Accounting Policies of Anand Rathi Share & Stock Brokers Ltd. Company

Mar 31, 2026

3 Material Accounting Policies

(a) Functional and presentation of currency

The standalone financial statements are presented
in Indian Rupees, which is the Company’s functional
currency and all amounts are rounded to the nearest
rupees in millions; except when otherwise stated.

(b) Basis of measurement

The Standalone Financial Statements have been
prepared on historical cost basis, except the following:

i) Certain financial assets and liabilities are
measured at fair value.

ii) Defined benefit plans - plan assets

measured at fair value.

Fair Value Measurement

In addition, for financial reporting purpose, fair value
measurements are categorised into Level 1, 2 or 3
based on the degree to which the inputs to the fair value
measurements are observable and the significance
of the inputs to the fair value measurements in its
entirety, which are described as follows:

- Level 1 inputs are quoted prices in active
markets for identical assets or liabilities that the
entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted
prices included within Level 1, that are
observable for the asset or liability, either
directly or indirectly; and

- Level 3 inputs are unobservable inputs for the
assets or liability.

(c) Critical Accounting Judgements and Key Sources
of Estimation Uncertainty

The preparation of the Company’s Standalone
Financial Statements requires management to make
judgement, estimates and assumptions that affect
the reported amount of revenue, expenses, assets
and liabilities and the accompanying disclosures.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in next financial years.

Estimates and underlying assumptions are reviewed
on an on going basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and future periods are affected.

(i) Depreciation / Amortisation and useful lives
of property, plant and equipment: Company

depreciates its Property, plant and equipment
over the estimated useful life as prescribed
under Part C of Schedule II to the Companies Act,
2013. Company remeasures remaining useful
life of an asset at the end of each reporting date.

(ii) Fair value measurement: Fair Value is a price of
orderly transaction between market participants
at the measurement date under current market
conditions. Company determines Fair Value of
Quoted Instruments from available market price.
When the fair values of financial assets and
financial liabilities recorded in the balance sheet
cannot be measured based on quoted prices in
active markets, their fair value is measured using
appropriate valuation techniques. The inputs
to these models are taken from observable
markets where possible, but where this is not
feasible, a degree of judgement is required in
establishing fair values. Judgements include
considerations of inputs such as liquidity risk,
credit risk and volatility.

(iii) Provisions: Provisions are recognized

when there is a present obligation (legal or
constructive) as a result of past event; and it
is probable that an outflow of resources will be
required to settle the obligation. Management
estimates it by using its best judgement of
future cash outflow.

(iv) Taxes: The Company periodically assesses
its liabilities and contingencies related to
income taxes for all years open to scrutiny
based on latest information available. For
matters where it is probable that an adjustment
will be made, the Company records its best
estimates of the tax liability in the current tax
provision. The Management believes that it has
adequately provided for the probable outcome
of these matters.

Deferred tax assets are recognised for unused
tax losses to the extent that it is probable that
taxable profit will be available against which the

losses can be utilised. Significant management
judgement is required to determine the amount
of deferred tax assets that can be recognised,
based upon the likely timing and the level of
future taxable profits.

(v) Recognition and measurement of defined
benefit obligations

The obligation arising from defined benefit
plan is determined on the basis of actuarial
assumptions. Key actuarial assumptions include
discount rate, trends in salary escalation and
attrition rate. The discount rate is determined
by reference to market yields at the end of the
reporting period on government securities.

(vi) Allowance for impairment of financial asset

The Company applies expected credit loss
model (ECL) for measurement and recognition
of impairment loss. The Company recognises
lifetime expected losses for all contract
assets and / or all trade receivables that do
not constitute a financing transaction. At each
reporting date, the Company assesses whether
the loans have been impaired. The Company
is exposed to credit risk when the customer
defaults on his contractual obligations. For the
computation of ECL, the loan receivables are
classified into three stages based on the default
and the ageing outstanding. The Company
recognises life time expected credit loss for trade
receivables and has adopted simplified method
of computation as per Ind AS 109. The Company
considers outstanding overdue for more than 90
days for calculation of expected credit loss.

(d) Property, Plant and Equipment & Intangible
Assets and Depreciation & Amortisation

Property, Plant and Equipment

Property, plant and equipment are stated at cost,
less accumulated depreciation and impairment,
if any. Direct costs in relation to the property, plant
and equipment are capitalized until such assets
are ready for use.

