h) Provisions and contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a
past event exists and it is probable that an outflow of resources embodying economic benefits will be
required to settle such obligation and the amount of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not require an outflow of resources embodying economic
benefits or the amount of such obligation cannot be measured reliably. When there is a possible
obligation or a present obligation in respect of which likelihood of outflow of resources embodying
economic benefits is remote, no provision or disclosure is made.
i) Cash and Cash Equivalents
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in
hand, bank balances, demand deposits with banks where the original maturity is three months or less
and other short term highly liquid investments.
j) Employees Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as
short term employee benefits and they are recognized in the period in which the employee renders the
related service. The Company recognizes the undiscounted amount of short term employee benefits
expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting
any amount already paid.
Post-Employment Benefits:
I. Defined Benefit plans:
i. Provident Fund scheme:
Retirement benefit in the form of provident fund is defined contribution scheme. The company
has no obligation, other than the contribution payable to the provident fund. The company
recognizes contribution payable to provident fund scheme as an expense, when an employee
renders the related services.
ii. Gratuity scheme:
The Company operates a defined benefit gratuity plan for employees. The Company contributes
to Life Insurance Corporation of India (a fund), towards meeting the Gratuity obligation.
Recognition and measurement of Defined Benefit plans:
The cost of providing defined benefits is determined using the Projected Unit Credit method with
actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized
in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the
fair value of plan assets. Any defined benefit asset (negative defined benefit obligations resulting from
this calculation) is recognized representing the present value of available refunds and reductions in
future contributions to the plan.
All expenses represented by current service cost, past service cost, if any, and net interest on the
defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements
of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on
the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset),
are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the
Statement of Profit and Loss in the subsequent periods.
The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as
per actuarial valuation by the independent actuary.
Other Long Term Employee Benefits:
As per company’s policy, no encashment of leave to any employee is allowed.
k) Lease Accounting
The company mainly has lease arrangement for building for office.
Short-term leases and leases of low-value assets
The Company has elected not to recognize ROU assets and lease liabilities for short term leases as well
as low value assets and recognizes the lease payments associated with these leases as an expense on
a straight-line basis over the lease term.
l) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating
resources and assessing performance of the operating segments of the Company.
m) Events after Reporting Date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at
the end of the reporting period, the impact of such events is adjusted within the financial statements.
Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
1.4 Key accounting estimates and judgments
The preparation of the Company’s financial statements requires the management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below:
a. Income taxes
The Company’s tax jurisdiction is India. Significant judgments are involved in estimating budgeted
profits for the purpose of paying advance tax, determining the provision for income taxes, including
amount expected to be paid/recovered for uncertain tax positions
b. Defined Benefit Obligation
The costs of providing post-employment benefits are charged to the Statement of Profit and Loss
in accordance with Ind AS 19 'Employee benefits’ over the period during which benefit is derived
from the employees’ services. The costs are assessed on the basis of assumptions selected by the
management. These assumptions include salary escalation rate, discount rates, expected rate of
return on assets and mortality rates.
C. Financial Risk management- Objectives and policies
The Company’s financial liabilities comprise mainly of borrowings, payable to clearing house and
other payables. The Company’s financial assets comprise mainly of investments, bank deposits with
more than 12 months of maturities, cash and cash equivalents, other balances with bank, balance with
clearing house and other receivables.
The Company is exposed to Credit risk and Liquidity risk. The board of directors oversees the
management of these financial risks.
a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. Any adverse effect on the interest rate on
bank deposit will fluctuate the future cash flow on bank deposits.
The company does have fixed interest bearing borrowings from the related parties during the
year as and when required for the business purpose. The company is not exposed to significant
interest rate risk at the respective reporting dates.
b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will
fluctuate due to changes in foreign exchange rates. The company is not exposed to changes in
any foreign currency as the company operates mainly in India.
c) Other Price Risk
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to
changes in market traded price. As the company is into the hedging business of trading in equity
futures and options, the other price risk arising from financial assets such as trading in equity
instruments and underlying commodities is minimal.
d) Credit Risk
Credit risk refers to risk that counterparty will default on its contractual obligations resulting in
financial loss to the Company. Credit risk arises primarily from financial assets such as investment
in mutual funds, bank deposits with more than 12 months of maturities, other balances with
banks, and other receivables.
The company is member of NSE and is doing trading in equity futures and options on its own
account The settlement of trade is done in a day or two, the credit risk arising from the trade
receivable is minimal.
