1. Material Accounting Policies
a) Basis of Accounting and Preparation of Financial Statements
The financial statement for the year ended March 31, 2025 has been prepared in accordance with Indian
Accounting Standard ('Ind AS'). The Company is covered under the definition of NBFC and the Ind AS is applicable
under Phase II as defined in notification dated March 30, 2016 issued by Ministry of Corporate Affairs (MCA), since
the company is a listed company.
These financial statements are prepared in accordance with Indian Accounting Standards (lnd AS) prescribed
under Sec 133 of the Companies Act ("the Act'') read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015.
These Financial Statements of the Company are presented as per Schedule III (Division III) of the Companies Act,
2013 applicable to NBFCs, as notified by the Ministry of Corporate Affairs (MCA). These Financial Statements of the
Company are presented in Indian Rupees ("INR"), which is also the Company's functional currency and all values
are rounded to nearest Lacs upto two decimal places, except otherwise indicated.
The Standalone financial statements for the year ended March 31, 2025 are being authorised for issue in
accordance with a resolution of the directors on May 30th, 2025.
b) Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires that management make
judgments, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities and disclosures of contingent assets and liabilities as of the date of the financial
statements and the income and expense for the reporting period. The actual results could differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods affected.
The Company makes certain judgments and estimates for valuation and impairment of financial instruments,
fair valuation of employee stock options, useful life of property, plant and equipment, deferred tax assets and
retirement benefit obligations. Management believes that the estimates used in the preparation of the financial
statements are prudent and reasonable.
c) Revenue Recognition
i. Revenue from brokerage activities is accounted for on the exchange settlement date of the transaction.
ii. Revenue from issue management, debt syndication, financial advisory services etc., is recognized based on
the stage of completion of assignments and terms of agreement with the client.
iii. Gains / losses on dealing in securities are recognized on the exchange settlement date of the transaction.
iv. Interest income is recognized using the effective interest rate method.
v. Revenue from dividend is recognized when the right to receive the dividend is established.
d) Property, Plant and Equipment (PPE)
Measurement at recognition:
i. Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if
any. Subsequent costs are included in the asset's carrying amount.
ii. All property, plant and equipment are initially recorded at cost. Cost comprises acquisition cost, borrowing cost if
capitalization criteria are met, and directly attributable cost of bringing the asset to its working condition for the intended
use.
iii. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future
economic benefit associated with these will flow with the Company and the cost of the item can be measured reliably.
iv. Any gain or loss on disposal of an ite m of property, plant and equipment is recognized in statement of profit and loss.
Depreciation:
i. Depreciation provided on property, plant and equipment is calculated on a Written-Down-Value (WDV) basis using the
rates arrived at based on the useful lives estimated by management.
ii. Depreciation on assets is provided on a Written Down Method as per the rates prescribed in Schedule II to the Companies
Act, 2013. Depreciation on additions to fixed assets is provided on a pro-rata basis from the date the asset is available for use.
Depreciation on sale / deduction from fixed assets is provided for up to the date of sale / deduction / scrapping, as the case
may be.
iii. The residual values, estimated useful lives and methods of depreciation of property, plant and equipment are reviewed at
the end of each financial year and changes if any, are accounted for on a prospective basis.
Capital Work in Progress:
i. Cost of the assets not ready for intended use, as on reporting date, is shown as capital work in progress. Advances given
towards acquisition of fixed assets outstanding at each reporting date are shown as other non-financial assets.
ii. Depreciation is not recorded on capital work- in-progress until construction and installation is completed and assets are
ready for its intended use.
Derecognition:
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic
benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and
equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is
recognized in the Statement of profit and Loss when the item is derecognized.
e) Intangible Assets:
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization.
Amortisation
Amortisation is calculated using the straight- line method to write down the cost of intangible assets to their residual values over
their estimated useful lives and is included in the depreciation and amortization in the statement of profit and loss.
f) Financial instruments
The Company recognizes all the financial assets and liabilities at its fair value on initial recognition; In the case of financial assets
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial
asset are added to the fair value on initial recognition. The financial assets are accounted on a trade date basis.
