a financial instrument that are possible within the 12 months after the reporting date.

Both Lifetime ECLs and 12-month ECLs are calculated on either an individual basis or a collective basis, depending on the nature of the underlying portfolio of financial instruments. The Company has classified its loan portfolio into Corporates / Firms, Individuals (HNIs) and Individuals (Retail).

The Company has established a policy to perform an assessment, at the end of each reporting period, of whether a financial instrument''s credit risk has increased significantly since initial recognition, by considering the change in the risk of default occurring over the remaining life of the financial instrument. The Company does the assessment of significant increase in credit risk at a borrower level. If a borrower has various facilities having different past due status, then the highest days past due (DPD) is considered to be applicable for all the facilities of that borrower.

Based on the above, the Company categorises its loans into Stage 1, Stage 2 and Stage 3 as described below:

Stage 1

All exposures where there has not been a significant increase in credit risk since initial recognition or that has low credit risk at the reporting date and that are not credit impaired upon origination are classified under this stage. The Company classifies all standard advances and advances upto 30 days default under this category. Stage 1 loans also include facilities where the credit risk has improved and the loan has been reclassified from Stage 2.

Stage 2

All exposures where there has been a significant increase in credit risk since initial recognition but are not credit impaired are classified under this stage. 30 Days Past Due is considered as significant increase in credit risk.

Stage 3

All exposures assessed as credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that asset have occurred are classified in this stage. For exposures that have become credit impaired, a lifetime ECL is recognised and interest revenue is calculated by applying the effective interest rate to the amortised cost (net of provision) rather than the gross carrying amount. 90 Days Past Due is considered as default for classifying a financial instrument as credit impaired. Credit-impaired financial assets:

At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt financial assets carried at FVOCI are credit-impaired. A financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial assets have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

a) Significant financial difficulty of the borrower or issuer;

b) A breach of contract such as a default or past due event;

c) The restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

d) It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

e) The disappearance of an active market for a security because of financial difficulties.

Loan Commitments

When estimating lifetime ECL, for undrawn loan commitments, the Company estimates the expected portion of the loan commitment that will be drawn down over its expected life. The ECL is then based on the present value of the expected shortfalls in cash flows if the loan is drawn down.

For margin funding facilities that include both a loan and an undrawn commitment, ECL are calculated and presented together with the loan. For loan commitments, the ECL is recognised within Provisions. Margin trading facilities

are secured by collaterals. As per policy of the Company, margin trading facilities to the extent covered by collateral and servicing interest on a regular basis is not considered as due/default.

Financial guarantee contracts

The Company''s liability under financial guarantee is measured at the higher of the amount initially recognised less cumulative amortisation recognised in the statement of profit and loss.

The mechanics of ECL:

The Company calculates ECLs based on probability-weighted scenarios to measure the expected cash shortfalls, discounted at an approximation to the EIR. A cash shortfall is the difference between the cash flows that are due to the Company in accordance with the contract and the cash flows that the Company expects to receive. The mechanics of the ECL calculations are outlined below and the key elements are, as follows:

Probability of default (PD) - The Probability of Default is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period, if the facility has not been previously derecognised and is still in the portfolio.

Exposure at default (EAD) - The Exposure at Default is an estimate of the exposure at a future default date.

Loss given default (LGD) - The Loss Given Default is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the Company would expect to receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD.

Trade Receivables

The Company follows the Ind AS109 ''simplified approach'' for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on

lifetime ECLs at each reporting date, right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated for changes in the forward-looking estimates. Company also writes off balances that are due generally for more than one year and are not likely to be recovered.

Forward looking information

While estimating the expected credit losses, the Company reviews macro-economic developments occurring in the economy and market it operates in. On a periodic basis, the Company analyses if there is any relationship between key economic trends like GDP, unemployment rates, benchmark rates set by the Reserve Bank of India, inflation etc. with the estimate of PD, LGD determined by the Company based on its internal data. While the internal estimates of PD, LGD rates by the Company may not be always reflective of such relationships, temporary overlays, if any, are embedded in the methodology to reflect such macro-economic trends reasonably.

Collateral Valuation

To mitigate its credit risks on financial assets, the Company seeks to use collateral, wherever possible. The collateral comes in various forms, such as equity shares, fixed deposits, etc. However, the fair value of collateral affects the calculation of ECLs. To the extent possible, the Company uses active market data for valuing financial assets held as collateral. Other financial assets which do not have readily determinable market values are valued using models.

(i) Write-offs

The Company reduces the gross carrying amount of a financial asset when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. This is generally the case when the Company determines that the client or borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subjected to

write-offs. Any subsequent recoveries against such loans are credited to the statement of profit and loss.

(j) Determination of fair value

On initial recognition, all the financial instruments are measured at fair value. For subsequent measurement, the Company measures certain categories of financial instruments as explained in note 52 at fair value on each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

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

Level 1 financial instruments - Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the measurement date. The Company

considers markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date.

Level 2 financial instruments - Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument''s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Company will classify the instruments as Level 3.

Level 3 financial instruments - Those that include one or more unobservable input that is significant to the measurement as whole.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Difference between transaction price and fair value at initial recognition:

The best evidence of the fair value of a financial instrument at initial recognition is the transaction price (i.e. the fair value of the consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation technique whose variables include only data from observable markets. When such evidence exists, the Company recognises the difference between the transaction price and the fair value in profit or loss on initial recognition (i.e. on day one).

When the transaction price of the instrument differs from the fair value at origination and the fair value is based on a valuation technique using only inputs observable in market transactions, the Company recognises the difference between the transaction price and fair value in net gain on fair value changes. In those cases where fair value is based on models for which some of the inputs are not observable, the difference between the transaction price and the fair value is deferred and is only recognised in statement of profit and loss when the inputs become observable, or when the instrument is derecognised.

3.3 Expenses

(i) Borrowing / finance costs

Borrowing costs

Expenses related to borrowing cost are accounted using effective interest rate. Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

Finance costs

Finance costs represents Interest expense recognised by applying the Effective Interest Rate (EIR) to the gross carrying amount of financial liabilities other than financial liabilities classified as FVTPL.

The EIR in case of a financial liability is computed

a. As the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the gross carrying amount of the amortised cost of a financial liability.

b. By considering all the contractual terms of the financial instrument in estimating the cash flows

c. Including all fees paid between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future cash flows is recognised in in the statement of profit and loss with the corresponding adjustment to the carrying amount of the assets.

Interest expense includes issue costs that are initially recognized as part of the carrying value of the financial liability and amortized over the expected life using the effective interest method. These include fees and commissions payable to advisers and other expenses such as external legal costs, rating fee etc, provided these are incremental costs that are directly related to the issue of a financial liability

(ii) Retirement and other employee benefits

Short term employee benefit

All employee benefits including statutory bonus / performance bonus / incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the statement of profit and loss of the year.

Post-employment employee benefits

a) Defined contribution schemes

Retirement / Employee benefits in the form of Provident Fund, Employees State Insurance Scheme and Labour Welfare Fund are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the statement of profit and loss of the year when the contribution to the respective funds are due

b) Defined benefit schemes

Retirement benefits in the form of gratuity is considered as defined benefit obligation. The scheme is formed by the Company and fund is managed by insurers to which the Company makes periodic contributions. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation, carried out by an

independent actuary at each Balance Sheet date, using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan are based on the market yields on Government Securities as at the Balance Sheet date. Re-measurement, comprising of actuarial gains and losses and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income in the period in which they occur. Re-measurements are not reclassified to profit and loss in subsequent periods.

Other Long Term Benefits Compensated absences

The employees can carry forward a portion of the unutilized accrued compensated absences and utilize it in future service periods. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase the entitlement. The obligation is measured based on independent actuarial valuation using the projected unit credit method.

(iii) Share-based payments

Equity-settled share-based payments to employees that are granted are measured by reference to the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the vesting conditions. It

recognises the impact of the revision to original estimates, if any, in statement of profit and loss, with a corresponding adjustment to equity.

