1.1 COMPANY INFORMATION

Monarch Networth Capital Limited ("MNCL" or
the "Company") is a public limited company and
incorporated under the provisions of Companies Act.
MNCL is predominantly engaged in Share & Stock
Broking, Merchant Banking, and Mutual Fund Distributor.
The Company is a member of National Stock Exchange
of India Ltd. (NSE), BSE Ltd. (BSE), Metropolitan Stock
Exchange of India Ltd (MSEI) in the Capital Market
and Derivatives (Futures & Options) Segment. It is also
Depository Participant with Central Depositary Services
India (CDSL) and National Securities Depository (India)
Limited (NSDL) and also registered in Securities and
Exchange Board of India ("SEBI") as a Category 1
Merchant Banker and Research Analyst.

Material accounting policies

The material accounting policies applied in the
preparation of these financial statements are set out
below.

1.2 BASIS OF PREPARATION

1.2.1 These financial statements ('financial statements') of the
Company have been prepared in accordance with the
Indian Accounting Standards (hereinafter referred to as
the 'Ind AS') as notified by Ministry of Corporate Affairs
('MCA') under Section 133 of the Companies Act, 2013
('the Act') read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended and other relevant
provisions of the Act. The Company has uniformly
applied the accounting policies during the periods
presented.

1.2.2The financial statements have been prepared on the
historical cost basis except for the following assets and
liabilities which have been measured at fair value :

1. Financial instruments measured at fair value

through profit or loss

2. Financial instruments measured at fair value

through other comprehensive income

3. Defined benefit plans - plan assets measured at fair
value

4. Share based payments

1.2.3Functional and presentation currency

These financial statements are presented in INR, which is
the Company's functional currency.

1.2.4Preparation of financial statements

The Company is covered in the definition of Non-Banking
Financial Company as defined in Companies (Indian
Accounting Standards) (Amendment) Rules, 2016. As
per the format prescribed under Division III of Schedule
III to the Companies Act, 2013 on 11 October 2018 (as
amended), the Company presents the Balance Sheet,
the Statement of Profit and Loss and the Statement of
Changes in Equity in the order of liquidity. A maturity
analysis of recovery or settlement of assets and liabilities
within 12 months after the reporting date and more
than 12 months after the reporting date is presented in
Note 41.

1.2.5 Use of estimates and judgments

The preparation of financial statements in conformity
with Ind AS which requires management to make
estimates, judgments, and assumptions that affect the
application of accounting policies and the reported
amounts of assets and liabilities (including contingent
liabilities) and disclosures as of the date of financial
statements and the reported amounts of revenue and
expenses for the reporting period. Actual results could
differ from these estimates. Accounting estimates and
underlying assumptions are reviewed on an ongoing
basis and could change from period to period.
Appropriate changes in estimates are recognized in the
period in which the Company becomes aware of the
changes in circumstances surrounding the estimates.
Any revisions to accounting estimates are recognized
prospectively in the period in which the estimate is
revised and future periods. The estimates and judgments
that have significant impact on carrying amount of assets
and liabilities at each balance sheet date are discussed in
relevant notes.

1.3 REVENUE RECOGNITION

The Company recognizes revenue from contracts with
customers based on a five step model as set out in Ind
AS 115, Revenue from Contracts with Customers, to
determine when to recognize revenue and at w h a t
amount. Revenue is measured based on the consideration
specified in the contract with a customer.

Revenue from contracts with customers is recognised
when services are provided and it is highly probable that
a significant reversal of revenue is not expected to occur.

Revenue is measured at fair value of the consideration
received or receivable. Revenue is recognized when
(or as) the Company satisfies a performance obligation
by transferring a promised service (i.e. an asset)

to a customer. An asset is transferred when (or as) the
customer obtains control of that asset.

When (or as) a performance obligation is satisfied,
the Company recognizes as revenue the amount of
the transaction price (excluding estimates of variable
consideration) that is allocated to that performance
obligation.

The Company applies the five-step approach for
recognition of revenue:

• Identification of contract(s) with customers;

• Identification of the separate performance
obligations in the contract;

• Determination of transaction price;

• Allocation of transaction price to the separate
performance obligations; and

• Recognition of revenue when (or as) each
performance obligation is satisfied.

