2.8 Provisions and Contingent liabilities
A provision is recognised when the Company has a present obligation as a result of a past event and it is probable
that an outflow of embodying economic benefits will be required to settle the obligation and there is a reliable
estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure
required to settle the present obligation at the Balance sheet date. Provisions are determined by discounting
the expected future cash flows (representing the best estimate of the expenditure required to settle the present
obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the liability. Provisions are reviewed at each balance sheet date and adjusted
to effect current management estimates.
The Company operates in a regulatory and legal environment that, by nature, has an element of litigation risk
inherent to its operations. Contingent liabilities are recognised when there is possible obligation arising from
past events that probably requires an outflow of resources and a reliable estimate can be made of the amount
of the obligation. For determining the probability and amount of liability, the Company takes into account a
number of factors including legal advice, the stage of the matter and historical evidence from similar incidents.
Significant judgement is required to conclude on these estimates.
2.9 Income Taxes
(i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, in accordance with the Income Tax Act, 1961 prescribed therein. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date. Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
(ii) Deferred tax
Deferred tax is provided using the Balance Sheet approach on temporary differences between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are
recognised for deductible temporary differences to the extent that it is probable that taxable profits will be
available against which the deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting 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
tax asset to be utilised. Unrecognised deferred tax assets, if any, are reassessed 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.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised either in OCI or in other equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.
Minimum Alternate Tax
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The
Company recognizes MAT credit available as an asset only to the extent that it is probable that the Company
will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to
be carried forward. In the year in which the Company recognizes MAT credit as an asset, the said asset is
created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The
Company reviews the MAT Credit Entitlement asset at each reporting date and writes down the asset to
the extent the Company does not have convincing evidence that it will pay normal tax during the specified
period.
2.10Earning per share (basic and diluted)
The Company reports basic and diluted earnings per equity share. Basic earnings per equity share have been
computed by dividing net profit/loss attributable to the equity share holders for the year by the weighted
average number of equity shares outstanding during the period. Diluted earnings per equity share have been
computed by dividing the net profit attributable to the equity share holders after giving impact of dilutive
potential equity shares for the year by the weighted average number of equity shares and dilutive potential
equity shares outstanding during the period/year, except where the results are anti-dilutive.
2.11Borrowing costs
Expenses related to borrowing cost are accounted using effective interest rate. Borrowing costs are interest and
other costs (including exchange differences relating to foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing
costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period
of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs
are recognised as an expense in the period in which they are incurred.
2.12Property, plant and equipment
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 assets carrying amount or recognized as a seperate 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 that item can be measured reliably. The carrying amount of any component accounted for as a seperate
asset is derecognized when replaced. All other repairs and maintenance are charged to statement of profit and
loss during the reporting period in which they are incurred.
Advance paid towards the acquisition of Property, plant and equipment outstanding of each balance sheet date
is classified as capital advances under non-financial assets and the cost of assets not put to use before such date
are disclosed under "Capital work in progress"
Depreciation on property, plant and equipment
(a) Depreciation is provided on a pro-rata basis for all tangible assets on straight line method over the useful life
of assets.
(b) Useful lives of assets are determined by the Management by an internal technical assessment.
(c) Depreciation on addition to assets and assets sold during the year is being provided for on a pro rata basis
with reference to the month in which such asset is added or sold as the case may be.
(d) An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included under other income in the Statement of Profit and Loss when the
asset is derecognised.
(e) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate.
2.13 Intangible assets and amortisation thereof
Intangible assets are initially recognised at cost and subsequently carried at cost less accumulated amortisation
and accumulated impairment. The intangible assets are amortised using the straight line method over a period
of their useful lives estimated by the management. The useful lives of intangible assets are reviewed at each
financial year end and adjusted prospectively, if appropriate.
2.14 Impairment of non-financial assets
An assessment is done at each Balance Sheet date to ascertain whether there is any indication that an asset
may be impaired. If any such indication exists, an estimate of the recoverable amount of asset is determined. If
the carrying value of relevant asset is higher than the recoverable amount, the carrying value is written down
accordingly.
2.15 Retirement and other employee benefits
(i) Gratuity
The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act.
