(f) Provisions and contingent liabilities and Contingent Assets:
Provisions are recognized, when there is a present legal or constructive obligation as a result of a past event, it is probable that
an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can
be made. If the effect of the time value of money is material, the provision is discounted using a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the obligation and the unwinding of the discount is
recognised as interest expense.
Contingent liabilities are recognized only when there is a possible obligation arising from past events, due to occurrence or
non-occurrence of one or more uncertain future events, not wholly within the control of the Company, or where any present
obligation cannot be measured in terms of future outflow of resources, or where a reliable estimate of the obligation cannot be
made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided
for.
Contingent assets are not recognized in the financial statements.
(g) Revenue recognition:
Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts and other credits, if any,
as specified in the contract with the customer. The Company presents revenue from contracts with customers net of indirect
taxes in its statement of profit and loss.
The Company considers whether there are other promises in the contract that are separate performance obligations to which a
portion of the transaction price needs to be allocated. In determining the transaction price, the Company considers the effects
of variable consideration, the existence of significant financing components, noncash consideration and consideration payable
to the customer, if any.
The following specific recognition criteria must also be met before revenue is recognized:
(i) Revenue from Stock broking services is recognised on trade date basis.
(ii) Depository Fees , is recognised on accrual basis and as per terms agreed with the customers. Other charges recovered
from secondary broking customers are recognised upon completion of services.
(iii) I ssue management fees and placement fees, underwriting commission and financial advisory fees are accounted on
completion of milestones specified in the contract.
(iv) Income on account of distribution from funds are recognised on the receipt of the distribution letter or when right to
receive is established.
(v) Interest income, including income arising from other financial instruments measured at amortized cost, is recognized
using the effective interest rate method.
(vi) 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
Contract balances
Contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company
performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a
contract asset is recognised for the earned consideration that is conditional.
Trade receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of
time is required before payment of the consideration is due).
Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers
goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due
(whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
(h) Employee Benefits:
Retirement benefits in the form of state governed Employee Provident Fund, Employee State Insurance and Employee Pension
Fund Schemes are defined contribution schemes (collectively the ‘Schemes’). The Company has no obligation, other than the
contribution payable to the Schemes. The Company recognizes contribution payable to the Schemes as expenditure, when
an employee renders the related service. The contribution paid in excess of amount due is recognized as an asset and the
contribution due in excess of amount paid is recognized as a liability.
Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on
project unit credit method as at the balance sheet date. The Company recognizes the net obligation of a defined benefit plan in
its balance sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/ (asset)
are recognized in other comprehensive income. In accordance with Ind AS, re-measurement gains and losses on defined
benefit plans recognized in OCI are not to be subsequently reclassified to statement of profit and loss. As required under Ind
AS compliant Schedule III, the Company recognizes re-measurement gains and losses on defined benefit plans (net of tax) to
retained earnings.
Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit.
The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the
unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit
for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using
the projected unit credit method, made at the end of each financial year. Actuarial gains/losses are immediately taken to the
statement of profit and loss. The Company presents the accumulated leave liability as a current liability in the balance sheet,
since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.
(i) Borrowing Costs:
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
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 capitalized/inventorised as part of the cost of the respective asset. All
other borrowing costs are charged to statement of profit and loss.
(j) Income Taxes:
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred tax are recognized in the statement of profit and loss, except when they relate to items that are recognized
in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other
comprehensive income or directly in equity, respectively.
i. Current income tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the
taxation authorities based on the taxable income for that period. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
ii Deferred income tax
Deferred income tax is recognized on temporary differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes, except when the deferred income tax arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting
nor taxable profit or loss at the time of the transaction.
Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet 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 income tax asset to be utilized.
Deferred tax relating to items recognized outside profit or loss is recognized in correlation to the underlying transaction either
in OCI or directly in equity.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance
sheet date.
