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Accounting Policies of Inventure Growth & Securities Ltd. Company
Mar 31, 2024
Note 2 Material Accounting Policy
2.1 Basis of Preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and notified under section 133 of the Companies Act, 2013 (the Act) along with other relevant provisions of the Act. The Company uses accrual basis of accounting. The financial statements are presented in Indian Rupee (INR) which is also the functional currency of the Company.
The financial statements have been prepared on a historical cost basis, except for certain financial instruments and defined benefit plan assets/Liability measured at fair value. 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.
The financial statements are prepared on a going concern basis, as the Management is satisfied that the Company shall be able to continue its business for the foreseeable future and no material uncertainty exists that may cast significant doubt on the going concern assumption. In making this assessment, the Management has considered a wide range of information relating to present and future conditions, including future projections of profitability, cash flows and capital resources.
2.2 Presentation of financial statements
The Company presents its Balance Sheet in order of liquidity. The Company prepares and presents its Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity in the format prescribed by Division III of Schedule III to the Act. The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 ''Statement of Cash Flows''. The Company generally reports financial assets and financial liabilities on a gross basis in the Balance Sheet. They are offset and reported net only when Ind AS specifically permits the same or it has an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event. Similarly, the Company offsets incomes and expenses and reports the same on a net basis when permitted by Ind AS specifically unless they are material in nature.
2.3 Critical accounting estimates and judgments
The preparation of the Company''s financial statements requires Management to make use of estimates and judgments.
In view of the inherent uncertainties and a level of subjectivity involved in measurement of items, it is possible that the outcomes in the subsequent financial years could differ from those based on Management''s estimates. Accounting estimates and judgments are used in various items in the financial statements for e.g.:
⢠Business model assessment
⢠Fair value of financial instruments
⢠Effective interest rate (EIR)
⢠Impairment of financial assets
⢠Provisions and contingent liabilities
⢠Provision for tax expenses
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⢠Residual value, useful life and indicators of recoverable value of property, plant and equipment
2 4 Income enhancing Fortunes, Lnncmng .Lives.
Revenue recognition
The Company recognises revenue from contracts with customers (other than financial assets to which Ind AS 109 ''Financial instruments'' is applicable) based on Ind AS 115 ''Revenue from contracts with customers''. The Company identifies contract(s) with a customer and its performance obligations under the contract, determines the transaction price and its allocation to the performance obligations in the contract and recognises revenue only on satisfactory completion of performance obligations. Revenue is measured at the fair value of the consideration received or receivable.
The Revenue includes the following:
(I) Brokerage fee income
Revenue from contract with customer is recognised when performance obligation is completed i.e. when the trade is executed. These include brokerage fees charged per transaction executed on behalf of the clients as per the contractually agreed rate.
(ii) Interest income
The Company recognises interest income using effective interest rate (EIR) on all financial assets subsequently measured under amortised cost or fair value through other comprehensive income (FVOCI). EIR is calculated by considering all costs and incomes attributable to acquisition of a financial asset or assumption of a financial liability and it represents a rate that exactly discounts estimated future cash payments/receipts through the expected life of the financial asset/financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability. The Company calculates interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets. In case of credit-impaired financial assets, the Company recognises interest income on the amortised cost net of impairment loss of the financial asset at EIR. If the financial asset is no longer credit-impaired, the Company reverts to calculating interest income on a gross basis.
(iii) Dividend income
Dividend income on equity shares is recognised when the Company''s right to receive the payment is established and 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.
(iv) Fees and commission income
Fees and commission income includes:
Income from depository operations is accounted when performance obligation is completed Advisory fees income is recognised when the performance obligation is satisfied by rendering the services to the client.
Distribution income is earned by distribution of services and products of other entities under distribution arrangements. The income so earned is recognised on successful distribution on behalf of other entities subject to there being no significant uncertainty of its recovery.
(v) Net gain on fair value changes
Any realised gain or loss on sale of financial assets (including derivatives and Securities held for trading) being classified as fair value through profit and loss ("FVTPL") is recognised as "Net gain or loss on fair value changes" under "Revenue from operatings" or "Expense" respectively in the statement of profit and loss.
Similarly, any difference between the fair values of financial assets (including derivatives and securities held for trading) being classified as fair value through profit or loss ("FVTPL") held by the company on the balance sheet date is recognised as on 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 "Expense" in the statement of profit and loss.
(vi) Recoveries of financial assets written off
The Company recognises income on recoveries of financial assets written off on realisation or when the right to receive the same without any uncertainties of recovery is established.
2.5 Expenditures
(i) Finance costs
Borrowing costs on financial liabilities are recognised using the EIR.
(ii) Fees and commission expenses
Fees and commission expenses which are not directly linked to the sourcing of financial assets, such as
commission/incentive incurred on provision of services and products distribution, recovery charges etc., are
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recognised in the Statement of Profit and Loss on an accrual basis.
2.6 Cash and cash equivalents Enhancing Fortunes. Enriching Lives.
Cash and cash equivalents include cash on hand, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value
2.7 Financial Instruments
A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Trade receivables and payables, loan receivables, investments in securities and subsidiaries, debt securities and other borrowings, preferential and equity capital etc. are some examples of financial instruments.
(i) Financial assets
Financial assets include cash, or an equity instrument of another entity, or a contractual right to receive cash or another financial asset from another entity. Few examples of financial assets are loan receivables, investment in equity and debt instruments, trade receivables and cash and cash equivalents.
Investment in subsidiaries
Investment in subsidiaries is recognised at cost and is not adjusted to fair value at the end of each reporting period. Cost of investment represents amount paid for acquisition of the said investment.
The Company assesses at the end of each reporting period, if there are any indications that the said investment may be impaired. If so, the Company estimates the recoverable value/amount of the investment and provides for impairment, if any i.e. the deficit in the recoverable value over cost.
Financial Assets (other than investment in subsidiaries)
Initial measurement
All financial assets are recognised initially at fair value including transaction costs that are attributable to the acquisition of financial assets except in the case of financial assets recorded at FVTPL where the transaction costs are charged to profit or loss.
