Mar 31, 2018
1. Significant accounting policies
(i) Corporate Information
The Company was incorporated on 28th June 1994 and got listed with BSE/NSE. The area of services include Equity Capital Market, Debt Capital Market, Private Equity and M&A, Infrastructure Advisory, Equity Broking & Wealth Management, Debt Portfolio Management Services and Distribution
(ii) Basis of preparation
The financial statements are prepared under the historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles (GAAP), to comply with the accounting standards specified u/s 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, relevant pronouncements of the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy either to in use.
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in schedule III of the Companies Act, 2013. Previous yearâs figures have been regrouped/ reclassified wherever considered necessary. Based on the nature of services and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/ non-current classification of its assets and liabilities.
(iii) Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Where, actual results could differ from these estimates, the differences between actual results and estimates are recognised in the periods in which the results are known / materialized.
(iv) Current/Non-current classification
All assets and liabilities are classified as current and noncurrent.
i) Assets
An asset is classified as current when it satisfies any of the following criteria:
a. It is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is expected to be realized within 12 months after the reporting date; or
d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date. Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.
ii) Liabilities
A liability is classified as current when it satisfies any of the following criteria.
a. It is expected to be settled in the Companyâs normal operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is due to be settled within 12 months after the reporting date; or
d. The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Current liabilities includes current portion of noncurrent financial liabilities. All other liabilities are classified as non-current.
(v) Revenue recognition
Revenue is recognized to the extent it is possible that economic benefits will flow to the Company and revenue can be reliably measured.
(a) Advisory and consultancy services: Fee is booked on the completion of task/project as per the terms of agreement. However, where the percentage of completion is significant enough to ascertain the outcome reliably, revenue is recognised to the extent it can be accurately measured.
(b) Wealth / Broking activities: Income from broking on distribution operations is recognised on the closure of the issue of mutual funds, bonds, fixed deposits and other money market instruments. Income from stock broking operations is accrued on completion of transaction at the stock exchanges for commission from broking operations.
(c) In the case of trading in bonds, the profit/ loss from the transaction is recognised on the closure of the deal and consequent delivery of the bond.
(d) Revenue on account of trading in shares is recognized on the basis of each trade executed at the stock exchange during the financial year.
(e) In respect of non delivery based transactions such as derivatives and intra day, the profit and loss is accounted for at the completion of each settlement, however in case of an open settlement the net result of transactions which are squared up on FIFO basis is recognized as profit/loss in the account.
(f) Depository charges is accounted for on accrual basis.
(g) Dividend income is recognised when the right to receive the income is established.
(h) In case of fixed income securities/deposits/loan, interest is recognised on a time proportionate basis.
(i) In respect of other heads of income, the Company follows the practice of recognising income on accrual basis.
(j) Brokerage and other revenue from operations are net of service tax / GST wherever applicable.
(vi) Borrowing Cost
Interest on borrowings is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable on the borrowings.
Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of profit & loss.
(vii) Expenditure
Expenses are recognised on accrual basis and provisions are made for all known losses and liabilities. Expenses incurred on behalf of other companies for sharing personnel, common services and facilities like premises, telephones etc, are allocated to them at cost and reduced from respective expenses.
Similarly, expense allocation received from other companies is included within respective expense classifications.
(viii) Employee benefits
The Companyâs obligations towards various employee benefits have been recognized as follows:
(a) Short term benefits
All employee benefits payable/available within twelve months of rendering the service are classified as shortterm employee benefits. Benefits such as salaries, wages and bonus etc., are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service.
(b) (Defned contribution plan)
Retirement / employee benefits in the form of Provident Fund, Employee State Insurance and Labour Welfare are considered as defined contribution plan and contributions to the respective funds administered by the Government are charged to the Statement of Profit and Loss of the year when the contribution to the respective funds are due.
(c) Gratuity (Defned benefit plan)
Gratuity is defined benefit plan. The present value of obligations under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation.
The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.
The Company makes contribution to an insurer managed funds for discharging its gratuity liability.
(d) Compensated absences (Other long-term benefits) The Company provides for leave encashment based on actuarial valuation using projected unit credit method in respect of past service. In respect of compensated absences arising during the tenure of service, lying to the credit of employee as on the last day of financial year, subject to the maximum period of leave allowable as per HR policy of the company. The defined benefit obligation is calculated taking into account the pattern of an ailment of leave. In respect of encashment of leave, the defined benefit is calculated taking into account all types of decrements and qualifying salary projected up to the assumed date of encashment. The valuation of leave encashment benefit is done as at the balance sheet date by an independent actuary. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss. However, company does not en-cash compensated absences.
(ix) Fixed assets
i) Tangible assets
Tangible assets are stated at the cost of acquisition or construction, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable costs of bringing the assets to their working condition for intended use. Borrowing costs directly attributable to acquisition or construction of fixed assets, which necessarily take a substantial period of time to be ready for their intended use are capitalised as part of the cost of such assets to the extent they relate to the period till such assets are ready to be put to use.
Depreciation on tangible assets
(a) Leasehold improvements are depreciated over the lease period as stated in the lease agreement or over the estimated useful life of the assets, whichever is shorter.
(b) Depreciation is provided based on useful life of assets on Straight Line Method (SLM). The useful life of assets is taken as prescribed in Schedule II to the Companies Act, 2013.
ii) Intangible assets and its amortisation
Intangible assets are recorded at cost and are amortised over the period the Company expects to derive economic benefits from their use.
Softwares are stated at cost of acquisition and are amortized on straight line basis.
iii) Advances paid towards acquisition of fixed assets and cost of assets not ready for use before the year end are disclosed as capital work in progress.
(x) Impairment
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. For assets that are not yet available for use, the recoverable is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortisation, if no impairment loss had been recognised.
(xi) Stock- in- Trade
Securities acquired with the intention to trade are classified as Stock -in- trade. Stock-in-Trade of Securities is valued at lower of the cost or fair value. Cost is determined on First-in-First-Out (FIFO) basis.
(xii) Investments
Investments are classified into long-term investments and current investments based on intent of the management at the time of making the investment. Investment intended to be held for more than one year from the date such investments are made are classified as long-term investments. All long-term investments are classified as noncurrent investments in the Balance Sheet. The portions of long-term investments which are expected to be realised within twelve months from the Balance Sheet date are classified as current investments. Current investments are valued at lower of cost and market value, computed category-wise e.g. quoted shares, unquoted shares, government securities and non government securities/bonds. The diminution in current investments is charged to the Statement of Profit and Loss and appreciation, if any, is recognised at the time of sale. Long-term investments, including investments in subsidiaries, are valued at cost unless there is diminution, other than temporary, in their value. Diminution is considered other than temporary based on criteria that include the extent to which cost exceeds the market value, the duration of the market value decline and the financial health of and specific prospects of the issuer.
i) The Cost is arrived at average method and is inclusive of brokerage, transfer expenses and demat charges, if any. The fair value is arrived at with reference to the market value, if available, quotation in any stock exchange or any other available information to indicate a transaction between unrelated willing buyer and willing seller at arms length price. Profit or Loss on sale of investment is determined on the basis of the weighted average cost method. On disposal of and Investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.
ii) In case of unquoted investments, the fair value is arrived on the basis of breakup value as per latest available audited balance sheet of the investee company.
iii) Interest accrued and/or broken period interest paid on unsold securities is recognized as âInterest Accrued on Investmentâ under Other Current Assets.
