Note 1: Significant accounting policies
The principal accounting policies applied in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all the years presented,
unless otherwise stated.
1. Company Overview
Wealth First Portfolio Managers Limited (the Company)
is a public company limited by shares, incorporated on
16thApril, 2002 and domiciled in India. The company
is listed on NSE. The Company has migrated from NSE
SME Platform to NSE Main Board w.e.f. 20th January,
2021. The Company is also providing Demat Services as
a Depository Participant of Central Depository Services
(India) Ltd (CDSL). The Company is engaged in the
business of providing share & stock broking services,
Portfolio Management, Mutual Funds Distribution,
Depository Participant services and to invest, buy,
sell or otherwise deal in all kind of securities and
other related activities. The Company's registered
office is at “Capitol House”, 10 Paras-II, Near Campus
Corner, Prahaladnagar, Anand Nagar Ahmedabad
Gujarat-380015.
The Company is mainly engaged in business of
distribution of various mutual funds existing in India and
also registered as a stock broker with the Securities
and Exchange Board of India (“SEBI”). It is a member
of NSE, BSE, MCX and NCDEX and is engaged in the
business of providing broking services to its clients
and a depository participant with Central Depository
Services (India) Limited (CDSL). Apart from distributing
mutual funds, the Company, along with its subsidiaries
is also engaged in distribution of various products like:
Insurance products, PMS Products, Unlisted Securities,
Bonds/FDs, AIFs, Stock broker etc.
2. Basis of preparation and presentation
A. Statement of Compliance:
The Standalone Financial Statements of Company
comprise the Standalone Balance Sheet as at
March 31, 2025, and the Standalone Statement of
Profit and Loss (including Other Comprehensive
Income), the Standalone Statement of Cash Flows
and the Standalone Statement of Changes in
Equity for the year ended March 31, 2025, and a
summary of significant accounting policies and
other explanatory information, (together referred
to as the “Standalone Financial Statements”).
The Standalone Financial Statements have been
prepared in accordance with Indian Accounting
Standards notified under Section 133 of the
Companies (Indian Accounting Standards) Rules,
2015, as amended from time to time, the provisions
of the Companies Act, 2013 (“the Act”) to the extent
notified and other accounting principles generally
accepted in India. The Company uses accrual
basis of accounting. The financial statements are
presented in Indian Rupee (INR) which is also the
functional currency of the Company.
The Standalone financial statements have been
prepared on a historical cost basis. The financial
statements are prepared on a going concern
basis, 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. In making this assessment,
the Management has considered a wide range of
information relating to present and future conditions,
including future projections of profitability, cash
flows and capital resources.
B. Presentation of financials statements
The Company is covered in the definition of
Company other than Non-Banking Financial
Company as defined in Companies (Indian
Accounting Standards) (Amendment) Rules,
2016. As per the format prescribed under Division
II of Schedule III to the Companies Act, 2013 on
11thOctober, 2013 the Company presents the
Balance Sheet, the Statement of Profit and Loss
and the Statement of Changes in Equity in the order
of liquidity.
C. Rounding off
All amounts disclosed in the Standalone Financial
Statements and notes have been rounded off to the
nearest thousands unless otherwise stated.
D. Use of estimates and judgments
The preparation of Standalone 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 Standalone 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 critical judgments in applying
accounting policies, as well as estimates and
assumptions that have the most significant effect
to the carrying amounts of assets and liabilities
within the next financial period, are included in the
following notes:
i) Depreciation / amortisation and Useful
life of property, plant and equipment and
Intangible Assets:
Property, plant and equipment / intangible
assets are depreciated / amortised over their
estimated useful lives, after taking into account
estimated residual value. Management reviews
the estimated useful lives and residual values
of the assets annually in order to determine
the amount of depreciation / amortisation to
be recorded during any reporting period.
(Refer Note 6)
ii) Recognition and measurement of
provisions and contingencies:
The Company recognises a provision if it
is probable that an outflow of cash or other
economic resources will be required to settle
the provision. If an outflow is not probable,
the item is treated as a contingent liability.
Risks and uncertainties are taken into account
in measuring a provision (Refer Note 7)
iii) Recognition of deferred tax assets:
Significant management judgement is required
to determine the amount of deferred tax assets
that can be recognised, based upon the likely
timing and the level of future taxable profits
together with future tax planning strategies
and future recoverability of deferred tax
assets. (Refer Note 12)
iv) Fair Value Measurement
Fair value is the price at the measurement
date, at which an asset can be sold or paid
to transfer a liability, in an orderly transaction
between market participants. The Company's
accounting policies require, measurement of
certain financial / non-financial assets and
liabilities at fair values (either on a recurring
or non-recurring basis). Also, the fair values of
financial instruments measured at amortized
cost are required to be disclosed in the said
Standalone Financial Statement. The Company
is required to classify the fair valuation method
of the financial / non-financial assets and
liabilities, either measured or disclosed at fair
value in the Standalone financial statements,
using a three level fair-value-hierarchy (which
reflects the significance of inputs used in the
measurement). Accordingly, the Company
uses valuation techniques that are appropriate
in the circumstances and for which sufficient
data are available to measure fair value,
maximizing the use of relevant observable
inputs and minimizing the use of unobservable
inputs. The three levels of the fair-value-
hierarchy are described below:
Level 1: Quoted (unadjusted) prices for
identical assets or liabilities in active markets
Level 2: Significant inputs to the fair value
measurement are directly or indirectly
observable
Level 3: Significant inputs to the fair value
measurement are unobservable.
v) Measurement of defined benefit
obligations:
The cost of the defined benefit gratuity plan
and the present value of the gratuity obligation
are determined by Management's reasonable
Estimates. 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 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 reporting date. (Refer Note 8)
3. Revenue recognition
The Company recognises revenue from contracts with
customers (other than financial assets to which Ind AS
109 ‘Financial instruments' is applicable) based on
Ind AS 115 ‘Revenue from contracts with customers.'