Retirement benefits in the form of gratuity is considered as defined benefit obligation. The above benefit
is funded and the present value of the obligation under such defined benefit plan is determined based on
actuarial valuation. The valuation has been carried out using the project Unit Credit Method as per Ind AS
19 to determine the Present Value of Defined Benefit Obligations and the related Current Service Cost and,
where applicable, Past Service Cost.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets, are recognised
immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in
the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
(ii) Provident fund
The Company contributes to a recognized provident fund which is a Defined Contribution Scheme. The
contributions are accounted for on an accrual basis and recognized in the Statement of Profit and Loss.
(iii) Compensated absences
Unutilized leave of staff lapses as at the year end and is not encashable. Accordingly, no provision is made
for compensated absences.
2.16 Fair value measurement
The Company measures its qualifying financial instruments at fair value on each Balance Sheet date.
Fair value is the price that would be received against sale of 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 in the accessible principal
market or the most advantageous accessible market as applicable.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy into Level I, Level II and Level III based on the lowest level input that is significant
to the fair value measurement as a whole.
For assets and liabilities that are fair valued in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.
2.17 Segment Reporting
The Company's business is to provide broking services, to its clients, in the capital markets in India. All other
activities of the Company are ancillary the main business. As such, there are no reportable segments that need
to be reported separately as defined in Ind AS 108, Operating Segments.
2.18 Lease Accounting
The Company has assessed its arrangements in accordance with Ind AS 116 - Leases and concluded that it does
not have any contracts that meet the definition of a lease during the reporting period.
Nature and Purpose of Reserve
(a) Capital Reserve
Capital reserve represents amount paid up on partly paid equity shares forfeited due to non-payment of call
money.
(b) Securities premium
Securities Premium reserves is used to record the premium on issue of shares. The reserve can be utilized only
for limited purposes such as issuance of bonus shares, writing off the preliminary expenses in accordance with
the provisions of the Companies Act, 2013.
(c) Taxation Reserve
Amount set aside to meet with substantial tax litigation if any.
(d) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders.
(e) General reserve
Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income
at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies
Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve
has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in
accordance with the specific requirements of Companies Act, 2013.
(f) Other comprehensive income
Other comprehensive income consist of remeasurement gains/losses on employees defined benefit expenses
and change in fair value of investments.
Basic earnings per share
The Basic earnings per share has been computed by dividing the net profit after tax attributable to equity shareholders
of the company by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share
The calculations of diluted earnings per share is based on profit attributable to shareholders and number of equity
shares outstanding after adjustment for the effects of all dilutive potential equity shares. In the absence of any
dilutive potential equity shares, the dilutive earnings per share is same as the basic earnings per share calculated
herein above.
Note 37 Segment Information
The Company's operations predominantly consist of "Securities broking and incidental activities". Hence there are
no reportable segments under Indian Accounting Standard- 108. During the year under report the Company was
engaged in its business only within India. The conditions prevailing in India being uniform, no separate geographical
disclosures are considered necessary.
In respect of any present obligation as a result of past event that could lead to a probable outflow of resources,
provisions have been made, which would be required to settle the obligation. The said provisions are made as per the
best estimate of the management and disclosure as per Ind AS 37 - "Provisions, Contingent Liabilities and Contingent
Assets" has been given below:
Note 43 Employee Benefits
Gratuity
The employees of the Company are eligible for gratuity in accordance with the Payment of Gratuity Act. To meet
its obligation the Company has a Defined Employee Benefit Plan. The valuation for the purpose of contribution the
funded plan has been carried based on Project Cost Unit method as per Ind AS 19 to determine the Present Value of
Defined Benefit Obligations and the related Current Service Cost and, where applicable, Past Service Cost.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on the net
defined benefit liability, are recognised immediately in the Balance Sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or
loss in subsequent periods.
The Company has established a comprehensive system for risk management and internal controls for all its businesses
to manage the risks that it is exposed. The objective of its risk management framework is to ensure that various risks
are identified, measured and mitigated and also that policies, procedures and standards are established to address
these risks and ensure a systematic response in the case of crystallization of such risks. The Company has exposure
to the following risks arising from financial instruments:
• Credit risk
• Liquidity risk
• Market risk
The risk management system features 'three lines of defence' approach.