(xiii) Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Exchange differences arising on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss. Monetary assets and liabilities denominated in foreign currency are translated at year-end rates and resultant gains/losses on foreign exchange translations other than in relation to acquisition of fixed assets and long term foreign currency monetary liabilities are recognised in the Statement of Profit and Loss.
(xiv) Current and deferred tax
Income-tax expense comprises current tax and deferred tax. Current tax expense is the amount of tax for the period determined in accordance with the income-tax law and deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. 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 realised.
(xv) Provisions, contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. The Company does not recognise assets which are of contingent nature until there is virtual certainty of realisability of such assets. However, if it has become virtually certain that an inflow of economic benefits will arise, asset and related income is recognised in the financial statements of the period in which the change occurs.
(xvi) Earnings per share
Earnings per share is calculated by dividing the net profit of loss for the year (including prior period item, if any) attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential shares outstanding during the year, except where the results would be anti-dilutive.
(xvii) Operating leases
Lease payments under operating lease are recognised as an expense on a straight line basis over the lease term.
xviii) Employee Stock Option Scheme (âESOSâ)
The Employees Stock Option Scheme (âthe Schemeâ) provides for grant of equity shares of the Company to wholetime directors and employees of the Company. The Scheme provides that employees are granted an option to subscribe to equity shares of the Company that vests in a graded manner. The options may be exercised within a specified period. The Company follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date. The fair market price is the closing price of the equity shares of the Company on the stock exchange/s on which the shares of the Company are listed, immediately prior to the date of the meeting of Compensation Committee of Board of Directors of the Company in which the options are granted. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date is considered.
(xix) Cash and Cash Equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.
(xx) Assets on Operating Leases
Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective agreements.
(xxi) Segment reporting
- Segments are identified by the management, keeping in view the dominant source and nature of risks and returns and the internal organization and management structure.
- Revenue and expenses have been identified to a segment on the basis of relationship to the operating activities of the segment.
- Revenue and expenses, which relate to the company as a whole and are not allocable to a segment on reasonable basis, have been disclosed as âunallocableâ.
- Segment assets and liabilities represent assets and liabilities in respective segments. Tax related assets, and other assets and liabilities that are not reported or cannot be allocated to a segment on a reasonable basis, have been disclosed as âunallocableâ
Mar 31, 2016
1. Significant accounting policies
(i) Basis of preparation
The financial statements are prepared under the historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles (GAAP), to comply with the accounting standards specified u/s 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, relevant pronouncements of the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy either to in use.
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in schedule III of the Companies Act, 2013. Previous year''s figures have been regrouped/ reclassified wherever considered necessary. Based on the nature of services and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of its assets and liabilities.
(ii) Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Adjustments as a result of differences between actual and estimates are made prospectively.
(iii) Current/Non-current classification
All assets and liabilities are classified as current and non-current.
i) Assets
An asset is classified as current when it satisfies any of the following criteria :
a. It is expected to be realized in, or is intended for sale or consumption in, the Company''s normal operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is expected to be realized within 12 months after the reporting date; or
d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current portion of noncurrent financial assets. All other assets are classified as non-current.
ii) Liabilities
A liability is classified as current when it satisfied any of the following criteria :
a. It is expected to be settled in the Company''s normal operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is due to be settled within 12 months after the reporting date; or
d. The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Current liabilities includes current portion of noncurrent financial liabilities. All other liabilities are classified as non-current.
(iv) Revenue recognition
(a) Advisory and consultancy services : Fee is booked on the completion of task / project as per the terms of agreement. However, where the percentage of completion is significant enough to ascertain the outcome reliably, revenue is recognized to the extent it can be accurately measured.
(b) Broking activities : Income from broking on distribution operations is recognized on the closure of the issue of mutual funds, bonds, fixed deposits and other money market instruments. Income from stock broking operations is accrued on completion of transaction at the stock exchanges for commission from broking operations.
(c) In the case of trading in bonds, the profit / loss from the transaction is recognized on the closure of the deal and consequent delivery of the bond.
(d) Revenue on account of trading in shares is recognized on the basis of each trade executed at the stock exchange during the financial year.
(e) In respect of non delivery based transactions such as derivatives, the profit and loss is accounted for at the completion of each settlement, however in case of an open settlement the net result of transactions which are squared up on FIFO basis is recognized as profit/loss in the account.
(f) Depository income is accounted for on accrual basis.
(g) Dividend income is recognized when the right to receive the income is established.
(h) In case of fixed income securities/deposits/loan, interest is recognized on a time proportionate basis.
(i) In respect of other heads of income, the Company follows the practice of recognizing income on accrual basis.
(v) Interest expense
Interest on borrowings is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable on the borrowings.
(vi) Expenditure
Expenses are recognized on accrual basis and provisions are made for all known losses and liabilities. Expenses incurred on behalf of other companies for sharing personnel, common services and facilities like premises, telephones etc, are allocated to them at cost and reduced from respective expenses.
Similarly, expense allocation received from other companies is included within respective expense classifications.
(vii) Employee benefits
The Company''s obligations towards various employee benefits have been recognized as follows :
(a) Short term benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service.
(b) Provident fund (Defined contribution plan) Provident fund is a defined contribution plan. The contributions towards provident fund which are being deposited with the Regional Provident Fund Commissioner are charged to the Statement of Profit and Loss.
(c) Gratuity (Defined benefit plan)
Gratuity is defined benefit plan. The present value of obligations under such defined benefit plan is determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation.
The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.
The Company makes contribution to an insurer managed funds for discharging its gratuity liability.
(d) Compensated absences (Other long-term benefits) The Company provides for leave encashment based on actuarial valuation using projected unit credit method in respect of past service. In respect of compensated absences arising during the tenure of service, the defined benefit obligation is calculated taking into account the pattern of an ailment of leave. In respect of encashment of leave, the defined benefit is calculated taking into account all types of decrements and qualifying salary projected up to the assumed date of encashment. The valuation of leave encashment benefit is done as at the balance sheet date by an independent actuary. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.
(viii) Fixed assets
i) Tangible assets
Tangible assets are stated at the cost of acquisition or construction, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable costs of bringing the assets to their working condition for intended use. Borrowing costs directly attributable to acquisition or construction of fixed assets, which necessarily take a substantial period of time to be ready for their intended use are capitalized as part of the cost of such assets to the extent they relate to the period till such assets are ready to be put to use.
Depreciation on tangible assets
(a) Leasehold improvements are depreciated over the lease period as stated in the lease agreement or over the estimated useful life of the assets, whichever is shorter.
(b) Depreciation is provided based on useful life of assets on Straight Line Method (SLM). The useful life of assets is taken as prescribed in Schedule II to the Companies Act, 2013.
ii) Intangible assets and its amortization
Intangible assets are recorded at cost and are amortized over the period the Company expects to derive economic benefits from their use.
iii) Advances paid towards acquisition of fixed assets and cost of assets not ready for use before the year end, are disclosed as capital work in progress.
(ix) Impairment
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated. For assets that are not yet available for use, the recoverable is estimated at each balance sheet date. An impairment loss is recognized whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortization, if no impairment loss had been recognized .
(x) Investments
Investments are classified into long-term investments and current investments based on intent of the management at the time of making the investment. Investment intended to be held for more than one year from the date such investments are made are classified as long-term investments. All long-term investments are classified as non-current investments in the Balance Sheet. The portions of long-term investments which are expected to be realized within twelve months from the Balance Sheet date are classified as current investments. Current investments are valued at lower of cost and market value, computed category-wise
e.g. quoted shares, unquoted shares, government securities and non government securities / bonds. The diminution in current investments is charged to the Statement of Profit and Loss and appreciation, if any, is recognized at the time of sale. Long-term investments, including investments in subsidiaries, are valued at cost unless there is diminution, other than temporary, in their value. Diminution is considered other than temporary based on criteria that include the extent to which cost exceeds the market value, the duration of the market value decline and the financial health of and specific prospects of the issuer.
