Note 2: Material accounting policies
The principal accounting policies applied in the preparation
of these standalone financial statements are set out below.
These policies have been consistently applied to all the years
presented, unless otherwise stated.
2.1 Statement of compliances and basis of preparation
and presentation
a) Statement of compliance
These standalone 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
(‘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 in these financial statements.
b) Basis of presentation
The Company presents the Balance Sheet, the
Statement of Profit and Loss and the statement of
Changes in Equity and disclosures are presented in
the format prescribed under Division III of Schedule
III to the Companies Act, 2013, as amended from
time to time, that are required to comply with Ind AS.
The financial statements were approved for issue
by the Board of Directors on May 23, 2025.
c) Basis of measurement
The financial statements have been prepared on
going concern basis, in accordance with accounting
principles generally accepted in India, as the
Management is satisfied that the Company shall
be able to continue its business for the foreseeable
future and no material uncertainty exists that
may cast significant doubt on the going concern
assumption. Further, the financial statements have
been prepared on accrual and historical cost basis,
except for the following:
• Certain Financial instruments are measured
at fair value (refer accounting policy regarding
Financial Instruments and fair value
measurement);
• Securities held for trading;
• Share based payments [refer note 2.16];
• Derivative Financial Instruments; and
• Defined benefit plans as per actuarial valuation
d) Functional and presentation currency
The Financial Statements are presented in Indian
Rupees which is also the functional currency
of the Company and all amount in the Financial
Statements are presented in ' lakhs, unless
otherwise stated. Certain amounts that are
required to be disclosed and do not appear due to
rounding-off are expressed as 0.00.
e) Use of estimates and judgments
The preparation of financial statements in
conformity with Ind AS 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.
Information about each of these estimates and
judgments is included in the relevant notes together
with information about the basis of calculation for
each affected line item in the financial statements.
The areas involving estimates for judgments are:
(i) Estimation of defined benefit obligations;
(ii) Recognition of deferred tax assets, estimation
of current tax expense and current tax payable;
(iii) Estimation of provisions and contingencies;
(iv) Fair value of employee share options;
(v) Fair value of financial instruments including
unlisted equity instruments;
(vi) Impairment of financial instruments;
(vii) Determination of useful life of Property, plant
and equipment & Investment property and
method of depreciation;
(viii) Determination of useful life of Intangible asset
and method of depreciation;
(ix) Effective interest rate;
(x) Evaluation of lease, lease term and
discount rates.
2.2 Property, plant and equipment (including Capital
work-in-progress)
Initial and Subsequent Recognition: Property, plant
and equipment (PPE) are stated at cost of acquisition
less accumulated depreciation. Cost includes
expenditure that is directly attributable to the acquisition
and installation of the assets. The cost of an item of PPE
is recognised as an asset, if, and only if, it is probable
that the economic benefits associated with the item will
flow to the Company in future periods, and the cost of
the item can be measured reliably. Expenditure incurred
after the PPE have been put into operations, such as
repair and maintenance expenses, are charged to the
Statement of Profit and Loss, during the period in which
they are incurred.
Where cost of a part of an asset (asset component) is
significant to total cost of the asset and useful life of that
part is different from the useful life of the remaining asset,
then useful life of that significant part is determined
separately and such asset component is depreciated
over its separate useful life.
Advances paid towards the acquisition of property, plant
and equipment outstanding at each balance sheet date
is classified as capital advances under other non-financial
assets and PPE which are not ready for intended use as
on the date of Balance sheet are disclosed as Capital
work-in-progress. Capital work-in-progress is stated at
cost comprising direct costs, related incidental expenses,
other directly attributable costs and borrowings costs,
net of accumulated impairment loss, if any.
Income and expenses related to the incidental operations,
not necessary to bring the item to the location and
condition necessary for it to be capable of operating in
the manner intended by management, are recognized in
Statement of profit and loss. Gains or losses arising on
retirement or disposal of property, plant and equipment
are recognised in the Statement of Profit and Loss.