(k) Earnings Per Share:
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary
items, if any) by the weighted average number of equity shares outstanding during the year including potential equity shares,
if any, on compulsory convertible debentures. Diluted earnings per share is computed by dividing the profit / (loss) after tax
(including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or
income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity
shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have
been issued on the conversion of all dilutive potential equity shares.
Note 3 : Standards issued but not yet effective:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has notified
Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions,
applicable to the Company w.e.f. April 1, 2024. The Company has reviewed the new pronouncements and based on its
evaluation has determined that it does not have any significant impact in its financial statements.
Note. 35
Employee benefit plans
Defined contribution plans
The eligible employees of the Company are entitled to receive benefits under Provident Fund, a defined contribution plan in which
both employees and the company makes monthly contributions at a specified percentage of the covered employees’ salary, the
contributions as specified under the Law are paid to the Provident Fund and Pension Fund to the provident fund authorities.
The total expense recognised in profit or loss of Rs.71.18 lakhs (for the year ended March 31, 2024 Rs.66.47 lakhs) represents
contributions payable to these plans by the Company at rates specified in the rules of the plans.
Leave Encashment - The eligible Leave encashment liability to the employees other than those deputed by Indian Bank has been
provided for on the basis of actuarial valuation based on number of days unutilised leave at each reporting date. The actuarial gain or
loss is recognised in the Statement of Profit and Loss as per Ind AS 19.
Defined benefit plans
Gratuity
Payments to defined benefit retirement benefit plans are recognised as an expense when employees have rendered service entitling
them to the benefits.
The plan provides for a lump sum payment to vested employees at retirement or death while in employment or on termination
of employment of an amount equivalent to 15 days’ salary payable for each completed year of service. Vesting occurs upon the
completion of five years of service. The Company makes an annual contribution to gratuity fund established as a Trust through a
Group Gratuity Policy with LIC of India. The Company’s liability towards Gratuity is actuarially determined at the reporting date using
the Project Unit Credit (PUC) method. Actuarial gains and losses on gratuity are recognised in Other Comprehensive Income as per
Ind AS 19.
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk
The principal assumptions used for the purposes of the actuarial valuations were as follows.
(A) i) Salary escalation by taking into account inflation, seniority, promotion, and other factors mentioned in para 90 of Ind AS 19
ii) Expected rate of return plan assets
iii) Attrition rate by reference to past experience and expected future experience and includes all types of withdrawals other than
death but including those due to disability.
(B) It is assumed that the active members of the scheme will experience in service mortality in accordance with the Indian Assured
Lives Mortality (2012-14) Ultimate Table.
(C) Discount Rate has been determined by reference to market yields on 28-02-2025 on Government bonds of term consistent with
estimated term of the obligations as per para 83 of Ind AS19. The source for determining the market yields is the Zero Coupon
Sovereign Rupee Yield Curve estimated by the Clearing Corporation of India Limited (CCIL) as on 28-02-2025
(D) As per the Company’s accounting policy actuarial gains and losses are recognized as per paras 127,128 and 129 of Ind AS19.
Gratuity is payable as per Payment of Gratuity Act, 1972. In terms of the same Gratuity is computed by multiplying last drawn salary
[Basic salary including Dearness Allowance if any] by completed years of continuous service with part thereof in excess of six months
and again by 15/26. Act provides for a vesting period of 5 years for withdrawal and retirement and a monetary ceiling on gratuity
payable to an employee on separation, as may be prescribed under the Payment of Gratuity Act, 1972, from time to time. However,
in cases where an enterprise has more favourable terms in this regard the same has been adopted.
(1) In respect of the disputed tax demand for Assessment Year 1992-93,on the deduction in respect of dividend income under
section 80M read with section 80AA, the Income Tax Appellate Tribunal, vide its order dated January 25, 2022, has accepted the
Company’s submissions and granted the relief sought. Consequently, the Assessing Officer is required to pass an order giving
effect to the Tribunal’s decision, which is expected to result in a substantial reduction in the tax demand. As of March 31, 2025,
the order giving effect has not yet been passed by the Assessing Officer. The Company is monitoring the matter and expects the
demand to be appropriately revised upon issuance of the said order.