Investments, which are held as stock in trade as part of the business operations are valued in the same manner as are relatable to Current Investments.
i) The Cost is arrived at FIFO method and is inclusive of brokerage, transfer expenses and demat charges, if any. The fair value is arrived at with reference to the market value, if available, quotation in any stock exchange or any other available information to indicate a transaction between unrelated willing buyer and willing seller at armâs length price.
ii) In case of unquoted investments, the fair value is arrived on the basis of breakup value as per latest available audited balance sheet of the investee company.
iii) Interest accrued and/or broken period interest paid on unsold securities is recognized as âInterest Accrued on Investmentâ under Other Current Assets.
(xi) Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transaction. Exchange differences arising on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss. Monetary assets and liabilities denominated in foreign currency are translated at year-end rates and resultant gains/losses on foreign exchange translations other than in relation to acquisition of fixed assets and long term foreign currency monetary liabilities are recognized in the Statement of Profit and Loss.
(xii) Current and deferred tax
Income-tax expense comprises current tax and deferred tax. Current tax expense is the amount of tax for the period determined in accordance with the income-tax law and deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. 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.
(xiii) Provisions, contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
The Company does not recognize assets which are of contingent nature until there is virtual certainty of reliability of such assets. However, if it has become virtually certain that an inflow of economic benefits will arise, asset and related income is recognized in the financial statements of the period in which the change occurs.
(xiv)Earnings per share
Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential shares outstanding during the year, except where the results would be anti-dilutive.
(xv) Operating leases
Lease payments under operating lease are recognized as an expense on a straight line basis over the lease term.
(xvi)Employee Stock Option Scheme (âESOSâ)
The Employees Stock Option Scheme (âthe Schemeâ) provides for grant of equity shares of the Company to whole-time directors and employees of the Company. The Scheme provides that employees are granted an option to subscribe to equity shares of the Company that vests in a graded manner. The options may be exercised within a specified period. The Company follows the intrinsic value method to account for its stock-based employee compensation plans. Compensation cost is measured as the excess, if any, of the fair market price of the underlying stock over the exercise price on the grant date. The fair market price is the closing price of the equity shares of the Company on the stock exchange/s on which the shares of the Company are listed, immediately prior to the date of the meeting of Compensation Committee of Board of Directors of the Company in which the options are granted. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date is considered.
(xvii)Cash and Cash Equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.
Mar 31, 2014
(i) Basis of preparation
The financial statements are prepared under the historical cost
convention, in accordance with the Indian Generally Accepted Accounting
Principles (GAAP), Accounting Standards prescribed under the Companies
(Accounting Standards) Rules, 2006, relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI) and the provisions
of the Companies Act, 2013 (to the extent notified) and Companies Act,
1956 (to the extent applicable). Accounting policies have been
consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard
requires a change in the accounting policy either to in use.
The financial statements have been prepared on the Revised Schedule VI
of the Companies Act 1956. All assets and liabilities have been
classified as current or non-current as per the Company''s normal
operating cycle and other criteria set out in the Revised Schedule VI
of the Companies Act, 1956. Previous year''s figures have been regrouped
/ reclassified wherever considered necessary.
(ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Examples
of such estimates include provision for assets and estimated useful
life of fixed assets. Actual results could differ from these
estimates. Adjustments as a result of differences between actual and
estimates are made prospectively.
(iii) Current/Non-current classification
All assets and liabilities are classified as current and non-current.
i) Assets
An asset is classified as current when it satisfies any of the
following criteria :
a. It is expected to be realized in, or is intended for sale or
consumption in, the Company''s normal operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is expected to be realized within 12 months after the reporting
date; or
d. It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of non- current financial
assets. All other assets are classified as non-current.
ii) Liabilities
A liability is classified as current when it satisfied any of the
following criteria :
a. It is expected to be settled in the Company''s normal operating
cycle;
b. It is held primarily for the purpose of being traded;
c. It is due to be settled within 12 months after the reporting date;
or
d. The Company does not have an unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.
Current liabilities includes current portion of non- current financial
liabilities. All other liabilities are classified as non-current.
(iv) Revenue recognition
(a) Advisory and consultancy services: Fees is booked on the completion
of task/project as per the terms of agreement. However, where the
percentage of completion is significant enough to ascertain the outcome
reliably, revenue is recognised to the extent it can be accurately
measured.
(b) Broking activities: Income from broking on distribution operations
is recognised on the closure of the issue of mutual funds, bonds, fixed
deposits and other money market instruments. Income from equity stock
broking operations is accrued on completion of transaction at the stock
exchanges for commission from equity broking operations.
(c) In the case of trading in bonds, the profit /loss from the
transaction is recognised on the closure of the deal and consequent
physical delivery of the bond.
(d) Revenue on account of trading in shares is recognized on the basis
of each trade executed at the stock exchange during the financial year.
(e) In respect of non delivery based transactions such as derivatives,
the profit and loss is accounted for at the completion of each
settlement, however in case of an open settlement the net result of
transactions which are squared up on FIFO basis is recognized as
Profit/Loss in the account.
(f) Depository income is accounted for on accrual basis.
(g) Dividend income is recognised when the right to receive the income
is established.
(h) In the case of fixed income securities/deposits/ loan, interest is
recognised on a time proportionate basis.
(i) In respect of other heads of income, the Company follows the
practice of recognising income on accrual basis.
(v) Interest expense
Interest on borrowings is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable on the
borrowings.
(vi) Expenditure
Expenses are recognised on accrual basis and provisions are made for
all known losses and liabilities. Expenses incurred on behalf of other
companies, in India, for sharing personnel, common services and
facilities like premises, telephones etc, are allocated to them at cost
and reduced from respective expenses.
Similarly, expense allocation received from other companies is included
within respective expense classifications.
(vii) Employee benefits
The Company''s obligations towards various employee benefits have been
recognized as follows :
(a) Short term benefits
All employee benefits payable/available within twelve months of
rendering the service are classified as short-term employee benefits.
Benefits such as salaries, wages and bonus etc., are recognized in the
Statement of Profit and Loss in the period in which the employee
renders the related service.
(b) Provident fund (Defined contribution plan) Provident fund is a
defined contribution plan. The contributions towards provident fund
which are being deposited with the Regional Provident Fund Commissioner
are charged to the Statement of Profit and Loss.
(c) Gratuity (Defined benefit plan)
Gratuity is defined benefit plan. The present value of obligations
under such defined benefit plan is determined based on actuarial
valuation carried out by an independent actuary using the Projected
Unit Credit Method, which recognizes each period of service as giving
rise to additional unit of employee benefit entitlement and measure
each unit separately to build up the final obligation.
The obligation is measured at the present value of estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plans, is based on the market
yields on Government securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the Statement
of Profit and Loss. The Company makes contribution to an insurer
managed funds for discharging its gratuity liability.