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 year in which they are incurred.
Depreciation methods, estimated useful lives and
residual value:
Depreciation is the systematic allocation of the
depreciable amount of an asset over its useful life.
The entity selects the method that most closely reflects
the expected pattern of consumption of the future
economic benefits embodied in the asset.
Depreciation is calculated using the diminishing balance
method to allocate their cost, net of their residual values,
over their estimated useful life prescribed under Schedule
II to the Companies Act, 2013. The Company provides
pro-rata depreciation from the date of installation / asset
is ready for use till date the assets are sold or disposed.
Leasehold improvements are amortized over the shorter
of the remaining term of underlying lease or useful life of
underlying asset.
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.
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. Gains and losses on
disposals are determined by comparing proceeds with
carrying amount and are recognized in the statement of
profit and loss when the asset is derecognized.
2.3 Investment property
I nvestment property is property (land or building) held
(by the owner or by the lessee under a finance lease)
to earn rentals or for capital appreciation (including
property under construction for such purposes) or both,
rather than for use in the production or supply of goods
or services or for administrative purposes or sale in the
ordinary course of business.
The company's investment property consists of leasehold
residential land and those portions of building taken on
lease (right-of-use asset) which have been rented out for
period of less than 12 months.
Initial and Subsequent Measurement: Investment
properties are measured initially at their cost of acquisition.
The cost comprises purchase price, borrowing cost, if
capitalization criteria are met and directly attributable
cost of bringing the asset to its working condition for
the intended use.
Investment properties are subsequently measured at cost
less accumulated depreciation and impairment losses.
Derecognition: The carrying amount of an item of
property is derecognised 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 is measured as the difference between the
net disposal proceeds and the carrying amount of the
item and is recognised in the statement of Profit and
Loss when the item is derecognised.
Depreciation and Useful life: Depreciation on
investment property is calculated using the straight-line
method to their residual values, over the useful life or
primary lease period whichever is less.
Though the Company measures investment property,
using cost-based measurement, the fair value of
investment property is disclosed in Note 13(a). Fair values
are determined based on an evaluation performed by an
accredited external independent valuer.
2.4 Non-current Assets held for sale
The Company classifies assets as held for sale if their
carrying amounts will be recovered principally through
a sale rather than through continuing use. Assets are
classified as held for sale only when the sale is highly
probable, and the asset is available for immediate sale in
its present condition subject only to terms that are usual
and customary for sale of such assets.
Assets which are subject to depreciation are not
depreciated or amortized once those are classified as
held for sale. These are measured at the lower of their
carrying amount and the fair value less costs to sell.
Assets and associated liabilities classified as held for
sale are presented separately in the balance sheet.
2.5 Leases
The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
a. Measurement and recognition of leases as a
Lessee:
The Company has adopted Ind AS 116 ‘Leases'
from April 01, 2021 and recognized Right-of-use
assets for leases previously classified as operating
leases and measured at an amount equal to lease
liability (adjusted for related prepayments/ accruals).
I nitial & Subsequent Measurement: 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 subsequently measured with a
corresponding adjustment to the related right-of-
use asset if the Company changes its assessment
on exercise of an extension or a termination option.
The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date of
the lease plus any initial direct costs less any lease
incentives. Subsequently, these are measured at
cost less accumulated depreciation and impairment
losses, if any.
Depreciation and Impairment: The Company
depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the
earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. The Company
also assesses the right-of-use asset for impairment
when such indicators exist.
Presentation: Lease Liability and Right-of-Use
Asset have been separately presented in the
Balance Sheet and lease payments have been
classified as financing cash flows.