In respect of options granted to the employees of the subsidiary companies, the amount equal to the expense for the grant date fair value of the award is recognized as a debit to investment in subsidiary as a capital contribution and a credit to equity.

(iv) Other expenses

All other expenses are recognized in the period they accrue/ occur.

(v) Impairment of non financial assets

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value in- use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.

The carrying amount of assets is reviewed at each balance sheet date whether there is any indication that an asset may be impaired. If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years.

(vi) Taxes Current Tax

Current tax assets and liabilities for the current and prior years are measured in accordance with Income Tax Act, 1961 at the amount expected to be recovered from, or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted, or substantively enacted, by the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in 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.

Deferred tax

Deferred tax assets and liabilities are recognised for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

- Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

- In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

- In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the 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 are re-assessed 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 relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities are realised simultaneously.

Minimum Alternate Tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that it is probable that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement.” The Company reviews the MAT Credit Entitlement asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

Goods and services tax paid on acquisition of assets or on incurring expenses

Expenses and assets are recognised net of the goods and services tax paid, except:

i. When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

ii. When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

3.4 Foreign currency translation

Initial recognition:

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.

Conversion:

Monetary assets and liabilities denominated in foreign currency, which are outstanding as at the reporting date, are translated at the reporting date at the closing exchange rate and the resultant exchange differences are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the spot exchange rates as at the date of recognition.

3.5 Cash and cash equivalents

Cash and cash equivalents comprise the net amount of short-term, highly liquid investments that are readily convertible to known amounts of cash (short-term deposits with an original maturity of three months or less) and are subject to an insignificant risk of change in value, cheques on hand and balances with banks. They are held for the purposes of meeting short-term cash commitments (rather than for investment or other purposes).

For the purpose of the statement of cash flows, cash and cash equivalents are as defined above.

3.6 Property, plant and equipment

Property, plant and equipment (PPE) are measured at cost less accumulated depreciation and accumulated impairment, (if any). The total cost of assets comprises its purchase price, freight, duties, taxes and any other incidental expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Changes in the expected useful life are accounted for by changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.

Subsequent costs are included in the asset''s carrying amount or recognized 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. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.

Depreciation :

Depreciation is calculated using the WDV method to write down the cost of property, plant and equipment to their residual values over their estimated useful lives which is in line with the estimated useful life as specified in Schedule II of the Companies Act, 2013 except for Leasehold Improvements which are amortised on a straight-line basis over the period of lease or estimated period of useful life of such improvement, subject to a maximum period of 36 months. Leasehold improvements include all expenditure incurred on the leasehold premises that have future economic benefits.

The estimated useful lives are as follows:
Particulars	Useful life as prescribed by Schedule II of the Companies Act, 2013	Useful life estimated by Company
Office premises	60 years	60 years
Furniture and fixture	10 years	10 years
Air conditioner	15 years	15 years
Office equipment	5 years	5 years
Vehicles	8 years	8 years
Computer end user	3 years	3 years
Computer data centre and networking	6 years	6 years

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

Property plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income / expense in the statement of profit and loss in the year the asset is derecognised. The date of disposal of an item of property, plant and equipment is the date the recipient obtains control of that item in accordance with the requirements for determining when a performance obligation is satisfied in Ind AS 115.

3.7 Intangible assets

An intangible asset is recognised only when its cost can be measured reliably and it is probable that the expected future economic benefits that are attributable to it will flow to the Company.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset comprises its purchase price and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end. Changes in the expected useful life, or the expected pattern of consumption of future economic benefits embodied in the asset, are accounted for by changing the amortisation period or methodology, as appropriate, which are then treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is presented as a separate line item in the statement of profit and loss. Amortisation on assets acquired/sold during the year is recognised on a pro-rata basis to the Statement of Profit and Loss from / upto the date of acquisition/sale.

Amortisation is calculated using the straight-line method to write down the cost of intangible assets to their residual values over their estimated useful lives. Intangible assets comprising of software are amortised on a straight-line basis over a period of 3 years from the start of the year of acquisition irrespective of the date of acquisition, unless it has a shorter useful life.

The Company''s intangible assets consist of computer software with finite life.

Gains or losses from derecognition of intangible assets are measured as the difference between the net disposal

proceeds and the carrying amount of the asset are recognised in the Statement of Profit and Loss when the asset is derecognised.

3.8 Leases (As a lessee)

(i) Identifying a lease

At the inception of the contract, the Company assesses whether a contract is, or contain, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether:

- The contract involves the use of an identified asset, this may be specified explicitly or implicitly.

- The Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

- The Company has right to direct the use of the asset.

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Mar 31, 2018

1. Significant Accounting Policies

1.1 Basis of Preparation of Financial Statements

a. The accompanying financial statements have been prepared on going concern basis in accordance with generally accepted accounting principles in India to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016. The financial statements have been prepared on an accrual basis of accounting and under the historical cost convention except for derivative financial instruments which have been measured at fair value. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year unless otherwise stated.

b. In view of criteria set out in the Schedule III to the Companies Act, 2013, the Company has considered 12 months period as its operating cycle for classifying its assets and liabilities as current or non-current.

1.2 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.3 Revenue Recognition

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

Income from Services

a. Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

b. Brokerage and other revenue from operations is net of Good and Services Tax or Service Tax wherever applicable.

c. Income from investment banking activities and other fees is recognized as and when such services are completed / performed and as per terms of agreement with the client.

d. Commission on Income in relation to distribution of third party financial products is recognised based on mobilization and intimation received from third parties.

Interest

e. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend

f. Dividend including interim are accounted when the right to receive payment is established.

Sale of Investments and Stock-in-Trade

g. The Profit/(Loss) earned on Sale of Investments and Stock-in-trade are recognized on trade date basis. Profit or Loss on Sale of Investments is determined on the basis of the weighted average cost method and Stock-in-trade on FIFO method. On disposal of an Investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

Accounting for Derivative Transactions

h. Income from derivative instruments comprises of Profit/ (Loss) in derivative instruments being equity derivative transactions in the nature of Futures and Options in Equity Stock/Index and currency derivative transactions in the nature of Futures and Options in Foreign Currencies both entered into for trading purposes and is determined in accordance with “Guidance Note on Accounting for Derivative Contracts” issued by The Institute of Chartered Accountants of India as follows:-

i. Subsequent to initial recognition, derivatives are measured at fair value at each Balance Sheet date, and changes therein are recognized in Statement of Profit and Loss. Fair Value is determined using quoted market prices on respective Exchanges.

ii. All directly attributable transaction costs on derivative transactions are recognized in Statement of Profit and Loss as they are incurred.

iii. Balance in “Options Premium Account” represents the fair value of premium paid or received for buying or selling the Options, respectively. Debit or Credit balance in the said account is disclosed under Short Term Loans and Advances and Other Current Liabilities respectively.

1.4 Property, Plant and Equipment and Depreciation

a. Property, plant and equipment, capital work in progress are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates are deducted in arriving at the purchase price.

b. Depreciation on Fixed Assets other than Leasehold Improvements have been provided on written down value method and computed with reference to the useful life of respective assets specified and in the manner prescribed in Schedule II of the Companies Act, 2013 including pro rata depreciation on additions/deletions made during the year.

c. Leasehold Improvements are depreciated on a straight-line basis over the Primary Lease Period or over a period of 3 years whichever is less.

1.5 Intangible Assets and Amortization

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in the Statement of Profit and Loss in the year in which the expenditure is incurred.

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on “Intangible Assets” are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

1.6 Investments

Investments, which are readily realizable and intended to be held for not more than twelve months from the date on which such investments are made, are classified as Current Investments. All other investments are classified as Non-Current Investments.

Non-Current Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Non-Current Investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

1.7 Retirement and Other Employee Benefits

i. Short term benefits

All employee benefits including short term compensated absences and statutory bonus/ performance bonus/incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

ii. Long term benefits

a. Post-Employment Benefits

- Defined Contribution Plans: Retirement/ Employee benefits in the form of Provident Fund, Employees State Insurance and Labour Welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

- Defined Benefit Plans: Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/loss, if any are immediately recognized in the Statement of Profit and Loss.

b. Other Long Term Benefits

As per the present policy of the Company, there are no other long term benefits to which its employees are entitled.