The first line of defence comprises its operational departments, which assume primary responsibility for their own
risks and operate within the limits stipulated in various policies approved by the Board or by committees constituted
by the Board.
The second line of defence comprises specialized department such as risk management and compliance. They
employ specialized methods to identify and assess risks faced by the operational departments and provide them
with specialized risk management tools and methods, facilitate and monitor the implementation of effective risk
management practices, develop monitoring tools for risk management, internal controls and compliances, report
risk related information and promote the adoption of appropriate risk prevention measures.
The third line of defence comprise the internal audit and external audit functions. They monitor and conduct
periodic evaluations of the risk management, internal controls and compliance activities to ensure the adequacy of
risk controls and appropriate risk governance and provide the Board with comprehensive feedback.
(A) Credit risk
It is risk of financial loss that the Company will incur a loss because its customers or counterparties to financial
instruments fails to meet its contractual obligation.
The Company's financial assets comprises of cash and bank balances, trade receivables, loans, investments and
other financial assets which comprise mainly of deposits.
The maximum exposure to credit risk at the reporting date is primarily from Company's trade receivables.
Trade receivables
The Company applies the Ind AS 109 simplified approach to measuring 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 recognized in the income statement. Subsequent
recoveries of amounts previously written off are credited to the income statement.
Loans
Loans comprise of margin trade funding (MTF) and loan to employees.
MTF are secured loans. The Company applies the Ind AS 109 simplified approach to measuring expected credit
losses (ECLs) for MTF at an amount equal to lifetime ECLs. The ECLs on MTF are calculated based on actual
historic credit loss experience over the preceding years on the total balance of non-credit impaired MTF. There
has been no credit impaired MTF observed by the Company as at the balance sheet date.
Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks with
high credit ratings assigned by international and domestic credit rating agencies. Investments comprise of quoted
equity instruments, which are market tradeable. Other financial assets include deposits for assets acquired on
lease and with qualified clearing counterparties and exchanges as per the prescribed statutory limits.
B Liquidity risk
Liquidity risk is the risk that the entity will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The entity's approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to entity's reputation.
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 close out market positions.
The Company has a view of maintaining liquidity with minimal risks while making investments. The Company
invests its surplus funds in short term liquid assets in bank deposits. The Company monitors its cash and bank
balances periodically in view of its short term obligations associated with its financial liabilities.
C Market Risk
Market risk arises when movements in market factors (foreign exchange rates, interest rates, credit spreads
and equity prices) impact the Company's income or market value of its portfolios. The Company, in its course of
business, is exposed to market risk due to change in equity prices, interest rates and foreign exchange rates. The
objective of market risk management is to maintain an acceptable level of market risk exposure while aiming to
maximize returns.
(i) Equity Price
The Company's exposure to equity price risk arises primarily on account of its proprietary positions and
on account of margin bases positions of its clients in equity cash and derivative segments. The Company's
equity price risk is managed in accordance with its Risk Policy approved by Board.
(ii) Interest rate risk
The Company is exposed to Interest rate risk if the fair value or future cash flows of its financial instruments
will fluctuate as a result of changes in market interest rates. Fair value interest rate risk is the risk of
changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates.
The Company's interest rate risk arises from interest bearing deposits with bank and loan given by it. Such
instrument exposes the Company to fair value interest rate risk. Management believes that the interest rate
risk attached to these financial assets is not significant due to the nature of these financial assets.
Refer to financial instruments by category table below for the disclosure on carrying value and fair value of financial
assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and
which are not carried at fair value, the carrying amount approximate fair value due to short maturity of these
instruments.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit
price), regardless of whether that price is directly observable or estimated using a valuation technique.
In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of
valuation techniques.
Valuation framework
The Company's valuation framework includes:
• Benchmarking prices against observable market prices or other independent sources;
• Development and validation of fair valuation models using model logic, inputs, outputs and adjustments.
Finance function is responsible for establishing procedures, governing valuation and ensuring fair values are in
compliance with accounting standards.