(2) During the financial year 2022-23, the Company received a giving effect order for Assessment Year 1998-99, raising a demand
of Rs. 380.09 lakhs, without considering the benefit of brought forward losses. The Company has filed a rectification application
with the Income Tax Department on August 9, 2024, requesting adjustment of the brought forward losses against the assessed
income. Upon such adjustment, the revised demand is expected to reduce to rs. 7.63 lakhs. Accordingly, no provision has been
made in the financial statements for the disputed amount.
(3) The disputed income tax demands aggregating to Rs. 1,842.78 lakhs for the Assessment Years 2007-08 to 2009-10. The
dispute relates to the Company’s claim for exemption under Section 10(38) of the Income-tax Act, 1961 (exemption on long¬
term capital gains arising from the sale of equity shares on which Securities Transaction Tax has been paid). The Assessing
Officer has treated the income as business income instead of capital gains. The Company has filed an appeal before the Hon’ble
High Court of Madras against the said treatment. Based on legal advice, the management believes that the ultimate outcome of
the matter is likely to be favorable and, accordingly, no provision has been made in the financial statements. For Assessment
Year 2007-08, the Company has paid Rs. 18 lakhs and for Assessment Year 2008-09, Rs.132 lakhs, in accordance with the stay
orders passed by the Hon’ble High Court of Madras.
(4) The Company received an assessment order dated November 25, 2016, for Assessment Year 2014-15, raising a demand of INR
24.80 lakhs. The demand was raised without considering the benefit of brought forward losses, credit for taxes already paid,
and certain other allowable adjustments. The Company has filed a rectification application with the Income Tax Department on
December 26, 2016, seeking correction of the aforementioned errors in the order.
ii) Sales Tax demand disputed in appeal - Rs.26.04 lakhs (Previous year Rs.26.04 lakhs).
iii) GST Excess Input tax demand disputed in Appeal - For FY 2018-19 - Rs.6.35 lakhs and For FY 2019-20 -Rs.10.91 lakhs
B) Guarantees - Counter guarantee issued to bank for guarantees - Nil (Previous Year- Nil).
C) Estimated amount of contracts remaining to be executed on capital account and not provided for - Nil (Previous Year - Nil).
Note 40.
Financial Risk Management Objectives and Policies
A. Capital management
The Company’s objective for capital management is to maximise shareholder value, safeguard business continuity and support the
growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other
strategic investment plans. The funding requirements are met through equity, operating cash flows generated and short term debt.
The Company is not subject to any externally imposed capital requirements.
B. Financial risk management
The Company is exposed to market risk, credit risk and liquidity risk. All these risks are managed by the company in accordance with
its Integrated Risk Management Policy approved by its Board.
B.1 Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises following types of risk: interest rate risk and market price risk. Financial instruments affected by market
risk inter-alia includes borrowings.
B.1.1 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. The company does not carry any floating rate financial instruments that exposes it to risk arising out of change in
interest rates.
B.1.2 Market Price Risk
The Company is exposed to market price risk, which arises from FVTPL investment in listed securities. The management monitors
the proportion of listed securities investments in its investment portfolio based on market indices. Material investments within the
portfolio are managed on an individual basis and all buy and sell decisions are approved by the appropriate authority.
B.2 Credit Risk
Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their contractual
obligation. The Company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual
counterparties, and by monitoring exposures in relations to such limits.
The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial
instruments presented in the financial statements. The Company’s major classes of financial assets are cash and cash equivalents,
term deposits, trade receivables and security deposits.
Cash and cash equivalents and term deposits with banks are considered to have negligible risk or nil risk, as they are maintained with
high rated banks financial institutions as approved by the Board of directors. Security deposits are kept with stock exchanges for
meeting minimum base capital requirements. These deposits do not have any credit risk.