Short - term/ Low value Leases: The Company
has elected to account for short-term leases and
leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use
asset and lease liability, the payments in relation to
these are recognized as an expense in Statement
of profit and loss on a systematic basis of lease
payment over the lease term.
b. Measurement and recognition of leases as a
Lessor:
As a lessor the Company identifies leases as
operating and finance lease. A lease is classified
as a finance lease if the Company transfers
substantially all the risks and rewards incidental to
ownership of an underlying asset.
For Finance leases- amounts due from lessees
are recorded as receivables at the Company's net
investment in the leases. Finance lease income is
allocated to accounting periods so as to reflect
a constant periodic rate of return on the net
investment outstanding in respect of the lease.
For Operating leases - Rental income is
recognised on a straight-line basis over the term of
the relevant lease.
2.6 Intangible assets
Measurement at recognition: Intangible assets are
recognized where it is probable that the future economic
benefit attributable to the assets will flow to the Company
and its cost can be reliably measured.
I ntangible assets acquired separately are measured on
initial recognition at cost. Intangible assets arising on
acquisition of business are measured at fair value as at
date of acquisition.
Internally generated intangibles including research
cost are not capitalized and the related expenditure
is recognized in the Statement of Profit and Loss
in the period in which the expenditure is incurred.
Expenditure on the development of intangible assets,
eligible for capitalisation, are carried as Intangible assets
under development where such assets are not yet ready
for their intended use.
Subsequent Measurement: Intangible assets with
finite useful life are carried at cost less accumulated
amortization and accumulated impairment loss, if
any. Intangible assets with indefinite useful lives,
that are acquired separately, are carried at cost/
fair value at the date of acquisition less accumulated
impairment loss, if any.
Amortization: It is the systematic allocation of the
amortizable amount of an asset over its useful life.
Intangible Assets with finite lives are amortized on
straight line basis over the estimated useful economic
life. The amortization expense on intangible assets with
finite lives is recognized in the Statement of Profit and
Loss. The amortization period and the amortization
method for an intangible asset with finite useful life is
reviewed at the end of each financial year. If any of
these expectations differ from previous estimates, such
change is accounted for as a change in an accounting
estimate. From the current financial year, the company
has shifted to straight-line basis method of amortization.
economic benefits are expected from its use or
disposal. Gains and losses on disposals are determined
by comparing proceeds with carrying amount and are
recognized in the statement of profit and loss when the
asset is derecognized.
2.7 Impairment of non-financial assets
At each reporting date, the Company assesses whether
there is any indication based on internal/external factors,
that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount
of the asset. The recoverable amount of asset is the
higher of its fair value or value in use. Value in use is
based on the estimated future cashflows, discounted
to their present value using a pre-tax discount rate that
reflects the current market assessment of time value of
money and the risks specific to it. If such recoverable
amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less
than its carrying amount, the carrying amount is reduced
to its recoverable amount and the reduction is treated as
an impairment loss and is recognised in the statement of
profit and loss.
All assets are subsequently reassessed for indications
that an impairment loss previously recognised may no
longer exist. An Impairment loss is reversed if there
has been a change in estimates used to determine the
recoverable amount. Such a reversal is made only to the
extent that the assets carrying amount would have been
determined, net of depreciation or amortization, had no
impairment loss been recognised.
2.8 Inventories
The Company deals in Commodities (Agri and
Non-Agri), which is held for the purpose of trading.
The Company follows Ind AS 2 “Inventories” for
valuation of inventory held for trade. Accordingly, the
Company carries its inventories at the lower of Cost or
Net realizable value (NRV).
Cost includes purchase price, duties, transport and
handling costs and other costs directly attributable
to the acquisition and bringing the inventories to their
present location and condition.
2.9 Cash and cash equivalents
For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash
in hand, deposits held at call with financial institutions,
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.
Bank borrowings are used for business purposes, and
hence bank overdrafts are not considered to be a part of
cash and cash equivalents in the statement of cash flow.
2.10 Investments in subsidiaries
Investments in subsidiaries are measured at cost
less accumulated impairment, if any, as per Ind AS
27 ‘Separate Financial Statements' and Ind AS 36
‘Impairment of Assets'.
