J Provisions and contingent liabilities:
Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the
best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding the
obligation. 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. When the Company
expects some or all of a provision to be reimbursed, for
example, under an insurance contract, the reimbursement
is recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to
a provision is presented in the Standalone Statement of
Profit and Loss net of any reimbursement. The unwinding of
the discount is recognised as finance cost. Expected future
operating losses are not provided for.
Contingent liabilities are not recognised but are disclosed
in the notes. Contingent assets are not recognised but are
disclosed in the notes where an inflow of economic benefits
is probable.
K Leases: Right-of-use assets and Lease liabilities
i) Leases
The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for
a period of time in exchange for consideration.
The Company as a lessee
The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
i) Right-of-use assets
The Company recognises right-of-use assets (“RoU
Assets”) at the commencement date of the lease (i.e.,
the date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement
date less any lease incentives received. Right-of-use
assets are depreciated on a straight-line basis over the
shorter of the lease term and the estimated useful lives
of the assets.
If ownership of the leased asset transfers to the
company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation
is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment.
Refer to the accounting policies in section 3 (C)
Impairment of non-financial assets.
ii) Lease Liabilities
At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid
under residual value guarantees. The lease payments
also include the exercise price of a purchase option
reasonably certain to be exercised by the Company and
payments of penalties for terminating the lease, if the
lease term reflects the Company exercising the option
to terminate. Variable lease payments that do not
depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the
period in which the event or condition that triggers the
payment occurs.
In calculating the present value of lease payments,
the Company uses its incremental borrowing rate at
the lease commencement date because the interest
rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a
change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate
used to determine such lease payments) or a change in
the assessment of an option to purchase the underlying
asset.
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption that are considered to be low
value. Lease payments on short-term leases and leases
of low-value assets are recognised as expense on a
straight-line basis over the lease term.
The Company as a lessor
Leases in which the Company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Rental
income from operating lease is recognised on a
straight-line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on
the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are
earned.
Leases are classified as finance leases when substantially
all of the risks and rewards of ownership transfer from
the Company to the lessee. Amounts due from lessees
under finance leases are recorded as receivables at
the Company’s net investment in the leases. Finance
lease income is allocated to accounting periods so as
to reflect a constant periodic rate of return on the net
investment outstanding in respect of the lease.
L Cash and Cash Equivalents
Cash and cash equivalents in the 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 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.
M Earning per share
Basic earnings per share is computed by dividing the profit
/ (loss) for the period attributable to equity share holder by
the weighted average number of equity shares outstanding
during the period. Diluted earnings per share is computed
by dividing the profit/(loss) for the period attributable to
Equity Share holders and the weighted average number
of shares outstanding during the period are adjusted for
effects of all dilutive portential equity shares.
N Dividend on Ordinary Shares
The Company recognizes a liability to make cash
distributions to equity holders of the Company when the
distribution is authorized and the distribution is no longer at
the discretion of the Company. As per the Act, a distribution
is authorized when it is approved by the shareholders. A
corresponding amount is recognized directly in equity.
O Segment Reporting
An operating segment is a component of the Company
that engages in business activities from which it may earn
revenues and incur expenses, whose operating results
are regularly reviewed by the company’s Chief Operating
Decision Maker (“CODM”) to make decisions for which
discrete financial information is available. Based on
the management approach as defined in Ind AS 108 -
Operating Segments, the CODM evaluates the Company’s
performance and allocates resources based on an analysis
of various performance indicators by business segments
and geographic segments.
P Cash flow statement
Cash flows are reported using the indirect method,
whereby net profits before tax is adjusted for the effects
of transactions of a non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The
cash flows from regular operating, investing and financing
activities of the Company are segregated based upon the
available information.
Q Contract balances
Trade Receivables : A 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 consideration due.
