2. Material Accounting Policies
2.1 Basis of preparation and presentation
2.1.1 Statement of compliance
The standalone financial statements as at and for the year
ended March 31, 2026 have been prepared in accordance
with Indian Accounting Standards ("Ind AS") notified under
section 133 of the Companies Act 2013, read together with
the Companies (Indian Accounting Standards) Rules, 2015
as amended time to time and the standalone financial
statement also complies with presentation requirements
of Division II of Schedule III to the Companies Act, 2013,
(Ind AS compliant Schedule III).
The Company has prepared the financial statements
on the basis that it will continue to operate as a going
concern.
2.1.2 Basis of measurement
The standalone financial statements have been prepared
and presented under the historical cost convention,
except for certain items that have been measured at fair
values at the end of each reporting period as required by
the relevant Ind AS:
i. inancial assets and liabilities measured at fair
value or amortised cost (refer material accounting
policies at 2.2.3, 2.2.4 and 2.2.5).
ii. Employee benefits (Gratuity and Compensated
absences) (refer material accounting policies at
2.2.11).
2.1.3 Functional and presentation currency
The Standalone financial statements of the Company
are presented in Indian rupees, the national currency of
India, which is the functional currency of the Company
and the currency of the primary economic environment
in which the Company operates. All financial information
presented in Indian rupees has been rounded off to the
nearest lakh upto two decimal except share and per share
data in terms of Schedule III unless otherwise stated.
2.1.4 Use of estimates and judgment
a) The preparation of standalone financial
statements in conformity with Ind AS requires
the management to make judgments, estimates
and assumptions that affect the application of
accounting policies and the reported amounts of
assets, liabilities, income, expenses, disclosure of
contingent assets and disclosure of contingent
liabilities. Actual results may differ from these
estimates.
b) Estimates and underlying assumptions are
reviewed on a periodic basis. Revisions to
accounting estimates are recognized in the period
in which the estimates are revised and in any
future periods affected. In particular, information
about significant areas of estimation, uncertainty
and critical judgments in applying accounting
policies that have the most significant effect on
the amounts recognized in the standalone financial
statements is included in the following notes:
i. Income taxes: The Company's tax
jurisdiction is in India. Significant judgments
are involved in determining the provision
for income taxes, deferred tax assets and
liabilities including the amount expected
to be paid or recovered in connection with
uncertain tax positions.
ii. Employee Benefits: Defined employee
benefit assets / liabilities determined based
on the present value of future obligations
using assumptions determined by the
Company with advice from an independent
qualified actuary.
iii. Property plant and equipment and
Intangible assets: The charge in respect
of periodic depreciation/amortization is
derived after determining an estimate of an
asset's expected useful life and the expected
residual value at the end of its life. The useful
lives and residual values of the Company's
assets are determined by the management
at the time the asset is acquired and
reviewed periodically, including at each
financial year end. The lives are based on
historical experience with similar assets as
well as anticipation of future events, which
may impact their life, such as changes in
technology.
iv. Impairment of trade receivables:
The Company estimates the probability of
collection ofaccounts receivable by analysing
historical payment patterns, customer
status, customer credit-worthiness and
current economic trends. If the financial
condition of a customer deteriorates,
additional allowances may be required.
v. Fair value measurement of financial
instruments: The Company estimates fair
values of the unquoted equity shares using
discounted cash flow model. The valuation
requires management to make certain
assumptions about the model inputs,
including forecast cash flows, discount rate,
credit risk and volatility, the probabilities
of the various estimates within the range
can be reasonably assessed and are used
in management’s estimate of fair value
for these unquoted equity investments
(refer note 30).
2.2 Summary of material accounting policies
2.2.1 Revenue
a) The Company derives revenue primarily from
services to corporates and capital market
intermediary services. The Company recognises
revenue when the significant terms of the
arrangement are enforceable, services have been
delivered and the collectability is reasonably
assured. The method for recognizing revenues
and costs depends on the nature of the services
rendered:
i. Time and service contracts: Revenues and
costs relating to time and service contracts
are recognised at point in time as and
when the related services are rendered.
Services transferred at a point in time
includes revenue from transaction charges,
IPO/corporate action charges, E-CAS
statement charges, e-voting charges, etc.
ii. Annual fee contracts: Revenue from
annual fee contracts is recognised
proportionately over the period of the
contract. When services are performed
through an indefinite number of repetitive
acts over a specified period of time, revenue
is recognised on a straight line basis over
the specified period or under some other
method that better represents the stage
of completion. Services transferred over
time includes revenue from annual issuer
charges, account maintenance charges,
users facility charges, foreign investment
limit monitoring charges, etc.
b) Revenues are shown net of goods and service tax
and applicable discounts and allowances.
c) Trade receivables: A receivable is recognised if
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due).
d) Contract Liabilities: A contract liability is
recognised if a payment is received or a payment
is due (whichever is earlier) from a customer
before the Company transfers the related services.
Contract liabilities are recognised as revenue
when the Company performs under the contract
(i.e., transfers control of the related services to the
customer).
