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Accounting Policies of Monarch Networth Capital Ltd. Company

Mar 31, 2015

A) Accounting for Amalgamation

For the Financial year 2013-14, the financial statements have been prepared in accordance with Accounting Standard 14 (AS-14) - relating to Accounting for Amalgamations "The Pooling of Interests Method".

The Pooling of Interests Method

Under the pooling of interests method, the assets, liabilities and reserves of the transferor companies (MRBPL and MPFL) have been recorded by the transferee company (NSBL) at their existing carrying amounts.

The amalgamation being in the nature of merger, the identity of the reserves has been preserved and the reserves appear in the financial statements of the transferee company (NSBL) in the same form in which they appeared in the financial statements of the transferor companies (MRBPL and MPFL).

As a result of preserving the identity, reserves which are available for distribution as dividend before the amalgamation would also be available for distribution as dividend after the amalgamation. The difference between the amount recorded as share capital issued (plus any additional consideration in the form of cash or other assets) and the amount of share capital of the transferor companies (MRBPL and MPFL) have been adjusted.

b) Basis of Accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting priciples in India and the provisions of the Companies Act 2013. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

c) Use of Estimates

The Presentation of financial statements requries estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Managment believes that the estimates made in the preparation of financial statements are prudent and reasonable. Any difference between the actual results and estimate are recognised in the period in which results are known or materialised.

d) Revenue Recognition

Brokerage Income is recognised on the trade date. Subscription income for convenient brokerage plans is recognised on the basis of expiry of the scheme. Account Facilitation charges are recognised on quarterly/yearly basis considering registration/activation of the client account. Referral Fees are recognised on accrual basis. Late Payment Charges are shown net of respective interest cost. In respect of Interest Income, it is recognised on a time proportion basis. Dividend income is recognised when the right to receive payment is established on Balance Sheet date.

e) Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.The Company has disposed some fixed assets but the same does not affect the going concern nature.There has been no revalution of fixed assets during the year. Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation. All cost and expenses inciden- tal to acqusition and installation attributale to the intangible assets are capitalized.

f) Depreciation and Amortisation

Depreciation on Fixed Assets has been provided on pro-rata basis on straight line method at the rates prescribed by Schedule II to the New Companies Act, 2013 from the month following the month of purchase/acquisition of assets.

Considering the factors like utility of software, its nature, technological developments etc, if the management is of the opinion that the cost of acqusistion of software and related expenses requries to be written off in the year of acqusition, then it is charged to revenue in the year of acquistion. Individual assets/group of similar assets costing upto ' 5,000 has been depreciated in full in the year of purchase.The transitional effect has been adjusted in Opening General Reserve.

g) Investments

Investments intended to be held for more than a year are classified as Non-current investments. Non-current investments are valued at cost less permanent diminution in value, if such a decline is other than temperory in the opinion of the management.

h) Inventories

Stock in trade of the Transferee Company (NSBL) mainly represents securities held as stock in course of market making activities and remaining comprises of securities held as a result of error in execution of orders, is valued at cost. (Previous year cost value).

Stock in trade of the Transferor Company (MRBPL) has been valued at cost.Stock in trade of the Transferor Company (MPFL) has been valued at cost or market price whichever is lower. (Previous year cost value).

i) Employee Benefits Transferee Company

Contribution to defined contribution scheme such as provident fund, is charged to the statement of profit & loss of the period to which they relate.

Defined benefit plans like Gratuity are determined based on acturial valuation carried out by an independent acturary at the Balance Sheet date using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit, and measures each unit separately to build up final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determinig the present value of the obligation under defined benefit plans, is based on the market yield on government securities at the Balance Sheet date.

Expenses on training, recruitment are charged to revenue in the year of incurrence.

Expenditure on leave travel concession to employees is recognised in the year of availment due to uncertainities of accrual. Leave encashment is provided on actual basis.

Short Term Employee Benefit payable within one year are provided on accrual basis at acturial value.

j) Taxes on Income

Tax expenses comprises current and deferred tax. Provision for current tax is made after taking ito consideration benefits admissible under the provisions of income-tax Act, 1961.