Contract Liability : A contract liability is the obligation to
transfer goods and services to the customer for which the
Company has received the consideration (or an amount of
consideration is due) from the customer. Contract liabilities
are recognized as revenue when the Company performs
obligations under the contract. The same is disclosed
as “Advance from customers” under Other non-financial
liabilities.
R Concentration Test and Business Combination (Ind AS
103)
Where the Company acquires a set of activities and assets,
it elects to apply the optional concentration test under Ind
AS 103 — Business Combinations, paragraph B7A, on a
transaction-by-transaction basis, to determine whether the
acquired set constitutes a business or an asset acquisition.
If substantially all of the fair value of the gross assets
acquired is concentrated in a single identifiable asset or
a group of similar identifiable assets, the acquired set is
not a business. In such cases, the acquisition is accounted
for as an asset acquisition under the applicable standard
governing the nature of the asset acquired.
The Company defines ‘substantially all’ for this purpose as
90% or more of the fair value of the gross assets acquired
being attributable to a single identifiable asset or a group of
similar identifiable assets. The concentration test is applied
to gross assets acquired, excluding deferred tax liabilities
arising solely from differences between the fair value of
gross assets and their tax bases, and any goodwill arising
solely as a consequence of such deferred tax liabilities.
Business combinations are accounted for using the
acquisition method of accounting. The acquisition date is
the date on which control is transferred to the acquirer. The
consideration transferred for the acquisition of a subsidiary
or a business acquired through slump sale comprises:
i. Fair value of the assets transferred;
ii. Liabilities incurred to the former owners of the acquired
business;
iii. Equity interests issued by the Company; and
iv. Fair value of any asset or liability arising from a
contingent consideration arrangement ;and “
Identifiable assets acquired, liabilities and contingent
liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values
at the acquisition date. The Company recognises any non¬
controlling interest in the acquired entity on an acquisition-
by-acquisition basis either at fair value or at the non¬
controlling interest’s proportionate share of the acquired
entity’s net identifiable assets. Acquisition-related costs are
expensed as incurred.
The excess of:
• sum of consideration transferred
• amount of any non-controlling interest in the acquired
entity
• acquisition-date fair value of any previous equity
interest in the acquired entity”
over the fair value of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the business acquired,
the difference is recognised in other comprehensive income
and accumulated in equity as capital reserve provided there
is clear evidence of the underlying reasons for classifying
the business combination as a bargain purchase. In other
cases, the bargain purchase gain is recognised directly in
equity as capital reserve.
S Share based payment expense
Employees (including senior executives) of the Company
receive remuneration in the form of share-based payments,
whereby employees render services as consideration for
equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by
the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised, together with a corresponding
increase in share-based payment (SBP) reserves in equity,
over the period in which the performance and/or service
conditions are fulfilled in employee benefits expense.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired
and the Company’s best estimate of the number of equity
instruments that will ultimately vest. The statement of
profit and loss expense or credit for a period represents
the movement in cumulative expense recognised as at
the beginning and end of that period and is recognised in
employee benefits expense.
Service and non-market performance conditions are not
taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being
met is assessed as part of the Company’s best estimate of
the number of equity instruments that will ultimately vest.
Market performance conditions are reflected within the
grant date fair value. Any other conditions attached to an
award, but without an associated service requirement,
are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and
lead to an immediate expensing of an award unless there
are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately
vest because non-market performance and/or service
conditions have not been met. Where awards include a
market or non-vesting condition, the transactions are
treated as vested irrespective of whether the market or
non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified,
the minimum expense recognised is the expense had the
terms had not been modified, if the original terms of the
award are met. An additional expense is recognised for any
modification that increases the total fair value of the share-
based payment transaction, or is otherwise beneficial to the
employee as measured at the date of modification. Where
an award is cancelled by the entity or by the counterparty,
any remaining element of the fair value of the award is
expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.
* During the current financial year, the management undertook a reassessment of the useful life of the acquired customer folios,
considering factors such as lower churn, revenue sustainability from the acquired folios, and the availability of the Company’s digital
infrastructure in serving the acquired customer base.