2.2.2 Investments in subsidiaries and associates
Subsidiary company :- A subsidiary is a company
that is controlled by another company, usually
because the parent company owns more than 50%
of its shares, giving it the power to make decisions.
Associate company :- Associate company, is one in which
another company has a significant influence but not full
control, typically by owning between 20% and 50% of
its shares.
Investments in subsidiaries and associates are
measured at cost are tested annualy. Any impairment
loss is recognized in the statement of profit and loss.
Dividend income if any from subsidiaries and associates
is recognised when its right to receive the dividend is
established.
2.2.3 Financial instruments
a) Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instruments.
b) The classification of financial instruments depends
on the objective of the business model for which it
is held. Management determines the classification
of its financial instruments at initial recognition.
All financial instruments are initially measured
at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial
assets and financial liabilities at fair value through
profit or loss) are added to or deducted from
the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognised
immediately in profit or loss.
c) Purchase or sales of financial assets are recognised
on trade date.
d) For the purpose of subsequent measurement,
financial instruments of the Company are classified
in the following categories: financial assets (debt
instrument) at amortised cost, financial asset
(equity instruments) at Fair value Through Profit
and Loss account ("FVTPL”) and financial liabilities
at amortised cost or FVTPL.
e) The Company derecognizes a financial asset when
the contractual rights to the cash flows from the
financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition
under Ind AS 109. A financial liability (or a part
of a financial liability) is derecognized from the
Company's Balance Sheet when the obligation
specified in the contract is discharged or cancelled
or expires.
f) All assets and liabilities for which fair value is
measured or disclosed in the standalone financial
statements are categorised within the fair value
hierarchy, described as follows, based on the
lowest level input that is significant to the fair
value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
2.2.4 Financial Assets
a) Financial assets (debt instruments) at
amortised cost
i. A financial asset shall be measured at
amortised cost if both of the following
conditions are met:
• the financial asset is held within a
business model whose objective is to
hold financial assets in order to collect
contractual cash flows and
• the contractual terms of the financial
assets give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding (SPPI).
ii. They are presented as current assets, except
for those maturing later than 12 months
after the reporting date which are presented
as non-current assets. Financial assets
are measured initially at fair value plus
transaction costs and subsequently carried
at amortized cost using the effective interest
method, less any impairment loss.
iii. Financial assets measured at amortised cost
are represented by investment in interest
bearing debt instruments, trade receivables,
security deposits, cash and cash equivalents,
employee and other advances and eligible
current and non-current assets.
iv. Cash and cash equivalents comprise cash
on hand and in banks and demand deposits
with banks with original maturity less than
3 months. These can be withdrawn at any
time without prior notice or penalty on the
principal except for earmarked balances
v. For the purposes of the cash flow statement,
cash and cash equivalents include cash on
hand, in banks and demand deposits with
banks, net of outstanding bank overdrafts
that are repayable on demand, book
overdraft and are considered part of the
Company's cash management system.
b) Equity instruments at FVTPL
All equity instruments are measured at fair value
through Profit and loss other than investments in
subsidiaries and associates.
c) Financial assets at FVTPL
FVTPL is a residual category for financial assets.
Any financial asset which does not meet the
criteria for categorization as at amortised cost
or as FVTOCI, is classified as FVTPL. In addition
the Company may elect to designate the financial
asset, which otherwise meets amortised cost or
FVTOCI criteria, as FVTPL if doing so eliminates
or significantly reduces a measurement or
recognition inconsistency.
d) Earmarked Funds
Earmarked Fund is in respect of variable pay
payable to Key Management Personnel('KMP’) of
the Company held for specific purposes as per the
SEBI (Depositories and Participants) Regulations
2018, security against bank guarantees, amount
unpaid against dividend, amount payable against
Government Securities, stamp duty collected,
proceeds received for auction of demat accounts
and arbitration deposits. These amounts are either
invested in bank fixed deposits or available in
current bank account and the same are earmarked
in the Balance Sheet. Investment income earned
on these financial instruments is credited to
respective liabilities and not credited to the
Statement of Profit or Loss except for fixed deposit
against bank guarantees.
2.2.5 Financial liabilities
Financial liabilities at amortised cost
Financial liabilities at amortised cost represented by trade
payables, lease labilities and other financial liabilities are
initially recognized at fair value, and subsequently carried
at amortized cost using the effective interest method.
2.2.6 Equity
Ordinary shares: Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of
new ordinary shares are recognised as a deduction from
equity, net of any tax effect (if any).
2.2.7 Property, plant and equipment (PPE)
a) Recognition and measurement:
i. Property, plant and equipment are measured
at cost less accumulated depreciation
and impairment losses, if any. The cost
comprises the purchase price and any
attributable cost of bringing the assets to
its working condition for its intended use.
ii. Capital work in progress is stated at cost, net
of accumulated impairment loss, if any.
b) Derecognition of PPE:
An item of property, plant and equipment
is derecognised upon disposal or when no
future economic benefits are expected to
arise from the continued use of the asset.