For subsequent measurement, financial assets are categorised into:
Amortised cost: The Company classifies the financial assets at amortised cost if the contractual cash flows represent
solely payments of principal and interest on the principal amount outstanding and the assets are held under a business
model to collect contractual cash flows. The gains and losses resulting from fluctuations in fair value are not recognised
for financial assets classified in amortised cost measurement category.
Fair value through other comprehensive income (FVOCI): The Company classifies the financial assets as FVOCI if the
contractual cash flows represent solely payments of principal and interest on the principal amount outstanding and the
Company's business model is achieved by both collecting contractual cash flow and selling financial assets. In case of
debt instruments measured at FVOCI, changes in fair value are recognised in other comprehensive income. The
impairment gains or losses, foreign exchange gains or losses and interest calculated using the effective interest method
are recognised in profit or loss. On de-recognition, the cumulative gain or loss previously recognised in other
comprehensive income is re- classified from equity to profit or loss as a reclassification adjustment. In case of equity
instruments irrevocably designated at FVOCI, gains / losses including relating to foreign exchange, are recognised
through other comprehensive income. Further, cumulative gains or losses previously recognised in other
comprehensive income remain permanently in equity and are not subsequently transferred to profit or loss on
derecognition.
Fair value through profit or loss (FVTPL): The financial assets are classified as FVTPL if these do not meet the criteria for
classifying at amortised cost or FVOCI. Further, in certain cases to eliminate or significantly reduce a measurement or
recognition inconsistency (accounting mismatch), the Company irrevocably designates certain financial instruments at
FVTPL at initial recognition. In case of financial assets measured at FVTPL, changes in fair value are recognised in profit or
loss.
Profit or Loss on sale of investments is determined on the basis of first-in-first-out (FIFO) basis.
Fair value is the price that would be received to sell 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 either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non- financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation
techniques, as summarized below:
Level 1 - The fair value hierarchy have been valued using quoted prices for instruments in an active market.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes
inputs that are not observable and the unobservable inputs have a significant effect on the instrument's valuation.
Impairment of financial assets: In accordance with Ind AS 109, the Company applies Expected Credit Loss model (ECL)
for measurement and recognition of impairment loss. The Company recognizes lifetime expected losses for all contract
assets and / or all trade receivables that do not constitute a financing transaction. At each reporting date, the Company
assesses whether the loans have been impaired. The Company is exposed to credit risk when the customer defaults on
his contractual obligations. For the computation of ECL, the loan receivables are classified into three stages based on the
default and the aging of the outstanding.
If the amount of an impairment loss decreases in a subsequent period, and the decrease can be related objectively to an
event occurring after the impairment was recognised, the excess is written back by reducing the loan impairment
allowance account accordingly. The write-back is recognised in the statement of profit and loss.
For subsequent measurement, financial liability are categorised into:
All financial liabilities are initially recognised at fair value net of transaction cost that are attributable to the separate
liabilities. All financial liabilities are subsequently measured at amortised cost using the effective interest method or at
FVTPL.
Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognised by
the Company as an acquirer in a business combination to which lnd AS 103 applies or is held for trading or it is designated
as at FVTPL.
Financial liabilities that are not held-for- trading and are not designated as at FVTPL are measured at amortised cost. The
carrying amounts of financial liabilities that are subsequently measured at amortised cost are determined based on the
effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments (including all fees paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a
shorter period, to the amortised cost of a financial liability.
Equity instruments:
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability
derecognised and the consideration paid is recognised in the Statement of Profit and Loss.
g) Employee Benefits
Gratuity
The Company pays gratuity, a defined benefit plan, to its employees who retire or resign after a minimum period of five
years of continuous service. The Company makes contributions to the LIC Employees Gratuity Fund which is managed
by Life Insurance Company Limited (LIC) for the settlement of gratuity liability.