1.8 Assets on operating leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

1.9 Income Taxes Current Tax

Provision for Current taxation has been measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates for the relevant assessment years.

Deferred Tax

Deferred tax assets and liabilities are recognized for timing differences between the accounting and taxable income measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realization.

Minimum Alternate Tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. MAT Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” at each reporting date and writes down the asset to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

1.10 Impairment of Fixed Assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

1.11 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the Financial Statements.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation.

1.12 Foreign Currency Transactions

a. Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

b. Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

c. Exchange differences

The company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as below:

i. Exchange differences arising on a monetary item that, in substance, forms part of the company’s net investment in a non-integral foreign operation is accumulated in the foreign currency translation reserve until the disposal of the net investment. On the disposal of such net investment, the cumulative amount of the exchange differences which have been deferred and which relate to that investment is recognized as income or as expenses in the same period in which the gain or loss on disposal is recognized.

ii. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

iii. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the “Foreign Currency Monetary Item Translation Difference Account” and amortized over the remaining life of the concerned monetary item.

iv. All other exchange differences are recognized as income or as expenses in the period in which they arise.

1.13 Employee Stock Compensation Cost

The Company follows the intrinsic value method for valuation of Employee Stock Option in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 {erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999} and the Guidance Note on Accounting for Employee Share based payments, issued by the Institute of Chartered Accountants of India. The excess of market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortised in the Statement of Profit and Loss over the period of vesting, adjusting for the actual and expected vesting.

1.14 Cash and Cash Equivalents

Cash and Cash Equivalents includes cash on hand, balances with bank in current accounts (other than earmarked), fixed deposits with bank (free from any encumbrances), cheques on hand and balances in prepaid cards.

1.15 Segments

a. Identification of segments

The Company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the company operate.

b. Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

c. Segment accounting 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.

1.16 Earnings Per Share

The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard 20 on “Earnings Per Share”. Basic EPS is computed 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. Diluted EPS is computed 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 as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

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Mar 31, 2017

1. Corporate Information

The Company was incorporated in 1995 and got listed in 2006, is in the business of providing Stock Broking Services, Investment Banking, Depository Services and Distribution of Third Party Products.

2. Significant Accounting Policies

2.1 Basis of Preparation of Financial Statements

a) The accompanying Financial Statements have been prepared on going concern basis in accordance with Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The Financial Statements have been prepared under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the company unless otherwise stated.

b) In view of criteria set out in the Schedule III to the Companies Act, 2013, the Company has considered 12 months period as its operating cycle for classifying its assets and liabilities as Current or Noncurrent.

2.2 Use of Estimates

The preparation of Financial Statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

2.3 Revenue Recognition

Revenue is recognized to the extent it is possible that economic benefits will flow to the Company and revenue can be reliably measured.

1. Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

2. One time non refundable subscription fees for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. No brokerage under the said schemes are charged till the time brokerage on the trades executed by the clients gets equal to the subscription fees paid by the client.

3. Brokerage and other revenue from operations is net of service tax wherever applicable.

4. Income from investment banking activities and other fees is recognized as and when such services are completed / performed.

5. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

6. Dividend including interim are accounted when the right to receive payment is established.

7 The Profit/(Loss) earned on sale of investments are recognized on trade date basis. Profit or Loss on Sale of Investments is determined on the basis of the weighted average cost method. On disposal of an Investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

8. Income from trades in securities and derivative instruments comprises of Profit/(Loss) on sale of securities held as stock-in-trade and Profit/(Loss) in derivative instruments being equity derivative transactions in the nature of Futures and Options in Equity Stock/Index and currency derivative transactions in the nature of Futures and Options in foreign currencies both entered into for trading purposes and is determined as follows:-

a. in case of sale of securities, it is determined based on First-in-First-Out (FIFO) basis of cost of securities sold, and

b. in case of derivative instruments, it is determined as follows in accordance with "Guidance Note on Accounting for Derivative Contracts" issued by The Institute of Chartered Accountants of India :-

- All directly attributable transaction costs on derivative transactions are recognized in Statement of Profit and Loss as they are incurred. Subsequent to initial recognition, derivatives are measured at fair value at each Balance Sheet date, and changes therein are recognized in Statement of Profit and Loss. Fair Value is determined using quoted market prices on respective Exchanges.

- Balance in "Options Premium Account" represents the fair value of premium paid or received for buying or selling the Options, respectively. Debit or Credit balance in the said account is disclosed under Short Term Loans and Advances or Other Current Liabilities as the case may be.

2.4 Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

b) Depreciation on Fixed Assets other than Leasehold Improvements have been provided on written down value method and computed with reference to the useful life of respective assets specified and in the manner prescribed in Schedule II of the Companies Act, 2013 including pro rata depreciation on additions/deletions made during the year

c) Leasehold Improvements are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less.

2.5 Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on "Intangible

Assets" are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3

years irrespective of the date of acquisition.

2.6 Stock - in - Trade

Securities acquired with the intention to trade are classified as Stock - in - Trade. Stock - in - Trade of Securities is valued at lower of the cost or fair value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

2.7 Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other investments are classified as Non-Current Investments. Non-Current Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Non-Current Investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

2.8 Employee Benefits

(i) Short Term Benefits

All employee benefits including short term compensated absences and statutory bonus/ performance bonus/incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

(ii) Long Term Benefits

(a) Post Employment Benefits

(i) Defined Contribution Plans: - Retirement/ Employee benefits in the form of Provident Fund, Employees State Insurance and Labour Welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plans: - Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/ loss, if any are immediately recognized in the Statement of Profit and Loss.

(b) Other Long Term Benefits

As per the present policy of the Company, there are no other Long Term Benefits to which its employees are entitled.

2.9 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

2.10 Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

2.11 Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

2.12 Deferred Taxation

Deferred tax assets and liabilities are recognized for timing differences between the accounting and taxable income measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits

At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realization.

2.13 Minimum Alternative Tax ( MAT) Credit Entitlement

MAT Credit is recognized as an 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 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 is created by way of a credit to the Statement of Profit & Loss and shown as MAT Credit Entitlement. 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.

2.14 Contingencies and Events Occurring after the Balance Sheet Date

Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

2.15 Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

2.16 Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the Financial Statements.

2.17 Foreign Currency Transactions

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign Currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and Losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in Foreign Currencies are recognized in the Statement of Profit and Loss.

2.18 Employee Stock Compensation Cost

The Company follows the intrinsic value method for valuation of Employee Stock Option in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 {erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 } and the Guidance Note on Accounting for Employee Share based payments, issued by the Institute of Chartered Accounts of India. The excess of market price of shares at the time of grant of options, over the exercise price to be paid by the option holder is considered as employee compensation expense and is amortized in the Statement of Profit and Loss over the period of vesting, adjusting for the actual and expected vesting.

2.19 Cash and Cash Equivalents

Cash and Cash Equivalents includes cash on hand, balances with bank in current accounts (other than earmarked), fixed deposits with bank (free from any encumbrances), cheques on hand and balances in prepaid cards.

2.20 Segments

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue, expenses, assets and liabilities are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on a reasonable basis, are included under "Unallocated".

2.21 Earning Per Share

The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard

20 on "Earnings Per Share". Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

b: Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pay dividends in Indian Rupees. The dividend proposed if any by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except interim dividend.