Deferred taxes reflect the impact of timing differences between taxble income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred Tax is charged on the basis of the timing difference of Closing Balance method wherein provision for deferred tax made during the year equal to the diffrence between carrying amont of deferred tax as on balance sheet date using the tax rate and laws that are enacted or subtantively enacted as on the balance sheet date calculated on balance of items which are capable of reversal in one or more subsequent periods and the carrying amount of deferred tax at the beginning of the year. Such deferred tax assets are recognized and carried forward only if there is reasonable/virtual certainity of its realisation.

The carrying amount of Deferred Tax Assets are reviewed at each balance sheet date and written down or written up, to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

k) Borrowing Cost

Borrowing costs directly attributable to development of qualifying asset are capitalized till the date qualifying asset is ready for put to use for its intended purpose as part of cost of that asset. All Other Borrowing costs are reduced from corresponding income or recognized as expense in the period in which they are incurred.

l) Leases

Lease arrangements, where the risk and rewards incidental to the ownership of asset substantially vests with the lessor are recognized as operating lease. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss. Assets leased out under operating leases are capitalized. Lease rental are charged to the statement of profit and loss on accrual basis.

m) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period and adjusted for the effects of all dillutive potential equity shares.

n) Provisions, Contingent Liabilities and Contingent Assets

The company creates a provision when there is a present obligation because of past event that will probably result in the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of such obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilties are not recognised but disclosed in the notes. Contingent Assets neither recognised nor disclosed in the financial statements.

o) Segment Reporting

During the year under consideration, the Company NSBL (Merged Entities) has four operative segments namely, Capital Market (CM) Segment, Depository Participant (DP) segment and Merchant Banking (MB) segment and Portfolio Management Service (PMS). As the DP, PMS and MB, does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmental Report- ing", the company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpretation 20 52 "Disclosure of Segment Information", the company has not furnished the Segmental Reporting.


Mar 31, 2014

1. CORPORATE INFORMATION

Networth Stock Broking Limited (''the company'') has emerged as a leading provider of financial services and information provider primarily to Institutional and Retail clients in India for more than a decade. The company is a member of the National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE) in the Capital Market and Derivatives (Futures & Options) segment. It is Depositary Participant with Central Depository Services India (CDSL) and National Securities Depository (India) Limited (NSDL). The company also provides Merchant Banking and Market Maker Services.

Pursuant to the scheme of Amalgamation approved by the Hon''ble High Court of Gujarat on May 03, 2013 for Monarch Research and Brokerage Private Limited (''MRBPL'') and subsequently by the Hon''ble High Court Mumbai on August 07, 2014, for Monarch Project and Finmarkets Limited (''MPFL''), MRBPL and MPFL have been amalgamated with the company from the appointed date i.e. 1st April, 2010. The scheme of amalgamation became effective as on October 15, 2014. The Amalgamation has enabled appropriate consolidation of the activities of NSBL, MRBPL and MPFL, with pooling and more efficient utilization of resources, greater economies of scale, reduction in overheads and expenses and improvement in various operating parameters.

Pursuant to the Scheme of amalgamation all the assets and liabilities of the Transferor companies has been vested in the Company which includes Security Deposits as Member of various Exchanges under various segments, Intermediaries and Secured Term liabilities etc. The Company is in the process of initiating the Scheme of Amalgamation for transferring all assets/liabilities in the name of the Company which are presently in the name of the respective Transferor Companies.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Accounting for Amalgamation

For the year under review, the financial statements have been prepared in accordance with Accounting Standard 14 (AS-14) - relating to Accounting for Amalgamations "The Pooling of Interests Method".

The Pooling of Interests Method

Under the pooling of interests method, the assets, liabilities and reserves of the transferor companies (MRBPL and MPFL) have been recorded by the transferee company (NSBL) at their existing carrying amounts.

The amalgamation being in the nature of merger, the identity of the reserves has been preserved and the reserves appear in the financial statements of the transferee company (NSBL) in the same form in which they appeared in the financial statements of the transferor companies (MRBPL and MPFL).