Based on the above reassessment, the management has revised the useful life of the customer folios from 10 years to 15 years, with
effect from October 1, 2025.
This change constitutes a change in accounting estimate and has been applied prospectively in accordance with Ind AS 8 “Accounting
Policies, Changes in Accounting Estimates and Errors.”
Impact of the change in useful life:
Had the Company continued with the previously assessed useful life of 10 years for the customer folios, the charge for amortisation
for the year ended March 31, 2026 would have been higher by T 339.48 Lakhs, resulting in a corresponding impact on the profit before
tax for the year.
(v) Shares reserved for issue under options and contracts :
Refer Note 45 for details of shares to be issued under Employee Stock Option Schemes (ESOPs)
(vi) In the period of five years immediately preceding March 31, 2026:
(a) The Company has not allotted any equity shares as fully paid up without payment being received in cash.
(b) The Company has not bought back any equity shares.
(vii) Bonus shares issued in the period of five years immediately preceding March 31, 2026.
Pursuant to the Board Resolution dated July 22, 2021 and the Shareholders’ Resolution dated July 23, 2021, the Company issued
19 bonus equity shares of face value of 10 each for every 1 existing fully paid-up equity share of face value of 10 each, pursuant to
which 1,96,38,400 bonus equity shares were allotted on August 3, 2021 (“Bonus Issue”). Further, each equity share of face value
of 10 each was sub-divided into 2 equity shares of face value of 5 each (“Share Split”) by capitalisation of retained earnings of the
Company.
##The Board of Directors have recommended a final dividend of '3.5/- (face value of '5/- each) (70%) per equity share for the year
ended March 31, 2026 on 4,14,06,680 equity shares, amounting '1,449.23/- lakhs subject to the approval of the shareholders at the
ensuing Annual General Meeting and are not recognised as a liability.
The description of the nature and purpose of each reserve within Other equity is as follows:
(i) Securities Premium
Securities premium is received by the Company on issue of shares at premium. This balance will be utilised in accordance with
the provisions of Section 52 of the Act towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission/
discount expenses on issue of shares/debentures, premium payable on redemption of redeemable preference shares/debentures
and buy back of its own shares/securities under Section 68 of the Act.
(ii) General Reserves
General reserve is a free reserve, retained from the Company’s profits and can be utilized upon fulfilling certain conditions in
accordance with statute of the relevant Act.
(iii) Retained Earnings
Retained earnings comprise balances of accumulated (undistributed) profit and loss at each year end and balances of
remeasurement of net defined benefit plans, less any transfers to general reserve that can be distributed by the Company as
dividend to its shareholders in compliance with the requirements of the Act.
(iv) Share Based Payment Reserve
This reserve relates to share options granted by the company to its employee (including subsidiary Company) stock option plan.
Further information about share based payments to employee is set out in Note-45.
The Company’s objective for capital management is to ensure that it maintains a stable capital structure with the focus on total
equity to uphold investor, creditor and customer confidence, to ensure future development of its business and remain going
concern. The Company is focused on keeping strong capital base to ensure independence and sustained growth in business. The
Company determines the capital management requirement based on annual operating plans and long term and other strategic
investment plans. The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as
presented in the balance sheet. The funding requirements are predominately met through equity and out of cashflow generated
from operations.
The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and
the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the
amount of dividend paid to shareholders, return capital to shareholders, issue new shares or sell non-core assets to reduce the
debt.
(iii) Fair Value Hierarchy
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.
Financial assets and financial liabilities measured at fair value in the Balance Sheet are grouped into three levels of a fair value
hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: unobservable inputs for the asset or liability.
Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis.
(b) Financial Instrument measured at Amortised Cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are
a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be
significantly different from the values that would eventually be received or settled.