(i) Property, plant and equipment: Depreciation on Property, plant and equipment is provided on the straight-line method
over the useful lives of assets estimated by the Management. Depreciation for assets purchased during a period is
proportionately charged. The Management estimates the useful lives and residual values of the tangible assets as
prescribed under Part C of Schedule II of the Companies Act 2013 as follows:

Note: The residual values, useful lives and
methods of depreciation of property, plant
and equipment are reviewed at each financial
year end and adjusted prospectively, if
appropriate. The management believes that
these estimated useful lives are realistic and
reflect fair approximation of the period over
which the Property, plant and equipment are
likely to be used.

(ii) Intangible Assets: Intangible assets are recorded
at the consideration paid for the acquisition
of such assets and are carried at cost less
accumulated amortisation and impairment. The
Management estimates the useful lives and
residual values of the tangible assets as follows:

If any income is received from Capital WIP
and Intangible Assets thern earlier income
is to be recognised under P&L but now it is to
be capitalised.

(e) Financials Instruments
(i) Initial Recognition

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instruments.

Financial assets and financial liabilities are
initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or
issue of financial assets and financial liabilities

(other than financial assets and financial
liabilities at fair value through profit or loss and
ancillary costs related to borrowings) are added
to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly
attributable to the acquisition of financial assets
or financial liabilities at fair value through profit
or loss are recognised immediately in Statement
of Profit and Loss.

Financial assets with embedded derivatives are
considered in their entirety when determining
whether their cash flows are solely payment of
principal and interest.

(ii) Classification & Measurement of Financial Assets

Financial assets are classified at ''Amortised
Cost’, ''Fair Value through Profit and Loss’ (FVTPL)
and ''Fair Value through Other Comprehensive
Income’ (FVTOCI) in the following categories:

Debt Instruments at amortised cost: Debt
instruments that meet the following conditions
are subsequently measured at amortised cost
(except for those designated at FVTPL on
initial recognition)

• the asset is held within a business model
whose objective is to hold asset to collect
contractual cash flows; and

• the contractual terms of the instrument
give rise on specified dates to cash
flows that are solely payments of
principal and interest on the principal
amount outstanding

Debt Instruments at FVTOCI: Debt instruments
that meet the following conditions are
subsequently measured at FVTOCI (except for
those designated at FVTPL on initial recognition)

• the asset is held within a business model
whose objective is achieved both by
collecting contractual cash flows and
selling financial assets; and

• the contractual terms of the instrument
give rise on specified dates to cash
flows that are solely payments of
principal and interest on the principal
amount outstanding

Debt Instruments at FVTPL: Any debt instrument
which is either initially designated at FVTPL or
which does not meets the criteria for Amortised
cost or FVTOCI is measured at FVTPL.

Effective Interest Method: Interest income
from debt instruments is recognised using the
effective interest rate method. The effective
interest rate is the rate that exactly discounts
estimated future cash receipts through the
expected life of the financial asset. When
calculating the effective interest rate, the
company estimates the expected cash flows
by considering all the contractual terms of the
financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.

Equity Instruments at FVTOCI: On initial
recognition, the Company can make an
irrevocable election (on an instrument by
instrument basis) to present the subsequent
changes in fair value in other comprehensive
income pertaining to investments in equity
instruments. This election is not permitted if the
instrument is held for trading. The cumulative
gain or loss is not reclassified to the Statement
of Profit and Loss on disposal of the investment.

Financial Assets at FVTPL: Investments in
equity instruments are classified at FVTPL,
unless they were irrevocably elected on initial
recognition as FVOCI. Financial Assets at FVTPL
are measured at Fair Value at the end of each
reporting period, with any gains or losses arising
on remeasurement recognised in the Statement
of Profit and Loss.

Dividends are recognised in profit or loss
only when the right to receive payment is
established, it is probable that the economic

benefits associated with the dividend will flow
to the Company, and the amount of the dividend
can be measured reliably.

(iii) Impairment of financial assets

The Company assesses on a forward looking
basis the expected credit losses associated
with its assets carried at amortised cost, FVOCI
debt instruments, and other financial assets.
The impairment methodology applied depends
on whether there has been a significant increase
in credit risk. Note 49 details how the Company
determines whether there has been a significant
increase in credit risk.

For trade receivables only, the Company applies
the simplified approach permitted by Ind AS 109
Financial Instruments, which requires expected
lifetime losses to be recognised from initial
recognition of the receivables.

(iv) Derecognition of financial assets

A financial asset is derecognised only when :

• The Company has transferred the
rights to receive cash flows from the
financial asset or

• retains the contractual rights to receive
the cash flows of the financial asset, but
assumes a contractual obligation to pay
the cash flows to one or more recipients.

Where the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is derecognised. Where the entity has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial
asset is not derecognised.

