Accounting Policies of The Investment Trust of India Ltd. Company

Mar 31, 2023

1 COMPANY OVERVIEW

The Investment Trust of India Limited (the Company) was incorporated on June 14, 1991 as a private limited company. It was subsequently converted into a public limited company on October 20, 1994. The company had made an initial public offer in February, 1995. The Company is presently listed on BSE Limited and National Stock Exchange of India Limited. The Company is engaged in advisory services and trading activities besides holding investment in subsidiaries. The Group business consists of equity and commodity broking, mutual fund , financial services, lending business, investment banking and third party distribution activities which are carried out by separate subsidiaries and associate of the Company.

2 SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

(i) Compliance with Ind As

In accordance with the notification issued by the Ministry of Corporate Affairs, the company has adopted Indian Accounting Standards (referred to as "Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1,2016. These financial statements have been prepared in accordance with the Ind AS as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Act'') read with the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.

(ii) Application of new accounting pronouncement

Effective April 01,2018, the Company has adopted Indian Accounting Standard 115 (Ind AS 115) -Revenue from contracts with customers. The effect on adoption of Ind-AS 115 was insignificant.

(iii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

1) certain financial assets and liabilities that are measured at fair value;

2) defined benefit plans - plan assets measured at fair value;

(iv) Current non-current classification

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.

(b) use of estimates and judgments

The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Actual results may differ from these estimates. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.

Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investment, useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities.

(c) property, plant and equipment

The Company has applied for the one time transition exemption of considering the carrying cost on the transition date i.e. April 1, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost.

All items of property, plant and equipment are stated at cost less depreciation and impairment, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.

Depreciation methods, estimated useful lives and residual value

Depreciation on all the fixed assets except leasehold improvements and goodwill are provided on a Written Down Value Method over the estimated useful lives of assets. Leasehold improvements are amortised over the period of lease on Straight line Method. Goodwill, on the other hand, is amortised on Straight line Method.

The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act.

The residual values are not more than 5% of the original cost of the asset.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

(d) Lease Operating Lease As a lessee

With effect from 1 April 2019, the Company has applied Ind AS 116 ''Leases'' for all long term and material lease contracts covered by the Ind AS. The Company has adopted modified retrospective approach as stated in Ind AS 116 for all applicable leases on the date of adoption.

Measurement of Lease Liability

At the time of initial recognition, the Company measures lease liability as present value of all lease payments discounted using the Company''s incremental cost of borrowing.

Subsequently, the lease liability is -

(i) increased by interest on lease liability;

(ii) reduced by lease payments made; and

(iii) remeasured to reflect any reassessment or lease modifications specified in Ind AS 116 ''Leases'', or to reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures ''Right-of-use assets'' as present value of all lease payments discounted using the Company''s incremental cost of borrowing w.r.t said lease contract. Subsequently, ''Right-of-use assets'' is measured using cost model i.e. at cost less any accumulated depreciation and any accumulated impairment losses adjusted for any remeasurement of the lease liability specified in Ind AS 116 ''Leases''.

Depreciation on ''Right-of-use assets'' is provided on straight line basis over the lease period.

The exception permitted in Ind AS 116 for low value assets and short term leases has been adopted by Company.

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the excepted inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

(e) Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, balances with bank, deposits held with banks or highly liquid short term investments with maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(f) Inventories

Inventories of Stock-in-trade are stated ''at cost or net realisable value, whichever is lower''. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are ''First-in-First-out'' Due allowance is estimated and made for defective and obsolete items, wherever necessary.

(g) Investments in subsidiaries, joint ventures and associates

Investments in subsidiaries and associates are recognised at cost as per Ind AS 27.

(h) Financial Instruments

(i) Classification

The Company classifies its financial assets in the following measurement categories:

(1) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and

(2) those measured at amortised cost.

(ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.

Debt instruments:

The Company initially recognizes debt instruments issued on the date that they originate. All other debt instruments that do not meet the criteria for amortised cost are measured at fair value through Profit and Loss. Financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Equity instruments:

The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair value through profit and loss. However where the Company''s management makes an irrevocable choice on initial recognition to present fair value gains and losses on specific equity investments in other comprehensive income, there is no subsequent reclassification, on sale or otherwise, of fair value gains and losses to the Statement of Profit and Loss.

(iii) Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

(iv) Income recognition Interest income

Interest income from debt instruments is recognised using the effective interest rate method.

Dividends

Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established.

(i) segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

(j) Borrowings

Borrowings are initially recognised and measured at amortised cost. Subsequent to initial recognition, these borrowings are measured at amortized cost using the effective interest method, less any impairment losses.

Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The dividend on these preference shares is recognised in Statement of Profit and Loss as finance costs.

(k) Borrowing costs

Interest and other borrowing costs attributable to qualifying assets are capitalised. Other interest and borrowing costs are charged to Statement of Profit and Loss using effective interest method.

(l) provisions and contingent liabilities

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

(m) Revenue recognition

The Company derives revenues primarily from sale of traded goods and related services. The Company is also engaged in offering advisory services in capacity of investment manager to ''Alternate Investment Fund'', Loan processing services and other professional services.

Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.

The Company recognises provision for sales return, based on the historical results, measured on net basis of the margin of the sale. Therefore, a refund liability, included in other current liabilities, are recognized for the products expected to be returned.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of money.

The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:

1 The customer simultaneously receives and consumes the benefits provided by the Company''s performance.

2 The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or

3 The Company''s performance does not create an asset with an alternative use to the Company and an entity has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.

Revenue from sale of products and services are recognised at a time on which the performance obligation is satisfied. Amounts disclosed as revenue are exclusive of GST/Service Tax as applicable.

Revenue from sale of advisory services are recognised at a time on which the performance obligation is satisfied. Amounts disclosed as revenue are exclusive of GST as applicable.

(n) Employee benefits

(i) Defined benefit plans

For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the other comprehensive income for the period in which they occur. Past service cost both vested and unvested is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits.

The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

(ii) Defined contribution plans

The Company''s contribution towards Provident Fund and Family Pension Fund, which are defined contribution, are accounted for on an accrual basis and recognised in the Statement of Profit & Loss in the year in which they incur.

(iii) Compensated absences

Compensated absences are provided for on the basis of an actuarial valuation, using projected unit credit method, as at the date of the balance sheet, actuarial gains / losses , if any , are immediately recognized in the statement of profit and loss.

(iv) Employee Options

The fair value of options granted is recognised as an employee benefit expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:

* including any market performance conditions

* excluding the impact of any service and non-market performance vesting conditions, and

* including the impact of any non-vesting conditions

(o) Foreign currency translation

(i) Functional and presentation currency

The financial statements are presented in Indian rupee (INR), which is Company''s functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.