(d) Compensated absences (Other long-term benefits) The Company
provides for leave encashment based on actuarial valuation using
projected unit credit method in respect of past service. In respect of
compensated absences arising during the tenure of service, the defined
benefit obligation is
calculated taking into account the pattern of an ailment of leave. In
respect of encashment of leave, the defined benefit is calculated
taking into account all types of decrements and qualifying salary
projected up to the assumed date of encashment. The valuation of leave
encashment benefit is done as at the balance sheet date by an
independent actuary. Actuarial gains and losses are recognized
immediately in the Statement of Profit and Loss.
(viii) Fixed assets
i) Tangible assets
Tangible assets are stated at the cost of acquisition or construction,
less accumulated depreciation and impairment losses. Cost comprises the
purchase price and any attributable costs of bringing the assets to
their working condition for intended use. Borrowing costs directly
attributable to acquisition or construction of fixed assets, which
necessarily take a substantial period of time to be ready for their
intended use are capitalised as part of the cost of such assets to the
extent they relate to the period till such assets are ready to be put
to use.
Depreciation on tangible assets
(a) Leasehold improvements are depreciated over the lease period as
stated in the lease agreement or over the estimated useful life of the
assets, whichever is shorter.
(b) Other assets are depreciated on straight-line method at the rates
specified in Schedule XIV to the Companies Act, 1956 from the date of
put to use until the date of sale.
(c) Depreciation on assets costing up to Rs. 5,000 are depreciated at
the rate of 100% on pro-rata basis.
(d) Depreciation on additions to assets or on sale/ adjustment of
assets is calculated pro-rata from the date of such addition or up to
the date of such sale/adjustment.
(e) In view of management, the above reflects the estimated useful
lives of the respective fixed assets.
ii) Intangible assets and its amortisation
Intangible assets are recorded at cost and are amortised over the
period the Company expects to derive economic benefits from their use.
(ix) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount of the asset is estimated.
For assets that are not yet available for use, the recoverable is
estimated at each balance sheet date. An impairment loss is recognised
whenever the carrying amount of an asset or cash generating unit
exceeds its recoverable
amount. Impairment losses are recognised in the Statement of Profit and
Loss. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset''s carrying amount does
not exceed the carrying amount that would have been determined net of
depreciation or amortisation, if no impairment loss had been
recognised.
(x) Investments
Investments are classified into long-term investments and current
investments based on intent of the management at the time of making the
investment. Investment intended to be held for more than one year from
the date such investments are made are classified as long-term
investments. All long-term investments are classified as non-current
investments in the Balance Sheet. The portions of long-term investments
which are expected to be realised within twelve months from the Balance
Sheet date are classified as current investments. Current investments
are valued at lower of cost and market value, computed category-wise
e.g. quoted shares, unquoted shares, government securities and non
government securities/bonds. The diminution in current investments is
charged to the Statement of Profit and Loss and appreciation, if any,
is recognised at the time of sale. Long-term investments, including
investments in subsidiaries, are valued at cost unless there is
diminution, other than temporary, in their value. Diminution is
considered other than temporary based on criteria that include the
extent to which cost exceeds the market value, the duration of the
market value decline and the financial health of and specific prospects
of the issuer.
Investments, which are held as stock in trade as part of the business
operations are valued in the same manner as are relatable to Current
Investments.
i) The Cost is arrived at FIFO method and is inclusive of brokerage,
transfer expenses and demat charges, if any. The fair value is arrived
at with reference to the market value, if available, quotation in any
stock exchange or any other available information to indicate a
transaction between unrelated willing buyer and willing seller at arms
length price.
ii) In case of unquoted investments, the fair value is arrived on the
basis of breakup value as per latest available audited balance sheet of
the investee company.
iii) Interest accrued and/or broken period interest paid on unsold
securities is recognized as "Interest Accrued on Investment" under
Other Current Assets.
(xi) Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of the transaction. Exchange differences
arising on settlement of foreign currency transactions are recognised
in the Statement of Profit and Loss. Monetary assets and liabilities
denominated in foreign currency are translated at year- end rates and
resultant gains/losses on foreign exchange translations other than in
relation to acquisition of fixed assets and long term foreign currency
monetary liabilities are recognised in the Statement of Profit and
Loss.
(xii) Current and deferred tax
Income-tax expense comprises current tax and deferred tax. Current tax
expense is the amount of tax for the period determined in accordance
with the income-tax law and deferred tax charge or credit reflects the
tax effects of timing differences between accounting income and taxable
income for the period. The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using
the tax rates that have been enacted or substantively enacted by the
balance sheet date. Deferred tax assets are recognised only to the
extent there is reasonable certainty that the assets can be realised in
future; however, where there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax assets are recognised
only if there is a virtual certainty of realisation of such assets.
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 realised.
(xiii) Provisions, contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result
of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made.
The Company does not recognise assets which are of contingent nature
until there is virtual certainty of realisability of such assets.
However, if it has become virtually certain that an inflow of economic
benefits will arise, asset and related income is recognised in the
financial statements of the period in which the change occurs.
(xiv) Earnings per share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding during the year. Diluted earnings per
share is computed using the weighted average number of equity and
dilutive potential shares outstanding during the year, except where the
results would be anti-dilutive.
(xv) Operating leases
Lease payments under operating lease are recognised as an expense on a
straight line basis over the lease term.
The Employees Stock Option Scheme ("the Scheme") provides for grant
of equity shares of the Company to whole-time directors and employees
of the Company. The Scheme provides that employees are granted an
option to subscribe to equity shares of the Company that vests in a
graded manner. The options may be exercised within a specified period.
The Company follows the intrinsic value method to account for its
stock-based employee compensation plans. Compensation cost is measured
as the excess, if any, of the fair market price of the underlying stock
over the exercise price on the grant date. The fair market
price is the closing price of the equity shares of the Company on the
stock exchange/s on which the shares of the Company are listed,
immediately prior to the date of the meeting of Compensation Committee
of Board of Directors of the Company in which the options are granted.
If the shares are listed on more than one stock exchange, then the
stock exchange where there is highest trading volume on the said date
is considered.
(xvii)Cash and Cash Equivalents
In the cash flow statement, cash and cash equivalents include cash in
hand, demand deposits with banks, other short-term highly liquid
investments with original maturities of three months or less.
Rights, preferences and restrictions attached to equity shares
The Company has only one class of shares referred to as equity shares
having a par value Rs. 6 each. Each member of the Company has voting
rights on a poll, in proportion to his share in the paid-up equity
share capital. On show of hands every member present in person and
being holders of equity shares shall have one vote.
Each shareholder is entitled to receive interim dividend when it is
declared by the Board of Directors. The final dividend proposed by the
Board of Directors are paid when approved by the shareholders at Annual
General Meeting.
In the event of liquidation of the Company, the holders of the equity
shares will be entitled to receive any of the remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion of the equity shares held by the
shareholders.
The Company has instituted an Employee Stock Option Scheme in the year
2007, known as ''Employee Stock Option Scheme (''ESOS'' or ''Scheme'')
2007. This Scheme was adopted by the Board of Directors on 3 January
2008 and subsequently by shareholders of the Company on 4 March 2008,
and is for issue of 4,500,000 options of the Company convertible into
equal number of equity shares of the par value of Rs. 6 each. The
scheme was further amended by the Board of Directors on 5 March 2010
and subsequently by shareholders of the Company on 13 April 2010 to
increase number of options from 4,500,000 options to 15,000,000 options
of the Company convertible into equal number of equity shares. A
compensation committee comprising independent members of the Board of
Directors administers the scheme. The Compensation Committee has framed
various plan series under the scheme from time to time. All options had
been granted at their intrinsic value defined under the SEBI
guidelines.
