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Company Information

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SMC GLOBAL SECURITIES LTD.

16 July 2025 | 03:55

Industry >> Finance & Investments

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ISIN No INE103C01036 BSE Code / NSE Code 543263 / SMCGLOBAL Book Value (Rs.) 112.87 Face Value 2.00
Bookclosure 13/06/2025 52Week High 169 EPS 13.92 P/E 11.00
Market Cap. 1603.17 Cr. 52Week Low 101 P/BV / Div Yield (%) 1.36 / 1.57 Market Lot 1.00
Security Type Other

ACCOUNTING POLICY

You can view the entire text of Accounting Policy of the company for the latest year.
Year End :2025-03 

2 Material Accounting Policy
information

2.01 Revenue recognition

The company derives it's revenue
primarily from the brokerage services,
clearing services, depository services,
Interest income, distribution of third
party financial products such as mutual
fund and initial public offerings, fund
management services, research
support services and also engages in
proprietary & commodity trading.

(I) Broking: I n these types of contract
performance obligation is to
provide the platform to traders for
trading in securities, commodities
and the performance obligation
satisfies point in time i.e. as and
when the trade is executed.
Revenue on commission/brokerage
on sale made on behalf of
principals is accounted for at the
time of purchase/sale made on
their behalf.

(ii) Distribution of third party

financial products: In these types
of contract performance
obligation is to sell the third party
financial products to the
subscriber and the performance
obligation satisfies point in time
i.e. as and when subscription is
ensured and target based
incentives are confirmed by
registrar / respective companies.
Unbilled revenue is the income
that has become due on account
of services rendered by the
company but pending to be billed.

(iii) Depository services: In these
types of contract performance
obligation is periodic

maintenance of customer account
as depository participant and the
performance obligation satisfies
over time i.e. over the period and
there is reasonable certainty of
recovery.

(iv) Proprietary trading: Ind AS 115

Revenue from Contract with
Customer is not applicable on this
business and hence the revenue is
recognised as per Ind AS 109
Financial Instruments i.e. as and
when trade is executed. Refer to
the Policy on Financial
Instruments w.r.t regular way
purchase and sales of Financial
Assets.

Commodity trading: In these
types of contracts the
performance obligation satisfies
in time i.e. when the sale is
executed or ownership is
transferred. Accordingly the
revenue is recognised on
whenever the transaction is
executed.

(v) Interest income: Interest income
on a financial asset at amortised
cost is recognised on a time
proportion basis taking into
account the amount outstanding
and the effective interest rate
(‘EIR’). The EIR is the rate that
exactly discounts estimated future
cash flows of the financial assets
through the expected life of the
financial asset or, where
appropriate, a shorter period, to
the net carrying amount of the
financial instrument. The internal
rate of return on financial assets
after netting off the fees received
and cost incurred approximates
the effective interest rate method
of return for the financial asset.
The future cash flows are
estimated taking into account all

the contractual terms of the
instrument.

The interest income is calculated
by applying the EIR to the gross
carrying amount of non-credit
impaired financial assets. For
credit impaired financial assets
the interest income is calculated
by applying the EIR to the
amortised cost of the credit-
impaired financial assets.

It also comprises of Interest on
delayed payment/margin trading
facility.

(vi) Portfolio and Fund management
services:
In these types of
contracts the performance
obligation satisfies over time i.e.
the services are rendered on
continuous basis and the revenue
is recognised on periodical basis
and also considering performance
based criteria of fund (as
applicable).

(vii) Research support services: In

these types of contract
performance obligation is periodic
input to participants on the basis
of capital market analysis and the
performance obligation satisfies
over time i.e. over the period.

(viii) Incentives from exchange:

Incentives from exchange are
recognised on point in time basis.

(iX) Alternative Investment fund
management fees Income:

Performance obligations are
satisfied over a period of time and
alternate investment
management fee is recognized on
monthly basis in accordance with
Private Placement Memorandum.

2.02 Property, plant and equipment

Property, plant and equipment are

stated at cost, less accumulated
depreciation and impairment, if any.
The company depreciates property,
plant and equipment over their
estimated useful lives on written down
value method. The estimated useful
lives of assets are as follows:

Office building 60 years

Computer equipments 3-6 years

Office equipments 5 years

Furniture and fixtures 10 years

Vehicles 8-10 years

The useful lives for these assets is in
compliance with the useful lives as
indicated under Part C of Schedule II of
the Companies Act, 2013.