As a result of preserving the identity, reserves which are available for distribution as dividend before the amalgamation would also be available for distribution as dividend after the amalgamation. The difference between the amount recorded as share capital issued (plus any additional consideration in the form of cash or other assets) and the amount of share capital of the transferor companies (MRBPL and MPFL) have been adjusted.

b) Basis of Accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act 1956. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

c) Use of Estimates

The Presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Any difference between the actual results and estimate are recognised in the period in which results are known or materialised.

d) Revenue Recognition

Brokerage Income is recognised on the trade date. Subscription income for convenient brokerage plans is recognised on the basis of expiry of the scheme. Account Facilitation charges are recognised on quarterly/yearly basis considering registration/activation of the client account. Referral Fees are recognised on accrual basis. Late Payment Charges are shown net of respective interest cost. In respect of Interest Income, it is recognised on a time proportion basis. Dividend income is recognised when the right to receive payment is established on Balance Sheet date.

e) Fixed Assets

Fixed Assets are stated at cost of acquisition as reduced by accumulated depreciation and impairment losses, if any. Cost comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use. The Company has disposed some fixed assets but the same does not affect the going concern nature. There has been no revaluation of fixed assets during the year.

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation. All cost and expenses incidental to acquisition and installation attributable to the intangible assets are capitalized.

f) Depreciation and Amortisation

Depreciation on Fixed Assets has been provided on pro-rata basis on straight line method at the rates prescribed by Schedule XIV to the Companies Act, 1956 from the month following the month of purchase/acquisition of assets.

Considering the factors like utility of software, its nature, technological developments etc, if the management is of the opinion that the cost of acquisition of software and related expenses requires to be written off in the year of acquisition, then it is charged to revenue in the year of acquisition. Individual assets/group of similar assets costing upto Rs. 5,000 has been depreciated in full in the year of purchase.

g) Investments

Investments intended to be held for more than a year are classified as Non-current investments. Non-current investments are valued at cost less permanent diminution in value, if such a decline is other than temporary in the opinion of the management.

h) Inventories

Stock in trade of the Transferee Company (NSBL) mainly represents securities held as stock in course of market making activities and remaining comprises of securities held as a result of error in execution of orders, is valued at cost. (Previous year cost or market value, whichever is lower).

Stock in trade of the Transferor Company (MRBPL) has been valued at cost. Stock in trade of the Transferor Company (MPFL) has been valued at cost or market price whichever is lower.

i) Employee Benefits

Transferee Company

Contribution to defined contribution scheme such as provident fund, is charged to the statement of profit & loss of the period to which they relate. Defined benefit plans like Gratuity are determined based on actual valuation carried out by an independent actually at the Balance Sheet date using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit, and measures each unit separately to build up final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on the market yield on government securities at the Balance Sheet date.

Expenses on training, recruitment are charged to revenue in the year of incurrence.

Expenditure on leave travel concession to employees is recognised in the year of availment due to uncertainties of accrual. Leave encashment is provided on actual basis.

Short Term Employee Benefit payable within one year are provided on accrual basis at actual value.

Transferor Company (MPFL) has provided provision in the books of account with respect to the retirement benefits of the employees as per the guidelines provided by The payment of Gratuity Act, 1972.

j) Foreign Currency Transactions

Foreign Exchange transactions are recorded in the reporting currency i.e. rupee value, at the prevailing rate on the date of transaction. Monetary items are restated at the exchange rate prevailing on the date of balance sheet. Non monetary items are stated at cost.

Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in the previous financial statement, are recognised as income or as expenses in the year in which they arise.

k) Taxes on Income

Tax expenses comprises current and deferred tax. Provision for current tax is made after taking to consideration benefits admissible under the provisions of income-tax Act, 1961.