Where the entity has neither transferred a
financial asset nor retains substantially all
risks and rewards of ownership of the financial
asset, the financial asset is derecognised if
the Company has not retained control of the
financial asset. Where the Company retains
control of the financial asset, the asset is
continued to be recognised to the extent of
continuing involvement in the financial asset.

(v) Financial Liabilities:

Financial liabilities which are held for trading
or are designated at FVTPL are measured at
fair value with changes being recognised in the
statement of Proft and Loss.

Financial liabilities that are not held for
trading and are not designated as at FVTPL,
are measured at amortised cost. The
carrying amounts of financial liabilities that
are subsequently measured at amortised
cost are determined based on the effective
interest method.

(vi) Derecognition of financial liabilities

Company derecognises financial liabilities
when, and only when, the company’s obligations
are discharged, cancelled or have expired. A
subtantial modification in the terms of an existing
financial liability is accounted as a discharge
of original financial liabilitiy and recognition of
new financial liability. The difference between
the carrying amount of the financial liability
derecognised and the consideration paid and
payable is recognised as profit or loss.

(vii) Offsetting financial assets and liabilities

Financial assets and liabilities are offset and
the net amount presented in the statement of
financial position when, and only when, the
Company has a legal right and ability to offset
the amounts and intends either to settle on a
net basis or to realize the asset and settle the
liability simultaneously.

(viii) Deemed cost on transition to Ind AS: For

transition to Ind AS, the Company had elected
to continue with the carrying value of all its
Investments and are measured as per the
previous GAAP and had used that carrying value
as its deemed cost on the transition date.

(f) Derivatives financial instruments

Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and are
subsequently re-measured to their fair value at the
end of each reporting period. The resulting gain or
loss is recognised in the Statement of Profit and Loss.

(g) Impairment of Assets

Property, plant and equipment and intangible assets
with finite life are evaluated for recoverability whenever
there is any indication that their carrying amount may
not be recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair value less
cost to sell and the value in use) is determined on
an individual asset basis unless the asset does not
generate cash flows that are largely independent to
those from other assets.

The Carrying Amount of Assets is reviewed at each
Balance Sheet date if there is any indication of

impairment based on internal/external factors. An
asset is treated as impaired when the carrying cost of
assets exceeds its recoverable value. An impairment
loss, if any, is charged to Statement of Profit and Loss
in the year in which an asset is identified as impaired.
Reversal of impairment losses recognized in prior
years is recorded when there is an indication that
the impairment losses recognized for the assets no
longer exists or have decreased.

(h) Cash and cash equivalents

(i) Cash and cash equivalents in the balance sheet
comprise cash at bank and on hand and short¬
term deposit with original maturity upto three
months, which are subject to insignificant risk
of changes in value.

(ii) For the purpose of presentation in the statement
of cash flows, cash and cash equivalents
consists of cash and short-term deposit,
as defined above.

(i) Borrowing Cost and Finance Charges

Borrowing cost attributable to acquisition and
construction of qualifying assets are capitalized as a
part of the cost of such assets up to the date when such
assets are ready for its intended use. Other borrowing
cost are charged to the statement of profit and loss
in the period in which they are incurred. Borrowing
costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds and
is measured with reference to the effective interest
rate applicable to the respective borrowings.

(j) Leases

The Company assesses whether a contract contains a
lease, at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange
for consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves
the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term
of twelve months or less (short-term leases) and
low value leases. For these short-term and low value
leases, the Company recognizes the lease payments
as an operating expense on a straight-line basis over
the term of the lease.

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.

Right-of-use assets are depreciated on a straight¬
line basis over the lease term or its useful life
whichever is earlier. Right of use assets are evaluated
for recoverability whenever events or changes in
circumstances indicate that their carrying amounts
may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the
higher of the fair value less cost to sell and the value-
in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that
are largely independent of those from other assets.

The lease liability is initially measured at amortized cost
at the present value of the future lease payments. The
lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile
of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right of use
asset if the Company changes its assessment if whether
it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

(k) Employee Benefits

Defined Contribution plan - Retirement benefit in
the form of Provident Fund is a defined contribution
scheme. The Company is statutorily required to
contribute a specified portion of the basic salary of an
employee to a provident fund as a part of retirement
benefits to its employees. The contributions during
the period are charged to statement of profit and loss.
The Company recognizes contribution payable to the
Provident Fund scheme as an expenditure when an
employee renders related service.

Defined Benefit Plan - Gratuity, which is in the nature
of Defined Benefit Schemes, are payable only to
employees and accounted for on accrual basis. The
Cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations
being carried out at the end of each annual reporting
period. Remeasurement, comprising actuarial gains
and losses are recognised in other comprehensive
income in the period in which they occur and are not
reclassified to the Statement of Profit and Loss.