Addition to the, property plant and
equipment have been accounted only
when the item is in location and
condition necessary for its use.
Depreciation on asset added/sold/
discarded during the year is being
provided on prorata basis from / upto
the date on which such assets are
added/sold/discarded.

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
the assets not ready for use are
disclosed under ‘Capital work-in¬
progress’.

2.03 Intangible assets

Intangible assets are stated at cost less
accumulated amortization and
impairment, if any. Intangible assets are
amortized on a written down value
basis, from the date that they are
available for use. The rates used are as
follows:

Computer software 40%

Trade mark logo 40%

2.04 Income tax

The income tax expense comprises of
current and deferred tax.

The current tax is calculated on the
basis of the tax rates, laws and
regulations, which have been enacted
or substantively enacted as at the
reporting date. The payment made in
excess / (shortfall) of the Company’s
income tax obligation for the year are
recognised in the balance sheet as
current income tax assets / liabilities.

Deferred tax is recognised based on the
balance sheet approach, on temporary
differences arising between the tax
bases of assets and liabilities and their
carrying values in the financial
statements. Deferred tax assets are
recognised only to the extent that it is
probable that future taxable profit will
be available against which the
temporary differences can be utilised.
Deferred tax is determined using tax
rates that have been enacted or
substantively enacted at the reporting
date and are expected to apply when
the related deferred income tax asset is
realised or the deferred income tax
liability is settled.

Deferred tax assets and liabilities are
offset only if there is a legally
enforceable right to set off current tax
assets against current tax liabilities &
the deferred tax assets and the
deferred tax liabilities relate to income
taxes levied by the same taxation
authority.

2.05 Investment in subsidiaries

Investment in subsidiaries are
measured at cost less accumulated
impairment, if any.

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.

2.06 Financial instruments

(a) Initial recognition

The Company recognizes financial
assets and financial liabilities when it
becomes a party to the contractual
provisions of the instrument. All
financial assets and liabilities are
recognised at fair value on initial
recognition, except for trade
receivables which are initially
measured at transaction price.

Transaction costs that are directly
attributable to the acquisition or issue
of financial assets and financial
liabilities, that are not at fair value
through profit or loss, are adjusted
from the fair value of financial asset or
financial liabilities on initial
recognition. Regular way purchase and
sale of financial assets are accounted
for at trade date.

Transaction costs directly attributable
to the acquisition of financial assets or
financial liabilities at FVTPL are
recognised immediately in Statement
of profit and loss.

(b) Subsequent measurement

(i) Financial assets at amortised cost

A financial asset is subsequently
measured at amortised cost if it is held
within a business model whose
objective is to hold the asset in order 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 on the principal
amount outstanding. Advances,
security deposits, rental deposits, cash

and cash equivalents etc. are classified
for measurement at amortised cost.

(ii) Financial assets at fair value
through profit or loss

A financial asset which is not classified
at amortised cost are subsequently fair
valued through profit or loss. All
investment held for trading, derivative
financial instruments are measured at
fair value through profit and loss.

(iii) Financial liabilities

Financial liabilities are subsequently
carried at amortized cost using the
effective interest method, except for
contingent consideration recognised in
a business combination which is
subsequently measured at fair value
through profit and loss. For trade and
other payables maturing within one
year from the balance sheet date, the
carrying amounts approximate fair
value due to the short maturity of these
instruments.

(c) Derecognition of financial
instruments

The Company derecognizes a financial
asset when the contractual rights to
the cash flows from the financial asset
expire or it transfers the financial asset
and the transfer qualifies for
derecognition under Ind AS 109. A
financial liability (or a part of a
financial liability) is derecognised from
the Company's balance sheet when the
obligation specified in the contract is
discharged or cancelled or expires.

(d) Impairment

The Company recognizes loss
allowances using the expected credit
loss (ECL) model for the financial
assets which are not fair valued
through profit or loss. Loss allowance
for trade receivables with no significant
financing component is measured at an

amount equal to lifetime ECL. For all
other financial assets, expected credit
losses are measured at an amount
equal to the 12-month ECL, unless
there has been a significant increase in
credit risk from initial recognition in
which case those are measured at
lifetime ECL. The amount of expected
credit losses (or reversal) that is
required to adjust the loss allowance at
the reporting date to the amount that
is required to be recognised is
recognised as an impairment gain or
loss in profit and loss.

