A Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured, regardless of when the payment
is being made. Revenue is measured at the fair value of the consideration received or
receivable, taking into account contractually defined terms of payment net of taxes or
duties collected on behalf of the government.
(i) Trading and Brokerage Income
Trading income is recognized when a legally binding contract is executed. Brokerage
income and transaction charges are recognized on the trade date of the transaction upon
confirmation of the transaction by the exchanges.
(ii) Other Income
(a) Interest and Dividend Income - Interest income is recognized using the effective interest
rate method. The effective interest rate is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to the gross carrying amount of
a financial asset. While calculating the effective interest rate, the Company estimates the
expected cash flows by considering all the contractual terms of the financial instruments
but does not consider the expected credit losses.
Dividends are recognized in the statement of profit and loss only when the right to receive
payment is established, it is probable that the economic benefits associated with the
dividend will flow to the Company and the amount of the dividend can be measured
reliably."
(b) Depository transaction charges - Depository transaction charges are recognized on
completion of respective transaction. Annual maintenance charges for depository
accounts are accounted as and when the services are rendered.
(c) Income from portfolio management fees - Income from portfolio management fees are
recognized on the basis of agreements entered into with the clients and when the right to
receive income is established.
B Property, plant and equipment (PPE)
Property, plant and equipment are carried at acquisition cost less accumulated
depreciation and accumulated impairment losses, if any. The acquisition cost for this
purpose includes the purchase price (net of duties and taxes which are recoverable in
future) and expenses directly attributable to the asset to bring it to the site and in the
working condition for its intended use.
Subsequent costs are included in the asset's carrying amount or recognised 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. All
other repairs and maintenance are charged to statement of profit and loss during the
reporting period in which they are incurred.
An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from its use. Difference between the sales
proceeds and the carrying amount of the asset is recognized in the statement of profit and
loss.
C Intangible Assets
Intangible assets (software) are stated in the balance sheet at their carrying value being the
cost of acquisition less accumulated depreciation. The cost comprises purchase price and
directly attributable cost of bringing the asset to its working condition for the intended use.
Any trade discount and rebates are deducted in arriving at the purchase price.
D Depreciation and Amortisation
Depreciation on property, plant and equipment is provided on written down value method,
computed on the basis of useful lives as estimated by management which coincides with
rates prescribed in Schedule II to the Companies Act, 2013.
Intangible assets are amortised on written down value method computed on the basis of
useful lives as estimated by management.
The residual values, useful lives and method of depreciation are reviewed at each financial
year end and adjusted prospectively, if appropriate."
E Impairment of Assets
At each reporting date, the Company assesses whether there is any indication that an
asset may be impaired, based on internal or external factors. If any such indication exists,
the Company estimates the recoverable amount of the asset or the cash generating unit. If
such recoverable amount of the asset or cash generating unit to which the asset belongs is
less than its carrying amount, the carrying amount is reduced to its recoverable amount.
The reduction is treated as an impairment loss and is recognized in the statement of profit
and loss. If, at the reporting date there is an indication that a previously assessed
impairment loss no longer exists,the recoverable amount is reassessed, and the asset is
reflected at the recoverable amount.
Impairment losses previously recognized are accordingly reversed in the statement of
profit and loss.
F LeasesAs a Lessee:
The Company applies a single recognition and measurement approach for all leases,
except for short-term leases and leases of low-value assets.The Company recognises
lease liabilities to make lease payments and right-of-use assets representing the right to
use the underlying assets.
(i) Right-of-Use Assets
The Company recognises right-of-use assets (“ROU Assets”) at the commencement date
of the ease (i.e., the date the underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the shorter of the lease term and
the estimated useful lives of the assets. If ownership of the leased asset transfers to the
Company at the end of the lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset. The right-of use
assets are also subject to impairment. ROU asset shall be separately presented in the
Balance Sheet and lease payments shall be classified as financing cash flows. Refer to the
accounting policies in Section (E) Impairment of non-financial assets.
(ii) Lease liabilities
The lease liability is initially measured at amortized cost at the present value of the future
lease payments. The lease payments are discounted using the interest rate implicit in the
lease or, if not readily determinable, using the incremental borrowing rates in the country of
domicile of the leases. Lease liabilities are re-measured with a corresponding adjustment
to the related right of use asset if the Company changes its assessment if whether it will
exercise an extension or a termination option. Lease liability shall be separately presented
in the Balance Sheet and lease payments shall be classified as financing cash flows.
G Employee benefits:
Short-term employee benefits
Wages and salaries, including non-monetary benefits that are expected to be settled within
12 months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are
measured at the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet."
Defined benefit plan - Gratuity obligation
The liability or assets recognized in the balance sheet in respect of gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The defined benefit obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting
period on government bonds that have terms approximating to the terms of the related
obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in
employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognized in the period in which they occur, directly in other
comprehensive income. They are included in retained earnings in the statement of
changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan
amendments or curtailments are recognized immediately in profit or loss. The gratuity
liability is covered through a recognized Gratuity Fund managed by Life Insurance
Corporation of India and the contributions made under the scheme are charged to
Statement of Profit and Loss."
Defined contribution plans
Contributions to post employment benefit plans in the form of provident funs, employee
state insurance scheme and pension scheme as per regulations are charged as an
expense on accrual basis when employees have rendered the service. The Company has
no further payment obligations once the contributions have been paid. "
H Tax expenses
Accounting treatment in respect of deferred taxation and current tax is in accordance with
Indian Accounting Standard 12 (Ind AS 12) - "Income Taxes”.
Tax expense for the year comprises current and deferred tax.
Current Tax is the amount of tax payable on the taxable income for the year as determined
in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961
and other applicable tax laws that have been enacted or substantively enacted by the end
of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of
assets and liabilities in the Standalone financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences can
be utilised. Such deferred tax assets and liabilities are not recognised if the temporary
differences arise from the initial recognition (other than in a business combination) of
assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Tax relating to items recognized directly in equity or other comprehensive income is
recognised in equity or other comprehensive income and not in the Statement of Profit and
Loss.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they are related to income taxes levied by the same
tax authority, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realized simultaneously.
I Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
financialinstitutions, 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 and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in the balance sheet.
J Employee share based payments:
Equity- settled share-based payments to employees are measured at the fair value of the
employee stock options at the grant date. The fair value determined at the grant date of the
equity-settled share-based payments is amortised over the vesting period, based on the
Company's estimate of equity instruments that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Company revises its estimate of
the number of equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in the statement of profit and loss such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to the equity-
settled employee benefits reserve.
K Earnings Per Share
Basic Earnings Per Share (‘EPS') is computed by dividing the net profit attributable to the
equity shareholders by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net profit by the weighted
average number of equity shares considered for deriving basic earnings per share and also
the weighted average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. Dilutive potential equity shares are
deemed converted as of the beginning of the year, unless issued at a later date. In
computing diluted earnings per share, only potential equity shares that are dilutive and that
either reduces earnings per share or increases loss per share are included.
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