Subsequent measurement
All equity investments in scope of Ind AS 109 ''Financial Instruments'' are measured at fair value.
All fair value changes of the equity instruments designated as FVTPL are recognised in statement of profit and loss. All fair value changes, excluding dividends, of the equity instruments designated as FVOCI are recognised in Other Comprehensive Income,and not available for reclassification to profit or loss, even on sale of investments. Equity instruments at FVOCI are not subject to an impairment assessment.
Derecognition of Financial Assets
The Company derecognises a financial asset (or, where applicable, a part of a financial asset) when:
(i) The right to receive cash flows from the asset have expired; or
(ii) The Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under an assignment arrangement and the
Company has transferred substantially all the risks and rewards of the asset. Once the asset is derecognised, the Company does not have any continuing involvement in the same.
On derecognition of a financial asset in its entirety, the difference between:
(i) the carrying amount (measured at the date of derecognition) and
(ii) the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.
Impairment of financial assets
Expected Credit Loss (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 ECL allowance 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.
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 dneJo
Mar 31, 2023
Note 1 Corporate Information
Inventure Growth & Securities Limited. (''the Company'', IGSL'') is a company limited by shares, incorporated on 22 The Company is registered with Securities and Exchange Board of India (''SEBI'') under the Stock brokers and sub brokers Regulations, 1992 and is a member of Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited (NSE), Multi Commodity Exchange of India Ltd (MCX), National Commodity and Derivatives Exchange Limited (NCDEX) and Metropolitan Stock Exchange of India Limited (MSEI). The Company is engaged in the business of stock, currency and commodity broking, providing margin trading facility, depository services and distribution of mutual funds, to its clients and also executing the trades in securities market, debt market, equity derivative market, commodity derivative market and foreign currency derivative market in its proprietary account. It is registered with Central Depository Services (India) Limited in the capacity of Depository Participant and also registered with SEBI in capacity of Research Analyst and Investment Advisor.
Note 2 Significant Accounting Policy2.1 Basis of Preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and notified under section 133 of the Companies Act, 2013 (the Act) along with other relevant provisions of the Act. The Company uses accrual basis of accounting. The financial statements are presented in Indian Rupee (INR) which is also the functional currency of the Company.
The financial statements have been prepared on a historical cost basis, except for financial assets which have been measured at fair value. 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.
The financial statements are prepared on a going concern basis, as the Management is satisfied that the Company shall be able to continue its business for the foreseeable future and no material uncertainty exists that may cast significant doubt on the going concern assumption. In making this assessment, the Management has considered a wide range of information relating to present and future conditions, including future projections of profitability, cash flows and capital resources.
2.2 Presentation of financial statements
The Company presents its Balance Sheet in order of liquidity. The Company prepares and presents its Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity in the format prescribed by Division III of Schedule III to the Act. The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 ''Statement of Cash Flows''. The Company generally reports financial assets and financial liabilities on a gross basis in the Balance Sheet. They are offset and reported net only when Ind AS specifically permits the same or it has an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event. Similarly, the Company offsets incomes and expenses and reports the same on a net basis when permitted by Ind AS specifically unless they are material in nature.
2.3 Critical accounting estimates and judgments
The preparation of the Company''s financial statements requires Management to make use of estimates and judgments. In view of the inherent uncertainties and a level of subjectivity involved in measurement of items, it is possible that the outcomes in the subsequent financial years could differ from those based on Management''s estimates. Accounting estimates and judgments are used in various items in the financial statements for e.g.:
⢠Business model assessment
⢠Fair value of financial instruments
⢠Effective interest rate (EIR)
⢠Impairment of financial assets
⢠Provisions and contingent liabilities
⢠Provision for tax expenses
⢠Residual value, useful life and indicators of recoverable value of property, plant and equipment
2.4 Income Revenue recognition
The Company recognises revenue from contracts with customers (other than financial assets to which Ind AS 109 ''Financial instruments'' is applicable) based on Ind AS 115 ''Revenue from contracts with customers''. The Company identifies contract(s) with a customer and its performance obligations under the contract, determines the transaction price and its allocation to the performance obligations in the contract and recognises revenue only on satisfactory completion of performance obligations. Revenue is measured at the fair value of the consideration received or receivable.
The revenue includes the following:
(i) Brokerage fee income
Revenue from contract with customer is recognised when performance obligation is completed i.e. when the trade is executed. These include brokerage fees charged per transaction executed on behalf of the clients as per the contractually agreed rate.
The Company recognises interest income using effective interest rate (EIR) on all financial assets subsequently measured under amortised cost or fair value through other comprehensive income (FVOCI). EIR is calculated by considering all costs and incomes attributable to acquisition of a financial asset or assumption of a financial liability and it represents a rate that exactly discounts estimated future cash payments/receipts through the expected life of the financial asset/financial liability to the gross carrying amount of a financial asset or to the amortised cost of a financial liability. The Company calculates interest income by applying the EIR to the gross carrying amount of financial assets other than credit-impaired assets. In case of credit-impaired financial assets, the Company recognises interest income on the amortised cost net of impairment loss of the financial asset at EIR. If the financial asset is no longer credit-impaired, the Company reverts to calculating interest income on a gross basis.
(iii) Dividend income
Dividend income on equity shares is recognised when the Company''s right to receive the payment is established and 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.
(iv) Fees and commission income
Fees and commission income includes:
Income from depository operations is accounted when performance obligation is completed Advisory fees income is recognised when the performance obligation is satisfied by rendering the services to the client. Distribution income is earned by distribution of services and products of other entities under distribution arrangements. The income so earned is recognised on successful distribution on behalf of other entities subject to there being no significant uncertainty of its recovery.
(v) Net gain on fair value changes
The Company designates certain financial assets for subsequent measurement at fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI). The Company recognises gains on fair value change of financial assets measured at FVOCI and realised gains on derecognition of financial asset measured at FVTPL and FVOCI on net basis.