The company assesses at the end of each reporting
period if there are any indications of impairment on
such investments. If so, the company estimates the
recoverable amount of the investment and provides
for impairment.
2.11 Financial instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial instruments
also include derivative contracts such as foreign currency
forward contracts, interest rate swaps and currency
options, and embedded derivatives in the host contract.
a. Initial measurement: Financial assets and
financial liabilities are recognized when the entity
becomes a party to the contractual provisions of
the instrument. Regular way purchases and sales
of financial assets are recognized on trade-date,
the date on which the Company commits to
purchase or sell the asset. Financial instruments
are initially measured at their fair value, except in
the case of financial assets and financial liabilities
recorded at FVPL, transaction costs are added to,
or subtracted from, this amount.
When the fair value of financial assets and
liabilities differs from the transaction price on
initial recognition, the entity recognizes the
difference as follows:
- When the fair value is evidenced by a quoted
price in an active market for an identical asset
or liability (i.e., a Level 1 input) or based on
a valuation technique that uses only data
from observable markets, the difference is
recognized as a gain or loss.
- I n all other cases, the difference is deferred
till the timing of recognition of deferred profit
or loss is determined individually. It is either
amortized over the life of the instrument,
deferred until the instrument's fair value can
be determined using market observable
inputs, or realized through settlement.
When the Company revises the estimates of future
cash flows, the carrying amount of the respective
financial assets or financial liability is adjusted
to reflect the new estimate discounted using the
original effective interest rate. Any changes are
recognized in profit or loss.
b. Classification and subsequent measurement:
A. Financial assets
The Company classifies its financial assets
in the following measurement categories (i)
Amortized cost; (ii) Fair value through other
comprehensive income (FVOCI), and (iii) Fair
value through profit or loss (FVPL).
i. Financial assets carried at amortized cost:
A financial asset is measured at amortized cost
if it meets both of the following conditions:
• the asset is held within a business model
whose objective is to hold assets to
collect contractual cash flows (Asset held
to collect contractual cash flows); and
• the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest (SPPI) on the
principal amount outstanding.
This category generally applies to cash and
bank balances, trade and other receivables,
loans, security deposits etc. of the Company.
After initial measurement, such financial
assets are subsequently measured at
amortized cost using the effective interest rate
(EIR) method. Amortized 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 amortization
is included in interest income in the Statement
of Profit and Loss
ii. Financial assets at fair value through other
comprehensive income (FVOCI)
Financial assets that are held within a
business model whose objective is achieved
by both, selling financial assets and
collecting contractual cash flows that are
solely payments of principal and interest, are
subsequently measured at fair value through
other comprehensive income. Fair value
movements in debt and equity instruments
are recognised in the other comprehensive
income (OCI) except interest / dividend
income which is recognised in profit and loss.
However, in case of equity instruments, the
Company may, irrevocably elects to measure
the investments in equity instruments either at
FVOCI or FVPL and makes such election on an
instrument-by-instrument basis. If company
opts to measure the equity instruments at
FVOCI, such fair value movements will be
directly transferred to OCI.
iii. Financial assets at fair value through profit
and loss (FVPL)
Financial assets, which do not meet the criteria
for categorisation as at amortized cost or as
FVOCI or either designated, are measured at
FVPL. Subsequent changes in fair value are
recognised in profit or loss. The company
recognises the derivative financial asset
being the advance premium paid on the
Options, future's MTM profit and Securities for
trade - at FVPL.
B. Financial liabilities
The Company classifies its financial liabilities
in the following measurement categories (i)
Amortized cost, and (ii) Fair value through
profit or loss (FVPL).
Financial liabilities are classified at FVPL
when the financial liability is recognised
by the company on account of business
combination (Ind AS 103) or is held for trading
or is designated as FVPL. In all other cases,
they are measured at amortized cost.
i. Financial Liabilities carried at amortized
cost
Financial liabilities are subsequently measured
at amortized cost using the EIR method.