The Company holds collateral of securities against its credit exposures. The management has established accounts receivable policy
under which customer accounts are regularly monitored. The Company has a dedicated risk management team, which monitors the
positions, exposures and margins on a continuous basis.
B.3 Liquidity Risk
Liquidity represents the ability of the Company to generate sufficient cash flow to meet its financial obligations on time, both in
normal and in stressed conditions, without having to liquidate assets or raise funds at unfavorable terms thus compromising its
earnings and capital.
Prudent liquidity risk management requires sufficient cash and marketable securities and availability of funds through adequate
committed credit facilities to meet obligations when due and to close out market positions.
The Company aims to maintain the level of its cash and cash equivalents in the form of bank deposits at an amount in excess of
expected cash outflow on financial liabilities. Funds required for short period is taken care by utilising overdraft facility availded from
scheduled commercial bank.
NOTE: 43 ADDITIONAL REGULATORY INFORMATION
(i) No loans or advances in the nature of loans are granted to Promoters, Directors, KMPs and the related parties (as defined
under the Companies Act, 2013), either severally or jointly with any other person that are repayable on demand or without
specifying any terms or period of repayment.
(ii) The company does not hold any benami property and no proceedings have been initiated or pending against the company for
holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(iii) The Company has not availed any borrowings from banks or financial institutions on the basis of security of current assets.
(iv) The Company is not declared a wilful defaulter by any bank or financial institution or other lender (as defined under the
Companies Act 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank
of India.
(v) The Company is in the process of compiling the required information for the purpose of verification as to whether there are
any relationship with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies
Act, 1956. Pending such exercise, based on the information available with the company, there are no amounts or transactions
to disclose as required under (WB)(xi) of Part I of Division III of Schedule III to the Companies Act, 2013.
(vi) There are no charges or satisfaction yet to be registered with Registrar of companies (ROC).
(vii) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies
(Restriction on number of Layers) Rules, 2017.
(viii) There are no Scheme of Arrangements placed before the Competent Authority in terms of sections 230 to 237 of the Companies
Act, 2013 for approval.
(ix) Utilisation of Borrowed funds and share premium
(a) No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either
from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other
person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, directly or indirectly lend or invest in party identified in any manner by or on
behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
(b) The Company has not received any fund (which are material either individually or in the aggregate) from any party(s)
(Funding Party(ies)) with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
directly or indirectly lend or invest in other persons or entities identified in any manner by or on behalf of the Funding
Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(x) The Company has not traded or invested in Crypto currency or Virtual currency during the year ended 31st March, 2025.
(xi) The Company did not have any transactions which had not been recorded in the books of accounts that had been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or
any other relevant provisions of the Income Tax Act, 1961).
(xii) Additional regulatory information required under (WB) (xvi) of Division III of amended Schedule III of the Companies Act, 2013
i.e., the disclosure of ratios, is not applicable to the Company as it is in stock broking business and also the Company has not
conducted any Non-Banking Financial activities or any Housing Finance activities and it is not required to obtain Certificate of
Registration (CoR) from the Reserve Bank of India (RBI) as per section 45-IA of Reserve Bank of India Act, 1934.
ASHUTOSH CHOUDHURY (DIN 09245804) SUNIL JAIN (DIN 09665264) V HARIBABU (DIN 09523733)
DIRECTOR DIRECTOR PRESIDENT AND WHOLE TIME
DIRECTOR
TAUSIF INAMDAR CS. CHITRA M A
VICE PRESIDENT & CFO COMPANY SECRETARY
(A33512)
As per our report of even date attached
For BRAHMAYYA & CO
CHARTERED ACCOUNTANTS
(FRN 000511S)
CA. K JITENDRA KUMAR
PARTNER
(M.No: 201825)
Date : 24/04/2025
Place : Chennai
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