(vi) Recoveries of financial assets written off
The Company recognises income on recoveries of financial assets written off on realisation or when the right to receive the same without any uncertainties of recovery is established.
(vii) Taxes
Incomes are recognised net of the goods and services tax, wherever applicable.
(i) Finance costs
Borrowing costs on financial liabilities are recognised using the EIR.
(ii) Fees and commission expenses
Fees and commission expenses which are not directly linked to the sourcing of financial assets, such as commission/incentive incurred on provision of services and products distribution, recovery charges etc., are recognised in the Statement of Profit and Loss on an accrual basis.
(iii) Taxes
Expenses are recognised net of the Goods and Services Tax/Service Tax, except where credit for the input tax is not statutorily permitted.
Cash and cash equivalents include cash on hand, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value
A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Trade receivables and payables, loan receivables, investments in securities and subsidiaries, debt securities and other borrowings, preferential and equity capital etc. are some examples of financial instruments.
All the financial instruments are recognised on the date when the Company becomes party to the contractual provisions of the financial instruments. For tradable securities, the Company recognises the financial instruments on trade date.
(i) Financial assets
Financial assets include cash, or an equity instrument of another entity, or a contractual right to receive cash or
another financial asset from another entity. Few examples of financial assets are loan receivables, investment in
equity and debt instruments, trade receivables and cash and cash equivalents.
Investment in subsidiaries
Investment in subsidiaries is recognised at cost and is not adjusted to fair value at the end of each reporting period. Cost of investment represents amount paid for acquisition of the said investment.
The Company assesses at the end of each reporting period, if there are any indications that the said investment may be impaired. If so, the Company estimates the recoverable value/amount of the investment and provides for impairment, if any i.e. the deficit in the recoverable value over cost.
Financial Assets (other than investment in subsidiaries)
Initial measurement
All financial assets are recognised initially at fair value including transaction costs that are attributable to the acquisition of financial assets except in the case of financial assets recorded at FVTPL where the transaction costs are charged to profit or loss.
Subsequent measurement
All equity investments in scope of Ind AS 109 ''Financial Instruments'' are measured at fair value.
All fair value changes of the equity instruments designated as FVTPL are recognised in statement of profit and loss.
All fair value changes, excluding dividends, of the equity instruments designated as FVOCI are recognised in Other Comprehensive Income,and not available for reclassification to profit or loss, even on sale of investments. Equity instruments at FVOCI are not subject to an impairment assessment.
(ii) Derecognition of Financial Assets
The Company derecognises a financial asset (or, where applicable, a part of a financial asset) when:
(i) The right to receive cash flows from the asset have expired; or
(ii) The Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under an assignment arrangement and the Company has transferred substantially all the risks and rewards of the asset. Once the asset is derecognised, the Company does not have any continuing involvement in the same.
On derecognition of a financial asset in its entirety, the difference between:
(i) the carrying amount (measured at the date of derecognition) and
(ii) the consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss.
Impairment of financial assets Expected Credit Loss (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 ECL allowance 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.
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.
The Company follows ''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.
(iv) 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.
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.
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.
Financial liabilities include liabilities that represent a contractual obligation to deliver cash or another financial assets to another entity, or a contract that may or will be settled in the entities own equity instruments. Few examples of financial liabilities are trade payables, debt securities and other borrowings and subordinated debts.
(a) Initial measurement
All financial liabilities are recognised initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade payables, other payables and other borrowings.
(b) Subsequent measurement
After initial recognition, all financial liabilities are subsequently measured at amortised cost using the EIR. Any gains or losses arising on derecognition of liabilities are recognised in the Statement of Profit and Loss.
The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired.
(d) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet only if there is an enforceable legal right to offset the recognised amounts with an intention to settle on a net basis or to realise the assets and settle the liabilities simultaneously.
2.8 Provisions and Contingent liabilities
A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are reviewed at each balance sheet date and adjusted to effect current management estimates.
The Company operates in a regulatory and legal environment that, by nature, has an element of litigation risk inherent to its operations. Contingent liabilities are recognised when there is possible obligation arising from past events that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. For determining the probability and amount of liability, the Company takes into account a number of factors including legal advice, the stage of the matter and historical evidence from similar incidents. Significant judgement is required to conclude on these estimates.
(i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, in accordance with the Income Tax Act, 1961 prescribed therein. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. 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 is provided using the Balance Sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for deductible temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets, if any, are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised either in OCI or in other equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax
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 ,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.
2.10 Earning per share (basic and diluted)
The Company reports basic and diluted earnings per equity share. Basic earnings per equity share have been computed by dividing net profit/loss attributable to the equity share holders for the year by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed by dividing the net profit attributable to the equity share holders after giving impact of dilutive potential equity shares for the year by the weighted average number of equity shares and dilutive potential equity shares outstanding during the period/year, except where the results are anti-dilutive.
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.
2.12 Property, plant and equipment
Property, plant and equipment are carried at historical cost of acquisition less accumulated depreciation and impairment losses, consistent with the criteria specified in Ind AS 16 ''Property, Plant and Equipment''.
Depreciation on property, plant and equipment
Depreciation on property, plant and equipment
(a) Depreciation is provided on a pro-rata basis for all tangible assets on straight line method over the useful life of assets.
(b) Useful lives of assets are determined by the Management by an internal technical assessment.
(c) Depreciation on addition to assets and assets sold during the year is being provided for on a pro rata basis with reference to the month in which such asset is added or sold as the case may be.
(d) An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. 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 included under other income in the Statement of Profit and Loss when the asset is derecognised.
|
Particulars |
Useful life prescribed by Schedule II of the |
Useful life estimated by |
|
Buildings |
60 |
60 |
|
Computer & Data Processing |
6 |
6 |
|
⢠Servers and networks |
3 |
3 |
|
Furniture & Fixtures |
10 |
10 |
|
Office Equipments |
5 |
5 |
|
Air Conditioners |
5 |
5 |
(e) 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.