The EIR is a method of calculating the
amortized cost of a financial liability and of
allocating interest expense over the relevant
period at effective interest rate. The effective
interest rate is the rate that exactly discounts
estimated future cash payments through the
expected life of the financial liability, or, where
appropriate, a shorter period.
ii. Financial liabilities at fair value through
profit or loss
Financial liabilities at fair value through profit
and loss are measured at fair value with
all changes recognized in the statement of
profit and loss. The company recognises
the derivative financial liability being advance
premium received on the Options, Future's
MTM loss at FVPL.
c. Derecognition
A. Financial asset:
Financial asset is derecognised when:
- The rights to receive cash flows from the
asset have expired, or
- The Company has transferred its rights
to receive cash flows from the asset
and either (a) 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,
it evaluates if and to what extent it has
retained the risks and rewards of ownership.
When it has transferred substantially all risks
and rewards, the company derecognise the
asset and, 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.
On derecognition of a financial asset, the
difference between the carrying amount of
the asset (or the carrying amount allocated
to the portion of the asset derecognised)
and the sum of (i) the consideration received
(including any new asset obtained less any
new liability assumed) and (ii) any cumulative
gain or loss that had been recognised in OCI,
is recognised in profit or loss (except for equity
instruments measured at FVOCI). For Equity
Instruments at FVOCI, the realised amount
of gain/(loss) on their disposal is then finally
transferred from OCI to retained earnings.
B. Financial liability:
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.
d. Impairment of financial assets
The Company applies the Ind AS 109 simplified
approaches to measure Expected Credit Losses
(ECLs) for trade receivables at an amount equal
to lifetime ECLs. The ECLs on trade receivables
are calculated based on actual historic credit
loss experience over the preceding three to five
years on the total balance of non-credit impaired
trade receivables. The Company considers a
trade receivable to be credit impaired when one
or more detrimental events have occurred, such
as significant financial difficulty of the client or
it becoming probable that the client will enter
bankruptcy or other financial reorganization.
When a trade receivable is credit impaired, it is
written off against trade receivables and the amount
of the loss is recognised in the income statement.
Subsequent recoveries of amounts previously
written off are credited to the income statement.
The Company recognises impairment allowances
using ECL method on the financial assets that are
not measured at FVPL:
ECL are probability-weighted estimate of credit
losses. They are measured as follows:
i. Financial assets that are not credit impaired
- at the present value of all cash shortfalls
that are possible within 12 months after the
reporting date.
ii. Financial assets with significant increase
in credit risk - at the present value of all
cash shortfalls that result from all possible
default events over the expected life of the
financial assets.
iii. Financial assets that are credit impaired - at the
difference between the gross carrying amount
and the present value of estimated cash flows.
Financial assets are written off/fully provided for
when there is no realistic prospect of recovering a
financial asset in its entirety or a portion thereof.
However, financial assets that are written off
could still be subject to enforcement activities
under the Company's recovery procedures, taking
into account legal advice where appropriate.
Any recoveries made are recognised in the
Statement of Profit and Loss.
e. Offsetting financial instruments
Financial assets and liabilities are offset and the
net amount is reported in the balance sheet where
there is a legally enforceable right to offset the
recognised amounts and there is an intention to
settle on a net basis or realise the asset and settle
the liability simultaneously. The legally enforceable
right must not be contingent on future events
and must be enforceable in the normal course of
business and in the event of default, insolvency or
bankruptcy of the Company or the counterparty.
f. Securities for trade
The Company deals in Equity Shares (in addition to
Derivatives) which is held for the purpose of trading.