When determining whether credit risk
of a financial asset has increased
significantly since initial recognition
and when estimating expected credit
losses, the Company considers
reasonable and supportable
information that is relevant and
available without undue cost or effort.
This includes both quantitative and
qualitative information and analysis,
including on historical experience and
forward looking information.

Loss allowances for financial assets
measured at amortised cost are
deducted from the gross carrying
amount of the assets.

Simplified approach-The company
follows ‘simplified approach’ for
recognition of impairment loss
allowance on loans, other receivables
and other financial assets. The
application of simplified approach
does not require the company to track
changes in credit risk. Rather, it
recognises impairment loss allowance
based on lifetime ECLs at each
reporting date, right from its initial
recognition. The company uses a
provision matrix to determine
impairment loss allowance. The
provision matrix is based on its
historically observed default rates over
the expected life of financial assets
and is adjusted for forward-looking
estimates. At every reporting date, the
historically observed default rates are
updated for changes in the forward
looking estimates.

(e) 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 IndAS 109 and
such securities are classified at fair
value through Profit or loss

(f) 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

2.07 Employee benefits

(a) Defined contribution plans

Obligations for contributions to
defined contribution plans (provident
fund and employees state insurance)
are recognized as a employee benefit
expense in profit or loss in the years
during which services are rendered by
employees.

(b) Defined benefit plans

A defined benefit plan is a post¬
employment benefit plan other than a
defined contribution plan. The
Company’s gratuity scheme is a defined
benefit plan and in accordance with
Payment of Gratuity Act, 1972. As per
the plan, employee is entitled to get 15
days of basic salary for each completed
year of service with a condition of
minimum tenure of 5 years subject to a
maximum amount of INR 20.00 lakhs.

Defined benefit obligation (DBO) is
evaluated by actuary based on a number
of critical underlying assumptions such
as standard rates of inflation, mortality,
discount rate and anticipation of future
salary increases. Variation in these
assumptions may significantly impact
the DBO amount and the annual defined
benefit expenses.

Remeasurement of the net defined
benefit liability / asset recognised in
OCI are presented as a separate
component in SOCE.

(c) Short-term employee benefits

Short term benefits comprises of Salary
with allowances, Incentives, Bonus,
Personal accident and Medical benefit
policies etc. are expensed as the
related service is provided.

(d) Other long-term employee
benefits

Liability for leave encashment

The Company’s net obligation in
respect of long-term employee benefits
represents the present value of the
future benefits that employees have
earned in return for their service in the
current and prior periods. The
obligation is determined using
actuarial valuation techniques and is
discounted to reflect the time value of
money. Remeasurements, comprising
actuarial gains and losses, are
recognised in the statement of profit or
loss in the period in which they occur.
The valuation of the leave encashment
benefit is obtained from an
independent actuary. This benefit is
classified as a long-term benefit plan,
with settlement occurring upon
retirement or resignation, for
accumulated leave balance upto 45

days of last drawn basic salary.

2.08 Leases

The Company enters into hiring/service
arrangements for various
assets/services. This requires
significant judgements including but
not limited to, whether asset is
implicitly identified, substantive
substitution rights available with the
supplier, decision making rights with
respect to how the underlying asset
will be used, economic substance of
the arrangement, etc.

The Company as a Lessee

As a lessee the Company has measured
lease liability at the present value of
the remaining lease payments,
discounted using the incremental
borrowing rate at the date of initial
application. After the commencement
date / transition date, the Company
measures the right-of-use (ROU) asset
applying a cost model, whereas the
Company measures the right-of-use
(ROU) asset at cost:

(a) less any accumulated depreciation
and any accumulated impairment
losses; and

(b) adjusted for any remeasurement of
the lease liability.

The Company recognises the finance
charges on lease expense on reducing
balance of lease liability. The ROU
asset is depreciated over the lease term
on straight line basis.

The Company applies the above policy
to all leases except:

(a) leases for which the lease term (as
defined in Ind AS 116) ends within 12
months of the acquisition date;

(b) leases for which the underlying
asset is of low value.

The Company 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.

At the commencement date, the
Company recognises assets held under
a finance lease in its balance sheet and
present them as a receivable at an
amount equal to the net investment in
the lease. After the initial recognition
the Company recognises finance
income over the lease term, based on a
pattern reflecting a constant periodic
rate of return on the lessor’s net
investment in the lease.

The lease payments on operating
leases are recognised as income on
straight-line basis.