The weighted average share price of options exercised under the scheme
during the year ended 31 March 2012 was Rs.26.65. No options were
exercised during the year ended 31 March 2014 and 31 March 2013.
Series-wise options outstanding as at 31 March 2014 and 31 March 2013
are summarized in the table mentioned below:
a) As at 31 March 2014, the Company had 2,751,000 (previous year
3,001,000) number of shares reserved for issue under employee stock
option plans. Out of above 2,641,000 (previous year 2,727,664) employee
stock options are vested and are exercisable at any point of time.
b) Since, no options were granted during the current financial year
ended 31 March 2014 and previous year ended 31 Mach 2013, the
disclosures relating to the weighted average fair value of the options
granted, effect on compensation cost, proforma loss after tax, basic
and diluted earnings per share and key assumptions like risk fee
interest rate, expected life and expected volatility are not
applicable.
Nature of security and terms of repayment of secured borrowings:
Nature of security
Term loan from others amounting to Rs. 186,973,619 (previous year Rs.
202,168,294) are secured by way of equitable mortgage of one of
building owned by the Company. Further, the loan has also been
guaranteed by Mr. Navjeet Singh Sobti, Executive Vice Chairman of the
Company.
Terms of payment
Term loan is taken from financial institution and carries an interest
rate of LIBOR minus 100 bps. The interest rate as at year end is 13.50%
per annum (previous year 13.40%). The last installment would fall due
on 10 July 2020. The loan is repayable in 120 equal monthly
installments along with the interest. Loan amounting to Rs. 15,382,363
(previous year Rs. 13,656,258) repayable in next 12 months has been
shown as current maturities of secured long-term borrowings in Note 2.9
Term loans from banks amounting to Rs. Nil (previous year Rs. 284,976)
are secured against hypothecation of specific vehicles financed.
Loans are repayable in 36 equal monthly installments along with the
interest and carries fixed interest rate from 9.08% to 13.75% per annum
specific to the respective banks. The last installment would fall due
on 15 July 2014. Loan amounting to Rs. 284,976 (previous year Rs.
1,390,724) repayable in next 12 months has been shown as current
maturities of secured long-term borrowings in Note 2.9.
1 The Company has carried out computation of deferred tax in accordance
with Accounting Standard 22 - Accounting for Taxes on Income notified
in the Companies (Accounting Standards) Rules, 2006. Management is of
the view that it is not virtually certain to realise the deferred tax
assets arising on carried forward losses and unabsorbed depreciation.
Accordingly, in the absence of virtual certainty deferred tax asset has
not been recognised.
Bank overdrafts are for the working capital requirements of the Company
and are secured by way of pledge of fixed deposits amounting to Rs.
25,000,000 with IDBI Bank Limited and Rs.15,000,000 with the Punjab
National Bank Limited. The rate of interest is 11.00% per annum with
both IDBI Bank Limited and Punjab National Bank Limited.
1 The Ministry of Micro, Small and Medium Enterprises has issued an
Office Memorandum dated 26 August 2008 which recommends that Micro and
Small Enterprises should mention in their correspondence with their
customers, the Entrepreneurs Memorandum number as allocated after
filing of the Memorandum. Based on information received and available
with the Company, there are no trade payables and other current
liabilities payable to Micro and Small Enterprises as at 31 March 2014
and 31 March 2013.
1 There are no amounts due for payment to the Investor Education and
Protection Fund under Section 205C of the Companies Act, 1956 as at the
year end.
2 The balance includes salary payable amounting to Rs.13,265,931
(previous year Rs. 12,799,338).
1 During the year, the company disposed of its stake in one of its
subsidiary, Almondz Insurance Brokers Private Limited (AIBPL) by sale
of its entire shareholding of 918000 equity shares. The sale is in
terms of the decision of the Board of Directors of the company in its
meeting held on 11 November, 2012 and approval of Insurance Regulatory
Authority of India (IRDA).
2 During the previous year the company acquired 80 % of holding in a
company Skiffle Healthcare Services Limited (SHSL). As per accounting
policy followed by the company, long term investments including
investments in subsidiaries are valued at cost unless there is
diminution, other than temporary, in their value. The diminution in
value has not been provided as the same is considered to be temporary
in view of initial stage of the project undertaken by SHSL.
1 The interest income on deposits pledged with banks/stock exchange has
been included in operating income since the same is directly
attributable to primary revenue generating operation of the company.
Earnings per share (EPS) are computed in accordance with AS
20ÂEarnings per Share by dividing the net profit after tax by the
weighted average number of equity shares outstanding for the period
Mar 31, 2012
(i) Basis of preparation
The financial statements are prepared under the historical cost
convention, in accordance with the Indian Generally Accepted Accounting
Principles (GAAP), Accounting Standards prescribed under the Companies
(Accounting Standards) Rules, 2006, relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI) and the provisions
of the Companies Act, 1956, as adopted consistently by the Company.
In preparation and presentation of these financial statements, the
Company has adopted the Revised Schedule VI to the Companies Act, 1956.
The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosure made in the financial statements. All assets and liabilities
have been classified as current or non-current as per the Company's
normal operating cycle and other criteria set out in the Revised
Schedule VI of the Companies Act, 1956. Previous year's figures have
been regrouped/reclassified to conform to the classification of assets
and liabilities as at 31 March 2012.
(ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Examples of such estimates include provision for assets and estimated
useful life of fixed assets. Actual results could differ from these
estimates. Adjustments as a result of differences between actual and
estimates are made prospectively.
(iii) Revenue recognition
(a) Advisory and consultancy services: Fees is booked on the completion
of task/project as per the terms of agreement. However, where the
percentage of completion is significant enough to ascertain the outcome
reliably, revenue is recognised to the extent it can be accurately
measured.
(b) Broking activities: Income from broking on distribution operations
is recognised on the closure of the issue of mutual funds, bonds, fixed
deposits and other money market instruments. Income from equity stock
broking operations is accrued on completion of transaction at the stock
exchanges for commission from equity broking operations.
(c) In the case of trading in bonds, the profit/loss from the
transaction is recognised on the closure of the deal and consequent
physical delivery of the bond.
(d) Dividend income is recognised when the right to receive the income
is established.
(e) In the case of fixed income securities/deposits, interest
recognised on a time proportionate basis.
(f) In respect of other heads of income, the Company follows the
practice of recognising income on accrual basis.
(iv) Interest expense
Interest on borrowings is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable on the
borrowings.
(v) Expenditure
Expenses are recognised on accrual basis and provisions are made for
all known losses and liabilities. Expenses incurred on behalf of other
companies, in India, for sharing personnel, common services and
facilities like premises, telephones, etc. are allocated to them at
cost and reduced from respective expenses.
Similarly, expense allocation received from other companies is included
within respective expense classifications.
(vi) Employee benefits
The Company's obligations towards various employee benefits have been
recognised as follows :
(a) Short term benefits
All employee benefits payable/available within twelve months of
rendering the service are classified as short-term employee benefits.
Benefits such as salaries, wages and bonus etc., are recognised in the
Statement of Profit and Loss in the period in which the employee
renders the related service.
(b) Provident fund (Defined contribution plan) Provident fund is a
defined contribution plan. The contribution towards provident fund
which are being deposited with the Regional Provident Fund Commissioner
are charged to the Statement of Profit and Loss.
(c) Gratuity (Defined benefit plan)
Gratuity is defined benefit plan. The present value of obligations
under such defined benefit plan is determined based on actuarial
valuation carried out by an independent actuary using the Projected
Unit Credit Method, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measure
each unit separately to build up the final obligation.