Such Securities for trade are valued at Fair value in
accordance with Ind AS 109 and such securities
are classified at fair value through Profit and loss.
g. Investment in Equity Shares, Mutual Funds
and AIFs
Company also invests in Securities like Equity
shares, Mutual fund and AIF (Alternate Investment
Fund) other than held for trade or, held for strategic
purpose. In respect of such financials instruments,
company decides to measure them, at the time
of initial recognition, at FVPL or FVOCI based on
management assessment.
h. Hedging of Foreign Currency Risk
The company uses derivative financial instruments,
such as Future Currency contracts to hedge its
foreign currency risks. Such derivative instruments
are measured at fair value. These derivatives are
carried as financial asset when fair value is positive
and as financial liability when fair value is negative.
Any gains or losses arising from changes in the
fair value of such derivatives are taken directly to
profit and loss.
2.12 Fair Value Measurement:
The Company measures financial instruments such as
derivatives, securities for trade, at fair value at each
balance sheet date.
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:
i. In the principal market for the asset or liability, or
ii. I n the absence of a principal market, in the most
advantageous market for the asset or liability
accessible to the Company.
Fair value measurements are categorized as under
Level 1, Level 2 and Level 3 based on the degree to
which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair
value measurement in its entity.
I nformation about the valuation techniques and inputs
used in determining the fair value of various assets and
liabilities are disclosed in Note 56.
2.13 Revenue Recognition
Revenue (other than for those items to which Ind
AS 109 ‘Financial Instruments' are applicable) is
measured at fair value of the consideration received
or receivable. The Company recognises 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 what 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 recognised when (or as) the Company
satisfies a performance obligation by transferring a
promised service or goods (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.
i. Brokerage income
It is recognised on trade date basis and is
exclusive of Goods and Service Tax (GST),
Securities Transaction Tax (STT) and Stamp Duty,
wherever applicable.
ii. Interest income
Interest income on financial asset at amortized cost
is recognized on a time proportion basis.
iii. Dividend income
Dividend income is recognized in the statement of
profit and loss on the date that the Company's right
to receive payment is established, it is probable
that the economic benefits associated with the
dividend will flow to the entity and the amount of
dividend can be reliably measured. This is generally
when the Board of Directors/shareholders approve
the dividend and company holds shares on the
dividend record date.
iv. Research Advisory income
Research advisory income is accounted for on an
accrual basis in accordance with the terms and
tenure of the respective agreements entered into
between the Company and the counter party.
v. Market making fees (Incentive Income)
Incentives from exchange are recognized on
point in time basis.
vi. Portfolio management commission income
Portfolio management commissions is recognised
on an accrual basis in accordance with the
terms and tenure of the agreement entered
with customers.
vii. Proprietary Income (Income from trading in
securities)
I nd AS 115 is not applicable on this income and
hence the revenue is recognised as per Ind
AS 109 ‘Financial Instruments', as and when
trade is executed.
viii. Rental Income
Lease income from operating leases where the
Company is a lessor is recognized in income on
a straight-line basis over the lease term unless
the receipts are structured to increase in line with
expected general inflation to compensate for the
expected inflationary cost increases. The respective
leased assets are included in the balance sheet
based on their nature.
ix. Revenue from Depository Operation
The income is recognized on accrual basis and as
at the time when the right to receive is established
by the reporting date.
x. Other Income
Other Income have been recognized on accrual
basis in the Financial Statements, except when
there is uncertainty of collection.
2.14 Income Taxes
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. Income taxes recognised in any year
consists of following:
a. Current Tax: 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 has a legally enforceable right to set
off the recognised amounts; and intends either to
settle on a net basis, or to realise the asset and
settle the liability simultaneously.
b. Deferred Tax:
i. 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. The measurement of deferred tax
reflects the tax consequences that would
follow from the manner in which the Company
expects, at the reporting date, to recover
or settle the carrying amount of its assets
and liabilities.
ii. 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 available against which deductible
temporary differences can be utilised.
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 realized, such reductions are reversed
when the probability of future taxable
profits improves.
iii. 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.
iv. 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.
v. 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.