(p) Income tax

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Minimum Alternate Tax credit is recognised when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.

(q) Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

(r) Impairment of financial assets

The Company applies expected credit loss (ECL) model for measurement and loss allowance on the following:

1 Trade receivables and Lease receivables

2 Financial assets measured as at amortised cost (other than trade receivables)

In case of Trade receivables and Lease receivables, the Company follows simplified approach wherein an amount equal to lifetime ECL is measured and recognised as loss allowance.

In case of other assets, the Company determines if there has been significant increase in credit risk of financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12 months ECL is measured and recognised as loss allowance.

Subsequently, if the credit quality of financial asset improves such that, there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognising impairment loss allowance based on 12 months ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with Contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate.

Lifetime ECL are expected credit losses resulting from all possible default events over the expected life of financial assets. 12 months ECL are a portion of Lifetime ECL which result from default events that are possible within 12 months from the reporting date.

ECL are measured in a manner that, they reflect unbiased and probability weighted amounts determined by range of outcome, taking into account the time value of money and other reasonable information available as result of past events, current conditions and forecasts of future economic conditions.

As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward looking estimates. At each reporting date, the historically observed default rates and change in forward looking estimates are updated.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income / expenses in Statement of Profit and Loss under the head ''Other expenses''

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Mar 31, 2018

1 SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

(i) Compliance with Ind AS

In accordance with the notification issued by the Ministry of Corporate Affairs, the company has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016. These financial statements have been prepared in accordance with the Ind AS as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’) read with of the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.

These financial statements for the year ended March 31, 2018 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended March 31, 2017, the Company had prepared its financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as ‘Previous GAAP’) used for its statutory reporting requirement in India.

The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at April 1, 2016 being the date of transition to Ind AS.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

1) certain financial assets and liabilities that are measured at fair value;

2) defined benefit plans - plan assets measured at fair value;

The scheme of amalgamation (“Scheme”) between the Company and The Investment Trust of India Limited (“ITIL”) (Formerly known as ITI Wealth Management Private Limited) was approved by the Hon’ble Bombay High Court on October 16, 2016 and from The National Company Law Tribunal (NCLT) and other applicable regulatory authorities on December 13, 2017. The Scheme between the Company and ITIL and their respective shareholders and creditors, for merger of ITIL with and into the Company has become effective from January 01, 2016, hence ITIL ceased to exist effective from January 01, 2016. The financial statements of the company include all the assets, liabilities, reserves and surplus of ITIL at their carrying amounts and in the same form as at the appointed date.

(iii) Current non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.

(b) Use of estimates and judgments

The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Actual results may differ from these estimates. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.

Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investment, useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities.

(c) Property, plant and equipment

The Company has applied for the one time transition exemption of considering the carrying cost on the transition date i.e. April 1, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost.

All items of property, plant and equipment are stated at cost less depreciation and impairment, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.

Depreciation methods, estimated useful lives and residual value

Depreciation on all the fixed assets except leasehold improvements and goodwill are provided on a Written Down Value Method over the estimated useful lives of assets. Leasehold improvements are amortised over the period of lease on Straight line Method. Goodwill, on the other hand, is amortised on Straight line Method.

The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act.

The residual values are not more than 5% of the original cost of the asset.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.

(d) Lease Operating Lease As a lessee

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee, are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the Company’s expected inflationary cost increases.

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the excepted inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

(e) Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, balances with bank, deposits held with banks or highly liquid short term investments with maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(f) Inventories

Inventories of Stock-in-trade are stated ‘at cost or net realisable value, whichever is lower’. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are ‘First-in-First-out’ Due allowance is estimated and made for defective and obsolete items, wherever necessary.

(g) Investments in subsidiaries, joint ventures and associates

Investments in subsidiaries and associates are recognised at cost as per Ind AS 27.

(h) Financial Instruments

(i) Classification

The Company classifies its financial assets in the following measurement categories:

(1) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and

(2) those measured at amortised cost.

(ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.

Debt instruments:

The Company initially recognizes debt instruments issued on the date that they originate. All other debt instruments that do not meet the criteria for amortised cost are measured at fair value through Profit and Loss. Financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.

Equity instruments:

The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair value through profit and loss. However where the Company’s management makes an irrevocable choice on initial recognition to present fair value gains and losses on specific equity investments in other comprehensive income, there is no subsequent reclassification, on sale or otherwise, of fair value gains and losses to the Statement of Profit and Loss.

(iii) Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

(iv) Income recognition Interest income

Interest income from debt instruments is recognised using the effective interest rate method.

Dividends

Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established.

(i) Segment Reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

(j) Borrowings

Borrowings are initially recognised and measured at amortised cost. Subsequent to initial recognition, these borrowings are measured at amortized cost using the effective interest method, less any impairment losses.

Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The dividend on these preference shares is recognised in Statement of Profit and Loss as finance costs.

(k) Borrowing costs

Interest and other borrowing costs attributable to qualifying assets are capitalised. Other interest and borrowing costs are charged to Statement of Profit and Loss using effective interest method.

(l) Provisions and contingent liabilities

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

(m) Revenue recognition

Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are exclusive of GST/ Service Tax.

The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company’s activities as described below.

Sale of goods

Sales are recognised when goods are supplied and significant risk and rewards of ownership in the goods are transferred to the buyer.

Revenue from services

Professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realization / collection. (n) Employee benefits

(i) Defined benefit plans

For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the other comprehensive income for the period in which they occur. Past service cost both vested and unvested is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits.

The retirement benefit obligations recognised in the balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

(ii) Defined contribution plans

The Company’s contribution towards Provident Fund and Family Pension Fund, which are defined contribution, are accounted for on an accrual basis and recognised in the Statement of Profit & Loss in the year in which they incur.

(iii) Compensated absences

Compensated absences are provided for on the basis of an actuarial valuation, using projected unit credit method, as at the date of the balance sheet, actuarial gains / losses , if any , are immediately recognized in the statement of profit and loss.

(o) Foreign currency translation

(i) Functional and presentation currency

The financial statements are presented in Indian rupee (INR), which is Company’s functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.

(p) Income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Minimum Alternate Tax credit is recognised when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.

