Note 2: Significant Accounting Policies & Notes to Accounts
• Basis of Preparation of Financial Statements
The financial statements of the Company comply in all material aspects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013 ("the Act") read with Companies (Indian Accounting Standards)
Rules, 2015 and other relevant provisions of the Act.
• Use of Estimates :
The preparation of financial statements requires the management of the Company to make estimates and
assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent
liabilities as at the date of the financial statements and reported amounts of income and expense during the year. The
estimates and assumptions used in the accompanying financial statements are based on management's evaluation of
the relevant facts and circumstances as at the date of the financial statements. Future results could differ due to
changes in these estimates and the difference between the actual result and the estimates are recognized in the
period in which the results are known / materialized.
• Property, plant and equipment:
Property, plant and equipment are stated at cost of acquisition less accumulated depreciation. Cost includes
expenditure that is directly attributable to the acquisition and installation of the assets. Subsequent costs are included
in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All
other repairs and maintenance are charged to Statement of profit and loss during the reporting period in which they
are incurred.
• Depreciation & Amortization:
In respect of fixed assets (other than freehold land and capital work-in-progress) acquired during the year,
depreciation/amortization is charged on a straight line basis so as to write-off the cost of the assets over the useful
lives and for the assets acquired prior to April 1, 2014, the carrying amount as on April 1, 2014 is depreciated over the
remaining useful life based on an evaluation.
• Non-Current Investments:
Non-Current Investments are treated as strategic long-term investments and the same are stated at the cost without
considering any increase or erosion in the value.
• Inventories:
Inventories are consisting of stocks and securities and the same are accounted at market value as per Ind AS 2.
• Cash and Cash Equivalents:
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank
balances, demand deposits with banks where the original maturity is 3 months or less and other short term highly
liquid investments that are readily convertible into knows amount of cash and which are subject to insignificant risk of
change in value.
• Revenue Recognition:
Revenue is measured at fair value of the consideration receivable or received. Ind AS 115, Revenue from contracts
with customers, outlines a single comprehensive model of accounting for revenue arising contracts with customers.
The company recognises revenue from customers based on a five -step modal set out in Ind AS 115:
• Identify contact(s) with a customer.
• Identify performance obligation in the contract
• Determine the transaction price
• Allocate the contract price to the performance obligations in the contract
• Revenue Recognise
Revenue includes the following:
• Brokerage income
It is recognized on settlement date basis and is exclusive of goods and service tax and securities transaction tax
(STT) wherever applicable.
• Advisory Fees
Fees based income on services are recognised as earned on a pro-rata basis over the term of the contract.
• Depository income
Income from services rendered on behalf of depository is recognised upon rendering of the services, in
accordance with the terms of contract.
• Interest income
Interest income is recognized on accrual basis in Statement of profit and loss for all financial instruments
measured at amortised cost.
• Dividend income
Dividend income is recognized in the statement of profit or loss on the date that the Company's right to receive
payment is established
• Employee Benefits:
Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of
Profit and Loss of the year in which the related service is rendered. The contributions remitted to government
administered Provident and Pension Fund on behalf of its employees in accordance with the relevant statute are
charged to the Statement of Profit and Loss as and when due. The Company has no further obligations for future
Provident/ Pension fund benefits other than its monthly contributions. Post-employment and other long term
employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the
employee has rendered services. The expenses are recognised at the present value of the amount payable.
Provision for gratuity amount is made as per the actuarial valuation.
• Borrowing Cost:
Borrowing cost are includes interest, amortization of ancillary costs incurred in connection with the
arrangement of borrowings. Borrowing cost that are attributable to the acquisition of qualifying assets are
capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of
time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit & Loss in
the period in which they are incurred.
• Segment Reporting:
The Company business is to provide stock broking services and corporate advisory services to its clients, in the
capital market in India. All other activities of the company are ancillary to the main business. As such, there are
no reportable segments that need to be reported separately as defined in Ind AS 108, Operating Segment.
• Lease accounting:
Ind AS 116 defines a lease as a contract, or part of a contract, that conveys the right to use an asset (the
underlying asset) for a period of time in exchange for consideration. Under Ind AS 116 lessees have to recognize
a lease liability reflecting future lease payments and a 'right-of-use asset' for almost all lease contracts
• Earnings Per Share (E.P.S.):
- Basic earnings per share
Basic earnings per share is calculated by dividing the net profit for the period (excluding other comprehensive
income) attributable to equity shareholders of the Company by the weighted average number of equity shares
outstanding during the financial year, adjusted for bonus element in equity shares issued during the year.
- Diluted earnings per share
Diluted earnings per share is computed by dividing the net profit for the period attributable to equity
shareholders by the weighted average number of shares outstanding during the period as adjusted for the
effects of all diluted potential equity shares except where the results are anti-dilutive.
• Income Tax
The income tax expense or credit for the period is the tax payable on the current period's taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses. Current and deferred tax is recognized in profit
or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in
equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
Current Tax
Current tax is measured at the amount of tax expected to be payable on the taxable income for the year as
determined in accordance with the provisions of the Income Tax Act, 1961.
Current tax assets and current tax liabilities are off set when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred Tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilize those temporary differences and losses.
Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of
investments in subsidiaries where the Company is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority.
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