Interest income

For all financial instruments measured either at amortised
cost or at fair value through other comprehensive
income ('OCI'), interest income is recorded using the
effective interest rate (EIR), which is the rate that exactly
discounts the estimated future cash payments or receipts
over the expected life of the financial instrument or a
shorter period, where appropriate, to the gross carrying
amount of the financial asset or to the amortised cost of
a financial liability. Interest income is included in other
income in the statement of profit and loss.

Interest is earned on delayed payments from customers
and is recognised on a time proportion basis taking into
account the amount outstanding from customers and
the rates applicable.

Fee and commission income

Brokerage Income is recognised on the trade date in
accordance with the terms of contract and is exclusive
of goods and service tax and securities transaction tax
(STT) wherever applicable. Service income is recognized,

exclusive of taxes, point in time when the performance
obligation is satisfied.

Merchant banking and other advisory services
Merchant banking and financial advisory fees are
accounted on completion of performance obligation
in accordance with the terms of the contract with the
clients.

Asset management services

Income from alternate investment management fee
is recognized in accordance with Private Placement
Memorandum

Dividends

Dividend income is accounted for when the right to
receive the same is established, which is generally when
shareholders approve the dividend.

1.4 PROPERTY, PLANT AND EQUIPMENT

I tems of property, plant and equipment are measured
at acquisition cost of the items less accumulated
depreciation and impairment loss. Acquisition cost
includes expenditure that is directly attributable to
getting the asset ready for 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. The
carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss
during the reporting period in which they are incurred.

Items of spare parts that meet the definition of 'property,
plant and equipment' have been recognised as property,
plant and equipment. The depreciation on such an item
of spare part will begin when the asset is available for
use i.e. when it is in the location and condition necessary
for it to be capable of operating in the manner intended
by management. In case of a spare part, as it may be
readily available for use, it may be depreciated from the
date of purchase of the spare part.

Capital work in progress is stated at cost, net of
accumulated impairment losses, if any. All the direct
expenditure related to implementation including
incidental expenditure incurred during the period of

implementation of a project, till it is commissioned, is
accounted as Capital work in progress (CWIP) and after
commissioning the same is transferred / allocated to the
respective item of property, plant and equipment.

Pre-operating costs, being indirect in nature, are
expensed to the statement of profit and loss as and
when incurred.

Property, plant and equipment are eliminated from
financial statement, either on disposal or when retired
from active use. Losses arising in the case of retirement
of property, plant and equipment are recognised in the
statement of profit and loss in the year of occurrence.

Depreciation methods, estimated useful lives and
residual value

Depreciation on property, plant and equipment is
provided using the written down method based on the
useful life of the assets as estimated by the management
and is charged to the Statement of Profit and Loss as
per the requirements of Schedule II of the Companies
Act, 2013. The estimate of the useful life of the assets
has been assessed based on technical advice which
considered the nature of the asset, the usage of the
asset ,expected physical wear and tear, the operating
conditions of the asset, anticipated technological
changes, manufacturers warranties and maintenance
support, etc.

Depreciation on items of property, plant and equipment
acquired / disposed off during the year is provided on
pro-rata basis with reference to the date of addition /
disposal. Cost of lease-hold land is amortized equally
over the period of lease.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

1.5 INTANGIBLE ASSETS

Intangible assets are recognised when it is probable that
the future economic benefits that are attributable to the
assets will flow to the Company and the cost of the asset
can be measured reliably.

I ntangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets

acquired in a business combination is their fair value at
the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in
which the expenditure is incurred.

Amortisation methods, estimated useful lives and
residual value

I ntangible assets are amortised in statement of Profit
and Loss over their estimated useful lives based on
underlying contracts where applicable.

The amortisation period and the amortisation method
for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period.

1.6 IMPAIRMENT OF NON-FINANCIAL ASSETS

The Company assesses, at each 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. 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. When 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.

Recoverable amount is determined:

1. In case of individual asset, at higher of the fair value
less cost to sell and value in use; and

2. I n case of cash-generating unit (a group of assets
that generates identified, independent cash flows),
at the higher of the cash-generating unit's fair value
less cost to sell and the value in use.