In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d: Shares Reserved for issue under options:

The Company has reserved issuance of 23,50,925 ( Previous Year 23,66,325 ) Equity Shares of Rs. 10/- each for offering to eligible employees of the Company and its subsidiaries under Employees Stock Option Schemes. The Options would vest over a maximum period of four years or such other period as may be decided by the Board/Remuneration Committee subject to the applicable law.

b) The Company introduced ESOP-2010 Scheme during the year 2010-11 and consequently set up "Emkay Employees Welfare Trust (ESOP Trust) " to administer and implement the said Scheme in accordance with recommendations of the Nomination, Remuneration and Compensation Committee of the Company. Consequent to various Circulars and Notifications issued by SEBI from January 2013 onwards (including Notification of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 on 28.10.2014 and subsequent amendments thereof), the Company first modified its Employee Stock Option Plan 2010 (ESOP-2010) on 20.12.2013 vide Members Resolution whereby the said ESOP Trust can only subscribe to the shares of the Company and no secondary market purchases were allowed. Subsequently, the company for the second time modified its Employee Stock Option Plan 2010 by passing members special resolution through postal ballot process on 9^th March 2016 whereby ESOP Trust is authorized to purchase shares of the Company from the secondary market , some changes made in the definition of employee(s), number of shares held by the ESOP Trust from secondary market acquisition not to exceed 5% of the paid up equity capital and power to borrow money from company so as to be in complete compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations , 2014 including any subsequent amendments thereof.

e) The Fair Value and other disclosures and assumptions have been determined by an independent consultant and relied upon by the Auditors.

(ii) The Company has provided interest free loan to "Emkay Employees Welfare Trust" an independent ESOP Trust which is administrating ESOP 2010 Scheme of the Company and the loan outstanding as at 31^st March, 2017 is Rs. 374.00 Lac (Previous Year Rs. 574.00 Lac). As on 31^st March, 2017, the trust has 4, 27,630 (net of 3,27,018 Equity Shares sold during financial year 2016-2017 in the secondary market) Equity Shares of the Company purchased from the market (having cost of acquisition amounting to Rs. 333.71 Lac) during the period commencing from September,2010 to July,2011 for Stock Options granted/to be granted from time to time to the eligible employees. The said holding of 4,27,630 Equity Shares comprises of 3,62,630 Equity Shares of the Company for which Options are yet to be granted (which includes Options lapsed due to employees leaving the Company) herein after called "Un-appropriated Options" and 65,000 Equity Shares against which Options are already granted to the eligible employees.

From the date of notification of SEBI (Share based Employee Benefits) Regulations,2014 i.e. 28.10.2014, the Company had a choice to either appropriate the Un- appropriated Options within one year i.e. by 27.10.2015 or to sell in the secondary market within five years i.e. by 27.10.2019. Since the company could not appropriate the Un-appropriated Options by 27.10.2015, the Company had sold 3,27,018 Equity Shares during the FY 2016-17 in the secondary market and the remaining Un-appropriated Options representing 3,40,130 Equity Shares shall be sold in the secondary market on or before 27.10.2019 and 22,500 Equity Shares shall either be re-granted on or before 31.03.2018 or sold in the secondary market on or before 27.10.2019.

The repayment of the loan granted by the Company to the ESOP Trust is dependent on the time and price at which Un-appropriated Options representing 3, 40,130 Equity Shares of the Company shall be sold in the secondary market, Un-appropriated Options representing 22,500 Equity Shares are either re-granted on or before 31.03.2018 else sold in the secondary market on or before 27.10.2019 and appropriated Options representing 65,000 Equity Shares are exercised by the eligible employees.

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Mar 31, 2016

1. Corporate Information

The Company which was incorporated in 1995 and got listed in 2006, is in the business of providing Stock Broking Services, Investment Banking, Depository Services and Distribution of Third Party Products.

2. Significant Accounting Policies:

2.1 Basis of Preparation of Financial Statements

a) The accompanying financial statements have been prepared on going concern basis in accordance with Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The Financial Statements have been prepared under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the Company unless otherwise stated.

b) In view of criteria set out in the Schedule III to the Companies Act, 2013, the Company has considered 12 months period as its operating cycle for classifying its assets and liabilities as current or noncurrent.

2.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognized in the periods in which the results are known / materialize.

2.3 Revenue Recognition

Revenue is recognized to the extent it is possible that economic benefits will flow to the Company and revenue can be reliably measured.

1. Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

2. One time non refundable subscription fees for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. No brokerage under the said schemes are charged till the time brokerage on the trades executed by the clients gets equal to the subscription fees paid by the client.

3. Brokerage and other revenue from operations is net of service tax wherever applicable.

4. Income from investment banking activities and other fees is recognized as and when such services are completed / performed.

5. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

6. Dividend including interim are accounted when the right to receive payment is established.

7. Income from trades in securities and derivative instruments comprises of Profit/(Loss) on sale of securities held as stock-in-trade and Profit/(Loss) in derivative instruments being equity derivative transactions in the nature of Futures and Options in Equity Stock/Index and currency derivative transactions in the nature of Futures and Options in foreign currencies both entered into for trading purposes and is determined as follows:-

(i) In case of sale of securities, it is determined based on First-in-First-Out (FIFO) basis of cost of securities sold, and

(ii) in case of derivative instruments, it is determined as follows in accordance with “Guidance Note on Accounting for Derivative Contracts” issued by The Institute of Chartered Accountants of India :-

- All directly attributable transaction costs on derivative transactions are recognized in Statement of Profit and Loss as they are incurred. Subsequent to initial recognition, derivatives are measured at fair value at each Balance Sheet date, and changes therein are recognized in Statement of Profit and Loss. Fair Value is determined using quoted market prices on respective Exchanges.

- Balance in “Options Premium Account” represents the fair value of premium paid or received for buying or selling the Options, respectively. Debit or Credit balance in the said account is disclosed under Short Term Loans and Advances or Other Current Liabilities as the case may be.

2.4 Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

b) Depreciation on Fixed Assets other than Leasehold Improvements have been provided on written down value method and computed with reference to the useful life of respective assets specified and in the manner prescribed in Schedule II of the Companies Act, 2013 including pro rata depreciation on additions/deletions made during the year

c) Leasehold Improvements are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less.

2.5 Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on “Intangible Assets” are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

Membership Rights in Stock Exchanges are amortized on straight- line basis over a period of 10 years.

2.6 Stock - in - Trade

Securities acquired with the intention to trade are classified as Stock - in - Trade. Stock - in - Trade of securities is valued at lower of the cost or fair value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

2.7 Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other Investments are classified as Non-Current Investments. Non-Current Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Non-Current Investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

2.8 Employee Benefits

(i) Short Term Benefits

All employee benefits including short term compensated absences and statutory bonus/ performance bonus/incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

(ii) Long Term Benefits

(a) Post Employment Benefits

(i) Defined Contribution Plans: - Retirement/ Employee benefits in the form of Provident Fund, Employees State Insurance and Labour Welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plans: - Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/ loss, if any are immediately recognized in the Statement of Profit and Loss.

(b) Other Long Term Benefits

As per the present policy of the company, there are no other long term benefits to which its employees are entitled.

2.9 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

2.10 Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

2.11 Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

2.12 Deferred Taxation

Deferred tax assets and liabilities are recognized for timing differences between the accounting and taxable income measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realization.

2.13 Minimum Alternative Tax ( MAT) Credit Entitlement

MAT Credit is recognized as an 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 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 is created by way of a credit to the Statement of Profit & Loss and shown as MAT Credit Entitlement. 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.

2.14 Contingencies and Events Occuring after the Balance Sheet Date

Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

2.15 Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

2.16 Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

2.17 Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and Losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss.

2.18 Employee Stock Compensation Cost

The company follows the intrinsic value method as prescribed by the Guidance note on “Accounting for Employee Share-based Payments” issued by the Institute of Chartered Accountants of India to account for the compensation cost of its Stock based employee compensation plans.

2.19 Cash And Cash Equivalents

Cash and cash equivalents includes cash on hand, balances with bank in current accounts (other than earmarked), fixed deposits with bank (free from any encumbrances), cheques on hand and balances in prepaid cards.

2.20 Segments

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue, expenses, assets and liabilities are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on a reasonable basis, are included under “Unallocated”.

2.21 Earning Per Share

The Company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard 20 on “Earnings Per Share”. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

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Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

The accompanying financial statements have been prepared in accordance with Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The Financial Statements have been prepared under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the Company unless otherwise stated.