2.13 Intangible assets and amortisation thereof
Intangible assets are initially recognised at cost and subsequently carried at cost less accumulated amortisation and accumulated impairment. The intangible assets are amortised using the straight line method over a period of their useful lives estimated by the management. The useful lives of intangible assets are reviewed at each financial year end and adjusted prospectively, if appropriate.
2.14 Impairment of non-financial assets
An assessment is done at each Balance Sheet date to ascertain whether there is any indication that an asset may be impaired. If any such indication exists, an estimate of the recoverable amount of asset is determined. If the carrying value of relevant asset is higher than the recoverable amount, the carrying value is written down accordingly.
2.15 Retirement and other employee benefits
(i) Gratuity
The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act. Retirement benefits in the form of gratuity is considered as defined benefit obligation. The above benefit is funded and the present value of the obligation under such defined benefit plan is determined based on actuarial valuation. The valuation has been carried out using the project Unit Credit Method as per Ind AS 19 to determine the Present Value of Defined Benefit Obligations and the related Current Service Cost and, where applicable, Past Service Cost.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets, are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
The Company contributes to a recognized provident fund which is a Defined Contribution Scheme. The contributions are accounted for on an accrual basis and recognized in the Statement of Profit and Loss.
Unutilized leave of staff lapses as at the year end and is not encashable. Accordingly, no provision is made for compensated absences.
The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.
Fair value is the price that would be received against sale of 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 in the accessible principal market or the most advantageous accessible market as applicable.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
Mar 31, 2018
Note 1 Significant Accounting Policies
(a) Basis of accounting and preparation of financial statements
The financial statements have been prepared on a going concern and on accrual basis, under the historical cost convention and in accordance with the generally accepted accounting principles, the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government and relevant provisions of the Companies Act 2013, to the extent applicable.
(b) Use of Estimates
The preparation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumption that affect the reported amount of assets, liabilities, revenues & expenses and disclosure of contingent assets & liabilities. The estimates & assumptions used in the accompanying financial statements are based upon managementâs evaluation of the relevant facts and circumstances as of the date of the Financial Statements. Actual results may defer from the estimates & assumptions used in preparing the accompanying Financial Statements. Any differences of actual results to such estimates are recognised in the year in which the results are known / materialised.
(c) Revenue Recognition
1 Income from brokerage activities is recognized as income as per contracted rates on the execution of transactions on behalf of the clients.
2 Income from arbitrage operations and trading in securities and derivatives comprises of profit/loss on sale of securities held as stock-in-trade and profit/loss on equity derivative instruments.
3 Interest income is recognised on accrual basis.
4 Dividend income is recognised when the right to receive payment is established.
5 In respect of other heads of income, the Company accounts the same on accrual basis.
(d) Fixed Assets
Fixed assets are stated at cost less depreciation/amortization. The cost of fixed assets comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.
(e) Depreciation / Amortization
Property, Plant & Equipment are depreciated on straight line basis as per useful life prescribed in schedule II of the Companies Act, 2013.
Intangible assets are amortized on a straight line basis over a period having regard to their useful economic life and estimated residual value in accordance with Accounting Standard (AS) 26 âIntangible Assetsâ.
Computer Softwares are amortized over a period of 4 years.
Bombay Stock Exchange Membership is amortized over a period of 15 years, having regard to the nature and long term economic life of the asset.
MCX Membership is amortized over a period of 4 years, having regard to the nature and useful economic life of the asset.
(e) Inventories
Shares and Securities acquired for sale in the ordinary course of business are considered as stock - in - trade, and are valued at lower of cost or market value as at the year end.
(f) Investments
Non-Current Investments are carried at cost. Provision for diminution in the value of Non-Current Investments is made only if such a decline is other than temporary in the opinion of the management.
Current Investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.
On disposal of investments the difference between its carrying amounts and net disposal proceeds is charged or credited to the Statement of Profit and Loss. Profit or loss on sale of investments is determined on a First-in-First-out (FIFO) basis.
(g) Securities Transaction Tax
Securities Transaction Tax related to the companyâs own transactions in shares & securities are charged to Statement of Profit & Loss.
(h) Borrowing Costs
Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue.
(i) Share Issue Expense
Expenses incurred in connection with issue of shares are adjusted against Securities Premium Account in the year in which shares are issued.
(j) Employees Retirement Benefits
1 Provident Fund
The Company contributes to a recognized provident fund which is a defined contribution scheme. The contributions are accounted for on an accrual basis and recognized in the Statement of Profit & Loss.
2 Gratuity
The employees of the Company are eligible for Gratuity in accordance with the Payment of Gratuity Act, and is a Defined Employee Benefit. The above benefit is not funded but provision is made in the accounts.
The present value of the obligation under such benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes each period of service that give rise to additional unit of employee benefit entitlement and measures each unit separately to built up the final obligation.
Actuarial gains and losses are recognized immediately in the Statement of Profit & Loss.
3 Compensated Leave
Unutilized leave of staff lapses as at the year end and is not encashable. Accordingly, no provision is made for compensated absences.
(k) Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law), deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the year).
Deferred Taxation
The deferred tax charge or credit and the corresponding deferred tax liabilities and assets are recognized using the tax rates that have been enacted or substantially enacted at the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of the assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonable/virtually certain (as the case may be) to be realised.
Minimum Alternate Tax
Minimum Alternate Tax (âMATâ) credit is recognised 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 the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the guidance note issued by Institute of Chartered Accountants of India (âICAIâ), the said asset is created by way of a credit to the statement of profit and loss. 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 convicing evidence to the effect that Company will pay normal income-tax during the specified period.
(l) Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generated unit to which the asset belongs, is less than its carrying amount, the carrying amount is reduced to its recoverable amount.
(m) Provisions, Contingent Liabilities & Contingent Assets
Contingent liabilities, if material, are disclosed by way of notes, contingent assets are not recognized or disclosed in the financial statements. 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.