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Company’s business activities are exposed to a variety of financial risks, namely liquidity risk, credit
risk and market risk. Risk management policies have been established to identify and analyse the risks faced by the Company, to
set and monitor appropriate risk limits and controls, periodically review and reflect the changes in the policy accordingly.
The Company’s Management reviews the adequacy of the risk management framework in relation to the risks faced by the
Company.
(a) Credit Risk:
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.
Credit Risk arises principally from the Company’s cash and bank balances, trade receivables, investments, securities held for
trade, loans, and security deposits.
The carrying amounts of financial assets represent the maximum credit risk exposure. Credit risk assessment on various
components is described below:
(i) Trade receivables
The Company’s trade receivables primarily include receivables from asset management companies (AMCs) for services
provided and receivable from stock exchanges (for trade executed on behalf of customers) as well as clients. The Company
has not made any provision on ECL on account of receivables from AMCs, Stock exchanges. These carries limited credit risk
based on the financial position of parties and Company’s historical experience of dealing with these parties.
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.
(ii) Cash and cash equivalents, bank deposits, investments and Securities held for trade
The Company maintains its cash and cash equivalents, bank deposits, investment, and securities held for trade with reputed
banks, financial institutions, and corporates. The credit risk on these instruments is limited because the counterparties are
banks and high credit rated financial institutions and corporates assigned by credit rating agencies.
(iii) Security Deposits and Loans
This consists of loans given to Employees and Security Deposits given to lessors as well as to utility providers like Electricity
companies. These carries limited credit risk based on the financial position of parties and Company’s historical experience of
dealing with these parties. With reference to loans given for margin trading facility, company hold collateral against its credit
exposures.
(iv) Expected Credit Loss (ECL):
The Company follows simplified ECL method in case of Trade Receivables pertaining to broking business and the Company
recognises lifetime expected losses for all trade receivables that do not constitute a financing transaction. The Company
assesses the provision for ECL on each reporting dates.
For the purpose of computation of ECL, the term default implies an event where amount due towards margin requirement
and/or mark to market losses for which the client was unable to provide funds / collaterals, within 90 days of its due, to
bridge the shortfall, the same is termed as margin call triggered.
The Company assesses allowance for expected credit losses for Loans and other financial assets. The ECL allowance is
based upon 12 months expected credit losses. These carries very minimal credit risk based on the financial position of
parties and Company’s historical experience of dealing with these parties. Credit Risk on Other Financial assets is considered
insignificant considering the nature of such assets and absence of counterparty risk.
(b) Market Risk:
Market risk is the risk of changes in market prices due to foreign exchange rates, interest rates which will affect the Company’s
income or the value of its financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management
of the Company’s exposure to market risks.
(i) Foreign currency risk
The functional currency of the Company is INR. The Company does not have material foreign currency exposure. Hence, currency
risk is very limited.
(ii) Price Risk :
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related
market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors
specific to an individual investments, its issuer and market. The Company’s exposure to price risk arises from diversified
investments in mutual funds and Bonds, and Securities held for trade, and classified in the balance sheet at fair value through
profit or loss.
(iii) 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. Interest rate risk primarily arises from investments in debt oriented mutual funds and debt securities. The
Company’s investments in debt oriented mutual funds and debt securities are primarily short-term, which do not expose it to
significant interest rate risk. Additionally, since there are no external borrowings, the Company is not exposed to interest rate risk
in with respect to borrowings.
(c) Liquidity risk:
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities that are
settled by delivering cash or other financial assets. The Company’s approach in managing liquidity is to ensure that it will have
sufficient funds to meet its liabilities. In doing this, management considers both normal and stressed conditions. The Company
also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade
and other payables.
The Company has established an appropriate liquidity risk management framework for the management of the Company’s short¬
term, medium-term, and long-term funding and liquidity management requirements. The Company manages liquidity risk by
maintaining adequate reserves and by continuously monitoring cash flows, and by matching the maturity profiles of financial
assets and liabilities.