The obligation is measured at the present value of estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plans, is based on the market
yields on Government securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognised immediately in the Statement
of Profit and Loss.
The Company makes contribution to an insurer managed funds for
discharging its gratuity liability.
(d) Compensated absences (other long-term benefits) The Company
provides for leave encashment based on actuarial valuation using
projected unit credit method in respect of past service. In respect of
compensated absences arising during the tenure of service, the defined
benefit obligation is calculated taking into account the pattern of
availment of leave. In respect of encashment of leave, the defined
benefit is calculated taking into account all types of decrements and
qualifying salary projected upto the assumed date of encashment. The
valuation of leave encashment benefit is done as at the balance sheet
date by an independent actuary. Actuarial gains and losses are
recognised immediately in the Statement of Profit and Loss.
(vii) Fixed assets Tangible assets
Tangible assets are stated at the cost of acquisition or construction,
less accumulated depreciation and impairment losses. Cost comprises the
purchase price and any attributable costs of bringing the assets to
their working condition for intended use. Borrowing costs directly
attributable to acquisition or construction of fixed assets, which
necessarily take a substantial period of time to be ready for their
intended use are capitalised.
Depreciation on tangible assets
(a) Leasehold improvements are depreciated over the lease period as
stated in the lease agreement or over the estimated useful life of the
assets, whichever is shorter.
(b) Other assets are depreciated on straight-line method at the rates
specified in Schedule XIV to the Companies Act, 1956 from the date of
put to use until the date of sale.
(c) Depreciation on assets costing up to Rs. 5,000 are depreciated at
the rate of 100% on pro-rata basis.
(d) Depreciation on additions to assets or on sale/ adjustment of
assets is calculated pro-rata from the date of such addition or up to
the date of such sale/ adjustment.
(e) In view of management, the above reflects the estimated useful
lives of the respective fixed assets.
Intangible assets and its amortisation
Intangible assets are recorded at cost and are amortised over the
period the Company expects to derive economic benefits from their use.
(viii) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount of the asset is estimated.
For assets that are not yet available for use, the recoverable is
estimated at each balance sheet date. An impairment loss is recognised
whenever the carrying amount of an asset or cash generating unit
exceeds its recoverable amount. Impairment losses are recognised in
the Statement of Profit and Loss. An impairment loss is reversed if
there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent
that the asset's carrying amount does not exceed the carrying amount
that would have been determined net of depreciation or amortisation, if
no impairment loss had been recognised.
(ix) Investments
Investments are classified into long-term investments and current
investments based on intent of the management at the time of making the
investment. Investment intended to be held for more than one year from
the date such investments are made are classified as long-term
investments. All long-term investments are classified as non-current
investments in the Balance Sheet. The portions of long-term investments
which are expected to be realised within twelve months from the Balance
Sheet date are classified as current investments. Current investments
are valued at lower of cost and market value, computed category-wise
e.g. quoted shares, unquoted shares, government securities and non
government securities/bonds. The diminution in current investments is
charged to the Statement of Profit and Loss and appreciation, if any,
is recognised at the time of sale. Long-term investments, including
investments in subsidiaries, are valued at cost unless there is
diminution, other than temporary, in their value. Diminution is
considered other than temporary based on criteria that include the
extent to which cost exceeds the market value, the duration of the
market value decline and the financial health of and specific prospects
of the issuer.
(x) Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates
prevailing at the date of the transaction. Exchange differences
arising on settlement of foreign currency transactions are recognised
in the Statement of Profit and Loss. Monetary assets and liabilities
denominated in foreign currency are translated at year- end rates and
resultant gains/losses on foreign exchange translations are recognised
in the Statement of Profit and Loss.
(xi) Current and deferred tax
Income-tax expense comprises current tax and deferred tax. Current tax
expense is the amount of tax for the period determined in accordance
with the income-tax law and deferred tax charge or credit reflects the
tax effects of timing differences between accounting income and taxable
income for the period. The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognised using
the tax rates that have been enacted or substantively enacted by the
balance sheet date. Deferred tax assets are recognised only to the
extent there is reasonable certainty that the assets can be realised in
future; however, where there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax assets are recognised
only if there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as 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 realised.
(xii) Provisions, contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result
of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
The Company does not recognise assets which are of contingent nature
until there is virtual certainty of realisability of such assets.
However, if it has become virtually certain that an inflow of economic
benefits will arise, asset and related income is recognised in the
financial statements of the period in which the change occurs.
(xiii) Earnings per share
Basic earnings per share is computed using the weighted average number
of equity shares outstanding during the year. Diluted earnings per
share is computed using the weighted average number of equity and
dilutive potential shares outstanding during the year, except where the
results would be anti-dilutive.
(xiv) Operating leases
Lease payments under operating lease are recognised as an expense on a
straight line basis over the lease term.
(xv) Employee Stock Option Scheme ("ESOS")
The Employees Stock Option Scheme ("the Scheme") provides for grant
of equity shares of the Company to whole-time directors and employees
of the Company. The Scheme provides that employees are granted an
option to subscribe to equity shares of the Company that vests in a
graded manner. The options may be exercised within a specified period.
The Company follows the intrinsic value method to account for its
stock-based employee compensation plans. Compensation cost is measured
as the excess, if any, of the fair market price of the underlying stock
over the exercise price on the grant date. The fair market price is the
closing price of the equity shares of the Company on the stock
exchange/s on which the shares of the Company are listed, immediately
prior to the date of the meeting of Compensation Committee of Board of
Directors of the Company in which the options are granted. If the
shares are listed on more than one stock exchange, then the stock
exchange where there is highest trading volume on the said date is
considered.
(xvi) Cash and Cash Equivalents
In the cash flow statement, cash and cash equivalents include cash in
hand, demand deposits with banks, other short-term highly liquid
investments with original maturities of three months or less.
Mar 31, 2011
(i) Basis of preparation
The financial statements are prepared under the historical cost
convention, in accordance with the Indian Generally Accepted Accounting
Principles (GAAP), Accounting Standards prescribed under the Companies
(Accounting Standards) Rules, 2006, relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI) and the provisions
of the Companies Act, 1956, as adopted consistently by the Company.
(ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Examples of such estimates include provision for assets and estimated
useful life of fixed assets. Actual results could differ from these
estimates. Adjustments as a result of differences between actual and
estimates are made prospectively.
(iii) Revenue recognition
- Advisory and consultancy services : Fees is booked on the completion
of task/project as per the terms of agreement. However, where the
percentage of completion is significant enough to ascertain the outcome
reliably, revenue is recognised to the extent it can be accurately
measured.
- Broking activities : Income from broking on distribution operations
is recognised on the closure of the issue of mutual funds, bonds, fixed
deposits and other money market instruments. Income from equity stock
broking operations is accrued on completion of transaction at the stock
exchanges for commission from equity broking operations.
- In the case of trading in bonds, the profit/loss from the transaction
is recognised on the closure of the deal and consequent physical
delivery of the bond.
- Dividend income is recognised when the right to receive the income is
established.
- In the case of fixed income securities/deposits, interest is
recognised on a time proportionate basis.
- In respect of other heads of income, the Company follows the practice
of recognising income on accrual basis.
(iv) Interest expense
Interest on borrowing is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable on the
borrowing.
(v) Expenditure
Expenses are recognised on accrual basis and provisions are made for
all known losses and liabilities. Expenses incurred on behalf of other
companies, in India, for sharing personnel, common services and
facilities like premises, telephones, etc., are allocated to them at
cost and reduced from expenses. Similarly, expense allocation received
from other companies is included within respective expense
classifications.