(q) Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

In determining the allowance for doubtful trade receivables the company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

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Mar 31, 2017

1 COMPANY OVERVIEW

Fortune Financial Services (India) Limited (''Fortune'' or the Company) was incorporated on June 14, 1991 as a private limited company. It was subsequently converted into a public limited company on October 20, 1994. The company had made an initial public offer in February, 1995. The Company is presently listed on The BSE Limited. The Company is engaged in Advisory Services and trading activities besides holding investment in subsidiaries. The Group business consist of equity and commodity broking, financial services, Investment banking, Reinsurance and third party distribution activities which are carried out by separate subsidiaries of Fortune.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of financial statements

The accompanying financial statements are prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material respects with Accounting Standards ("AS") specified under Section 133 of the Companies Act, 2013("the Act") read with Rule 7 of the Companies (Accounts) rules, 2014 and other relevant provisions of the Act to the extent notified and applicable, as well as applicable guidance note and pronouncements of the Institute of Chartered Accountants of India (ICAI).

2.2 Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

2.3 Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliable measured.

a. Investment banking income is accounted on the basis of the terms of agreement with the clients.

b. Professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realization / collection.

c. Sales are recognized when goods are supplied and significant risk and rewards of ownership in the goods are transferred to the buyer.

d. Income from distribution is accounted when there is reasonable certainty of its ultimate realization/collection.

e. Interest income is recognized on an accrual (time proportion) basis.

f. Dividend income is recognized when the right to receive dividend is established.

g. Profit / loss on sale of investment is determined at the time of actual sale/ redemption

2.4 Employee benefits

a) Provident fund

The Company''s contribution towards Provident Fund and Family Pension Fund, which are defined contribution, are accounted for on an accrual basis and recognized in the Statement of Profit & Loss in the year in which they incur.

b) Gratuity

Gratuity is post employment benefit and is in the nature of Defined Benefit Plan. The Liability recognized in the balance sheet in respect of gratuity is the present value of defined benefit obligation at the balance sheet date together with the adjustments for unrecognized actuarial gain or losses and the past service costs. The defined benefit obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.

c) Compensated absences

Compensated absences are provided for on the basis of an actuarial valuation, using projected unit credit method, as at the date of the balance sheet, actuarial gains / losses , if any , are immediately recognized in the statement of profit and loss.

2.5 Tangible assets

Tangible fixed assets are stated at cost of acquisition net of tax / duty credits less accumulated depreciation. Cost includes all expenses incurred incidental to the acquisition of fixed assets.

2.6 Intangible assets

Intangible assets are stated at cost of acquisition, net of tax / duty credits availed less amortization and impairment losses, if any. An asset is recognized when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it''s cost can be reliably measured.

2.7 Depreciation and amortization

The Company provides for depreciation and amortization as under:

The Company provides for depreciation as under:

a. On written down value basis, in accordance with the useful life prescribed in Schedule II to the Companies Act, 2013.

b. On a pro-rata basis on assets purchased / sold during the year.

c. On leasehold improvements, over the primary period of the lease.

d. On intangible assets, over a period of five years from the date of acquisition.

2.8 Impairment

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in a prior accounting period is reversed if there is a change in the estimate of the recoverable amount.

2.9 Taxation

Provision for tax comprises current tax and deferred tax charge or credit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates applicable to the relevant assessment year .

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognized using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognized only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realized on account of other timing differences ; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of assets. Deferred tax assets, if any, are reassessed periodically.

Minimum alternate tax credit ( MAT credit) is recognized as an assets only to the extent there is convincing evidence that the company will pay normal tax during the specified period . Such asset is reviewed at each balance sheet date and carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the company will pay normal tax during the specified period.

2.10 Investments

All Investments are stated at cost. Investments that are readily realizable and intent to be held for not more than one year from the date on which investments are made are classified as current investments . All other investments are classified as Noncurrent investments . Current investments are carried at cost or fair value whichever is lower. Provision for diminution in value of current investments is made if the fair value of investments is less than its cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary. Provision for diminution in value of investments made during the year is charged to the Statement of Profit and Loss.

2.11 Derivative instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract price of all the contracts in the series, is recognized on the expiry/square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any, in the mark-to-market margin account (maintained scrip wise /index wise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

2.12 Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

2.13 Provisions, contingent liabilities and contingent assets

A provision is recognized when there is a present obligation as a result of past events for which a probable outflow of resources embodying economic benefits are expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent liabilities are not recognized but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligations, unless the probability of outflow of resources is remote.

Contingent assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

2.14 Leases

Operating lease where the less or effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Lease payments for assets taken under operating leases are charged off to the statement of Profit and Loss over the lease term.

2.15 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Realized gains and losses on foreign currency transactions during the year are recognized in the Statement of Profit and Loss. Monetary items denominated in foreign currency are restated using the closing exchange rate of the date of the balance sheet and the resulting net exchange difference is recognized in the Statement of Profit and Loss.

2.16 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand and deposits with bank. The Company considers all highly liquid investments/ bank deposits with a remaining maturity on the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

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Mar 31, 2016

1 COMPANY OVERVIEW

Fortune Financial Services (India) Limited (''Fortune'' or the Company) was incorporated on June 14, 1991 as a private limited company. It was subsequently converted into a public limited company on October 20, 1994. The company had made an initial public offer in February, 1995. The Company is presently listed on The BSE Limited. The Company is engaged in Investment Advisory Services besides holding investment in subsidiaries. The Group business consist of equity and commodity broking, finance, financial services , Investment banking and third party distribution activities which are carried out by separate subsidiaries of Fortune.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of financial statements

The accompanying financial statements are prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material respects with Accounting Standards ("AS") specified under Section 133 of the Companies Act, 2013("the Act") read with Rule 7 of the Companies (Accounts) rules, 2014 and other relevant provisions of the Act to the extent notified and applicable, as well as applicable guidance note and pronouncements of the Institute of Chartered Accountants of India (ICAI).

2.2 Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

2.3 Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliable measured.

a. Investment banking income is accounted on the basis of the terms of agreement with the clients.

b. Placement fees, professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realization / collection.

c. Income from distribution is accounted when there is reasonable certainty of its ultimate realization/collection.

d. Interest income is recognized on an accrual (time proportion) basis.

e. Dividend income is recognized when the right to receive dividend is established.

f. Profit / loss on sale of investment is determined at the time of actual sale/ redemption

2.4 Employee benefits

a) Short term employee benefits

Employee benefits such as salaries, allowances short term compensated absences, estimated cost of bonus, exgratia and employee benefits under defined contribution plans such as provident fund and other funds which fall due within twelve months of rendering the service are classified as short term employee benefits and charged as expense to the Statement of Profit and Loss in the period in which the service is rendered

b) Long term employee benefits

Defined contribution plan such as provident fund etc. are charged to the statement of profit and loss as incurred. Defined benefit plans - The present value of obligation under such a plan is determined based on the actuarial valuation using the Projected Unit Credit Method, actuarial gains and losses arising on such valuation are recognized immediately in the statement of profit and loss. In case of funded defined benefit plans the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis. Other long term employee benefit are recognized in the same manner as defined benefit plans.