Mar 31, 2015
(a) Basis of accounting and preparation of financial statements
The financial statements have been prepared on a going concern and on
accrual basis, under the historical cost convention and in accordance
with the generally accepted accounting principles , the accounting
standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government and relevant provisions of the
Companies Act 1956 and Companies Act 2013, to the extent applicable.
(b) Use of Estimates
The preparation of the financial statements in conformity with the
generally accepted accounting principles requires the management to
make estimates and assumption that affect the reported amount of
assets, liabilities, revenues & expenses and disclosure of contingent
assets & liabilities. The estimates & assumptions used in the
accompanying financial statements are based upon management's
evaluation of the relevant facts and circumstances as of the date of
the Financial Statements, Actual results may defer from the estimates &
assumptions used in preparing the accompanying Financial Statements.
Any differences of actual results to such estimates are recognised in
the year in which the results are known / materialised.
(c) Revenue Recognition
1 Income from brokerage activities is recognized as income as per
contracted rates on the execution of transactions on behalf of the
clients.
2 Income from arbitrage operations and trading in securities and
derivatives comprises of profit/loss on sale of securities
held as stock-in-trade and profit/loss on equity derivative
instruments.
3 Interest income is recognised on accrual basis.
4 Dividend income is recognised when the right to receive payment is
established,
5 In respect of other heads of income, the Company accounts the same on
accrual basis.
(d) Fixed Assets
Fixed assets are stated at cost less depreciation/amortization. The
cost of fixed assets comprises purchase price and any attributable cost
of bringing the asset to its working condition for its intended use.
(e) Depreciation / Amortization
Tangible fixed assets are depreciated on straight line basis as per
useful life prescribed in schedule II of the Companies Act, 2013
Intangible assets are amortized on a straight line basis over a period
having regard to their useful economic life and estimated residual
value in accordance with Accounting Standard (AS) 26 "Intangible
Assets".
Computer Softwares are amortized over a period of 4 years.
Bombay Stock Exchange Membership is amortized over a period of 15
years, having regard to the nature and long term economic life of the
asset.
MCX Membership is amortized over a period of 4 years, having regard to
the nature and useful economic life of the asset.
(f) Inventories
Shares and Securities acquired for sale in the ordinary course of
business are considered as stock - in - trade, and are valued at lower
of cost or market value as at the year end.
(g) Investments
Non-Current Investments are carried at cost. Provision for diminution
in the value of Non-Current Investments is made only if such a decline
is other than temporary in the opinion of the management.
Current Investments are carried at lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each
category of investments.
On disposal of investments the difference between its carrying amounts
and net disposal proceeds is charged or credited to the Statement of
Profit and, Loss. Profit or loss on sale of investments is determined
on a First-in-First-out (FIFO) basis.
(h) Securities Transaction Tax
Securities Transaction Tax related to the company's own transactions in
shares & securities are charged to Statement of Profit & Loss.
(i) Borrowing Costs
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are
included to the extent they relate to the period till such assets are
ready to be put to use. All other borrowing costs are charged to
reveriue.
(j) Share Issue Expense
Expenses incurred in connection with issue of shares are adjusted
against Securities Premium Account in the year in which shares are
issued.
(k) Employees Retirement Benefits
1 Provident Fund
The Company contributes to a recognized provident fund which is a
defined contribution scheme. The contributions are accounted for on an
accrual basis and recognized in the Statement of Profit & Loss.
2 Gratuity
The employees of the Company are eligible for Gratuity in accordance
with the Payment of Gratuity Act, and is a Defined Employee Benefit.
The above benefit is not funded but provision is made in the accounts
The present value of the obligation under such benefit plans is
determined based on actuarial valuation using the Projected Unit Credit
Method which recognizes each period of service that give rise to
additional unit of employee benefit entitlement and measures each unit
separately to built up the final obligation.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
3 Compensated Leave
Unutilized leave of staff lapses as at the year end and is not
encashable. Accordingly, no provision is made for compensated absences.
(l) Equity Index/Stock  Futures :
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 ÂEquity
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.
As on the Balance Sheet date, the profit/ loss on open position in
Index/Stock futures are accounted for as follows:
1 Credit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account', being anticipated profit, is ignored and no credit is
taken in the Statement of Profit & Loss.
2 Debit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account', being anticipated loss, is recognized in the
Statement of Profit & Loss.
On final settlement or squaring up of contracts for equity index/stock
futures, the profit or loss is calculated as difference between
settlement/squaring up price and contract price. Accordingly, debit or
credit balance pertaining to the settlement/squared up contract in
"Mark-to-Market Margin Equity Index/Stock Futures Account' is
recognized in the Statement of Profit & Loss upon expiry of the
contracts.
"Initial Margin ÂEquity Index/Stock Futures Account, representing
initial margin paid, for entering into contracts for Equity Index/Stock
Futures, which are released on final settlement/squaring-up of
underlying contracts, is disclosed as under Loans and advances.
(m) Equity Index/Stpck  Options :
"Equity Index/Stock Option Premium Account represents premium paid or
"received for buying or selling the options, respectively.
(n) Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law), deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the year).
Deferred Taxation
The deferred tax charge or credit and the corresponding deferred tax
liabilities and assets are recognized using the tax rates that have
been enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent there is
reasonable certainty that the asset can be realised in future; however,
where there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realisation of the assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written-up
to reflect the amount that is reasonable/virtually certain (as the case
may be) to be realised.
(o) Impairment of Assets
The Company assessat each balance sheet date whether there is any
indication that an asset may be impaired based on internal/external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generated unit to which the
asset belongs, is less than its carrying amount, the carrying amount is
reduced to its recoverable amount.
(p) Provisions, Contingent Liabilities & Contingent Assets .
Contingent liabilities, if material, are disclosed by way of notes,
contingent assets are not recognized or diseclosed in the financial
statements. 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.
Mar 31, 2014
(a) Basis of accounting and preparation of financial statements
The financial statements have been prepared on a going concern and on
accrual basis, under the historical cost convention and in accordance
with the generally accepted accounting principles , the accounting
standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government and relevant provisions of the
Companies Act 1956, to the extent applicable.