(b) Defined Benefits Plans
The Company provides for retirement benefits in the form of Gratuity. The Company’s gratuity scheme (funded) provides for
lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an
amount equivalent to 15 days salary payable for each completed year of service subject to a ceiling of ' 20 Lakhs. Vesting occurs
upon completion of 5 years of service.The Company contributes gratuity liabilities to the Prudent Corporate Advisory Services
Ltd Employee’s Group Gratuity Fund ( the Trust ). Trustees administer contributions made to the Trusts and contributions are
invested in Insurer Managed Funds.
The present value of the defined benefits plan was measured using the projected unit credit method.
Estimates of future salary increase takes into account: inflation, seniority, promotion and other relevant factors, such as supply and
demand in the employment market.
The plan exposes the Company to significant actuarial risks such as interest rate risk and inflation risk:
Inflation risk - A significant proportion of the defined benefit liability is linked to inflation. An increase in the inflation rate will increase
the Company’s liability.
Interest rate risk - The present value of the defined benefit liability is calculated using a discount rate prevailing market yields of
Indian government securities. A decrease in discount rate will increase the Company’s defined benefit liability.
(c) Compensated absence:
The employees are entitled for leave for each year of service and part thereof, subject to the limits specified, the unavailed
portion of such leaves can be accumulated or encashed during/at the end of the service period up to a maximum of 100 days.
Expenses recognised in the Statement of Profit and Loss amounts to '146.69 lakhs for the year ended March 31, 2026 (March 31,
2025: ' 101.90 lakhs)
The current and non-current classification of obligations under defined benefit plans and other long-term benefits is done bases
on the actuarial valuation reports.
(d) Asset - Liability Matching Strategies
The Company has purchased insurance policy, which is basically a year -on-year cash accumulation plan in which the interest
rate is declared on yearly basis and is guaranteed for a period of one year.The Insurance Company, as part of the policy rules,
makes payment of all gratuity outgoes happening during the year ( subject to sufficiency of funds under the policy ).The policy
thus mitigates the liquidity risk.
However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liablities . Thus, the
company is exposed to movement in interest rate ( in particular , the significant fall in interest rates , which should result in a
increase in liablity without corresponding increase in the asset)
Nature of CSR activities:
1. Educational infrastructure & systems strengthening
2. Nurture women entrepreneurship & employability
3. General community infrastructure support & welfare initiatives
4. Nurturing aquatic & terrestrial ecosystems for better environment & reduced emissions
5. Public health infrastructure, capacity building & support programs
6. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare.
7. Training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports
38 Operating Segment
The Company determines Operating Segments as components of an entity for which discrete financial information is available that
is evaluated regularly by chief operating decision maker (CODM), in deciding how to allocate resources and assessing performance.
The Company’s activities revolve around distribution of Financial Products i.e. Mutual Funds, Bonds, Fixed Deposits, Insurance,
Structured Products etc. Various financial products are aggregated into one reportable segment due to the similarities of the
products and services provided to the customers and similarities in method used to provide services and regulatory environment.
Considering the nature of Company’s business, as well as based on reviews by CODM to make decisions about resource allocation
and performance measurement, there is only one reportable segment in accordance with the requirements of Ind AS - 108 -
‘‘Operating Segments’’, prescribed under Companies (Indian Accounting Standards) Rules, 2015.
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2%
of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.
The areas for CSR activities are promoting education, art and culture, healthcare, destitute care, women entrepreneurship &
employability and rehabilitation, environment sustainability, disaster relief and Public health. A CSR committee has been formed
by the Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities
which are specified in Schedule VII of the Companies Act, 2013.
As per notification issued by Ministry of Corporate Affairs dated January 22, 2021, where a company spends an amount in excess
of requirement provided under sub-section (5) of section 135, such excess amount may be set off against the requirement to
spend under sub-section (5) of section 135 up to immediate succeeding three financial years.