2.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognised in the periods in which the results are known / materialize.

2.3 Revenue Recognition

(a) Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

(b) One time non refundable subscription fees for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. No brokerage under the said schemes are charged till the time brokerage on the trades executed by the clients gets equal to the subscription fees paid by the client.

(c) Dividend including interim are accounted when the right to receive payment is established.

(d) Profit/(Loss) in proprietary trades in securities and derivatives comprises of Profit/(Loss) on sale of securities held as stock-in-trade, Profit/(Loss) on equity derivative instruments and Profit/(Loss) on currency futures transactions. Profit/(Loss) on sale of securities is determined based on first-in-first-

out (FIFO) basis of cost of securities sold. Profit/(Loss) on equity derivative instruments is determined as explained in para 2.4 and 2.5 below. Profit/(Loss) on Currency Futures transactions is also determined mutatis mutandis as explained in para 2.4 and 2.5 below.

2.4 Equity Index/Stock - Futures

i. Equity Index/Stock Futures are marked-to-market on a daily basis. Debit or Credit balance disclosed under Short-Term Loans and Advances or Current Liabilities, respectively, in the Mark-to-Market Margin - Equity Index/Stock Futures Account, represents the net amount paid or received on the basis of movement in the prices of Index/Stock futures till the Balance Sheet date.

ii. As on the Balance Sheet date, Profit/(Loss) on open positions in Equity Index/Stock Futures is accounted for as follows:

a) Credit balance in the Mark-to-Market Margin - Equity Index/Stock Futures Account, being the anticipated profit, is ignored and no credit for the same is taken in the Statement of Profit and Loss.

b) Debit balance in the Mark-to-Market Margin - Equity Index/Stock Futures Account, being the anticipated loss, is provided in the Statement of Profit and Loss and is reflected in "Provision for Loss on Equity Index/Stock Futures Account" under Current Liabilities.

iii. On final settlement or squaring-up of contracts for Equity Index/Stock Futures, the Profit or Loss is calculated as the difference between the settlement / squaring-up price and the contract price. Accordingly, debit or credit balance pertaining to the settled / squared-up contract in Mark- to-Market Margin - Equity Index/Stock Futures Account after adjustment of the provision for anticipated losses is recognized in the Statement of Profit and Loss. When more than one contract in respect of the relevant series of Equity Index/Stock Futures contract to which the squared- up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the Profit/(Loss) on squaring-up.

2.5 Equity Index/Stock - Options

(i) "Equity Index/Stock Options Premium Account" represents premium paid or received for buying or selling the options, respectively. Debit or Credit balance under the said account is disclosed under Short - Term Loans and Advances or Current Liabilities as the case may be.

(ii) At the time of final settlement

Premium paid/received is recognised as an expense/income on exercise of Option. Further, difference between the final settlement price as on the exercise/expiry date and the strike price is recognised as Profit or Loss.

(iii) At the time of squaring off

Difference between the premium paid and received on squared off transactions is treated as Profit or Loss.

(iv) At the Balance Sheet date

In the case of long positions, provision is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet date, and in the case of short positions, for the amount by which premium on the Balance Sheet date exceeds the premium received for those options, and is reflected in "Provision for Loss on Equity Index/Stock Option Account" under Current Liabilities.

2.6 Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

b) Depreciation on Fixed Assets other than Improvements to Leasehold/Licensed Premises have been provided on written down value method and computed with reference to the useful life of respective assets specified and in the manner prescribed in Schedule II of the Companies Act, 2013 including pro rata depreciation on additions/deletions made during the year

c) Improvements to Leasehold/Licensed Premises are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less starting from the date when the Leasehold/Licensed Premises are put to use.

2.7 Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on "Intangible Assets" are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

Membership Rights in Stock Exchanges are amortized on straight- line basis over a period of 10 years.

2.8 Stock - in - Trade

Stock - in - Trade of securities are valued at lower of the cost or market value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

2.9 Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other investments are classified as Long Term Investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Long Term investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

2.10 Employee Benefits

(i) Short Term Benefits

All employee benefits including short term compensated absences and statutory bonus/performance bonus/incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

(ii) Long Term Benefits

(a) Post Employment Benefits

(i) Defined Contribution Plans: - Retirement/Employee benefits in the form of Provident Fund, Employees State Insurance and Labour Welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plans: - Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by insurers to which the trustees make periodic contributions. Actuarial gain/ loss, if any are immediately recognized in the Statement of Profit and Loss.

(b) Other Long Term Benefits

As per the present policy of the Company, there are no other long term benefits to which its employees are entitled.

2.11 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

2.12 Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

2.13 Share Issue Expenses

Expenses incurred in connection with fresh issue of Share Capital are adjusted against Securities Premium Account in the year in which they are incurred.

2.14 Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

2.15 Deferred Taxation

Deferred tax assets and liabilities are recognized for timing differences between the accounting and taxable income measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits

At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realization.

2.16 Contingencies and Events Occuring after the Balance Sheet Date

Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

2.17 Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

2.18 Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

2.19 Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and Losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss.

2.20 Employee Stock Compensation Cost

The Company follows the intrinsic value method as prescribed by the Guidance note on "Accounting for Employee Share-based Payments" issued by the Institute of Chartered Accountants of India to account for the compensation cost of its Stock based employee compensation plans.

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Mar 31, 2014

1.1 Basis of Preparation of Financial Statements

The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles and provisions of the Companies Act, 1956 under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the Company unless otherwise stated.

1.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognised in the periods in which the results are known/materialize.

1.3 Revenue Recognition

(a) Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

(b) One time non refundable subscription fees for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. No brokerage under the said schemes are charged till the time brokerage on the trades executed by the clients gets equal to the subscription fees paid by the client.

(c) Dividend including interim is accounted when the right to receive payment is established.

(d) Profit/(Loss) in proprietory trades in securities and derivatives comprises of profit/(loss) on sale of securities held as stock-in-trade, profit/(loss) on equity derivative instruments and profit/(loss) on currency futures transactions. Profit/(loss) on sale of securities is determined based on first-in-first-out (FIFO) basis of cost of securities sold. Profit/(loss) on equity derivative instruments is determined as explained in para 2.4 and 2.5 below. Profit/(loss) on Currency Futures transactions is also determined mutatis mutandis as explained in para 2.4 and 2.5 below.

1.4 Equity Index/Stock - Futures

(a) Equity Index/Stock Futures are marked-to-market on a daily basis. Debit or Credit balance disclosed under Short- Term Loans and Advances or Current Liabilities, respectively, in the Mark-to-Market Margin - Equity Index/Stock Futures Account, represents the net amount paid or received on the basis of movement in the prices of Index/Stock futures till the Balance Sheet date.

(b) As on the Balance Sheet date, Profit/Loss on open positions in Equity Index/Stock Futures is accounted for as follows:

i) Credit balance in the Mark-to-Market Margin - Equity Index/Stock Futures Account, being the anticipated profit, is ignored and no credit for the same is taken in the Statement of Profit and Loss.

ii) Debit balance in the Mark-to-Market Margin - Equity Index/Stock Futures Account, being the anticipated loss, is provided in the Statement of Profit and Loss and is reflected in "Provision for Loss on Equity Index/ Stock Futures Account" under Current Liabilities.

(c) On final settlement or squaring-up of contracts for Equity Index/Stock Futures, the Profit or Loss is calculated as the difference between the settlement/squaring-up price and the contract price. Accordingly, debit or credit balance pertaining to the settled/squared-up contract in Mark-to-Market Margin - Equity Index/Stock Futures Account after adjustment of the provision for anticipated losses is recognized in the Statement of Profit and Loss. When more than one contract in respect of the relevant series of Equity Index/Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the Profit/ Loss on squaring-up.

1.5 Equity Index/Stock - Options

(a) "Equity Index/Stock Options Premium Account" represents premium paid or received for buying or selling the options, respectively. Debit or Credit balance under the said account is disclosed under Short - Term Loans and Advances or Current Liabilities as the case may be.