2.5 Tangible assets

Tangible fixed assets are stated at cost of acquisition net of tax / duty credits less accumulated depreciation. Cost includes all expenses incurred incidental to the acquisition of fixed assets.

2.6 Intangible assets

Intangible assets are stated at cost of acquisition, net of tax / duty credits availed less amortization and impairment losses, if any. An asset is recognized when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it''s cost can be reliably measured.

2.7 Depreciation and amortization

The Company provides for depreciation and amortization as under:

The Company provides for depreciation as under:

a. On written down value basis, in accordance with the useful life prescribed in Schedule II to the Companies Act, 2013.

b. On a pro-rata basis on assets purchased / sold during the year.

c. On leasehold improvements, over the primary period of the lease.

d. On intangible assets, over a period of five years from the date of acquisition.

2.8 Impairment

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in a prior accounting period is reversed if there is a change in the estimate of the recoverable amount.

2.9 Taxation

Provision for tax comprises current tax and deferred tax charge or credit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates applicable to the relevant assessment year .

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognized using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognized only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realized on account of other timing differences ; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of assets. Deferred tax assets, if any, are re-assessed periodically.

Minimum alternate tax credit ( MAT credit) is recognized as an assets only to the extent there is convincing evidence that the company will pay normal tax during the specified period . Such asset is reviewed at each balance sheet date and carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the company will pay normal tax during the specified period.

2.10 Investments

"All Investments are stated at cost. Investments that are readily realizable and intent to be held for not more than one year from the date on which investments are made are classified as current investments. All other investments are classified as noncurrent investments . Current investments are carried at cost or fair value whichever is lower. Provision for diminution in value of current investments is made if the fair value of investments is less than its cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary. Provision for diminution in value of investments made during the year is charged to the Statement of Profit and Loss. ''''

2.11 Derivative instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract price of all the contracts in the series, is recognized on the expiry/square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any, in the mark-to-market margin account (maintained scrip wise /index wise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

2.12 Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

2.13 Provisions, contingent liabilities and contingent assets

A provision is recognized when there is a present obligation as a result of past events for which a probable outflow of resources embodying economic benefits are expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent liabilities are not recognized but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligations, unless the probability of outflow of resources is remote.

Contingent assets are neither recognized , nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

2.14 Leases

Operating lease where the lesser effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Lease payments for assets taken under operating leases are charged off to the statement of Profit and Loss over the lease term.

2.15 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Realized gains and losses on foreign currency transactions during the year are recognized in the Statement of Profit and Loss. Monetary items denominated in foreign currency are restated using the closing exchange rate of the date of the balance sheet and the resulting net exchange difference is recognized in the Statement of Profit and Loss.

2.16 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand and deposits with bank. The Company considers all highly liquid investments/ bank deposits with a remaining maturity on the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

c Terms / Rights attached to Equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of an equity share is entitled to one vote per share on every resolution placed before the Company on the right to receive dividend. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

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Mar 31, 2015

1 COMPANY OVERVIEW

Fortune Financial Services (India) Limited ('Fortune' or the Company) was incorporated on June 14, 1991 as a private limited company. It was subsequently converted into a public limited company on October 20, 1994. The company had made an initial public offer in February, 1995. The Company is presently listed on The Bombay Stock Exchange. The company has Indian subsidiaries for equity and commodity broking, financing , Investment banking and third party distribution activities.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of financial statements

The accompanying financial statements have been prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material aspects with the Accounting Standards (AS) prescribed in the Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 2013 ("The Act") issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable.

2.2 Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon Management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

2.3 Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliable measured.

a. Investment banking income is accounted on the basis of the terms of agreement with the clients.

b. Placement fees, professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realization / collection.

c. Income from distribution is accounted when there is reasonable certainty of its ultimate realization/collection.

d. Interest income is recognized on an accrual (time proportion) basis.

e. Dividend income is recognized when the right to receive dividend is established.

f. Profit / loss on sale of investment is determined at the time of actual sale/ redemption

2.4 Employee benefits

a) Short term employee benefits

Employee benefits such as salaries, allowances short term compensated absences, estimated cost of bonus, exgratia and employee benefits under defined contribution plans such as provident fund and other funds which fall due within twelve months of rendering the service are classified as short term employee benefits and charged as expense to the Statement of Profit and Loss in the period in which the service is rendered

b) Long term employee benefits

Defined contribution plan such as provident fund etc. are charged to the statement of profit and loss as incurred. Defined benefit plans - The present value of obligation under such a plan is determined based on the actuarial valuation using the Projected Unit Credit Method, acturial gains and losses arising on such valuation are recognized immediately in the statement of profit and loss. In case of funded defined benefit plans the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis. Other long term employee benefit are recognized in the same manner as defined benefit plans.

2.5 Tangible assets

Tangible fixed assets are stated at cost of acquisition net of tax / duty credits less accumulated depreciation. Cost includes all expenses incurred incidental to the acquisition of fixed assets.

2.6 Intangible assets

Intangible assets are stated at cost of acquisition, net of tax / duty credits availed less amortization and impairment losses, if any. An asset is recognized when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it's cost can be reliably measured.

2.7 Depreciation and amortization

The Company provides for depreciation and amortization as under:

The Company provides for depreciation as under:

a. On written down value basis, in accordance with the useful life prescribed in Schedule II to the Companies Act, 2013.

b. On a pro-rata basis on assets purchased / sold during the year.

c. On leasehold improvements, over the primary period of the lease.

d. On intangible assets, over a period of five years from the date of acquisition.

2.8 Impairment

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in a prior accounting period is reversed if there is a change in the estimate of the recoverable amount.

2.9 Taxation

Provision for tax comprises current tax and deferred tax charge or credit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates applicable to the relevant assessment year .

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognised using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognised only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realised on account of other timing differences ; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of assets. Deferred tax assets, if any, are re- assessed periodically.

Minimum alternate tax credit ( MAT credit) is recognised as an assets only to the extent there is convincing evidence that the company will pay normal tax during the specified period . Such asset is reviewed at each balance sheet date and carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the company will pay normal tax during the specified period.

2.10 Investments

"All Investments are stated at cost. Investments that are readily realisable and intent to be held for not more than one year from the date on which investments are made are classified as current investments . All other investments are classified as long term investments . Current investments are carried at cost or fair value whichever is lower. Provision for diminution in value of current investments is made if the fair value of investments is less than its cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary. Provision for diminution in value of investments made during the year is charged to the Statement of Profit and Loss. "

2.11 Derivative instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract price of all the contracts in the series, is recognized on the expiry/square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any, in the mark-to-market margin account (maintained scrip wise /index wise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

2.12 Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

2.13 Provisions, contingent liabilities and contingent assets

A provision is recognised when there is a present obligation as a result of past events for which a probable outflow of resources embodying economic benefits are expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent liabilities are not recognised but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligations, unless the probability of outflow of resources is remote.