(i) Gross amount required to be spent during the year '306.28 lakhs (previous year ' 225.24 lakhs)
(ii) Excess amount to be set off against succeeding three financial years '6.66 lakhs (previous year Rs. 3.73 lakhs)
Out of the total CSR expenditure of '309.21 lakhs (Previous year '225.60 lakhs), an amount of '54.80 lakhs (Previous year
'30.00 lakhs) has been spent through Kokilaben Charitable Trust, an entity over which Key Managerial Personnel has significant
influence.(Refer Note-36)
41 Recent accounting pronouncements
The Ministry of Corporate Affairs (MCA) notifies new standards / amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. During the year, the MCA has amended the Ind AS as below:
Ind AS 1- Presentation of Financial Statements:
The amendment relates to classification of liabilities as current or non-current and non-current liabilities with covenants. In the
context of classifying a liability as current, it removes the requirement of existence of a right to defer settlement for at least 12
months after the reporting date and instead requires that the said right should exist on the reporting date and have substance.
The amendment also introduces guidance on classification of liabilities with covenants.”
Ind AS 7- Statement of Cash Flows:
The amendments requires to inform users of the Financial Statements of the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying amount of liabilities and the range of payment due dates.”
Ind AS 107- Financial Instruments Disclosures:
The amendments to add supplier finance arrangements as a factor that may cause concentration of liquidity risk ”
Ind AS 12- Income Taxes:
The amendments to the Pillar Two Model Rules introduce a temporary mandatory exemption from deferred tax accounting for
top-up taxes and require companies to disclose their use of this exemption. This relief takes effect immediately and applies
retrospectively. In addition, the amendments mandate new disclosures to compensate for any potential loss of information
resulting from the exemption.”
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates:
The amendments provide guidance on determining exchangeability between currencies and estimating spot rates when a
currency is not exchangeable”
The Company has evaluated the amendments and there is no material impact on its Financial Statement.
42 Events Occuring After Balance Sheet Date
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approved
Standalone Financial Statements to determine the necessity for recognition and/or reporting of any of these events and
transactions in the Standalone Financial Statements as of May 07, 2026 there is no significant events occured, except
disclosed.
The Board of Directors have recommended a final dividend of ' 3.5/- (face value of '5/- each) (70%) per equity share for the year
ended March 31, 2026 on 4,14,06,680 equity shares, amounting '1449.23/- lakhs subject to the approval of the shareholders at
the ensuing Annual General Meeting and is not recognised as a liability.
43 Compliance With Number Of Layers Of Companies:
The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013
read with the Companies ( Restriction on number of Layers) Rules, 2017.
Note-1.1 During the financial year 2025-26, the Company received favourable appellate orders from the Commissioner
of Income Tax (Appeals) - NFAC, Delhi, in respect of Assessment Years 2016-17 and 2018-19. The appeals pertained to
assessment orders passed under Section 147 of the Income-tax Act, 1961, wherein income tax demands of '20.69 lakhs for
Assessment Year 2016-17 and '9.10 lakhs for Assessment Year 2018-19 had been raised primarily on account of denial of
exemption in respect of a portion of dividend income. The Commissioner of Income Tax (Appeals) - NFAC, Delhi has allowed
the Company’s appeals and deleted the aforesaid demands aggregating to '29.79 lakhs. Accordingly, the said matters stand
resolved in favour of the Company and no income tax demand remains payable in respect of the above assessment years.
Out of the demand for Assessment Year 2016-17, the Company had earlier paid '4.14 lakhs under protest, being 20% of the disputed
tax demand, and the balance demand of '16.55 lakhs had been adjusted by the Income Tax Department against the income tax
refund due to the Company for Assessment Year 2022-23. Consequent to the favourable appellate order passed by the Commissioner
of Income Tax (Appeals) - NFAC, Delhi, the total amount of '20.69 lakhs so paid/adjusted against the said demand has been released
by the Income Tax Department.