(b) At the time of final settlement

Premium paid/received is recognised as an expense/income on exercise of Option. Further, difference between the final settlement price as on the exercise/expiry date and the strike price is recognised as Profit or Loss.

(c) At the time of squaring off

Difference between the premium paid and received on squared off transactions is treated as Profit or Loss.

(d) At the Balance Sheet date

In the case of long positions, provision is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet date, and in the case of short positions, for the amount by which premium on the Balance Sheet date exceeds the premium received for those options, and is reflected in "Provision for Loss on Equity Index/Stock Option Account" under Current Liabilities.

1.6 Fixed Assets and Depreciation

(a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

(b) Depreciation on Fixed Assets other than Improvements to Leasehold/Licensed Premises have been provided on written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956 as amended from time to time including pro rata depreciation on additions/deletions made during the year.

(c) Improvements to Leasehold/Licensed Premises are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less starting from the date when the Leasehold/Licensed Premises are put to use.

1.7 Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on "Intangible Assets" are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

Membership Rights in Stock Exchanges are amortized on straight line basis over a period of 10 years.

1.8 Stock - in - Trade

Stock - in - Trade of securities are valued at lower of the cost or market value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

1.9 Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other investments are classified as Long Term Investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Long Term Investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

1.10 Employee Benefits

(a) Short Term Benefits

All employee benefits including short term compensated absences and statutory bonus/performance bonus/ incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

(b) Long Term Benefits

(i) Post Employment Benefits

(a) Defined Contribution Plans:- Retirement/Employee benefits in the form of Provident Fund, Employees State Insurance and Labour Welfare are considered as Defined Contribution Plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(b) Defined Benefit Plans:- Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/loss, if any are immediately recognized in the Statement of Profit and Loss.

(ii) Other Long Term Benefits

As per the present policy of the Company, there are no other long term benefits to which its employees are entitled.

1.11 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.12 Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

1.13 Share Issue Expenses

Expenses incurred in connection with fresh issue of Share Capital are adjusted against Securities Premium Account in the year in which they are incurred.

1.14 Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

1.15 Deferred Taxation

Deferred tax assets and liabilities are recognized for timing differences between the accounting and taxable income measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realization.

1.16 Contingencies and Events occuring after the Balance Sheet date Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

1.17 Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

1.18 Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

1.19 Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss.

1.20 Employee Stock Compensation Cost

The Company follows the intrinsic value method as prescribed by the Guidance note on "Accounting for Employee Share-based Payments" issued by the Institute of Chartered Accountants of India to account for the compensation cost of its Stock based employee compensation plans.

1.21 Stock Lending and Borrowing

Borrowing/Lending fees paid/received on stocks borrowed/lent under Stock Lending and Borrowing Mechanism is recognized on accrual basis.

Amount deposited with Stock Exchanges for borrowed stocks has been shown as Current Assets under Short-term Loans and Advances and the same is reversed on return of such borrowed stock.

Sale proceeds of borrowed stock has been shown as Current Liabilities under Other Current Liabilities and the same is reversed on squaring up of the transaction with resultant gain/loss being recognized in the Statement of Profit and Loss.

Provision is made for anticipated losses however anticipated profits are ignored for difference between sale price of borrowed stock and the price prevailing at the Balance Sheet date on such borrowed stock.

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Mar 31, 2013

1.1 Basis of Preparation of Financial Statements

The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles and provisions of the Companies Act, 1956 under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the Company unless otherwise stated.

1.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognised in the periods in which the results are known / materialized.

1.3 Revenue Recognition

(a) Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

(b) One time non refundable subscription fees for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. No brokerage under the said schemes is charged till the time brokerage on the trades executed by the clients gets equal to the subscription fees paid by the client.

(c) Dividend including interim is accounted when the right to receive payment is established.

(d) Profit/ (Loss) in proprietory trades in securities and derivatives comprises of profit/(loss) on sale of securities held as stock-in-trade, profit/(loss) on equity derivative instruments and profit/(loss) on currency futures transactions. Profit/ (loss) on sale of securities is determined based on first-in-first-out (FIFO) basis of cost of securities sold. Profit/(loss) on equity derivative instruments is determined as explained in para 2.4 and 2.5 below. Profit/(loss) on Currency Futures transactions is also determined mutatis mutandis as explained in para 2.4 and 2.5 below.

1.4 Equity Index/Stock - Futures

(a) Equity Index/Stock Futures are marked-to-market on a daily basis. Debit or Credit balance disclosed under Short- Term Loans and Advances or Current Liabilities, respectively, in the Mark-to-Market Margin - Equity Index / Stock Futures Account, represents the net amount paid or received on the basis of movement in the prices of Index/Stock futures till the Balance Sheet date.

(b) As on the Balance Sheet date, Profit / Loss on open positions in Equity Index / Stock Futures is accounted for as follows:

i) Credit balance in the Mark-to-Market Margin - Equity Index / Stock Futures Account, being the anticipated profit, is ignored and no credit for the same is taken in the Statement of Profit and Loss.

ii) Debit balance in the Mark-to-Market Margin - Equity Index / Stock Futures Account, being the anticipated loss, is provided in the Statement of Profit and Loss and is reflected in "Provision for Loss on Equity Index/Stock Futures Account" under Current Liabilities.

(iii) On final settlement or squaring-up of contracts for Equity Index / Stock Futures, the Profit or Loss is calculated as the difference between the settlement / squaring-up price and the contract price. Accordingly, debit or credit balance pertaining to the settled / squared-up contract in Mark-to-Market Margin - Equity Index / Stock Futures Account after adjustment of the provision for anticipated losses is recognized in the Statement of Profit and Loss. When more than one contract in respect of the relevant series of Equity Index / Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the Profit / Loss on squaring-up.

1.5 Equity Index/Stock - Options

(a) "Equity Index/Stock Options Premium Account" represents premium paid or received for buying or selling the options, respectively. Debit or Credit balance under the said account is disclosed under Short - Term Loans and Advances or Current Liabilities as the case may be.

(b) At the time of final settlement

Premium paid/received is recognised as an expense/income on exercise of Option. Further, difference between the final settlement price as on the exercise/expiry date and the strike price is recognised as Profit or Loss.

(c) At the time of squaring off

Difference between the premium paid and received on squared off transactions is treated as Profit or Loss.

(d) At the Balance Sheet date

In the case of long positions, provision is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet date, and in the case of short positions, for the amount by which premium on the Balance Sheet date exceeds the premium received for those options, and is reflected in "Provision for Loss on Equity Index/Stock Option Account" under Current Liabilities.

1.6 Fixed Assets and Depreciation

(a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

(b) Depreciation on Fixed Assets other than Improvements to Leasehold/ Licensed Premises have been provided on written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956 as amended from time to time including pro rata depreciation on additions/deletions made during the year.

(c) Improvements to Leasehold/Licensed Premises are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less starting from the date when the Leasehold/Licensed Premises are put to use.

1.7 Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on "Intangible Assets" are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

Membership Rights in Stock Exchanges are amortized on straight- line basis over a period of 10 years.

1.8 Stock - in - Trade

Stock - in - Trade of securities are valued at lower of the cost or market value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

1.9 Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other investments are classified as long term investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Long Term investments. Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

1.10 Employee Benefits

(a) Short Term Benefits

All employee benefits including short term compensated absences and statutory bonus/performance bonus/incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

(b) Long Term Benefits

i) Post Employment Benefits

(1) Defined Contribution Plans: - Retirement/Employee benefits in the form of Provident Fund, Employees State Insurance and labour welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(2) Defined Benefit Plans: - Retirement benefits in the form of gratuity are considered as defined benefit obligation and are provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/loss, if any are immediately recognized in the Statement of Profit and Loss.

ii) Other Long Term Benefits

As per the present policy of the Company, there are no other long term benefits to which its employees are entitled.

1.11 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.12 Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

1.13 Share Issue Expenses

Expenses incurred in connection with fresh issue of Share Capital are adjusted against Securities Premium Account in the year in which they are incurred.