Contingent assets are neither recognised, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

2.14 Leases

Operating lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Lease payments for assets taken under operating leases are charged off to the statement of Profit and Loss over the lease term.

2.15 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Realized gains and losses on foreign currency transactions during the year are recognized in the Statement of Profit and Loss. Monetary items denominated in foreign currency are restated using the closing exchange rate of the date of the balance sheet and the resulting net exchange difference is recognized in the Statement of Profit and Loss.

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Mar 31, 2014

A) Basis of preparation

i) The Consolidated Financial Statements are prepared in accordance with the Accounting Standards 21 (AS 21) "Consolidated Financial Statements" as specified in the Companies (Accounting Standards) Rules, 2006.

ii) The notes and significant accounting policies to the Consolidated Financial Statements are intended to serve as a guide for a better understanding of the Groups position. In this respect, the Company has disclosed such notes and policies which represent the required disclosure.

b) Principles of consolidation

The consolidated financial statements have been prepared on the following basis:

i) The financial statements of the Company and its subsidiaries are combined on a line-by-line basis by adding together like items of assets, liabilities, income and expense after eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses and are presented to the extent possible, in the same manner as the Company''s independent financial statements.

ii) The details of subsidiaries and the interest of the Company therein, included in the Consolidated Financial Statements are as under :

c) Goodwill on consolidation

Goodwill on consolidation represents the difference between the Company''s share in the net worth of subsidiaries, and the cost of acquisition at each point of time of making the investment in the subsidiaries.

3 SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of preparation of financial statements

The accompanying financial statements have been prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material aspects with the Accounting Standards (AS) prescribed in the Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 1956 ("The Act") and guidelines issued by the Reserve Bank of India (RBI) for Non Banking Financial Companies, to the extent applicable.

3.2 Use of estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual result and estimates are recognised in the period in which the results are known / materialised.

3.3 Revenue recognition

Revenue is recognised when it is earned and no significant uncertainty exists of its ultimate realisation/collection.

a. Investment banking income is accounted on the basis of the terms of agreement with the clients.

b. Professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realisation/collection.

c. Income from broking activities is recognised on the trade dates.

d. Income from distribution is accounted when there is reasonable certainty of its ultimate realisation.

e. Interest income is recognised on an accrual (time proportion) basis. In its two subsidiaries which are non banking financial companies, interest on Non Performing Assets (NPAs), if any, is recognised on receipt basis, as per Reserve Bank of India guidelines.

f. Commission income on first year premium on insurance policies is recognised, when insurance policies sold by the Company are accepted by the principal insurance company. Renewal commission is accounted for on receipt basis.

g. Income from depository operations is recognised on accrual basis.

h. Dividend Income is recognised when the right to receive dividend is established. i. Profit/loss on sale of investment is determined at the time of actual sale/redemption

3.4 Employee Benefits

a) Short term employee Benefits

Employee benefits such as salaries, allowances, short term compensated absences, estimated cost of bonus, exgratia and employee benefits under defined contribution plans such as provident fund and other funds which fall due within twelve months of rendering the service are classified as short term employee benefits and charged as expense to the Statement of Profit and Loss in the period in which the service is rendered.

b) Long term employee benefits

Employee benefits under defined benefit plans like gratuity which fall due for payment after a period of twelve months from rendering of service or after completion of employment are determined base on acturial valuation using the projected unit credit method.

The Company''s obligations recognised in the Balance Sheet represents the present value of obligations as reduced by the fair value of plan assets, where applicable.

3.5 Employee stock option scheme

The stock options granted by the Company are accounted for as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) and the Guidance Note on Accounting for Stock Options issued by The Institute of Chartered Accountants of India, whereby the intrinsic value of the options are recognised as deferred employee compensation. The deferred employee compensation, if any, is charged to the Statement of Profit and Loss on a straight line basis over the vesting period of the options. The Employee Stock Option outstanding account, net of unamortised deferred employee compensation, if any is shown separately as part of reserves.

3.6 Tangible assets

Tangible fixed assets are stated at cost of acquisition, net of tax/duty credits availed less amortisation and impairment losses, if any. An asset is recognised when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it''s cost can be reliably measured.

3.7 Intangible assets

Intangible assets are stated at cost of acquisition, net of tax/duty credits availed less amortisation and impairment losses, if any. An asset is recognised when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it''s cost can be reliably measured.

3.8 Depreciation and amortisation

The Company provides for depreciation and amortisation as under:

a. On written down value basis, in accordance with the rates prescribed in Schedule XIV to the Act.

b. On intangible assets, over a period of three years from the date of acquisition.

c. On a pro-rata basis on assets purchased / sold during the year.

d. On assets costing less than Rs.5,000, at hundred percent of the cost of the asset in the year of purchase.

e. On leasehold improvements, over the primary period of the lease.

f. On goodwill on acquisition over a period of five years from the date of acquisition

g. On goodwill on consolidation over a period of five years from the date of acquisition

3.9 Impairment

An asset is treated as impaired when the carrying amount of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in a prior accounting period is reversed if there is a change in the estimate of the recoverable amount recoverable amount.

3.10 Taxation

Provision for tax comprises current tax and deferred tax charge or benefit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates and laws.

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income and are capable of reversal in one or more subsequent periods. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognised using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognised only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realised; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of assets. Deferred tax assets, if any, are re-assessed periodically.

3.11 Investments

All Investments are stated at cost. Investments are classified as current or long term in accordance with Accounting Standard 13 on "Accounting for Investments". Provision for diminution in vale of current investments is made if the fair value of investments is less than its cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary. Provision for diminution in value of investments made during the year is charged to the Statement of Profit and Loss.

3.12 Derivative Instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract price of all the contracts in the series, is recognised on the expiry/ square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any, in the mark- to-market margin account (maintained scrip wise /index wise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

3.13 Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

3.14 Miscellaneous expenditure

Preliminary expenditure and expenditure in connection with the raising of capital is amortised over a period of ten years from the year of commencement of business operation or from the year of raising capital.

3.15 Provisions, contingent liabilities and contingent assets

A provision is recognised when there is a present obligation as a result of past events for which a probable outflow of resources is expected to settle the obligation and the amount of obligation can be reasonably estimated.