(vi) Retirements benefits
The Company''s obligations towards various employee benefits have been
recognised as follows :
(a) Short term benefits
All employee benefits payable / available within twelve months of
rendering the service are classified as short-term employee benefits.
Benefits such as salaries, wages and bonus etc., are recognised in the
Profit and Loss Account in the period in which the employee renders the
related service.
(b) Provident fund (Defined contribution plan) Provident fund is a
defined contribution plan. The contribution towards provident fund
which are being deposited with the Regional Provident Fund Commissioner
and are charged to the Profit and loss account.
(c) Gratuity (Defined benefit plan)
Gratuity is defined benefit plan. The present value of obligations
under such defined benefit plan is determined based on actuarial
valuation carried out by an independent actuary using the Projected
Unit Credit Method, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measure
each unit separately to build up the final obligation.
The gratuity trust invests the contribution in insurer managed scheme.
Yearly contributions to the Gratuity Trust are charged to the Profit
and Loss Account.
The obligation is measured at the present value of estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plans, is based on the market
yields on Government securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognised immediately in the profit and
loss account.
(d) Compensated absences (other long - term benefits) The Company
provides for leave encashment based on actuarial valuation using
projected unit credit method in respect of past service. In respect of
compensated absences arising during the tenure of service, the defined
benefit obligation is calculated taking into account the pattern of
availment of leave. In respect of encashment of leave, the defined
benefit is calculated taking into account all types of decrements and
qualifying salary projected upto the assumed date of encashment. The
valuation of leave encashment benefit is done as at the balance sheet
date by an independent actuary. Actuarial gains and losses are
recognized immediately in the profit and loss account.
(vii) Fixed assets
Fixed assets are stated at the cost of acquisition or construction,
less accumulated depreciation and impairment losses. Cost comprises the
purchase price and any attributable costs of bringing the assets to
their working condition for intended use. Borrowing costs directly
attributable to acquisition or construction of fixed assets, which
necessarily take a substantial period of time to be ready for their
intended use are capitalized. Advances paid towards acquisition of
fixed assets and cost of assets not ready for use before the year end,
are disclosed as capital work in progress.
(viii) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount of the asset is estimated.
For assets that are not yet available for use, the recoverable is
estimated at each balance sheet date. An impairment loss is recognised
whenever the carrying amount of an asset or cash generating unit
exceeds its recoverable amount. Impairment losses are recognised in
the profit and loss account. An impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
asset''s carrying amount does not exceed the carrying amount that would
have been determined net of depreciation or amortisation, if no
impairment loss had been recognised.
(ix) Depreciation and amortisation
(a) Leasehold improvements are amortised over the lease period as
stated in the lease agreement or over the estimated useful life,
whichever is shorter.
(b) Other assets are depreciated on straight-line method at rates
specified in Schedule XIV to the Companies Act, 1956 from the date of
put to use until the date of sale.
(c) Depreciation on assets costing up to Rs. 5,000 are depreciated at
the rate of 100% on pro-rata basis.
(d) Depreciation on additions to assets or on sale / adjustment of
assets is calculated pro-rata from the date of such addition or up to
the date of such sale / adjustment.
(e) Intangible assets are recorded at cost and amortised over the
period the Company expects to derive economic benefits from their use.
(x) Investments
Investments are classified into long-term investments and current
investments based on intent of the management at the time of making the
investment. Investments intended to be held for more than one year are
classified as long- term investments. Current investments are valued at
lower of cost and market value, computed category-wise e.g. quoted
shares, unquoted shares, government securities and non government
securities / bonds. The diminution in current investments is charged to
the profit and loss account; appreciation, if any, is recognised at the
time of sale. Long-term investments, including investments in
subsidiaries, are valued at cost unless there is diminution, other than
temporary, in their value. Diminution is considered other than
temporary based on criteria that include the extent to which cost
exceeds the market value, the duration of the market value decline and
the financial health of and specific prospects of the issuer.
(xi) Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates
prevailing at the date of the transaction. Exchange differences
arising on settlement of foreign currency transactions are recognised
in the Profit and Loss Account. Monetary assets and liabilities
denominated in foreign currency are translated at year end rates and
resultant gains / losses on foreign exchange translations are
recognised in the Profit and Loss Account.
(xii) Taxation
Income - tax expense comprises current tax and deferred tax. Current
tax expense is the amount of tax for the period determined in
accordance with the income-tax law and deferred tax charge or credit
reflects the tax effects of timing differences between accounting
income and taxable income for the period. The deferred tax charge or
credit and the corresponding deferred tax liabilities or assets are
recognised using the tax rates that have been enacted or substantively
enacted by the balance sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty that the assets can be
realised in future; however, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognised only if there is a virtual certainty of realisation of such
assets. Deferred tax assets are reviewed as 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 realised.
(xiii) Provisions, contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result
of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
The Company does not recognise assets which are of contingent nature
until there is virtual certainty of realisability of such assets.
However, if it has become virtually certain that an inflow of economic
benefits will arise, asset and related income is recognised in the
financial statements of the period in which the change occurs.
(xiv) Earnings per share
Basic earning per share is computed using the weighted average number
of equity shares outstanding during the year. Diluted earnings per
share is computed using the weighted average number of equity and
dilutive potential shares outstanding during the year, except where the
results would be anti-dilutive.
(xv) Operating leases
Lease payments under operating lease are recognised as an expense on a
straight line basis over the lease term.
(xvi) Employee Stock Option Scheme ("ESOS")
The Employees Stock Option Scheme ("the Scheme") provides for grant of
equity shares of the Company to wholetime directors and employees of
the Company. The Scheme provides that employees are granted an option
to subscribe to equity shares of the Company that vests in a graded
manner. The options may be exercised within a specified period. The
Company follows the intrinsic value method to account for its
stock-based employee compensation plans. Compensation cost is measured
as the excess, if any, of the fair market price of the underlying stock
over the exercise price on the grant date. The fair market price is the
closing price of the equity shares of the Company on the stock
exchange/ s on which the shares of the Company are listed, immediately
prior to the date of the meeting of Compensation Committee of Board of
Directors of the Company in which the options are granted. If the
shares are listed on more than one stock exchange, then the stock
exchange where there is highest trading volume on the said date is
considered. Since the exercise price of the Company''s stock options are
equal to fair market price on the aforesaid date, there is no
compensation cost under the intrinsic value method.
Mar 31, 2010
(i) Basis of preparation
The financial statements are prepared under the historical cost
convention, in accordance with the Indian Generally Accepted Accounting
Principles (GAAP), Accounting Standards prescribed under the Companies
(Accounting Standards) Rules, 2006, relevant pronouncements of the
Institute of Chartered Accountants of India (ICAI) and the provisions
of the Companies Act, 1956, as adopted consistently by the Company.
(ii) Use of estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Examples of such estimates include provision for assets and estimated
useful life of fixed assets. Actual results could differ from these
estimates. Adjustments as a result of differences between actual and
estimates are made prospectively.
(iii) Revenue recognition
- Advisory and consultancy services : Fees is booked on the completion
of task/project as per the terms of agreement. However, where the
percentage of completion is significant enough to ascertain the outcome
reliably, revenue is recognised to the extent it can be accurately
measured.
- Broking activities : Income from broking on distribution operations
is recognised on the closure of the issue of mutual funds, bonds, fixed
deposits and other money market instruments. Income from equity stock
broking operations is accrued on completion of transaction at the stock
exchanges for commission from equity broking operations.
