"Aagam Capital Limited" ('the Company') was incorporated in India on December 27, 1991 as "Principle Capital Markets Limited". The name was changed on February 7, 1996 and June 26, 2006 to "Principal Capital Markets Limited" and "Subhkam Capital Limited" respectively. The name was further changed on January 23, 2013 to "Aagam Capital Limited".

The Company is engaged in the business of dealing in share and securities.

The Company received its certificate of registration as a non-banking finance company on August 5, 1998 from the Reserve Bank of India (RBI), Department of Non-Banking Supervision, Mumbai Regional Office, in its former name "Principal Capital Markets Limited" which was changed subsequently to "Subhkam Capital Limited" and further changed to "Aagam Capital Limited". The company has received the revised certificate of registration from RBI subsequent to the change of name to "Aagam Capital Limited".

a. Basis of preparation of Financial Statements

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles (GAAP) in India. GAAP includes Accounting Standards (AS) notified by the Government of India under Section 133 of the Companies Act, 2013, provisions of the Companies Act, 2013, pronouncements of Institute of Chartered Accountants of India and guidelines issued by Securities and Exchange Board of India (SEBI). The Company has presented financial statements as per format prescribed by Revised Schedule III, notified under the Companies Act, 2013, issued by Ministry of Corporate Affairs. Except where otherwise stated, the accounting policies are consistently applied.

b. Fixed Assets and Depreciation/ Amortisation

- Tangible fixed assets are stated at cost of acquisition or construction less accumulated depreciation.

The cost of fixed asset includes non-refundable taxes & levies, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing cost attributable to acquisition or construction of qualifying fixed assets is capitalized to respective assets when the time taken to put the assets to use is substantial.

- Depreciation on fixed assets is provided on straight line method on the basis of the depreciation rates prescribed in Schedule II of the Companies Act, 2013 or based on useful life of the asset as estimated by the management, whichever is higher.

c. Investments

Investments are classified as long term or current based on management's intention at the time of purchase. Investments which are intended to be held for one year or more are classified as long term investments and investments which are intended to be held for less than one year are classified as current investments.

Long term investments are recorded at cost as on the date of transaction and any decline in the carrying value other than temporary in nature is provided for. Current investments are valued at cost or market/fair value, whichever is lower.

d. Revenue Recognition

i) Interest income is accounted on accrual basis.

ii) Realised gains and losses in respect of equity securities and units of mutual funds are calculated as

the difference between the net sales proceeds and their cost. Cost in respect of equity shares and units of mutual funds are computed using first in first out (FIFO) method.

e. Use of Estimates

The preparation of financial statements are in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known /materialised.

f. Equity Index / Stock Futures.

i) Margin Deposits representing margin paid for entering into a contract for equity index/stock futures which are released on final settlement/squaring up of the underlying contract, are disclosed under Loans and advances.

ii) 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.

iii) As on the Balance Sheet date profit/loss on open positions in equity index/stock futures in 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 adjusted in the Profit and Loss Account.

iv) 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 recognised in the Profit and Loss Account.

g. Equity Index / Stock Options

i) "Equity Index/Stock option premium account" represents premium paid or received for buying or selling the options, respectively.

ii) Margin deposits representing margin paid for entering into contract for equity index /stock options which are released on final settlement/squaring up of the underlying contracts are disclosed under Loans and Advances.

iii) As 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 the premium prevailing on the balance sheet date exceeds the premium received for those options and is reflected in "Provision for loss on equity Index/Stock Options Account."

iv) When the option contracts are squared up before the expiry of the options the premium prevailing on that date is recognised in the Profit and Loss Account.

On the expiry of the contracts and on exercising the options the difference between the final settlement price and the strike price is transferred to the Profit and Loss Account.

In both the cases, the premium paid or received for buying or selling the option as the case may be is recognized in the profit and loss account for the squared-up/settled contracts.

h. Taxes on Income

Provision for current tax is made on the assessable income at the tax rate applicable to the relevant assessment year. Minimum Alternate Tax (MAT) eligible for set off in subsequent years, (as per tax laws) is recognized as an asset by way of credit to the Profit and Loss Account only if there is convincing evidence of its realisation. At each balance sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realisation.

Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised mainly on account of unabsorbed depreciation and carry forward of losses to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

i. Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resource is remote, no provision or disclosure is made.

j. The Company follows the Prudential Norms for Assets Classification, Income Recognition, Accounting Standards, Provision for non-performing assets as prescribed by the Reserve Bank of India under Non-Banking Financial (Non deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. During the year, these norms have been amended, mandating 0.25% provision against the outstanding standard assets.