Contingent liabilities are not recognised but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligation, unless the probability of outflow of resources is remote. Contingent Assets are neither recognised, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

3.16 Leases

Operating lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Lease payments for assets taken under operating leases are charged off to the statement of Profit and Loss over the lease term.

3.17 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand and deposits with bank. The Company considers all highly liquid investments/ bank deposits with a remaining maturity on the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

3.18 Cash flow statements

The Cash Flow Statement is prepared using the indirect method set out in Accounting Standard 3 on "Cash flow Statement" and presents the cash flow by operating, investing and financing activities of the Company.

3.19 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Realised gains and losses on foreign currency transactions during the year are recognised in the Statement of Profit and Loss. Monetary items denominated in foreign currency are restated using the closing exchange rate of the date of the balance sheet and the resulting net exchange difference is recognised in the Statement of Profit and Loss.

c Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of an equity share is entitled to one vote per share.

During the year ended March 31, 2014 the amount of dividend per share recognised as distribution to equity shareholders was Nil (March 31, 2013 Nil)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive their share in the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d The Company has not reserved any shares for issue of options and contracts/commitments for sale of shares/divestments.

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Mar 31, 2013

1.1 Basis of preparation of financial statements

The accompanying financial statements have been prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material aspects with the Accounting Standards (AS) prescribed in the Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 1956 (The Act") issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable.

1.2 Useof estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual result and estimates are recognised in the period in which the results are known / materialised.

1.3 Revenue recognition

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

a. Issue Management fee is accounted on the basis of the terms of agreement with the clients.

b Placement fees, professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realisation / collection.

c Income from distribution is accounted when there is reasonable certainty of its ultimate realisation/collection.

d. Interest income is recognised on an accrual (time proportion) basis.

e. Dividend income is recognised when the right to receive dividend is established.

f Profit / loss on sale of investment is determined at the time of actual sale/ redemption.

1.4 Employee benefits

a) Short term employee benefits

Employee benefits such as salaries, allowances short term compensated absences, estimated cost of bonus, ex-gratia and employee benefits under defined contribution plans such as provident fund and other funds which fall due within twelve months of rendering the service are classified as short term employee benefits and charged as expense to the Statement of Profit and Loss account in the period in which the service is rendered

b) Long term employee benefits

Employee benefit under defined benefits plans like gratuity which fall due for payment after a period of twelve months from rendering of service or after completion of employment are determined based on actuarial valuation using the projected unit credit method.

The Company''s obligations recognised in the Balance Sheet represents the present value of obligations as reduced by the fair value of plan of assets, where applicable.

1.5 Employee stock option scheme.

The stock options granted by the Company are accounted for as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) and the Guidance Note on Accounting for

Stock Options issued by The Institute of Chartered Accountants of India, whereby the intrinsic value of the options are recognised as deferred employee compensation. The deferred employee compensation, if any, is charged to the

Statement of Profit and Loss on a straight line basis over the vesting period of the options. The Employee Stock Option outstanding account, net of unamortised deferred employee compensation, if any is shown separately as part of reserves.

1.6 Tangiblefixed assets

Tangible fixed assets are stated at cost of acquisition net of tax / duty credits less accumulated depreciation and impairment losses, if any. Cost of acquisition includes all expenses incurred to bring the assets to their location and working conditions up to the date the assets are put to use.

1.7 Intangible fixed assets

Intangible Assets are stated at cost of acquisition, net of tax / duty credits availed less amortisation and impairment

losses, if any. An asset is recognised when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it''s cost can be reliably measured.

1.8 Depreciation and amortisation

The Company provides for depreciation and amortisation as under:

a. On written down value basis, in accordance with the rates prescribed in Schedule XIV to the Act.

b. On intangible assets, over a period of three years from the date of acquisition.

c On a pro-rata basis on assets purchased / sold during the year.

d. On assets costing less than Rs.5,000, at hundred percent of the cost of the asset in the year of purchase.

e. On leasehold improvements, over the primary period of the lease.

1.9 Impairment

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in a prior accounting period is reversed if there is a change in the estimate of the recoverable amount.

1.10 Taxation

Provision for tax comprises current tax and deferred tax charge or benefit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates and laws.

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income and are capable of reversal in one or more subsequent periods. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognised using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognised only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realised; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of assets. Deferred tax assets, if any, are re-assessed periodically.

1.11 Investments

All Investments are stated at cost. Investments are classified as current or long term in accordance with Accounting Standard 13 on "Accounting for Investments". Provision for diminution in vale of current investments is made if the fair value of investments is less than its cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary. Provision for diminution in value of investments made during the year is charged to the Statement of Profit and Loss.

1.12 Derivative instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract price of all the contracts in the series, is recognised on the expiry/square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any, in the mark- to-market margin account (maintained scrip wise /index wise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

1.13 Earnings per share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable.to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

1.14 Miscellaneous expenditure

Preliminary expenditure and expenditure in connection with the raising of capital is amortised over a period of ten years from the year of commencement of business operations or from the year of raising of capital.

1.15 Provisions, contingent liabilities and contingent assets

A provision is recognised when there is a present obligation as a result of past events for which a probable outflow of resources is expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent liabilities are not recognised but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligation, unless the probability of outflow of resources is remote. Contingent Assets are neither recognised, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

1.16 Leases

Operating lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Lease payments for assets taken under operating leases are charged off to the statement of Profit and Loss over the lease term.

1.17 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand and deposits with bank. The Company considers all highly liquid investments/ bank deposits with a remaining maturity on the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.18 Cash flow statement

The Cash Flow Statement is prepared using the indirect method set out in Accounting Standard 3 on "Cash flow Statement" and presents the cash flow by operating, investing and financing activities of the Company.

1.19 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Realised gains and losses on foreign currency transactions during the year are recognised in the Statement of Profit and Loss. Monetary items denominated in foreign currency are restated using the closing exchange rate of the date of the balance sheet and the resulting net exchange difference is recognised in the Statement of Profit and Loss.

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Mar 31, 2012

1.1 Basis of Preparation of Financial Statements

The accompanying financial statements have been prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material aspects with the Accounting Standards (AS) prescribed in the Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 1956 ("The Act'') issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable.

The Ministry of Corporate Affairs revised Schedule VI to the Act for the financial year commencing on or after April 1, 2011. The Balance Sheet, Statement of Profit and Loss. Cash Flow and comparative financial information for the previous year have accordingly been prepared and presented with disclosures as required under the revised Schedule VI.

1.2 Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

1.3 Revenue Recognition

Revenue is recognized when it is earned and no significant uncertainty exists of its ultimate realization/collection.

a. Issue Management fee is accounted on the basis of the terms of agreement with the clients.

b. Placement fees, professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realization / collection.

c Income from distribution is accounted when there is reasonable certainty of its ultimate realization/collection.

d. Interest income is recognized on an accrual (time proportion) basis.

e. Dividend income is recognized when the right to receive dividend is established.