(b) Use of Estimates
The preparation of the financial statements in conformity with the
generally accepted accounting principles requires the management to
make estimates and assumption that affect the reported amount of
assets, liabilities, revenues & expenses and disclosure of contingent
assets & liabilities. The estimates & assumptions used in the
accompanying financial statements are based upon management''s
evaluation of the relevant facts and circumstances as of the date of
the Financial Statements. Actual results may defer from the estimates &
assumptions used in preparing the accompanying Financial Statements.
Any differences of actual results to such estimates are recognised in
the year in which the results are known / materialised.
(c) Revenue Recognition
1 Income from brokerage activities is recognized as income as per
contracted rates on the execution of transactions on behalf of the
clients.
2 Income from arbitrage operations and trading in securities and
derivatives comprises of profit/loss on sale of securities held as
stock-in-trade and profit/loss on equity derivative instruments.
3 Interest income is recognised on accrual basis.
4 Dividend income is recognised when the right to receive payment is
established.
5 In respect of other heads of income, the Company accounts the same on
accrual basis.
(d) Fixed Assets
Fixed assets are stated at cost less depreciation/amortization. The
cost of fixed assets comprises purchase price and any attributable cost
of bringing the asset to its working condition for its intended use.
(e) Depreciation / Amortization
Tangible fixed assets are depreciated on straight line basis in
accordance with the rates prescribed under Schedule XIV of the
Companies Act, 1956.
Intangible assets are amortized on a straight line basis over a period
having regard to their useful economic life and estimated residual
value in accordance with Accounting Standard (AS) 26 "Intangible
Assets".
Computer Softwares are amortized over a period of 4 years.
Bombay Stock Exchange Membership is amortized over a period of 15
years, having regard to the nature and long term economic life of the
asset.
MCX Membership is amortized over a period of 4 years, having regard to
the nature and useful economic life of the asset.
(f) Inventories
Shares and Securities acquired for sale in the ordinary course of
business are considered as stock - in -trade, and are valued at lower
of cost or market value as at the year end.
(g) Investments
Non-Current Investments are carried at cost. Provision for diminution
in the value of Non-Current Investments is made only if such a decline
is other than temporary in the opinion of the management.
Current Investments are carried at lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each
category of investments.
On disposal of investments the difference between its carrying amounts
and net disposal proceeds is charged or credited to the Statement of
Profit and Loss. Profit or loss on sale of investments is determined on
a First-in- First-out (FIFO) basis.
(h) Securities Transaction Tax
Securities Transaction Tax related to the company''s own transactions in
shares & securities are charged to Statement of Profit & Loss.
(i) Borrowing Costs
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are
included to the extent they relate to the period till such assets are
ready to be put to use. All other borrowing costs are charged to
revenue.
(j) Share Issue Expense
Expenses incurred in connection ''with issue of shares are adjusted
against Securities Premium Account in the year in which shares are
issued.
(k) Keyman Insurance
Keyman Insurance premium paid during the financial year is ''written off
as expenditure in the Statement of Profit & Loss.
(l) Employees Retirement Benefits
1 Provident Fund
The Company contributes to a recognized provident fund which is a
defined contribution scheme. The contributions are accounted for on an
accrual basis and recognized in the Statement of Profit & Loss.
2 Gratuity
The employees of the Company are eligible for Gratuity in accordance
''with the Payment of Gratuity Act, and is a Defined Employee Benefit.
The above benefit is not funded but provision is made in the accounts.
The present value of the obligation under such benefit plans is
determined based on actuarial valuation using the Projected Unit Credit
Method ''which recognizes each period of service that give rise to
additional unit of employee benefit entitlement and measures each unit
separately to built up the final obligation.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
3 Compensated Leave
Unutilized leave of staff lapses as at the year end and is not
encashable. Accordingly, no provision is made for compensated absences.
(m) Equity Index/Stock -Futures :
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.
As on the Balance Sheet date, the profit/ loss on open position in
Index/Stock futures are accounted for as follows.
1 Credit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account" , being anticipated profit, is ignored and no credit
is taken in the Statement of Profit & Loss.
2 Debit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account ", being anticipated loss, is recognized in the
Statement of Profit & Loss.
On final settlement or squaring up of contracts for equity index/stock
futures, the profit or loss is calculated as difference between
settlement/squaring up price and contract price. Accordingly, debit or
credit balance pertaining to the settlement/squared up contract in
"Mark -to-Market Margin Equity Index/Stock Futures Account is
recognized in the Statement of Profit & Loss upon expiry of the
contracts.
"Initial Margin-Equity Index/Stock Futures Account" , representing
initial margin paid, for entering into contracts for Equity Index/Stock
Futures, which are released on final settlement/squaring -up of
underlying contracts, is disclosed as under Loans and advances.
(n) Equity Index/Stock -Options :
Equity Index/Stock Option Premium Account represents premium paid or
received for buying or selling the options, respectively.
(o) Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law), deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the year).
Deferred Taxation
The deferred tax charge or credit and the corresponding deferred tax
liabilities and assets are recognized using the tax rates that have
been enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent there is
reasonable certainty that the asset can be realised in future, however,
where there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realisation of the assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written -up
to reflect the amount that is reasonable/virtually certain (as the case
may be) to be realised.
(p) Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired based on internal/external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generated unit to which the
asset belongs, is less than its carrying amount, the carrying amount is
reduced to its recoverable amount.
(q) Provisions, Contingent Liabilities & Contingent Assets
Contingent liabilities, if material, are disclosed by way of notes,
contingent assets are not recognized or disclosed in the financial
statements. 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.
Mar 31, 2013
(a) Basis of accounting and preparation of financial statements
The financial statements have been prepared on a going concern and on
accrual basis, under the historical cost convention and in accordance
with the generally accepted accounting principles , the accounting
standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government and relevant provisions of the
Companies Act 1956, to the extent applicable.