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 no such transactions can be identified, an
appropriate valuation model is used. These calculations
are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available
fair value indicators.

The Company bases its impairment calculation on
detailed budgets and forecast calculations, which are
prepared separately for each of the Company's CGUs to
which the individual assets are allocated. These budgets
and forecast calculations generally cover a period of five
years. For longer periods, a long-term growth rate is
calculated and applied to project future cash flows after
the fifth year.

I mpairment losses of continuing operations, including
impairment on inventories, are recognised in the
statement of profit and loss, except for properties
previously revalued with the revaluation surplus taken to
OCI. For such properties, the impairment is recognised
in OCI up to the amount of any previous revaluation
surplus.

1.7 LEASES

A lease is defined 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'. The
Company assess whether it has the right to direct 'how
and for what purpose' the asset is used throughout the
period of use.

Measurement and recognition of leases as a lessee

The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or
to restore the site on which it is located, less any lease
incentives received.

Certain lease arrangements include the option to extend
or terminate the lease before the end of the lease term.
The right-of-use assets and lease liabilities include these
options when it is reasonably certain that the option will
be exercised.

The right-of-use asset is subsequently measured at cost
less accumulated depreciation, accumulated impairment
losses, if any and adjusted for any re measurement of the
lease liability. The right-of-use assets are depreciated
using the straight-line method from the commencement
date over the shorter of lease term or useful life of right-
of-use asset. The estimated useful lives of right-of-use
assets are determined on the same basis as those of
property, plant and equipment. Right-of-use assets are
tested for impairment whenever there is any indication
that their carrying amounts may not be recoverable.
Impairment loss, if any, is recognised in the standalone
statement of profit and loss.

The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be
readily determined, the incremental borrowing rate
applicable to the entity within the Company. Generally,
the Company uses its incremental borrowing rate as
the discount rate. For leases with reasonably similar
characteristics, the Company, on a lease by lease basis,
may adopt either the incremental borrowing rate specific
to the lease or the incremental borrowing rate for the
portfolio as a whole. The lease payments shall include
fixed payments, variable lease payments, residual value
guarantees, exercise price of a purchase option where
the Company is reasonably certain to exercise that
option and payments of penalties for terminating the
lease, if the lease term reflects the lessee exercising an
option to terminate the lease.

The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the
carrying amount to reflect any reassessment or lease
modifications or to reflect revised in-substance fixed
lease payments.

The Company recognises the amount of the re¬
measurement of lease liability as an adjustment to the
right-of-use asset. Where the carrying amount of the
right-of-use asset is reduced to zero and there is a further
reduction in the measurement of the lease liability, the
Company recognises any remaining amount of the re¬
measurement in standalone statement of profit and loss.

The Company has elected not to recognise right-of-
use assets and lease liabilities for short-term leases of
all assets that have a lease term of 12 months or less
and leases of low-value assets. The Company recognizes
the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.

Company as a lessee

Lease income from operating leases where the company
is a lessor is recognised in income on a straight-line
basis. The respective leased assets are included in the
balance sheet based on their nature.

1.8 BORROWING COSTS

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost
of the asset. All other borrowing costs are expensed in
the period in which they occur. Borrowing costs consist
of interest and other costs that the Company incurs in
connection with the borrowing of funds.

1.9 FINANCIAL INSTRUMENTS

A. Financial assets

Initial recognition and measurement
All financial assets are recognised initially at fair value
plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value
through profit or loss are expensed in profit or loss.

Financial assets are classified, at initial recognition, as
financial assets measured at fair value or as financial
assets measured at amortised cost.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in four categories:

1. Financial assets at amortised cost

2. Financial assets at fair value through other
comprehensive income (FVTOCI)

3. Financial assets at fair value through profit or loss
(FVTPL)

4. Equity instruments measured at fair value through
other comprehensive income ('FVTOCI')

Financial asset at amortised cost

A financial asset is measured at the amortised cost if
both the following conditions are met:

1. The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and

2. Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included
in finance income in the profit or loss. The losses arising
from impairment are recognised in the profit or loss.
This category generally applies to trade and other
receivables.