The Company identifies contract(s) with a customer
and its performance obligations under the contract,
determines the transaction price and its allocation to the
performance obligations in the contract and recognises
revenue only on satisfactory completion of performance
obligations. Revenue is measured at the fair value of the
consideration received or receivable.
Brokerage income is recognised as per contracted
rates at the point in time when transactions performance
obligation is satisfied on behalf of the customers on the
trade date and is reflected net of related stock exchange
chargesss, goods and service tax and security
transaction tax. These include brokerage fees charged
per transaction executed on behalf of the clients as per
the contractually agreed rate.
Dividend income on equity shares is recognised
when the Company's right to receive the payment is
established, which is generally when shareholders
approve the dividend.
Interest income is recognized on accrual basis.
4. Cash and cash equivalents
Cash and cash equivalents in the Standalone 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. Cash and cash equivalents
for the purpose of Standalone Statement of Cash Flow
comprise cash and cheques in hand, bank balances,
demand deposits with banks where the original maturity
is three months or less.
5. Financial Instruments
A financial instrument is defined as any contract that
gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
Trade receivables and payables, loan receivables,
investments in securities and subsidiaries, debt
securities and other borrowings, preferential and equity
capital etc. are some examples of financial instruments.
All the financial instruments are recognised on the date
when the Company becomes party to the contractual
provisions of the financial instruments. For tradable
securities, the Company recognises the financial
instruments on trade date.
i) Financial Assets
Financial assets include cash, or an equity
instrument of another entity, or a contractual right
to receive cash or another financial asset from
another entity. Few examples of financial assets
are loan receivables, investment in equity and debt
instruments, trade receivables and cash and cash
equivalents.
Investment in subsidiaries
Investment in subsidiaries is recognised at cost
and is not adjusted to fair value at the end of each
reporting period. Cost of investment represents
amount paid for acquisition of the said investment.
The Company assesses at the end of each
reporting period, if there are any indications that
the said investment may be impaired. If so, the
Company estimates the recoverable value/amount
of the investment and provides for impairment,
if any i.e. the deficit in the recoverable value
over cost.
Financial Assets (other than investment in subsidiaries)
Initial recognition and measurement
All financial assets are recognized at fair value on
initial recognition
Subsequent measurement
The Company has applied Ind AS 109 and classifies
its financial assets in the following measurement
categories:
• Fair value through profit or loss (FVTPL);
• Fair value through other comprehensive income
(FVOCI); or
• Amortised cost.
Financial assets carried at amortised cost:
A financial asset is measured at the amortised cost
if the following condition is met:
• The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows.
Derecognition of Financial Assets
The Company derecognises a financial asset (or,
where applicable, a part of a financial asset) when:
• The right to receive cash flows from the asset
have expired; or
• The Company has transferred its right 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 an assignment arrangement and the
Company has transferred substantially all the
risks and rewards of the asset. Once the asset
is derecognised, the Company does not have
any continuing involvement in the same.
On derecognition of a financial asset in its entirety,
the difference between:
• the carrying amount (measured at the date of
derecognition) and
• the consideration received (including any new
asset obtained less any new liability assumed)
is recognised in profit or loss.
ii) Financial Liabilities
Initial recognition and measurement
Financial liabilities are measured at cost.
Interest expense and foreign exchange gains and
losses are recognised in profit or loss. Any gain
or loss on derecognition is also recognised in
Statement of Profit or loss.
Subsequent measurement
Financial liabilities are subsequently measured at cost
Derecognition
A financial liability is derecognised when the
obligation specified in the contract is discharged,
cancelled or expires.
6. Property, plant, equipment and Intangible assets
Property, plant and equipment are carried at historical
cost of acquisition less accumulated depreciation and
impairment losses, consistent with the criteria specified
in Ind AS 16 ‘Property, Plant and Equipment'.
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.
On transition to Ind AS, the Company has elected to
continue with the carrying value of all of its property,
plant and equipment measured as per the previous
GAAP and use that carrying value as the deemed cost
of the property, plant and equipment.
Depreciation is calculated using the written down
method to allocate their cost, net of their residual
values, over their estimated useful life as determined by
management. As per information given to us these life
is not less than estimated useful life prescribed under
schedule II to the Companies Act, 2013. The Company
provides prorata depreciation from the date of installation
till date the assets are sold or disposed.
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.
Other Intangible Assets
Intangible assets purchased are measured at cost or fair
value as of the date of acquisition, as applicable, less
accumulated amortisation and accumulated impairment,
if any. The amortization period and the amortization
method are reviewed at least at each financial year end.
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