(b) Use of Estimates
The preparation of the financial statements in conformity with the
generally accepted accounting principles requires the management to
make estimates and assumption that affect the reported amount of
assets, liabilities, revenues & expenses and disclosure of contingent
assets & liabilities. The estimates & assumptions used in the
accompanying financial statements are based upon management''s
evaluation of the relevant facts and circumstances as of the date of
the Financial Statements. Actual results may defer from the estimates &
assumptions used in preparing the accompanying Financial Statements.
Any differences of actual results to such estimates are recognised in
the year in which the results are known / materialised.
(c) Revenue Recognition
1. Income from brokerage activities is recognized as income as per
contracted rates on the execution of transactions on behalf of the
clients.
2. Income from arbitrage operations and trading in securities and
derivatives comprises of profit/loss on sale of securities held as
stock-in-trade and profit/loss on equity derivative instruments.
3. Interest income is recognised on accrual basis.
4. Dividend income is recognised when the right to receive payment is
established.
5. In respect of other heads of income, the Company accounts the same
on accrual basis.
(d) Fixed Assets
Fixed assets are stated at cost less depreciation/amortization. The
cost of fixed assets comprises purchase price and any attributable cost
of bringing the asset to its working condition for its intended use.
(e) Depreciation / Amortization
Tangible fixed assets are depreciated on straight line basis in
accordance with the rates prescribed under Schedule XIV of the
Companies Act, 1956.
Intangible assets are amortized on a straight line basis over a period
having regard to their useful economic life and estimated residual
value in accordance with Accounting Standard (AS) 26 "Intangible
Assets".
Computer Softwares are amortized over a period of 4 years.
Bombay Stock Exchange Membership is amortized over a period of 15
years, having regard to the nature and long term economic life of the
asset.
MCX Membership is amortized over a period of 4 years, having regard to
the nature and useful economic life of the asset.
(f) Inventories
Shares and Securities acquired for sale in the ordinary course of
business are considered as stock - in  trade, and are valued at lower
of cost or market value as at the year end.
(g) Investments
Non-Current Investments are carried at cost. Provision for diminution
in the value of Non- Current Investments is made only if such a decline
is other than temporary in the opinion of the management. Current
Investments are carried at lower of cost and fair value. The comparison
of cost and fair value is done separately in respect of each category
of investments. On disposal of investments the difference between its
carrying amounts and net disposal proceeds is charged or credited to
the Statement of Profit and Loss. Profit or loss on sale of investments
is determined on a First-in-First-out (FIFO) basis.
(h) Securities Transaction Tax
Securities Transaction Tax related to the company''s own transactions in
shares & securities are charged to Statement of Profit & Loss.
(i) Borrowing Costs
Borrowing costs relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are
included to the extent they relate to the period till such assets are
ready to be put to use. All other borrowing costs are charged to
revenue.
(j) Share Issue Expense
Expenses incurred in connection with issue of shares are adjusted
against Securities Premium Account in the year in which shares are
issued.
(k) Keyman Insurance
Keyman Insurance premium paid during the financial year is written off
as expenditure in the Statement of Profit & Loss.
(l) Employees Retirement Benefits
1 Provident Fund
The Company contributes to a recognized provident fund which is a
defined contribution scheme. The contributions are accounted for on an
accrual basis and recognized in the Statement of Profit & Loss.
2 Gratuity
The employees of the Company are eligible for Gratuity in accordance
with the
Payment of Gratuity Act, and is a Defined Employee Benefit. The above
benefit is not funded but provision is made in the accounts.
The present value of the obligation under such benefit plans is
determined based on actuarial valuation using the Projected Unit Credit
Method which recognizes each period of service that give rise to
additional unit of employee benefit entitlement and measures each unit
separately to built up the final obligation.
Actuarial gains and losses are recognized immediately in the Statement
of Profit & Loss.
3 Compensated Leave
Unutilized leave of staff lapses as at the year end and is not
encashable. Accordingly, no provision is made for compensated absences.
(m) Equity Index/Stock  Futures :
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.
As on the Balance Sheet date, the profit/ loss on open position in
Index/Stock futures are accounted for as follows:
1 Credit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account", being anticipated profit, is ignored and no credit is
taken in the Statement of Profit & Loss.
2 Debit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account", being anticipated loss, is recognized in the
Statement of Profit & Loss.
On final settlement or squaring up of contracts for equity index/stock
futures, the profit or loss is calculated as difference between
settlement/squaring up price and contract price. Accordingly, debit or
credit balance pertaining to the settlement/squared up contract in
"Mark-to-Market Margin Equity Index/Stock Futures Account" is
recognized in the Statement of Profit & Loss upon expiry of the
contracts.
"Initial Margin  Equity Index/Stock Futures Account", representing
initial margin paid, for entering into contracts for Equity Index/Stock
Futures, which are released on final settlement/squaring-up of
underlying contracts, is disclosed as under Loans and advances.
(n) Equity Index/Stock  Options :
"Equity Index/Stock Option Premium Account" represents premium paid or
received for buying or selling the options, respectively.
(o) Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law), deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the year).
Deferred Taxation
The deferred tax charge or credit and the corresponding deferred tax
liabilities and assets are recognized using the tax rates that have
been enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent there is
reasonable certainty that the asset can be realised in future; however,
where there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realisation of the assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written-up
to reflect the amount that is reasonable/virtually certain (as the case
may be) to be realised.
(p) Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired based on internal/external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generated unit to which the
asset belongs, is less than its carrying amount, the carrying amount is
reduced to its recoverable amount.
(q) Provisions, Contingent Liabilities & Contingent Assets
Contingent liabilities, if material, are disclosed by way of notes,
contingent assets are not recognized or disclosed in the financial
statements. 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.
Mar 31, 2012
(a) Basis of accounting and preparation of financial statements
The financial statements have been prepared on a going concern and on
accrual basis, under the historical cost convention and in accordance
with the generally accepted accounting principles , the accounting
standards prescribed in the Companies (Accounting Standards) Rules,
2006 issued by the Central Government and relevant provisions of the
Companies Act 1956, to the extent applicable.