The Company has funded its Gratuity liability under
group scheme with an Insurer. The retirement benefit
obligation recognised in the balance sheet represents
the present value of the defined benefit obligations
reduced by the fair value of the scheme assets. Any
asset resulting from this calculation is limited to the
present value of any economic benefits available in
the form of refunds from the plans or reductions in
future contributions to the scheme.

Short Term Employee Benefits - The undiscounted
amount of short-term employee benefits expected
to be paid in exchange for the services rendered by
employees are recognized during the year when the
employees render the service. These benefits include
incentive which are expected to occur within twelve
months after the end of the period in which the
employee renders the related service.

(l) Foreign Currency transactions and translations

Transactions in foreign currencies are recorded
at the rate of exchange prevailing on the date of
the transaction. Exchange differences arising on
settlement of revenue transactions are recognised
in the statement of profit and loss. Monetary assets
and liabilities contracted in foreign currencies are
restated at the closing rate of exchange ruling
at the Balance Sheet date. Non-monetary assets
and liabilities that are measured at fair value in a
foreign currency are translated into the functional
currency at the exchange rate when the fair value was
determined. Non-monetary assets and liabilities that
are measured based on historical cost in a foreign
currency are translated at the exchange rate at the
date of the transaction.

(m) Revenue Recognition

The Company assesses the nature,timing and extent
of revenue based on performance obilgations in
its contracts/understanding/trade customs with
customers & clients.

Revenue is recognised to the extent that is probable
that the economic benefits will flow to the Company
and the amount based on performance obligation
can be reliably measured. Revenue is measured at
the fair value of consideration received or receivable
taking into account the amount of discounts as
per Ind AS 115.

1. Revenue from contract with customer
is recognized at the point in time when
performance obligation is satisfied. Income
from broking activities is accounted for on the
trade date of transactions.

2. Revenue from depository services on account
of transaction charges is recognised at
the point in time when the performance
obligation is satisfied.

3. Income related with Distribution income on
Mutual Fund and other financial products is
accounted on accrual basis.

4. Dividend income is accounted for when the right
to receive the income is established.

5. Difference between the sale price and the
carrying value of investment is recognised as
profit or loss on sale/ redemption on investment
on trade date of transaction.

6. Interest income is recognised on accrual basis.

7. Delayed payment charges (interest on late
payments) are accounted for at the point in
time of default.

8. Financial assets at fair value through profit or
loss are carried in the balance sheet at fair value,
with net changes in fair value recognised in the
statement of profit and loss.

9. In respect of other heads of income, it is
accounted for to the extent it is probable that
the economic benefits will flow, and the revenue
can be reliably measured, regardless of when
the payment is being made.

(n) Taxes on Income

The tax expenses for the period comprises of current
tax and deferred income tax. Tax is recognised in
statement of profit or loss except to the extent that
it relates to an item recognised directly in equity or in
other comprehensive income.

Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income for the year and any
adjustment to the tax payable or receivable in respect
of previous years. The amount of current tax reflects
the best estimate of the tax amount expected to be
paid or received after considering the uncertainty, if
any, related to income taxes. It is measured using tax
rates (and tax laws) enacted or substantively enacted
by the reporting date.

Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off
the recognised amounts, and it is intended to realise
the asset and settle the liability on a net basis or
simultaneously.

Deferred tax

Deferred tax is recognized in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.
Deferred tax is also recognized in respect of carried
forward tax losses and tax credits. Deferred tax is not
recognized for:

- Temporary differences arising on the initial
recognition of assets or liabilities in a transaction
that is not a business combination and that
affects neither accounting nor taxable profit or
loss at the time of transaction;

- Temporary differences related to investment
in subsidiary to the extent that the Company is
able to control the timing of the reversal of the
temporary differences and it is probable that they
will not reverse in the foreseeable future; and

Deferred tax assets are recognized to the extent
that it is probable that future taxable profits will be
available against which the temporary difference
can be utilized. The existence of unused tax losses
is strong evidence that future taxable profit may
not be available. Therefore, in case of a history of
recent losses the Company recognizes a deferred tax
asset only to the extent that it has sufficient taxable
temporary differences or there is convincing other
evidence that sufficient taxable profit will be available
against which such deferred tax asset can be realized.
Deferred tax assets- unrecognized or recognized, are
reviewed at each reporting date and are recognized
/reduced to the extent that it is probable/no longer
probable respectively that the related tax benefit
will be realized.

Change in Rate of Income Tax

The company has opted for Section 115BAA of the
Income Tax Act, 1961 for computing its tax liability.