Credit risk arising from investment in mutual funds, derivative financial instruments, bank
deposits and other balances with banks is limited and there is no collateral held against these
because the counterparties are banks and recognized financial institutions with high credit
ratings assigned by the international credit rating agencies.
e) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet
commitments associated with financial instruments that are settled by delivering cash or
another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly
at close to its fair value.
The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of
financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate
funds in cash and cash equivalents.
D. Capital Management
For the purpose of the Company’s capital management, capital includes issued capital and all other
equity reserves attributable to the equity shareholders of the Company. The primary objective of the
Company when managing capital is to safeguard its ability to continue as a going concern and to
maintain an optimal capital structure so as to maximize shareholder value. As at 31st March, 2024,
the Company has only one class of equity shares and has no long term debt. Consequent to such capital
structure, there are no externally imposed capital requirements. In order to maintain or achieve an
optimal capital structure, the Company allocates its capital for the re-investment into business based
on its long term financial plans.
27. Ageing of trade receivable and trade payable
Trade receivable and trade payable ageing schedule as required as per schedule III to the Companies Act
2013 as amended is not given as the company is the member of National Stock Exchange of India Ltd and
trades in shares and securities in its own accounts and have no retails clients. The amount receivable and/
or payable to clearing house on account of any trade is settled under T 1 and T 2 settlement basis and
shown under other current financial assets or other current financial liabilities as the case may be.
a. Disproportionate increase in current assets compared to current liabilities during the year has led to
increase in current ratio.
b. Reduction in short term borrowings by around 22% coupled with increase in total equity by around
27% has led to decrease in debt equity ratio.
c. Since the company is member of National Stock Exchange and doing trades in shares and securities in
its own account, inventory turnover ratio, trade receivable turnover ratio and trade payables turnover
ratio are not given.
d. Disproportionate increase in share of profit from firm compared to average investment in firm has led
to increase in the return on investment.
e. The return on mutual funds are functions of market dynamics.
30. Accounting policy related to employee’s benefits of gratuity and other benefits is accounted in
accordance with Ind AS 19-“Employees Benefit”. No provision for leave encashment is made during the
year in view of company’s policy of not allowing encashment and accumulation of eligible leave.
The Company is recognizing and accruing the employees benefits as per Ind-AS -19 On “Employees Benefits”
Details are given below: -
36. As at March 31, 2025, the company has reviewed the future earnings of all the cash generating units in
accordance with the Ind AS 36 “Impairment of Assets. As the carrying amount of assets does not exceed
the future recoverable amount, consequently, no adjustment to carrying amount of assets is considered
necessary by the Management.
37. In the Opinion of the Management, the current Assets and Loans and Advances as shown in the books are
expected to realize at their Book Values in the normal course of business and adequate provision have been
made in respect of all known liabilities.
38. Based on the information available with the Company, there are no suppliers who are registered as micro,
small or medium enterprises under The Micro, Small and Medium Enterprises Development Act, 2006 as
at March 31, 2025.
39. Disclosures of transactions with the struck off companies
The Company did not have any transactions with companies struck off under Section 248 of the Companies
Act,2013 or Section 560 of Companies Act, 1956 during the financial year.
40. No transactions to report against the following disclosure requirements as notified by MCA pursuant to
amended Schedule III:
(a) Crypto Currency or Virtual Currency
(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made
thereunder
(c) Registration of charges or satisfaction with Registrar of Companies
(d) Relating to borrowed funds:
i. Wilful defaulter
ii. Utilisation of borrowed funds & share premium
iii. Borrowings obtained on the basis of security of current assets
iv. Discrepancy in utilisation of borrowings
(e) Borrowings obtained on the basis of security of current assets.
(f) Foreign Currency Exposure
41. Previous year’s figures have been regrouped wherever necessary to confirm with this year’s classification.
As per our attached report of even date
For V. J. Shah & Co. For and on behalf of the Board of Dolat Algotech Limited
Firm Registration Number: 109823W
Chartered Accountants
Chintan V. Shah Pankaj D. Shah Harendra D. Shah
Partner Managing Director Director
Membership No.: 164370 DIN: 00005023 DIN: 00012601
Place: Mumbai Vaibhav P. Shah Sandeepkumar G. Bhanushali
Date: 29th May, 2025 Chief Financial Officer Company Secretary
|