Any gain or loss arising on the disposal or
retirement of an item of property, plant and
equipment is determined as the difference
between the sales proceeds and the carrying
amount of the asset and is recognised in
profit or loss.
2.2.8 Intangible assets
a) Intangible assets are measured at cost as of the
date of acquisition less accumulated amortization
and accumulated impairment losses, if any.
b) Intangible assets consists of computer software.
c) Intangible assets under development is stated at
cost, net of accumulated impairment loss, if any.
2.2.9 Depreciation / Amortisation:
a) Depreciation / Amortisation has been provided
on the straight-line method as per the useful life
prescribed in Schedule II to the Companies Act,
2013 except in respect of the following categories
of assets, in whose case the life of the assets
has been assessed as under based on technical
advice, taking into account the nature of the asset,
the estimated usage of the asset, the operating
conditions of the asset, past history of replacement,
anticipated technological changes, manufacturers
warranties and maintenance support, etc.
b) Depreciation / Amortisation methods, useful life
and residual values are reviewed at each reporting
date, with the effect of any changes in estimate
accounted for on a prospective basis.
c) Amounts paid towards the acquisition of
property, plant and equipment outstanding as
of each reporting date and the cost of property,
plant and equipment not ready for intended use
are disclosed under capital work- in-progress.
Depreciation is not charged on capital work-in¬
progress until construction and installation
are completed and the asset is ready for its
intended use.
2.2.10 Impairment
Financial assets carried at amortised cost
i. In accordance with Ind AS 109, the Company
applies expected credit loss (ECL) model for
measurement and recognition of impairment loss.
The Company follows 'simplified approach' for
recognition of impairment loss allowance on trade
receivables.
ii. 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.
iii. The Company has used a practical expedient by
computing the expected credit loss allowance for
trade receivable based on a detailed analysis of
trade receivables.
iv. ECL impairment loss allowance (or reversal)
during the year is recognised as expense / income
in the Statement of Profit and Loss.
v. Financial assets measured at amortised cost,
contractual revenue receivable: ECL is presented
as an allowance, i.e. as an integral part of the
measurement of those assets in the balance sheet.
The allowance reduces the net carrying amount.
Until the asset meets write off criteria, the
Company does not reduce impairment allowance
from the gross carrying amount.
2.2.11 Employee benefits
The Company participates in various employee benefit
plans. Post-employment benefits are classified as either
defined contribution plans or defined benefit plans.
Under a defined contribution plan, the Company's only
obligation is to pay a fixed amount with no obligation to pay
further contributions if the fund does not hold sufficient
assets to pay all employee benefits. The related actuarial
and investment risks fall on the employee. The expenditure
for defined contribution plans is recognized as expense
during the period when the employee provides service.
Under a defined benefit plan, it is the Company's obligation
to provide agreed benefits to the employees. The related
actuarial and investment risks fall on the Company.
The present value of the defined benefit obligations is
calculated using the projected unit credit method.
i. Short term employee benefits: Performance
linked bonus is provided as and when the same is
approved by the Board of Directors.
ii. Post-employment benefits and other long term
employee benefits are treated as follows:
• Defined Contribution Plans
Provident Fund: The Provident fund plan
is operated by Regional Provident Fund
Commissioner (RPFC) and the contribution
thereof are paid / provided for.
Contributions to the defined contribution
plans are charged to profit or loss for the
respective financial year as and when
services are rendered by the employees.
• Defined Benefits Plans
Gratuity: The Company provides for a
gratuity payment to eligible employees, at
retirement or termination of employment
based on the last drawn salary and years
of employment with the Company as per
applicable act. Gratuity for employees
is covered by Gratuity Scheme with Life
Insurance Corporation of India and the
contribution thereof is paid/provided for.
Provision for gratuity is made on the basis
of actuarial valuation on Projected Unit
Credit Method as at the end of the year.
Remeasurement gains or losses are
recognised in other comprehensive
income. Further, the profit or loss does
not include an expected return on plan
assets. Instead net interest recognised in
profit or loss is calculated by applying the
discount rate used to measure the defined
benefit obligation to the net defined benefit
liability or asset. The actual return on the
plan assets above or below the discount rate
is recognised as part of re-measurement of
net defined liability or asset through Other
Comprehensive Income.
Remeasurements comprising gains or
losses and return on plan assets (excluding
amounts included in net interest on the net
defined benefit liability) are not reclassified
to profit or loss in subsequent periods.
Compensated absences: Accumulated
compensated absences, which are
expected to be availed or encashed
within 12 months from the end of the
year are treated as short term employee
benefits. The obligation towards the
same is measured at the expected cost of
accumulating compensated absences as
the additional amount expected to be paid
as a result of the unused entitlement as at
the year end. Accumulated compensated
absences, which are expected to be availed
or encashed beyond 12 months from the
end of the year are treated as non-current
employee benefits. The Company's liability
is actuarially determined (using the
Projected Unit Credit method) at the end
of year.
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