Financial asset at FVTOCI

A financial asset is classified as at the FVTOCI if both of
the following criteria are met:

1. The objective of the business model is achieved
both by collecting contractual cash flows and
selling the financial assets, and

2. The asset's contractual cash flows represent SPPI.

Financial assets included within the FVTOCI category
are measured initially as well as at each reporting date
at fair value. Fair value movements are recognized in the
other comprehensive income (OCI).

Financial instrument at FVTPL

FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is
classified as at FVTPL.

I n addition, a company may elect to designate a debt
instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election
is allowed only if doing so reduces or eliminates a

measurement or recognition inconsistency (referred
to as 'accounting mismatch'). The Company has not
designated any debt instrument as at FVTPL.

Financial assets included within the FVTPL category are
measured at fair value with all changes recognized in the
Statement of profit and loss.

Equity investments

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which are held
for trading and contingent consideration recognised
by an acquirer in a business combination to which Ind
AS103 applies are classified as at FVTPL. For all other
equity instruments, company has taken an irrevocable
election to present in other comprehensive income
subsequent changes in the fair value.

If the company decides to classify an equity instrument as
at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is
no recycling of the amounts from OCI to the Statement
of profit and loss, even on sale of investment. However,
the Company may transfer the cumulative gain or loss
within equity.

De-recognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the
Company's balance sheet) when:

1. The rights to receive cash flows from the asset have
expired, or

2. The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
'pass-through' arrangement; and either

a) the Company has transferred substantially all
the risks and rewards of the asset, or

b) the company has neither transferred nor
retained substantially all the risks and rewards
of the asset, but has transferred control of the
asset.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise
the transferred asset to the extent of the Company's
continuing involvement. In that case, the Company also
recognises an associated liability. The transferred asset and
the associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.

Impairment of financial assets

The company assesses impairment based on expected
credit loss (ECL) model to the following:

1. Financial assets measured at amortised cost;

2. Financial assets measured at fair value through
other comprehensive income (FVTOCI);

Expected credit losses are measured through a loss
allowance at an amount equal to:

1. The 12-months expected credit losses (expected
credit losses that result from those default events
on the financial instrument that are possible within
12 months after the reporting date); or

2. Full time expected credit losses (expected credit
losses that result from all possible default events
over the life of the financial instrument).

The Company follows 'simplified approach' for
recognition of impairment loss allowance on:

1. Trade receivables or contract revenue receivables;
and

2. All lease receivables resulting from transactions
within the scope of Ind AS 17

Under the simplified approach, the company does
not track changes in credit risk. Rather, it recognises
impairment loss allowance based on lifetime ECLs at
each reporting date, right from its initial recognition.

The Company follows the simplified approach permitted
by Ind AS 109 - Financial Instruments- for recognition
of impairment loss allowance. The application of
simplified approach does not require the Company
to track changes in credit risk of trade receivable. The
Company calculates the expected credit losses on trade
receivables using a provision matrix on the basis of its
historical credit loss experience.

ECL impairment loss allowance (or reversal) recognized
during the period is recognized as income/ expense in
the statement of profit and loss (P&L). This amount is
reflected under the head 'other expenses' in the P&L.
The balance sheet presentation for various financial
instruments is described below:

Financial assets measured as at amortised cost,
contractual revenue receivables and lease receivables:
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.

For assessing increase in credit risk and impairment
loss, the company combines financial instruments on
the basis of shared credit risk characteristics with the
objective of facilitating an analysis that is designed to
enable significant increases in credit risk to be identified
on a timely basis.

The company does not have any purchased or
originated credit-impaired (POCI) financial assets, i.e.,
financial assets which are credit impaired on purchase/
origination.

B. Financial liabilities

Initial recognition and measurement
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.

The company's financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts.

Subsequent measurement

The measurement of financial liabilities depends on their
classification, as described below:

1. Financial liabilities at fair value through profit or
loss

2. Loans and borrowings measured on amortised cost
basis

3. Financial guarantee contracts

Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the
purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are
recognised in the profit or loss.