1.4 Employee Benefits

a) Short Term Employee Benefits

Employee benefits such as salaries, allowances short term compensated absences, estimated cost of bonus , excreta and employee benefits under defined contribution plans such as provident fund and other funds which fall due within twelve months of rendering the service are classified as short term employee benefits and charged as expense to the profit and loss account in the period in which the service is rendered

b) Long Term Employee Benefits

Employee benefits under defined benefits plans like gratuity which fall due for payment after a period of twelve months from rendering of service or after completion of employment are determined base on acturial valuation using the projected unit credit method.

The Company's obligations recognized in the Balance Sheet represents the present value of obligations as reduced by the fair value of plan of assets, where applicable

1.5 Employee Stock Option Scheme.

The stock options granted by the Company are accounted for as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) and the Guidance Note on Accounting for Stock Options issued by The Institute of Chartered Accountants of India, whereby the intrinsic value of the options are recognized as deferred employee compensation. The deferred employee compensation, if any, is charged to the profit and loss account on a straight line basis over the vesting period of the options. The Employee Stock Option outstanding account, net of unamortized deferred employee compensation, if any is shown separately as part of reserves.

1.6 Tangible Fixed Assets

Tangible fixed assets are stated at cost of acquisition net of tax / duty credits less accumulated depreciation and impairment losses, if any. Cost of acquisition includes all expenses incurred to bring the assets to their location and working conditions up to the date the assets are put to use.

1.7 Intangible Fixed Assets

Intangible Assets are stated at cost of acquisition, net of tax / duty credits availed less amortization and impairment losses, if any. An asset recognized when it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where it is cost can be reliably measured.

1.8 Depreciation and amortization

The Company provides for depreciation and amortization as under:

a. On written down value basis, in accordance with the rates prescribed in schedule XIV to the Act.

b. On intangible assets, over a period of three years from the date of acquisition on written down value basis, c On a pro-rata basis on assets purchased / sold during the year.

d. On assets costing less than Rs.5,000 at hundred percent of the cost of the asset in the year of purchase.

e. On leasehold improvements, over the primary period of the lease.

1.9 Impairment of Assets

An asset is treated as impaired when the carrying amount of the assets exceeds its recoverable amount. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimate of its recoverable amount.

1.10 Taxation

Provision for tax comprises current tax and deferred tax charge or benefit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates and laws.

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income and are capable of reversal in one or more subsequent periods. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognized using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognized only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realized; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of assets. Deferred tax assets, if any, are re-assessed periodically.

1.11 Investments

All Investments are stated at cost. Investments are classified as current or long term in accordance with Accounting Standard 13 on "Accounting for Investments". Provision for diminution in value of current investments is made if the fair value of investments is less than its cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary. Provision for diminution in value of current investments is made during the year is charged to the statement of profit and loss.

1.12 Derivative Instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract price of all the contracts in the series, is recognized on the expiry/ square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any, in the mark- to-market margin account (maintained scrip wise /index wise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

1.13 Earnings Per Share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

1.14 Miscellaneous Expenditure

Preliminary expenditure and expenditure in connection with the raising of capital is amortized over a period of ten years from the year of commencement of business operations or from the year of raising of capital.

1.15 Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present obligation as a result of past events for which a probable outflow of resources is expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent liabilities are not recognized but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

1.16 Leases

Lease payments for assets taken under operating leases are charged off to the Profit and Loss Account as and when incurred.

1.17 Cash and Cash Equivalents

Cash and cash equivalents comprise of cash on hand and deposits with bank. The Company considers all highly liquid investments/ bank deposits with a remaining maturity on the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.18 Cash flow Statements

Cash flows is prepared using the indirect method set out in Accounting Standard 3 on "Cash flow Statement" and presents the cash flow by operating, investing and financing activities of the Company.

1.19 Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Realized gains and losses on foreign currency transactions during the year are recognized in the statement of profit and loss. Monetary items denominated in a foreign currency are restated using the closing exchange rate on the date of balance sheet and resulting net exchange difference is recognized in the Statement of Profit and Loss.

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Mar 31, 2011

1. Basis of Preparation of financials Statements

The accompanying financial statements have been prepared under the historical cost convention on an accrual basis. The financial statements have been prepared in accordance with the generally accepted accounting principles to comply in all material aspects with the accounting standards prescribed in the Companies (Accounting Standards) Rules 2006, issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable.

2. Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expense during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

3. Revenue Recognition

Revenue is recognised when there is reasonable certainty of its ultimate realisation / collection.

a. Issue Management fee is accounted on the basis of the terms of agreement with the clients.

b. Placement fees, professional fees and other service charges are accounted when there is reasonable certainty of its ultimate realisation / collection.

c. Income from distribution is accounted when there is reasonable certainty of its ultimate realisation/collection.

d. Interest income is recognised on an accrual (time proportion) basis.

e. Dividend income is recognised when the right to receive dividend is established.

4. Employee Benefits

a) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. These benefits like short-term compensated absences, estimated cost of bonus and ex-gratia are recognised in the period in which the employee renders the related service.

b) Post Employment Benefits

i) Defined Benefit Plans

The Company's net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets is deducted.

The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, are based on the market yields on Government securities at the Balance Sheet date.

Actuarial gains and losses are recognised immediately in the profit and loss account.

ii) Defined Contribution Plans

The Company contributes to defined contribution plans like the state governed employees provident fund and pension fund schemes for all its employees who are eligible for the benefit. All such contributions are recognised during the period in which the employee renders the related service.

5. Employee Stock Option Scheme.

The stock options granted by the Company are accounted for as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Stock Options issued by The Institute of Chartered Accountants of India, whereby the intrinsic value of the options are recognised as deferred employee compensation. The deferred employee compensation, if any, is charged to the profit and loss account on a straight line basis over the vesting period of the options. The Employee Stock Option outstanding account, net of unamortised deferred employee compensation, if any is shown separately as part of reserves.

6. Tangible Fixed Assets

Tangible fixed assets are stated at cost of acquisition net of tax / duty credits availed less accumulated depreciation and impairment loss, if any. Costs include all expenses incidental to the acquisition of fixed assets.

7. Intangible Assets

Intangible assets are stated at cost of acquisition net of tax / duty credits availed less amortisation.