2.15 Retirement and other employee benefits
a. Short-term obligations:
Short-term employee benefits comprise of
employee costs such as salaries, bonus etc. and are
recognised as an expense at the undiscounted
amount in the Statement of Profit and Loss for the
year in which the related services are rendered.
The Company recognises the costs of bonus
payments when it has a present obligation to make
such payments as a result of past events and a
reliable estimate of the obligation can be made.
b. Post-employment obligations:
Post-employment benefit plans are classified into
defined benefit plans and defined contribution
plans as under: -
i. Defined contribution plan: Contribution
made to the recognised provident fund,
employees state insurance scheme etc.
which are defined contribution plans, is
charged to the Statement of Profit and Loss
in the period in which they occur.
ii. Defined benefits plan: The Company has
unfunded gratuity as defined benefit plan
where the amount that an employee will
receive on separation/retirement is defined by
reference to the employee's length of service
and final salary. The defined benefit obligation
is calculated at or near the Balance Sheet date
by an independent actuary using the projected
unit credit method. The liability recognised in
the Balance Sheet in respect of gratuity is the
present value of defined benefit obligation
at the Balance Sheet date together with the
adjustments for unrecognised actuarial gain or
losses and the past service costs. The change
in the liability between the reporting dates is
charged in the Statement of profit and loss
(except for the unrealised actuarial gains and
losses). Actuarial gains and losses comprise
experience adjustment and the effects
of changes in actuarial assumptions are
recognized in the period in which they occur,
directly in other comprehensive income.
An actuarial valuation involves making various
assumptions that may differ from actual
developments in the future. These include the
determination of the discount rate; future salary
increases; attrition and mortality rates. Due to
the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each year end.
2.16 Share based payments
Employees Stock Option Scheme (Equity-settled
transactions)
The Company grants share-based awards to eligible
employees [of the company and/or of the subsidiaries/
associates under the group] with a view to attract and
retain talent, align individual performance with the
Company's objectives, and provide an incentive to
continue contributing to the success of the Company.
The Company has two Employee Stock Option Schemes
viz. Share India Employees Stock Option Scheme, 2022
(ESOS 2022) and Share India Employees Stock Option
Scheme-II (ESOS-II).
Employees (including senior executives) of the
Company receive remuneration in the form of
share-based payments, whereby employees render
services as consideration for equity instruments
(equity-settled transactions).
The grant-date fair value of equity-settled share-based
payment arrangements granted to employees under the
Employee Stock Option Scheme (‘ESOS') is generally
recognised as an employee stock option scheme
expense, with a corresponding increase in equity, on a
straight-line basis over the vesting period of the awards.
Such fair valuation is calculated using appropriate
Valuation Model. The increase in equity is presented as
“Equity-settled Share options outstanding Reserve”, as
separate component in equity.
In respect of Stock Options granted to the employees of
the subsidiary/associate, the fair value is recognised with
debit to the Investment in Subsidiary/Associate [instead
of recording an expense] with a corresponding increase
in equity, on a straight-line basis over the vesting period
of the awards. Such increase in equity is presented as
“Equity-settled Share options outstanding Reserve”, as
a separate component in equity.
Service and non-market performance conditions are not
taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being
met is assessed as part of the Company's best estimate
of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within
the grant date fair value. No expense is recognized for
awards that do not ultimately vest because performance
and/or service conditions have not been met. At the end
of each period, the Company revises its estimates of
the number of options that are expected to be vested
based on the non-market performance conditions at
the vesting date.
When the terms of an equity-settled awards are modified,
the minimum expense recognised is the expense had
the terms not been modified, if the original terms of the
award are met. An additional expense is recognised for
any modification that increases the total fair value of
the share-based payment transaction, or is otherwise
beneficial to the employee as measured at the date
of modification.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.
2.17 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 an entity incurs in connection
with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded as
an adjustment to the borrowing costs.
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