1.14 Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

1.15 Deferred Taxation

Deferred tax assets and liabilities are recognized for timing differences between the accounting and taxable income measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realization.

1.16 Contingencies and Events Occuring after The Balance Sheet Date

Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

1.17 Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

1.18 Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

1.19 Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss.

1.20 Employee Stock Compensation Cost

The Company follows the intrinsic value method as prescribed by the Guidance note on "Accounting for Employee Share- based Payments" issued by the Institute of Chartered Accountants of India to account for the compensation cost of its Stock based employee compensation plans.

1.21 Stock Lending and Borrowing

Borrowing/Lending fees paid/received on stocks borrowed/lent under Stock Lending and Borrowing Mechanism is recognized on accrual basis.

Amount deposited with Stock Exchanges for borrowed stocks has been shown as Current Assets under Short-term Loans and Advances and the same is reversed on return of such borrowed stock.

Sale proceeds of borrowed stock has been shown as Current Liabilities under Other Current Liabilities and the same is reversed on squaring up of the transaction with resultant gain/loss being recognized in the Statement of Profit and Loss. Provision is made for anticipated losses however anticipated profits are ignored for difference between sale price of borrowed stock and the price prevailing at the Balance Sheet date on such borrowed stock.

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Mar 31, 2012

1.1 Basis of Preparation of Financial Statements

The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles and provisions of the Companies Act, 1956 under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the company unless otherwise stated.

1.2 Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognised in the periods in which the results are known / materialize.

1.3 Revenue Recognition

(a) Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf ' of the clients on the trade date.

(b) One time non refundable subscription fees for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. No brokerage under the said schemes are charged till the time brokerage on the trades executed by the clients gets equal to the subscription fees paid by the client.

(c) Portfolio Management Fees is accounted on accrual basis as follows

(i) in case of fees on fixed percentage of Assets Under Management, income is accrued at the end of each quarter or closure of Portfolio Account, whichever is earlier.

(ii) in case of fees based on returns on Portfolio, income is accounted at the end of completion of one year by each client from the date of joining the Portfolio Management Scheme or closure of Portfolio Account, whichever is earlier.

(d) Dividend including interim are accounted when the right to receive payment is established.

(e) Profit/(Loss) in proprietory trades in securities and derivatives comprises of profit/(loss) on sale of securities held as stock-in-trade, profit/(loss) on equity derivative instruments and profit/(loss) on currency futures transactions. Profit/(loss) on sale of securities is determined based on first-in-first-out (FIFO) basis of cost of securities sold. Profit/(loss) on equity derivative instruments is determined as explained in para 2.4 and 2.5 below. Profit/(loss) on Currency Futures transactions is also determined mutatis mutandis as explained in para 2.4 and 2.5 below.

1.4 Equity Index/Stock-Futures

(i) Equity Index/Stock Futures are marked-to-market on a daily basis. Debit or Credit balance disclosed under Short- Term Loans and Advances or Current Liabilities, respectively, in the Mark-to-Market Margin - Equity Index / Stock Futures Account, represents the net amount paid or received on the basis of movement in the prices of Index/Stock futures till the Balance Sheet date.

(ii) As on the Balance Sheet date, Profit / Loss on open positions in Equity Index / Stock Futures is accounted for as follows:

a) Credit balance in the Mark-to-Market Margin - Equity Index / Stock Futures Account, being the anticipated profit, is ignored and no credit for the same is taken in the Statement of Profit and Loss.

b) Debit balance in the Mark-to-Market Margin - Equity Index/Stock Futures Account, being the anticipated loss, is provided in the Statement of Profit and Loss and is reflected in "Provision for Loss on Equity Index/Stock Futures Account" under Current Liabilities.

(iii) On final settlement or squaring-up of contracts for Equity Index / Stock Futures, the Profit or Loss is calculated as the difference between the settlement / squaring-up price and the contract price. Accordingly, debit or credit balance pertaining to the settled / squared-up contract in Mark-to-Market Margin - Equity Index / Stock Futures Account after adjustment of the provision for anticipated losses is recognized in the Statement of Profit and Loss. When more than one contract in respect of the relevant series of Equity Index / Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the Profit / Loss on squaring-up.

1.5 Equity index/Stock-Options

(i) "Equity Index/Stock Options Premium Account" represents premium paid or received for buying or selling the options, respectively. Debit or Credit balance under the said account is disclosed under Short - Term Loans and Advances or Current Liabilities as the case may be.

(ii) At the time of final settlement

Premium paid/received is recognised as an expense/income on exercise of Option. Further, difference between the final settlement price as on the exercise/expiry date and the strike price is recognised as Profit or Loss.

(iii) At the time of squaring off

Difference between the premium paid and received on squared off transactions is treated as Profit or Loss.

(iv) At the Balance Sheet date

In the case of long positions, provision is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet date, and in the case of short positions, for the amount by which premium on the Balance Sheet date exceeds the premium received for those options, and is reflected in "Provision for Loss on Equity Index/Stock Option Account" under Current Liabilities.

1.6 Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

b) Depreciation on Fixed Assets other than Improvements to Leasehold/ Licensed Premises have been provided on written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956 as amended from time to time including pro rata depreciation on additions/deletions made during the year.

c) Improvements to Leasehold/Licensed Premises are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less starting from the date when the Leasehold/Licensed Premises are put to use.

1.7 Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard - 26 on "Intangible Assets" are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

Membership Rights in Stock Exchanges are amortized on straight- line basis over a period of 10 years.

1.8 Stock-in-Trade

Stock - in - Trade of securities are valued at lower of the cost or market value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

1.9 Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other investments are classified as long term investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the Long Term investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis.

1.10 Employee Benefits

(i) Short Term Benefits

All employee benefits including leave encashment (short term compensation absences) and statutory bonus/ performance bonus/ incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Statement of Profit and Loss of the year.

(ii) Long Term Benefits

(a) Post Employment Benefits

(i) Defined Contribution Plans:- Retirement/ Employee benefits in the form of Provident Fund, Employees State Insurance and labour welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plans:- Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/loss, if any are immediately recognized in the Statement of Profit and Loss.

(b) Other Long Term Benefits

As per the present policy of the company, there are no other long term benefits to which its employees are entitled.

1.11 Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.12 Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

1.13 Share Issue Expenses

Expenses incurred in connection with fresh issue of Share Capital are adjusted against Securities Premium account in the year in which they are incurred.

1.14 Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

1.15 Deferred Taxation

Deferred Tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the tax rates that have been enacted or substantively enacted after the balance sheet date, to the extent that the timing difference are expected to crystallize as deferred tax charge/benefit in the Statement of Profit and Loss and as deferred tax assets/ liabilities in the Balance Sheet.

1.16 Contingencies and Events Occurring After The Balance Sheet Date

Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

1.17 Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

1.18 Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

1.19 Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit and Loss.

1.20 Employee Stock Compensation Cost

The company follows the intrinsic value method as prescribed by the Guidance note on "Accounting for Employee Share-based Payments" issued by the Institute of Chartered Accountants of India to account for the compensation cost of its Stock based employee compensation plans.

1.21 Stock Lending and Borrowing

Borrowing/Lending fees paid/received on stocks borrowed/lent under Stock Lending and Borrowing Mechanism is recognized on accrual basis.

Amount deposited with Stock Exchanges for borrowed stocks has been shown as Current Assets under Short-term Loans and Advances and the same is reversed on return of such borrowed stock.

Sale proceeds of borrowed stock has been shown as Current Liabilities under Other Current Liabilities and the same is reversed on squaring up of the transaction with resultant gain/loss being recognized in the Statement of Profit and Loss.

Provision is made for anticipated losses however anticipated profits are ignored for difference between sale price of borrowed stock and the price prevailing at the Balance Sheet date on such borrowed stock.

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Mar 31, 2010

1. Basis of Preparation of Financial Statements

The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles and provisions of the Companies Act, 1956 under the historical cost convention on the accrual basis of accounting. The accounting policies have been consistently applied by the company unless otherwise stated.

2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognised in the periods in which the results are known / materialize.