Financial liabilities designated upon initial recognition at
fair value through profit or loss are designated as such
at the initial date of recognition, and only if the criteria
in Ind AS 109 are satisfied. For liabilities designated as
FVTPL, fair value gains/ losses attributable to changes
in own credit risks are recognized in OCI. These gains/
loss are not subsequently transferred to the Statement
of profit and loss. However, the company may transfer
the cumulative gain or loss within equity. All other
changes in fair value of such liability are recognised in
the statement of profit and loss. The Company has not
designated any financial liability as at FVTPL.

Loans and borrowings

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are
recognised in the Statement of profit and loss when
the liabilities are derecognised as well as through the
EIR amortisation process. Amortised cost is calculated
by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included as finance costs
in the Statement of profit and loss.

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 in the
respective carrying amounts is recognised in the
statement of profit and loss.

C. Off-setting of financial instruments

Financial assets and financial liabilities are offset and the
net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities
simultaneously.

D. Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement
The Company uses derivative financial instruments,
such as forward currency contracts, to hedge its foreign
currency risks. Such derivative financial instruments are
initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value
of derivatives are taken directly to profit or loss, except
for the effective portion of cash flow hedges, which is
recognised in OCI and later reclassified to profit or loss
when the hedge item affects profit or loss or treated
as basis adjustment if a hedged forecast transaction
subsequently results in the recognition of a non-financial
asset or non-financial liability.

Premium/Discount, in respect of forward foreign
exchange contract, is recognised over the life of the
contracts. Exchange differences on such contracts are
recognised in the Statement of Profit and Loss in the
period in which the exchange rate changes. Profit/Loss
on cancellation / renewal of forward exchange contract
is recognized as income/expense.

1.10 INCOME TAX

Current tax

Current tax is measured at the amount expected to
be recovered from or paid to the taxation authorities,
based on the rates and tax laws enacted or substantively
enacted, at the reporting date in the country where the
entity operates and generates taxable income. Current
tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

Deferred tax

Deferred tax is provided using the balance sheet
approach on temporary differences at the reporting
date between the tax bases of assets and liabilities and
their corresponding carrying amounts for the financial
reporting purposes.

Deferred tax assets are the amounts of income taxes
recoverable in future periods in respect of:

1. deductible temporary differences;

2. the carry forward of unused tax losses; and

3. the carry forward of unused tax credits.

The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are recognised
to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be
recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.

1.11 INVENTORIES

Inventories are valued at the Market Value.

Inventories mainly represents securities held as stock
in course of market making activities and remaining
comprises of securities held as a result of error in
execution of orders.

1.12EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve
months of rendering services are classified as short term
employee benefits. Benefits such as salaries, wages,
short-term compensated absences, performance
incentives etc., and the expected cost of bonus, ex-
gratia are recognised during the period in which the
employee renders related service.

Payments to defined contribution retirement benefit
plans are recognised as an expense when employees
have rendered the service entitling them to the
contribution.

Long-term employee benefits

Post-employment and other employee benefits are
recognised as an expense in the statement of profit and
loss for the period in which the employee has rendered
services. The expenses are recognised at the present
value of the amount payable determined using actuarial
valuation techniques. Actuarial gains and loss in respect
of post-employment and other long term benefits are
charged to the statement of other comprehensive
income.

1.13CASH AND CASH EQUIVALENTS

Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are
subject to an insignificant risk of changes in value. For
the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits,
as defined above, net of outstanding bank overdrafts as

they are considered an integral part of the Company's
cash management.

1.14SEGMENT ACCOUNTING:

The Chief Operational Decision Maker monitors the
operating results of its business Segments separately
for the purpose of making decisions about resource
allocation and performance assessment. Segment
performance is evaluated based on profit or loss and is
measured consistently with profit or loss in the financial
statements.

The Operating segments have been identified on the
basis of the nature of products/services.

The accounting policies adopted for segment reporting
are in line with the accounting policies of the Company.
Segment revenue, segment expenses, segment assets
and segment liabilities have been identified to segments
on the basis of their relationship to the operating activities
of the segment. Inter Segment revenue is accounted on
the basis of transactions which are primarily determined
based on market/fair value factors. Revenue, expenses,
assets and liabilities which relate to the Company as a
whole and are not allocated to segments on a reasonable
basis have been included under "unallocated revenue /
expenses / assets / liabilities".