Deferred taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred Tax is charged on the basis of the timing difference of Closing Balance method wherein provision for deferred tax made during the year equal to the difference between carrying amount of deferred tax as on balance sheet date using the tax rate and laws that are enacted or substantively enacted as on the balance sheet date calculated on balance of items which are capable of reversal in one or more subsequent periods and the carrying amount of deferred tax at the beginning of the year. Such deferred tax assets are recognized and carried forward only if there is reasonable/virtual certainly of its realisation.

The carrying amount of Deferred Tax Assets are reviewed at each balance sheet date and written down or written up, to reflect the amount that is reasonably/virtually certain, as the case may be, to be realized.

l) Borrowing Cost

Borrowing costs directly attributable to development of qualifying asset are capitalized till the date qualifying asset is ready for put to use for its intended purpose as part of cost of that asset. All Other Borrowing costs are reduced from corresponding income or recognized as expense in the period in which they are incurred.

m) Leases

Lease arrangements, where the risk and rewards incidental to the ownership of asset substantially vests with the lessor are recognized as operating lease. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss. Assets leased out under operating leases are capitalized. Lease rental are charged to the statement of profit and loss on accrual basis.

n) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period and adjusted for the effects of all dilutive potential equity shares.

o) Provisions, Contingent Liabilities and Contingent Assets

The company creates a provision when there is a present obligation because of past event that will probably result in the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of such obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilities are not recognised but disclosed in the notes. Contingent Assets neither recognised nor disclosed in the financial statements.

p) Segment Reporting

During the year under consideration, the Transferee Company (NSBL) has three operative segments namely, Capital Market (CM) Segment, Depository Participant (DP) segment and Merchant Banking (MB) segment. As the DP and MB, does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmental Reporting", the company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpretation 20 "Disclosure of Segment Information", the company has not furnished the Segmental Reporting.

During the year under consideration, the Transferor Company (MPFL) has two segments namely, Capital Market (CM) Segment, Depository Participant (DP) segment. As the DP does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmen- tal Reporting", the company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpretation 20 "Disclosure of Segment Information", the company has not furnished the Segmental Reporting.

During the year under consideration, the Transferor Company (MRBPL) has two segments namely, Capital Market (CM) Segment, Portfolio Management segment (PMS). As the PMS does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmental Reporting", the company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpre- tation 20 "Disclosure of Segment Information", the company has not furnished the Segmental Reporting.


Mar 31, 2013

A) Basis of Accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting priciples in India and the provisions of the Companies Act 1956. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

b) Use of Estimates

The Presentation of financial statements requries estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Managment believes that the estimates made in the preparation of financial statements are prudent and reasonable. Any difference between the actual results and estimate are recognised in the period in which results are known or materialised.

c) Revenue Recognition

Brokerage Income is recognised on the trade date. Subscription income for convenient brokerage plans is recognised on enrollment in the scheme. Account Facilitation charges are recognised on quarterly/yearly basis considering registration/activation of the client account. Referral Fees are recognised on accrual basis. Late Payment Charges are shown net of respective interest cost. In respect of Interest Income, it is recognised on a time proportion basis. Dividend income is recognised when the right to receive payment is established on Balance Sheet date.

d) Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.The Company has disposed some fixed assets but the same does not affect the going concern nature.There has been no revalution of fixed assets during the year.

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation. All cost and expenses incidental to acqusition and installation attributale to the intangible assets are capitalized.

e) Depreciation and Amortisation

Depreciation on Fixed Assets has been provided on pro-rata basis on straight line method at the rates prescribed by Schedule XIV to the Companies Act, 1956 from the month following the month of purchase/acquisition of assets.

Considering the factors like utility of software, its nature, technological developments etc, if the management is of the opinion that the cost of acqusistion of software and related expenses requries to be written off in the year of acqusition, then it is charged to revenue in the year of acquistion. Individual assets/group of similar assets costing upto ? 5,000 has been depreciated in full in the year of purchase.

f) Investments

Investments intended to be held for more than a year are classified as Non-current investments. Non-current investments are valued at cost less permanent diminution in value, if such a decline is other than temperory in the opinion of the management.

g) Inventories

Stock in trade mainly represents securities held as stock in course of merchant banking activities and remaining comprises of securities held as a result of error in execution of orders, is valued at cost or market value, whichever is lower.

h) Employee Benefits

Contribution to defined contribution scheme such as provident fund, is charged to the Statement of Profit and Loss of the period to which they relate.