3. Revenue Recognition

(a) (i) Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date.

(ii) One time non refundable adjustable subscription fees with a validity of maximum of one year for joining various special brokerage schemes are treated as income when the client agrees to join that particular scheme and renders payment for the same. Brokerage reversible under the said schemes are reversed by making provision at the end of each quarter. However, actual credit for brokerage reversible to the client is given at the end of the validity period of the scheme opted.

(b) Portfolio Management Fees is accounted on accrual basis as follows:-

(i) in case of fees based on fixed percentage of Assets Under Management, income is accrued at the end of each quarter or closure of Portfolio Account, whichever is earlier.

(ii) in case of fees based on returns on Portfolio, income is accounted at the end of completion of one year by each client from the date of his joining the Portfolio Management Scheme or closure of Portfolio Account, whichever is earlier.

(c) Dividend including interim are accounted when the right to receive payment is established.

(d) Profit/ (Loss) in proprietory trades in securities and derivatives comprises of profit/(loss) on sale of securities held as stock-in-trade, profit/(loss) on equity derivative instruments and profit/(loss) on currency futures transactions. Profit/(loss) on sale of securities is determined based on first-in-first-out (FIFO) basis of cost of securities sold. Profit/(loss) on equity derivative instruments is determined as explained in para 4 and 5 below. Profit/(loss) on Currency Futures transactions is also determined mutatis mutandis as explained in para 4 and 5 below.

4. Equity Index/Stock - Futures

(i) Equity Index/Stock Futures are marked-to-market on a daily basis. Debit or Credit balance disclosed under Loans and Advances or Current Liabilities, respectively, in the Mark-to-Market Margin – Equity Index / Stock Futures Account, represents the net amount paid or received on the basis of movement in the prices of Index/Stock futures till the Balance Sheet date.

(ii) As on the Balance Sheet date, Profit / Loss on open positions in Equity Index / Stock Futures is accounted for as follows:

Credit balance in the Mark-to-Market Margin – Equity Index / Stock Futures Account, being the anticipated profit, is ignored and no credit for the same is taken in the Profit and Loss account.

- Debit balance in the Mark-to-Market Margin – Equity Index / Stock Futures Account, being the anticipated loss, is provided in the Profit and Loss account and is reflected in “Provision for Loss on Equity Index/Stock Futures Account” under Current Liabilities.

(iii) On final settlement or squaring-up of contracts for Equity Index / Stock Futures, the Profit or Loss is calculated as the difference between the settlement / squaring-up price and the contract price. Accordingly, debit or credit balance pertaining to the settled / squared-up contract in Mark-to-Market Margin – Equity Index / Stock Futures Account after adjustment of the provision for anticipated losses is recognized in the Profit and Loss account. When more than one contract in respect of the relevant series of Equity Index / Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the Profit / Loss on squaring-up.

5. Equity Index/Stock - Options

(i) "Equity Index/Stock Options Premium Account" represents premium paid or received for buying or selling the options, respectively. Debit or Credit balance under the said account is disclosed under Loans and Advances or Current Liabilities as the case may be.

(ii) At the time of final settlement

Premium paid/received is recognised as an expense/income on exercise of Option. Further, difference between the final settlement price as on the exercise/expiry date and the strike price is recognised as Profit or Loss.

(iii) At the time of squaring off Difference between the premium paid and received on squared off transactions is treated as Profit or Loss.

(iv) At the Balance Sheet date In the case of long positions, provision is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet date, and in the case of short positions, for the amount by which premium on the Balance Sheet date exceeds the premium received for those options, and is reflected in “Provision for Loss on Equity Index/Stock Option Account” under Current Liabilities.

6. Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated depreciation.

b) Depreciation on Fixed Assets other than Improvements to Leasehold/ Licensed Premises have been provided on written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956 as amended from time to time including pro rata depreciation on additions/deletions made during the year.

c) Improvements to Leasehold/Licensed Premises are depreciated on a straight-line method over the Primary Lease Period or over a period of 3 years whichever is less starting from the date when the Leasehold/Licensed Premises are put to use.

7. Intangible Assets and Amortization

Items of expenditure that meet the recognition criteria as mentioned in Accounting Standard – 26 on “Intangible Assets” are classified as intangible assets and are amortized over the period of economic benefits.

Softwares are stated at cost of acquisition and are amortized on straight line basis over a period of 3 years irrespective of the date of acquisition.

Membership Rights in Stock Exchanges are amortized on straight- line basis over a period of 10 years.

8. Stock - in - Trade

Stock - in - Trade of securities are valued at lower of the cost or market value on individual scrip by scrip basis. Cost is determined on First-in-First-Out (FIFO) basis.

9. Investments

Investments that are readily realizable and intended to be held for not more than twelve months are classified as Current Investments. All other investments are classified as long term investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

Current Investments are stated at lower of cost and fair value and determined on an individual investment basis

10. Employee Benefits

(i) Short Term Benefits

All employee benefits including leave encashment (short term compensated absences) and statutory bonus/ performance bonus/ incentives payable wholly within twelve months of rendering the service are classified as short term employee benefits and are charged to the Profit and Loss Account of the year.

(ii) Long Term Benefits

(a) Post Employment Benefits

(i) Defined Contribution Plans: - Retirement/ Employee benefits in the form of Provident Fund, Employees State Insurance and labour welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Profit and Loss account of the year when the contribution to the respective funds are due.

(ii) Defined Benefit Plans: - Retirement benefits in the form of gratuity is considered as defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made as at the date of the Balance Sheet. The scheme is maintained and administered by an insurer to which the trustees make periodic contributions. Actuarial gain/loss, if any are immediately recognized in the Profit and Loss account.

(b) Other Long Term Benefits

As per the present policy of the company, there are no other long term benefits to which its employees are entitled.

11. Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

12. Assets on Operating Leases

Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective leave and license agreements.

13. Share Issue Expenses

Expenses incurred in connection with fresh issue of Share Capital are adjusted against Securities Premium account in the year in which they are incurred.

14. Taxation

Provision for Taxation has been made in accordance with the Income Tax Laws prevailing for the relevant assessment years.

15. Deferred Taxation

Deferred Tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the tax rates that have been enacted or substantively enacted after the balance sheet date, to the extent that the timing difference are expected to crystallize as deferred tax charge/benefit in the profit and loss account and as deferred tax assets/ liabilities in the Balance Sheet.

16. Contingencies and Events Occuring After The Balance Sheet Date

Events occurring after the date of the Balance Sheet, which provide further evidence of conditions that existed at the Balance Sheet date or that arose subsequently, are considered up to the date of approval of accounts by the Board of Directors, where material.

17. Impairment

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life.

18. Provisions, Contingent Liabilities & Contingent Assets

A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statements.

19. Foreign Currency Transactions

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Profit and Loss Account.

20. Employee Stock Compensation Cost

The company follows the intrinsic value method as prescribed by the Guidance note on “Accounting for Employee Share-based Payments” issued by the Institute of Chartered Accountants of India to account for the compensation cost of its Stock based employee compensation plans.

21. Stock Lending and Borrowing

Borrowing/ Lending fees paid/received on stocks borrowed/lent under Stock Lending and Borrowing Mechanism is recognized on accrual basis.

Amount deposited with Stock Exchanges for borrowed stocks has been shown under the head Current Assets, Loans and Advances and the same is reversed on return of such borrowed stock.

Sale proceeds of borrowed stock has been shown as Current Liabilities and the same is reversed on squaring up of the transaction with resultant gain/loss being recognized in the Profit and Loss account.

Provision is made for anticipated losses however anticipated profits are ignored for difference between sale price of borrowed stock and the price prevailing at the Balance Sheet date on such borrowed stock.

(B) CHANGES IN ACCOUNTING POLICIES

During the year, brokerage from secondary market is recognized as per contracted rates at the execution of transactions on behalf of the clients on the trade date which was hitherto recognized at the end of each settlement period when bills were raised on the clients. Consequent to the change, the Brokerage Income for the year is higher by Rs. 39,94,348/-.