Note-1.2 Pursuant to a scheme of amalgamation sanctioned u/s 233 of the Companies Act 2013 for amalgamation of Prudent
Broking Services Private Limited (“PBSPL” or “Transferor Company”) with the company with effect from April 01,2023(appointment
date). Accordingly, all contingent liabilities and legal obligations of the erstwhile PBSPL have been vested into the Company. Prior to
amalgamation, PBSPL had received an assessment order under Section 147 read with Section 144B of the Income-tax Act, 1961, dated
September 29, 2021, from the Assessment Unit of the Income Tax Department, raising a demand of '538.47 lakhs for Assessment Year
2013-14. The demand pertains to addition of income made under Section 68 read with Section 115BBE of the Act. Against this order,
PBSPL had filed an appeal on October 13, 2021, before the Commissioner of Income Tax (Appeals) - NFAC, Delhi. PBSPL has deposited
'50.00 lakhs under protest against the said demand and the matter is pending adjudication as at the reporting date.
Further, PBSPL has also received penalty orders dated June 25, 2024, under section 271FAA of the Income-tax Act, 1961, for Assessment
Years 2022-23 and 2023-24, each imposing a penalty of ' 0.50 lakhs. These penalties were levied for alleged furnishing of inaccurate
information under Section 285BA(1)(k) of the Act. The Company has preferred appeals against these penalty orders before the
Commissioner of Income Tax (Appeals) - NFAC, Delhi, on August 20, 2024, and the outcome are awaited.
Note-2 Under Goods and Service Tax Laws, the Company has received various demand orders,passed by Assistant Commissioner/Deputy
Com m issionerofCentral/StateTaxin thestatesofGujarat, Maharashtra,Telangana,and West BengalforraisingtotaldemandofGSTof'91.55
lakhs (including interest and penalty specified in orders) on various matters like Input Tax Credit (ITC) disallowance due to mismatch with
GSTR-2A, non-short reversal ofITC on exempt supplies, ineligible/blocked ITC availed. The Company has paid ' 5.49 lakhs pre-deposit and
the Company has filed an appeal with Appellate Authority of respective states and the same is yet to be concluded as on the reporting date.
In one of the matters in the State of West Bengal, involving demand of '40.78 lakhs, the Appellate Authority has confirmed the demand.
The Company intends to pursue further appeal before the Appellate Tribunal in accordance with the provisions of the GST laws. In this
regard, the Company has paid an additional pre-deposit of '1.83 lakhs, over and above the pre-deposit mentioned above”
Most of the issues of litigation pertaining to Income Tax and Goods and Service Tax are based on interpretation of the respective Laws
& Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in
the law as they are covered by judgements of respective judicial authorities which supports its contention. As such no material impact
on the financial position and performance of the Company is envisaged. Therefore, no provision has been made in the financial
statements, and the matters are being disclosed as contingent liabilities.
(b) Prudent Broking Services Private Limited (PBSPL) (“Trading member”) (erstwhile subsidiary, now merged in the company) had
entered into an agreement with IL&FS Securities Services Ltd (“ISSL” or “Clearing Member”) for appointing ISSL as Company’s
Clearing Member for Derivative Segment. In July 2019, the National Stock Exchange(“NSE”) disabled the terminals of ISSL citing
shortfalls in payments by ISSL which resulted in the trading members not being able to place trades for its clients. Considering
the IL&FS crisis, PBSPL filed a complaint with NSE’s Grievence Redressal Committee (GRC) on December 28, 2020 and GRC has
accepted PBSPL’s claim of ' 204.67 Lakhs in the committee meeting held on July 15, 2021 . Further, ANMI has filed an interlocutory
application under Rule 31 of National Company Law Appellate Tribunal Rules, 2016 on behalf of Trading Members, which was
admitted on December 01, 2021. The PBSPL has received the GRC order and directed ISSL to pay ' 204.67 Lakhs. The PBSPL has
received ' 203.67 Lakhs against Derivative Segment on September 21, 2022 subsequently PBSPL has reversed the impairment
provision amounting to '203.67 Lakhs. Balance ' 1 Lakhs against Debt Segment is still pending. (Refer Note 10).