Defined benefit plans like Gratuity are determined based on acturial valuation carried out by an independent acturary at the Balance Sheet date using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit, and measures each unit separately to build up final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on the market yield on government securities at the Balance Sheet date.

Expenses on training, recruitment are charged to revenue in the year of incurrence.

Expenditure on leave travel concession to employees is recognised in the year of availment due to uncertainties of accrual. Leave encashment is provided on actual basis.

Short Term Employee Benefit payable within one year are provided on accrual basis at actual value.

i) Foreign Currency Transactions

Foreign Exchange transactions are recorded in the reporting currency i.e. rupee value, at the prevailing rate on the date of transaction.

Monetary items are restated at the exchange rate prevailing on the date of Balance Sheet. Non monetary items are stated at cost.

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were intially recorded during the year, or reported in the previous financial statement, are recognised as income or as expenses in the year in which they arise.

j) Taxes on Income

Tax expenses cpmprises current and deferred tax. Provision for current tax is made after taking ito consideration benefits admissible under the provisions of income-tax Act, 1961.

Deferred taxes reflect the impact of timing differences between taxble income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred Tax is charged on the basis of the timing difference of Closing Balance method wherein provision for deferred tax made during the year equal to the diffrence between carrying amont of deferred tax as on Balance Sheet date using the tax rate and laws that are enacted or subtantively enacted as on the Balance Sheet date calculated on balance of items which are capable of reversal in one or more subsequent periods and the carrying amount of deferred tax at the beginning of the year. Such deferred tax assets are recognized and carried forward only if there is reasonable/virtual certainity of its realisation.

The carrying amount of Deferred Tax Assets are reviewed at each balance sheet date and written down or written up, to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

k) Borrowing Cost

Borrowing costs directly attributable to development of qualifying asset are capitalized till the date qualifying asset is ready for put to use for its intended purpose as part of cost of that asset. All Other Borrowing costs are reduced from coresponding income or recognized as expense in the period in which they are incurred.

I) Leases

Lease arrangements, where the risk and rewards incidental to the ownership of asset substantially vests with the lessor are recognized as operating lease. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss. Assets leased out under operating leases are capitalized. Lease rental are charged to the Statement of Profit and Loss on accrual basis.

m) Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period and adjusted for the effects of all dillutive potential equity shares.

n) Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation because of past event that will probably result in the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of such obligation. Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Contingent Liabilties are not recognised but disclosed in the notes. Contingent Assets neither recognised nor disclosed in the financial statements.

o) Segment Reporting

During the year under consideration, the Company has three operative segments namely, Capital Market (CM) segment, Depository Participant (DP) segment and Merchant Banking (MB) segment. As the DP and MB, does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmental Reporting", the Company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpretation 20 "Disclosure of Segment Information", the Company has not furnished the Segment Reporting.


Mar 31, 2012

A) Basis of Accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act 1956. All income and expenditure having a material bearing on the financial statements are recognized on accrual basis.

b) Presentation and disclosure of financial statements

During the year ended March 31, 2012, the Revised Schedule VI, notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. Pursuant to applicability of Revised Schedule VI on presentation of financial statements for the financial year ended March 31, 2012, the Company has classified all its assets / liabilities into current / non-current portion based on the time frame of twelve months from the date of financial statements. Accordingly, assets / liabilities expected to be realised / settled within twelve months from the date of financial statements, are classified as current and other assets / liabilities are classifies as non-current. Except accounting for dividend on investments in subsidiary companies, the adopted Revised Schedule VI does not impact recognition and measurement principle followed for preparation of financial statements. However it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

c) Use of Estimates

The Presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.Managment believes that the estimates made in the preparation of financial statements are prudent and reasonable.Any difference between the actual results and estimate are recognised in the period in which results are known or recognised.