FAIR VALUE HIERARCHY
The Company determines fair values of its financial instruments according to the following hierarchy:
Level 1: valuation based on quoted market price: financial instruments with quoted prices for identical instruments
in active markets that the Company can access at the measurement date.
Level 2: valuation using observable inputs: financial instruments with quoted prices for similar instruments in active
markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued
using models where all significant inputs are observable.
Level 3: valuation technique with significant unobservable inputs: financial instruments valued using valuation
techniques where one or more significant inputs are unobservable.
Valuation methodologies adopted
Fair values of financial assets, other than those which are subsequently measured at amortised cost, have been
arrived at as under:
• Fair values of inventories held for trading under FVTPL have been determined under level 1 using quoted market
prices of the underlying instruments;
• Fair values of investment in quoted equity instruments designated under FVOCI have been determined under
level 1 using quoted market prices of the underlying instruments;
• Fair values of derivative financial instruments under FVTPL have been determined under level 1 using quoted
market prices of the underlying instruments; The Company has determined that the carrying values of cash
and cash equivalents, bank balances, trade receivables, short term loans, investments in equity instruments
designated under FVOCI, trade payables, borrowings, bank overdrafts and other current liabilities are a
reasonable approximation of their fair value and hence their carrying values are deemed to be fair values.
(i) Disclosure of Capital to risk-weighted assets (CRAR),Tier I CRAR, Tier II CRAR and Liquidity coverage ratios
required under para (WB)(xvi) of Division III of Schedule III to the Act are not applicable to the Company as it is
in broking business and not an NBFC registered under section 45-IA of Reserve bank of India Act, 1934.
(ii) Title deeds of all immovable properties are held in the name of the Company.
(iii) The Company has not revalued any of its Property, Plant and Equipment and Intangible Assets during the year.
(iv) There are loans or advances in the nature of loan granted to promoters, directors, KMPs and the related parties,
either severally or jointly with any other person (Refer Note 37 Related Party Disclosures)
(v) The Company does not hold any benami property in its name. There are no proceedings initiated or pending
against the Company under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made
thereunder.
(vi) The Company has been sanctioned working capital limits from the banks against pledge of its fixed deposits. Due
to the very nature of the security offered, quaterly returns or statement of current assets are not required to be
filed by the Company.
(vii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or
government or any government authority.
(viii) There are no transactions with companies struck off under section 248 of the Companies Act, 2013 or section
560 of Companies Act, 1956.
(ix) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
(x) The Company is the Holding Company and 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.
(xi) The Company has filed scheme of arrangement on 30.04.2025 for restructuring w.e.f. 01 April 2025.
(xii) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or
• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(xiii) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall
• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or
• provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
(xiv) The Company does not have any such transaction which is not recorded in the books of accounts that has 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).
(xv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
Note 54. Events After Reporting Date
The Company has filed a composite Scheme of Arrangement on May 01, 2025 with the Hon'ble National Company
Law Tribunal (NCLT), Mumbai Bench, in accordance with the provisions of Sections 230 to 232 and Section 66 of
the Companies Act, 2013. Subsequently no accounting effect is to be given in the results as the Scheme is not yet
effective.
The Scheme involves amalgamation of the four wholly-owned subsidiaries and Immediately after coming into effect
of the amalgamation, Demerger of the Lending Business Undertaking of the Company into a wholly-owned subsidiary
of the Company.
Note 55. Figures have been rounded off to nearest lakhs. Previous year figures have been regrouped / reclassified
wherever necessary, to conform to this year's classification.
As per our attached report of even date For and on behalf of the Board of Directors
For CGCA & Associates LLP
Chartered Accountants Sd/- Sd/-
Firm Registration No. 123393W/W100755 Kanji B. Rita Kamlesh S. Limbachiya
(DIN 00727470) (DIN 02774663)
Sd/- Managing Director Wholetime Director
Gautam R. Mota
(Partner) Sd/- Sd/-
Membership No. 143113 Arvind J. Gala Shikha A. Mishra
Chief Financial Officer Company Secretary
Place : Mumbai
Date : 21 May 2025
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