C. Movement in Stock Options during the Year
The following table sets forth the activity pertaining to stock options under the ESOP 2025 during the financial year ended 31
March 2026:
45 Share-Based Payments
A. The Nomination and Remuneration Committee (“NRC”) of the Board of Directors, in terms of the approval granted by the
Shareholders of the Company by passing Special Resolution(s) at the Annual General Meeting held on July 31, 2025, in its
meeting held on October 07, 2025, approved the grant of 1,30,945 Employee Stock Options of face value R 5/- each to the eligible
employees of the Company and its wholly owned subsidiary, Gennext Insurance Brokers Private Limited, as determined by the
Prudent - Employee Stock Option Scheme 2025 (“ESOP 2025”).
46 Acquisition of Mutual Fund Distribution Business
During the current year the Company completed the acquisition of mutual fund distribution business of Indus Capital as a
going concern on a slump sale basis, effective October 1, 2025 for an aggregate consideration of R 12,375 lakhs. The transaction
primarily entails acquisition of customer folios of Indus Capital. Pursuant to the terms of the agreement, the Company has
paid an initial consideration of R 8,725 lakhs and the balance consideration of R 3,650 lakhs shall be payable after 3 years
subject to fulfillment of certain conditions. The fair value of the Customer Folios has been determined by external valuer
using the Multi-Period Excess Earnings Method (MEEM) under the Income Approach which amounts to '10,490.30 lakhs.
The acquired customer folios is amortised on a straight-line basis over its estimated useful life of 15 years from the date of
acquisition.
47 Impact of New Labour Codes on Employee Benefits
On November 21, 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial Relations Code, 2020,
the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020, (‘Labour Codes’) which
consolidate twenty-nine existing labour laws into a unified framework governing employee benefits during employment and post¬
employment. The Labour Codes amongst other things, introduced changes including a uniform definition of wages and enhanced
benefits relating to leave. The Company had assessed the financial implications of these changes which had resulted in increase in
gratuity liability arising out of past service cost and increase in leave liability. The Company continues to monitor the developments
pertaining to Labour Codes and will evaluate impact if any on the measurement of liability pertaining to employee benefits.
Employee benefits expense includes an amount of ' 134.28 lakhs being the impact of implementation of the Labour Codes in
current financial year.
48 Other statutory information
(a) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company
for holding any benami property.
(b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(c ) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
(d) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(i) 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
(ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(e) 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).
(f) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(g) The Company does not have any transactions with companies which are struck off.
(h) The Company has not taken any loan from bank or financial institutions. Consequently filling of quarterly returns or
statements of current assets with bank or financial institutions is not applicable to Company.
49 Additional regulatory information required under (WB)(xiv) of Division III of Schedule III amendment, disclosure of ratios, is not
applicable to the Company as it is in Distribution of Mutual Fund, Stock broking and other Financial and Non Financial Product
Distribution business and not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.
50 Disclosure for maintenance of books with audit trail
The Ministry of Corporate Affairs(MCA) has issued a notification dated 24th March 2021 (Companies(Accounts) Amendments
Rules,2021) which is effective from April 01,2023, states that every Company which uses accounting software for maintaining
its books of account shall use only such accounting software which has a feature of recording audit trail of each and every
transaction, and further creating an edit log of each change made in the books of account along with the date when such changes
were made and ensuring that the audit trail cannot be disabled.
In respect of software related to Mutual Fund and Insurance Business which is internally developed software by the Company,
No audit trail was enabled for all relevant transactions at the database level to log any direct data changes but the Company has
taken necessary action to safeguards all its data at transactions level.
51 The standalone financial statements were authorized for issue in accordance with a resolution of the Board of Directors on May
07, 2026.
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