d) Revenue Recognition

Brokerage Income is recognised on the trade date. Subscription income for convenient brokerage plans is recognised on enrollment in the scheme. Account Facilitation charges are recognised on quarterly/yearly basis considering registration/activation of the client account. Referral Fees are recognised on accrual basis. Late Payment Charges are shown net of respective interest cost. In respect of Interest Income, it is recognised on a time proportion basis.

e) Fixed Assets

Fixed Assets are stated at cost of acquisiton as reduced by accumulated depreciation and impairment losses, if any. Cost comprises purchase price and any attributable cost of bringing the asset to its working condition for its intended use.The Company has disposed some fixed assets but the same does not affect the going concern nature.There has been no revaluation of fixed assets during the year.

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation.All cost and expenses incidental to acquisition and installation attributable to the intangible assets are capitalized.

f) Depreciation and Amortisation

Depreciation on Fixed Assets has been provided on pro-rata basis on straight line method at the rates prescribed by Schedule XIV to the Companies Act, 1956 from the month following the month of purchase/acquisition of assets.

Considering the factors like utility of software, its nature, technological developments etc, if the management is of the opinion that the cost of acquisition of software and related expenses requries to be written off in the year of acquisition, then it is charged to revenue in the year of acquisition.

Improvement to Leasehold premises is written off over period of lease agreement on straight line basis.

g) Investments

Investments intended to be held for more than a year are classified as long term Investments. Long term Investments are valued at cost less permanent diminution in value, if such a decline is other than temporary in the opinion of the management. The current investments are valued at lower of cost or market value.

h) Stock in Trade

Stock in trade comprises of securities held as a result of error in execution of orders, is valued at cost or market value, whichever is lower.

i) Employee Benefits

Contribution to defined contribution scheme such as provident fund, is charged to Statement of Profit and Loss of the period to which they relate.

Defined benefit plans like Gratuity are determined based on acturial valuation carried out by an independent actuary at the Balance Sheet date using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit,and measures each unit separately to build up final obligation. The obligation is measured at the present value of the estimated future cash flows.The discount rate used fordeterminigthe present value of the obligation under defined benefit plans, is based on the market yield on government securities at the Balance Sheet date.

Expenses on training, recruitment are charged to revenue in the year of incurrence.

Expenditure on leave travel concession to employees is recognised in the year of availment due to uncertainities of accrual. Leave encashment is provided on actual basis.

Short Term Employee Benefit payable within one year are provided on accrual basis at actual value.

j) Foreign Currency Transactions

Foreign Exchange transactions are recorded in the reporting currency i.e. rupee value, at the prevailing rate on the date of transaction.

Monetary items are restated at the exchange rate prevailing on the date of balance sheet. Non monetary items are stated at cost.

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were intially recorded during the year or reported in the previous financial statement are recognised as income or as expenses in the year in which they arise.

k) Taxes on Income

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income-Tax Act, 1961.

Deferred Tax is charged on the basis of the timing difference of Closing Balance method wherein provision for deferred tax made during the year equal to the diffrence between carrying amont of deferred tax as on Balance Sheet date using the tax rate and laws that are enacted or subtantively enacted as on the Balance Sheet date calculated on balance of items which are capable of reversal in one or more subsequent periods and the carrying amount of deferred tax at the beginning of the year. Such deferred tax assets are recognized and carried forward only if there is reasonable/virtual certainity of its realisation.

The carrying amount of Deferred Tax Assets are reviewed at each Balance Sheet date and written down or written up, to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized.