A defined benefit plan is a post- employment benefit plan other than a defined contribution plan. The Company's net
obligation in respect of the defined benefit plan is calculated by estimating the amount of future benefit that employee
has earned in exchange of their service in the current and prior periods and discounted back to the current valuation
date to arrive at the present value of the defined benefit obligation. The defined benefit obligation is deducted from the
fair value of plan assets, to arrive at the net asset / (liability), which need to be provided for in the books of accounts of the
Company.
As required by the Ind AS19, the discount rate used to arrive at the present value of the defined benefit obligations is
based on the Indian Government security yields prevailing as at the balance sheet date that have maturity date
equivalent to the tenure of the obligation.
The calculation is performed by a qualified actuary using the projected unit credit method. When the calculation results
in a net asset position, the recognized asset is limited to the present value of economic benefits available in form of
reductions in future contributions.
Remeasurements arising from defined benefit plans comprises of actuarial gains and losses on benefit obligations, the
return on plan assets in excess of what has been estimated and the effect of asset ceiling, if any, in case of over funded
plans. The Company recognizes these items of remeasurements in other comprehensive income and all the other
expenses related to defined benefit plans as employee benefit expenses in their profit and loss account.
When the benefits of the plan are changed, or when a plan is curtailed or settlement occurs, the portion of the changed
benefit related to past service by employees, or the gain or loss on curtailment or settlement, is recognized immediately
in the profit or loss account when the plan amendment or when a curtailment or settlement occurs.
Provident Fund
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company is statutorily required
to contribute a specified portion of the basic salary of an employee to a provident fund as part of retirement benefits to its
employees. The contributions during the year are charged to the statement of profit and loss.
h) Borrowing costs
Borrowing costs include interest expense as per the effective interest rate (EIR) and other costs incurred by the Company
in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of those
tangible fixed assets which necessarily take a substantial period of time to get ready for their intended use are
capitalized. Other borrowing costs are recognized as an expense in the year in which they are incurred.
i) Foreign exchange transactions
The functional currency and the presentation currency of the Company is Indian Rupees. Transactions in foreign
currency are recorded on initial recognition using the exchange rate at the transaction date. Monetary assets and
liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the
reporting date. Exchange differences arising on the settlement or translation of monetary items are recognized in the
statement of profit and loss in the period in which they arise.
Assets and liabilities of foreign operations are translated at the closing rate at each reporting period. Income and
expenses of foreign operations are translated at monthly average rates. The resultant exchange differences are
recognized in other comprehensive income in case of foreign operation whose functional currency is different from the
presentation currency and in the statement of profit and loss for other foreign operations. Non-monetary items which
are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the
transaction.
j) Income tax
The income tax expense comprises current and deferred tax incurred by the Company. Income tax expense is recognised
in the income statement except to the extent that it relates to items recognised directly in equity or OCI, in which case
the tax effect is recognised in equity or OCI. Income tax payable on profits is based on the applicable tax laws in each tax
jurisdiction and is recognised as an expense in the period in which profit arises. Current tax is the expected tax
payable/receivable on the taxable income or loss for the period, using tax rates enacted for the reporting period and any
adjustment to tax payable/receivable in respect of previous years.
Current tax assets and liabilities are offset only if, the Company:
a) The entity has legally enforceable right to set off the recognized amounts; and
b) Intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purpose and the amounts for tax purposes.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised, for all deductible temporary differences, to the extent it is probable that future taxable profits will be
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Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based
on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset only if:
c) The entity has legally enforceable right to set off current tax assets against current tax liabilities; and
d) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same
taxable entity.
The tax effects of income tax losses, available for carry forward, are recognised as deferred tax asset, when it is probable that future
taxable profits will be available against which these losses can be set-off.
Additional taxes that arise from the distribution of dividends by the Company are recognised directly in equity at the same time as
the liability to pay the related dividend is recognised.
k) Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash flow statement include cash in hand, balances with the banks and short-term
investments with an original maturity of three months or less, and accrued interest thereon.
l) Impairment of non-financial assets
The Company assesses at the reporting date whether there is an indication that an asset may be impaired. If any indication exists,
or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or cash- generating unit's (“CGU”) fair value less costs of disposal and its value in use.
The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model
is used. Impairment losses are recognised in statement of profit and loss.
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