8. Depreciation and Amortisation

The Company provides for depreciation and amortisation as under:

a. On written down value basis, in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956.

b. On intangible assets, over a period of three years from the date of acquisition on written down value basis.

c. On a pro-rata basis, on assets purchased / sold during the year.

d. On assets costing less than Rs.5,000, at hundred percent of the cost of the asset in the year of purchase.

e. On leasehold improvements, over the primary period of the lease.

9. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in a prior accounting period is reversed if there is a change in the estimate of the recoverable amount.

10. Taxation

Provision for tax comprises current tax and deferred tax charge or benefit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates and laws.

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognised using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognised only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realised; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of assets. Deferred tax assets, if any, are re-assessed periodically.

11. Investments

All Investments are stated at cost. Investments are classified into long term investments and current investments. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary. Provision for diminution in the value of Current Investment as at the end of the year is charged to the Profit and Loss Account.

12. Derivative Instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract prices of all the contracts in the series, is recognised on the expiry/ square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the balance sheet, provision for anticipated loss is made for the debit balance if any in the mark-to market margin account (maintained scripwise/indexwise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

13. Earnings Per Share

The basic earnings per share is computed and disclosed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed and disclosed using the weighted average number of equity shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

14. Miscellaneous Expenditure

Expenditure in connection with the raising of capital / additional capital are amortised over a period of ten years from the year of raising of capital / additional capital.

15. Provisions, Contingent Liabilities and Contingent Assets

A Provision is recognised when there is a present obligation as a result of past events for which a probable outflow of resources is expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent Liabilities are not recognised but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a possible obligation, unless the probability of outflow of resources is remote. Contingent Assets are neither recognised, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

16. Leases

Lease payments for assets taken under operating leases are charged off to the Profit and Loss Account as and when incurred.

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Mar 31, 2010

1. Accounting Convention

The accompanying financial statements have been prepared under the historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 in compliance with the accounting standards prescribed in the Companies (Accounting Standards) Rules 2006, issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable.

2. Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

3. Revenue Recognition

Revenue is recognised when there is reasonable certainty of its ultimate realisation /collection.

a. Investment Banking and Merchant Banking Income

i. Underwriting Commission is accounted on the closure of the issue underwritten on the basis of the terms of agreement with the clients.

ii. Issue Management fee is accounted on the basis of the terms of agreement with the clients.

iii. Placement Fees and other Service Charges are accounted when there is reasonable certainty of its ultimate realisation /collection.

b. Interest income is recognised on a time proportion basis.

c. Dividend Income is recognised when the right to receive dividend is established.

4. Employee Benefits

Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. These benefits include compensated absences such as paid annual leave and sickness leave. The employees can carry forward a portion of the unutilised accrued leave balance and utilise it in future periods. The Company records an obligation in respect of compensated absences in the period in which the employee renders the service that increases the entitlement. The Company measures the cost of compensated absence as the amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date.

Long Term Employee Benefits

a. Defined Benefit Plans

The Companys net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets is deducted.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Accrued Benefit Method (same as projected Unit Credit Method), which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities at the Balance Sheet date.

Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

b. Defined contribution Plans

The Company contributes to the employees provident fund and pension fund schemes for all its employees who are eligible for the benefit. All such contributions are recognised as an expense and charged to revenue each year.

5. Employee Stock Option Scheme.

The stock options granted by the Company are accounted for as per the accounting treatment prescribed by Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) and the guidance note on Accounting for Stock Options issued by The Institute of Chartered Accountants of India, whereby the intrinsic value of the options are recognised as deferred employee compensation. The deferred employee compensation, if any, is charged to the Profit and Loss Account on a straight line basis over the vesting period of the options. The Employee Stock Options Outstanding Account, net of unamortised Deferred Employee Compensation, if any is shown separately as part of Reserves.

6. Tangible Fixed Assets

Tangible fixed assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Costs include all expenses incidental to the acquisition of fixed assets.

7. Intangible Assets.

Intangible assets are stated at cost of acquisition less amortisation.

8. Depreciation and Amortisation.

The Company provides for depreciation and amortisation as under:

a. On written down value basis in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956.

b. Intangible assets are amortised over a period of three years from the date of acquisition on written down value basis.

c. On a pro-rata basis on assets purchased / sold during the year.

d. Asset costing less than Rs. 5,000/- per item is fully depreciated in the year of purchase.

e. Leasehold improvements are depreciated over the primary period of the lease.

9. Impairment Loss

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in a prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

10. Taxation

Provision for tax comprises current tax, deferred tax charge or benefit.

Current taxes are measured on the basis of the taxes expected to be paid on the taxable income determined in accordance with the prevailing tax rates and laws.

Deferred tax is the tax effect of the timing differences between the accounting income and taxable income. Deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognised using the rates that have been enacted or substantially enacted as at the balance sheet date.

Deferred tax assets are recognised only to the extent there is a reasonable certainty that there will be sufficient taxable income against which it can be realised; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realisation of assets. Deferred Tax Assets, if any, are re-assessed periodically.

11. Investments

All Investments are stated at cost. Investments are classified into long term investments and current investments. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary. Provision for diminution in the value of Current Investment as at the end of the year is charged to the Profit and Loss Account.

12. Derivative Instruments

Daily mark-to-market margins on the derivative trades are accounted separately as against the initial margin payments under Current Assets. The profit/loss on the final settlement of the derivative contracts, calculated as the difference between the final settlement price and the contract prices of all the contracts in the series, is recognised on the expiry/ square-up of the series of equity index/stock futures by transfer from the mark-to-market margin account.

As on the date of the Balance Sheet, provision for anticipated loss is made for the debit balance if any in the mark-to market margin account (maintained scripwise/indexwise) on open futures contracts, credit balances if any, in the account attributable to anticipated income being ignored keeping in view the consideration of prudence.

13. Earnings per Share

Basic earnings per share is computed and disclosed by dividing the net profit after tax by the weighted average number of shares outstanding during the year.

Diluted earnings per share is computed and disclosed using the weighted average number of shares outstanding during the year, adjusted for the effects of all dilutive potential equity shares, if any.

14. Miscellaneous Expenditure

Preliminary expenditure and expenditure in connection with the raising of capital /additional capital are amortised over a period of ten years from the year of commencement of business operations or from the year of raising of capital / additional capital.

15. Provisions, Contingent Liabilities and Contingent Assets A Provision is recognised when there is a present obligation as a result of past events for which a probable outflow of resources is expected to settle the obligation and the amount of the obligation can be reliably estimated.

Contingent Liabilities are not recognised but are disclosed in the notes in case of:

a) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) a possible obligation, unless the probability of outflow of resources is remote. Contingent Assets are neither recognised, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

16. Leases

Lease payments for assets taken under operating leases are charged off to the Profit and Loss Account as and when incurred.