I) Borrowing Cost

Borrowing costs directly attributable to development of qualifying asset are capitalized till the date qualifying asset is ready for put to use for its intended purpose as part of cost of that asset. All Other Borrowing costs are reduced from coresponding income or recognized as expense in the period in which they are incurred.

m) Leases

Lease arrangements, where the risk and rewards incidental to the ownership of asset substantially vests with the lessor are recognized as operating lease. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss. Assets leased out under operating leases are capitalized. Lease rental are charged to Statement of Profit and Loss on accrual basis.

n) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period and adjusted for the effects of all dillutive potential equity shares.

o) Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation because of past event that will probably result in the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of such obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilties are not recognised but disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

p) Segment Reporting

During the year under consideration, the Company has three operative segments namely, Capital Market (CM) Segment, Depository Participant (DP) segment and Merchant Banking (MB) segment. As the DP and MB, does not fall within the parameters of "reportable segment" enunciated in Accounting Standard 17 "Segmental Reporting", the Company has only one reportable segment i.e. CM. In view of above and considering Accounting Standard Interpretation 20 "Disclosure of Segment Information", the Company has not furnished the Segmental Reporting.


Mar 31, 2010

1. Basis of Accounting

Financial statements are prepared under the historical cost convention ignoring changes if any in purchasing power of money on accural basis of accounting and in confirmity with the accounting principles generally accepted in India.

2. Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3. Revenue Recognition

Brokerage Income is recognised on the trade date.

Subscription income for convenient brokerage plans is recognised on enrollment in the scheme.

Account Facilitation charges is recognised on quarterly/yearly considering registration/activation of the client account.

In respect of Interest Income, is recognised on a time proportion basis.

4. Fixed Assets

Fixed Assets are stated at cost of acquisition as reduced by accumulated depreciation and impairment losses, if any. Cost comprises purchase price and any attributable cost of bringing the asset to its workingcondition for its intended use.

5. Depreciation

Depreciation on fixed assets has been provided on pro-rata basis on straight line method at the rates prescribed by Schedule XIV to the Companies Act, 1956from the month followingthe month of purchase/acquisition ofassets.

Considering the factors like utility of software, its nature, technological developments etc, if the management is of the opinion that the cost of acquisition of software and related expenses requires to be written off in the year of acquisition, then it is charged to revenue in the year ofacquisition.

Improvement to leasehold premises is written off over period of lease agreement on straight line basis.

6. Investments

Investments intended to be held for more than a year are classified as long term investments. Long term investments are valued at cost less permanent diminution in value, if any, in the opinion of the management. The current investments are valued at lower of cost or market value.

7. Stock in Trade

Stockintrade,comprisingof securities held asaresult of errorinexecutionof orders,isvalued at cost ormarket value, whichever is lower.

8. Employee Benefits

Employers Contribution to the Provident Fund and Pension fund are charged to the Profit and Loss Account of the period to which they relate. The annual contribution to the Group Gratuity Assurance Scheme of Life Insurance Corporation of India, determined on the basis of actuarialvaluationbythesaid Corporation is charged to Profit and Loss Account.

Short Term Employee Benefit payable within oneyear are provided on accrual basis at actual value.

9. Foreign Currency Transaction:

. Initial Recognition:

Foreign currency transactions are recorded in the reporting currency i.e. rupee value, by applying exchange rate between the reporting currency and the foreign currency on the date of transaction.

. Conversion:

Foreign currency monetary items are reported using the exchange rate on the balance sheet date. Non monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction.

. Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting companys monetary items at rates different from those at which they were initially recorded during the year, or reported in the previousfinancial statement, are recognised as income or as expenses in theyearinwhichtheyarise.

10. Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income of the year.

Deferred tax for the year is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the BalanceSheetdate. Deferred tax assets are recognized and carried forward only ifthere is reasonable/virtualcertaintyof its realisation.

The carrying amount of Deferred Tax Assets are reviewed at each balance sheet date and written down or written up, to reflect the amount that is reasonably/virtually certain, asthecasemay be,to be realized.

11. Borrowing Cost:

Borrowing costs directly attributable to development of qualifying asset are capitalized till the date qualifying asset is ready for put to use for its intended purpose as part of cost of that asset. Other borrowing costs are recognized as expense in the period in which they areincurred.

12. Lease Rental

Operating lease rental are charged to profit and loss account on accrual basis.

13. Earningspershare

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

Diluted earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period and adjusted for the effects of all dillutive potential equity shares.

14. Provisions

A provision is recognised when the company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

 
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