- In the case of trading in bonds, the profit/ loss from the
transaction is recognised on the closure of the deal and consequent
physical delivery of the bond.
- Dividend income is recognised when the right to receive the income is
established
- In the case of fixed income securities/ deposits, interest is
recognised on a time proportionate basis.
- In respect of other heads of income, the Company follows the practice
of recognising income on accrual basis.
(iv) Interest expense
Interest on borrowing is recognised on a time proportion basis taking
into account the amount outstanding and the rate applicable on the
borrowing.
(v) Expenditure
Expenses are recognised on accrual basis and provisions are made for
all known losses and liabilities. Expenses incurred on behalf of other
companies, in India, for sharing personnel, common services and
facilities like premises, telephones, etc. are allocated to them at
cost and reduced from expenses. Similarly, expense allocation received
from other companies is included within respective expense
classifications.
(vi) Retirements benefits
The CompanyÃs obligations towards various employee benefits have been
recognised as follows :
(a) Short term benefits
All employee benefits payable / available within twelve months of
rendering the service are classified as short-term employee benefits.
Benefits such as salaries, wages and bonus etc., are recognised in the
Profit and Loss Account in the period in which the employee renders the
related service.
(b) Provident fund (Defined contribution plan) Provident fund is a
defined contribution plans. The contribution towards provident fund
which are being deposited with the Regional Provident Fund Commissioner
and are charged to the Profit and loss account.
(c) Gratuity (Defined benefit plan)
Gratuity is defined benefit plan. The present value of obligations
under such defined benefit plan is determined based on actuarial
valuation carried out by an independent actuary using the Projected
Unit Credit Method, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measure
each unit separately to build up the final obligation.
The gratuity trust invests the contribution in insurer managed scheme.
Yearly contributions to the Gratuity Trust are charged to the Profit
and Loss Account.
The obligation is measured at the present value of estimated future
cash flows. The discount rates used for determining the present value
of obligation under defined benefit plans, is based on the market
yields on Government securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognised immediately in the profit and
loss account.
(d) Compensated absences (other long - term benefits) The Company
provides for leave encashment based on actuarial valuation using
projected unit credit method in respect of past service. In respect of
compensated absences arising during the tenure of service, the defined
benefit obligation is calculated taking into account the pattern of
availment of leave. In respect of encashment of leave, the defined
benefit is calculated taking into account all types of decrements and
qualifying salary projected upto the assumed date of encashment. The
valuation of leave encashment benefit is done as at the balance sheet
date by an independent actuary. Actuarial gains and losses are
recognized immediately in the profit and loss account.
(vii) Fixed assets
Fixed assets are stated at the cost of acquisition or construction,
less accumulated depreciation and impairment losses. Cost comprises the
purchase price and any attributable costs of bringing the assets to
their working condition for intended use. Borrowing costs directly
attributable to acquisition or construction of fixed assets, which
necessarily take a substantial period of time to be ready for their
intended use are capitalized. Advances paid towards acquisition of
fixed assets and cost of assets not ready for use before the year end,
are disclosed as capital work in progress.
(viii) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the recoverable amount of the asset is estimated.
For assets that are not yet available for use, the recoverable is
estimated at each balance sheet date. An impairment loss is recognised
whenever the carrying amount of an asset or cash generating unit
exceeds its recoverable amount. Impairment losses are recognised in
the profit and loss account. An impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
assetÃs carrying amount does not exceed the carrying amount that would
have been determined net of depreciation or amortisation, if no
impairment loss had been recognised.
(ix) Depreciation and amortisation
(a) Leasehold improvements are amortised over the lease period as
stated in the lease agreement or over the estimated useful life,
whichever is shorter.
(b) Other assets are depreciated on straight-line method at rates
specified in Schedule XIV to the Companies Act, 1956 from the date of
put to use until the date of sale.
(c) Depreciation on assets costing up to Rs. 5,000 are depreciated at
the rate of 100% on pro-rata basis.
(d) Depreciation on additions to assets or on sale/ adjustment of
assets is calculated pro-rata from the date of such addition or up to
the date of such sale/ adjustment.
(e) Intangible assets are recorded at cost and amortised over the
period the Company expects to derive economic benefits from their use.
(x) Investments
Investments are classified into long-term investments and current
investments based on intent of the management at the time of making the
investment. Investments intended to be held for more than one year are
classified as long- term investments. Current investments are valued at
lower of cost and market value, computed category-wise e.g. quoted
shares, unquoted shares, government securities and non government
securities/bonds. The diminution in current investments is charged to
the profit and loss account; appreciation, if any, is recognised at the
time of sale. Long-term investments, including
investments in subsidiaries, are valued at cost unless there is
diminution, other than temporary, in their value. Diminution is
considered other than temporary based on criteria that include the
extent to which cost exceeds the market value, the duration of the
market value decline and the financial health of and specific prospects
of the issuer.
(xi) Foreign currency transactions
Transactions in foreign currency are recorded at the exchange rates
prevailing at the date of the transaction. Exchange differences
arising on settlement of foreign currency transactions are recognised
in the Profit and Loss Account. Monetary assets and liabilities
denominated in foreign currency are translated at year end rates and
resultant gains/losses on foreign exchange translations are recognised
in the Profit and Loss Account.
(xii) Taxation
Income - tax expense comprises current tax and deferred tax. Current
tax expense is the amount of tax for the period determined in
accordance with the income-tax law and deferred tax charge or credit
reflects the tax effects of timing differences between accounting
income and taxable income for the period. The deferred tax charge or
credit and the corresponding deferred tax liabilities or assets are
recognised using the tax rates that have been enacted or substantively
enacted by the balance sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty that the assets can be
realised in future; however, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognised only if there is a virtual certainty of realisation of such
assets. Deferred tax assets are reviewed as 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 realised.
(xiii) Provisions, contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result
of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
The Company does not recognise assets which are of contingent nature
until there is virtual certainty of realisability of such assets.
However, if it has become virtually certain that an inflow of economic
benefits will arise, asset and related income is recognised in the
financial statements of the period in which the change occurs.
(xiv) Earnings per share
Basic earning per share is computed using the weighted average number
of equity shares outstanding during the year. Diluted earnings per
share is computed using the weighted average number of equity and
dilutive potential shares outstanding during the year, except where
the results would be anti-dilutive.
(xv) Operating leases
Lease payments under operating lease are recognised as an expense on a
straight line basis over the lease term.
(xvi) Employee Stock Option Scheme (ÃESOSÃ)
The Employees Stock Option Scheme (Ãthe SchemeÃ) provides for grant of
equity shares of the Company to wholetime directors and employees of
the Company. The Scheme provides that employees are granted an option
to subscribe to equity shares of the Company that vests in a graded
manner. The options may be exercised within a specified period. The
Company follows the intrinsic value method to account for its
stock-based employee compensation plans. Compensation cost is measured
as the excess, if any, of the fair market price of the underlying stock
over the exercise price on the grant date. The fair market price is the
closing price of the equity shares of the Company on the stock
exchange/ s on which the shares of the Company are listed, immediately
prior to the date of the meeting of Compensation Committee of Board of
Directors of the Company in which the options are granted. If the
shares are listed on more than one stock exchange, then the stock
exchange where there is highest trading volume on the said date is
considered. Since the exercise price of the CompanyÃs stock options
are equal to fair market price on the aforesaid date, there is no
compensation cost under the intrinsic value method.
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