(b) Use of Estimates
The preparation of the financial statements in conformity with the
generally accepted accounting principles requires the management to
make estimates and assumption that affect the reported amount of
assets, liabilities, revenues & expenses and disclosure of contingent
assets & liabilities. The estimates & assumptions used in the
accompanying financial statements are based upon management's
evaluation of the relevant facts and circumstances as of the date of
the Financial Statements. Actual results may defer from the estimates &
assumptions used in preparing the accompanying Financial Statements.
Any differences of actual results to such estimates are recognised in
the year in which the results are known / materialised.
(c) Presentation and disclosure in financial statements
For the year ended 31 March 2012, the Revised schedule VI notified
under Companies Act, 1956 is applicable to the Company for presentation
and disclosures in financial statements.
(d) Revenue Recognition
1 Income from brokerage activities is recognized as income as per
contracted rates on the execution of transactions on behalf of the
clients.
2 Income from arbitrage operations and trading in securities and
derivatives comprises of profit/loss on sale of securities held as
stock-in-trade and profit/loss on equity derivative instruments.
3 Interest income is recognised on accrual basis.
4 Dividend income is recognised when the right to receive payment is
established.
5 In respect of other heads of income, the Company accounts the same on
accrual basis.
(e) Fixed Assets
Fixed assets are stated at cost less depreciation/amortization. The
cost of fixed assets comprises purchase price and any attributable cost
of bringing the asset to its working condition for its intended use.
(f) Depreciation / Amortization
Tangible fixed assets are depreciated on straight line basis in
accordance with the rates prescribed under Schedule XIV of the
Companies Act, 1956.
Intangible assets are amortized on a straight line basis over a period
having regard to their useful economic life and estimated residual
value in accordance with Accounting Standard (AS) 26 "Intangible
Assets".
Computer Softwares are amortized over a period of 4 years.
Bombay Stock Exchange Membership is amortized over a period of 15
years, having regard to the nature and long term economic life of the
asset.
(g) Inventories
Shares and Securities acquired for sale in the ordinary course of
business are considered as stock - in - trade, and are valued at lower
of cost or market value as at the year end.
(h) Investments
Non-Current Investments are carried at cost. Provision for diminution
in the value of Non-Current Investments is made only if such a decline
is other than temporary in the opinion of the management.
Current Investments are carried at lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each
category of investments.
On disposal of investments the difference between its carrying amounts
and net disposal proceeds is charged or credited to the Statement of
Profit and Loss. Profit or loss on sale of investments is determined on
a First-in-First-out (FIFO) basis.
(i)Securities Transaction Tax
Securities Transaction Tax related to the company's own transactions in
shares & securities are charged to Profit & Loss account.
(j)Borrowing Cost
Borrowing cost relating to acquisition of fixed assets which takes
substantial period of time to get ready for its intended use are
included to the extent they relate to the period till such assets are
ready to be put to use. All other borrowing costs are charged to
revenue.
(k)Share Issue Expense
Expenses incurred in connection with fresh issue of share capital are
adjusted against Securities Premium Account in the year in which shares
are issued.
(l)Keyman Insurance
Keyman Insurance premium paid during the financial year is written off
as expenditure in the profit and loss account.
(m) Employees Retirement Benefits
1 Provident Fund
The Company contributes to a recognized provident fund which is a
defined contribution scheme. The contributions are accounted for on an
accrual basis and recognized in the profit and loss account.
2 Gratuity
The employees of the Company are eligible for Gratuity in accordance
with the Payment of Gratuity Act, and is a Defined Employee Benefit.
The above benefit is not funded but provision is made in the accounts.
The present value of the obligation under such benefit plans is
determined based on actuarial valuation using the Projected Unit Credit
Method which recognizes each period of service that give rise to
additional unit of employee benefit entitlement and measures each unit
separately to built up the final obligation.
Actuarial gains and losses are recognized immediately in the profit and
loss account
3 Compensated Leave
Unutilized leave of staff lapses as at the year end and is not
encashable. Accordingly, no provision is made for compensated absences.
(n) Equity Index/Stock - Futures:
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.
As on the Balance Sheet date, the profit/ loss on open position in
Index/Stock futures are accounted for as follows:
1 Credit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account", being anticipated profit, is ignored and no credit
is taken in the profit & loss account.
2 Debit balance in the "Mark-to-Market Margin-Equity Index/Stock
Futures Account", being anticipated loss, is recognized in the profit
& loss account.
On final settlement or squaring up of contracts for equity index/stock
futures, the profit or loss is calculated as difference between
settlement/squaring up price and contract price. Accordingly, debit or
credit balance pertaining to the settlement/squared up contract in
"Mark-to-Market Margin Equity Index/Stock Futures Account" is
recognized in the profit & loss account upon expiry of the contracts.
"Initial Margin - Equity Index/Stock Futures Account", representing
initial margin paid, for entering into contracts for Equity Index/Stock
Futures, which are released on final settlement/squaring-up of
underlying contracts, is disclosed as under Loans and advances.
(o) Equity Index/Stock - Options :
"Equity Index/Stock Option Premium Account" represents premium paid
or received for buying or selling the options, respectively.
(p) Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the income-tax law), deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the year).
Deferred Taxation
The deferred tax charge or credit and the corresponding deferred tax
liabilities and assets are recognized using the tax rates that have
been enacted or substantially enacted at the balance sheet date.
Deferred tax assets are recognised only to the extent there is
reasonable certainty that the asset can be realised in future; however,
where there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realisation of the assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written-up
to reflect the amount that is reasonable/virtually certain (as the case
may be) to be realised.
(q) Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired based on internal/external
factors. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of the cash generated unit to which the
asset belongs, is less than its carrying amount, the carrying amount is
reduced to its recoverable amount.
(r)Provisions, Contingent Liabilities & Contingent Assets
Contingent liabilities, if material, are disclosed by way of notes,
contingent assets are not recognized or disclosed in the financial
statements. 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.
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