Notes to Accounts of Prudent Corporate Advisory Services Ltd.

Mar 31, 2025

(a) Carrying value of trade receivables may be affected by the changes in credit risk of the counterparties as explained in Note 34.

(b) No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person. Trade Receivable due from Entities in which Director or Key Management personnel are Shareholder is ''6.10 lakhs ( Previous year Rs Nil) (Refer Note-36)

(c) The Company has duly provided its services and fulfilled the performance obligations for the month of March 2025 in March 2025 and for March 2024 in March 2024 itself, but as a part of its routine procedure, the Company has raised the invoices subsequent to the month. Since, the company has an unconditional right to consideration and only the act of billing has been deferred, the same has been classified as Trade Receivable. This has been duly reflected as unbilled in the trade receivable ageing.

##The Board of Directors have recommended a final dividend of ''2.5/- (face value of ''5/- each) (50%) per equity share for the year ended March 31, 2025 on 4,14,06,680 equity shares, amounting ''1035.17/- lakhs subject to the approval of the shareholders at the ensuing Annual General Meeting and are not recognised as a liability.

The description of the nature and purpose of each reserve within Other equity is as follows:

(i) Securities Premium

Securities premium is received by the Company on issue of shares at premium. This balance will be utilised in accordance with the provisions of Section 52 of the Act towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission/ discount expenses on issue of shares/debentures, premium payable on redemption of redeemable preference shares/debentures and buy back of its own shares/securities under Section 68 of the Act.

(ii) General Reserves

General reserve is a free reserve, retained from the Companyâs profits and can be utilized upon fulfilling certain conditions in accordance with statute of the relevant Act.

(iii) Retained Earnings

Retained earnings comprise balances of accumulated (undistributed) profit and loss at each year end and balances of remeasurement of net defined benefit plans, less any transfers to general reserve that can be distributed by the Company as dividend to its shareholders in compliance with the requirements of the Act.

33 Financial Instruments

(i) Capital Management

The Companyâs objective for capital management is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor and customer confidence, to ensure future development of its business and remain going concern. The Company is focused on keeping strong capital base to ensure independence and sustained growth in business. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented in the balance sheet. The funding requirements are predominately met through equity and out of cashflow generated from operations.

The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders, return capital to shareholders, issue new shares or sell non-core assets to reduce the debt.

(iii) Fair Value Hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.

Financial assets and financial liabilities measured at fair value in the Balance Sheet are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

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

Level 3: unobservable inputs for the asset or liability.

Fair value of the Companyâs financial assets and financial liabilities that are measured at fair value on a recurring basis.

(b) Financial Instrument measured at Amortised Cost

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

34 Financial Risk Management, Objective and Policies

The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The Companyâs business activities are exposed to a variety of financial risks, namely liquidity risk, credit risk and market risk. Risk management policies have been established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review and reflect the changes in the policy accordingly.

The Companyâs Management reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

(a) Credit Risk:

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit Risk arises principally from the Companyâs cash and bank balances, trade receivables, investments, securities held for trade, loans, and security deposits.

The carrying amounts of financial assets represent the maximum credit risk exposure. Credit risk assessment on various components is described below:

(i) Trade receivables

The Companyâs trade receivables primarily include receivables from asset management companies (AMCs) for services provided and receivable from stock exchanges (for trade executed on behalf of customers) as well as clients. The Company has not made any provision on ECL on account of receivables from AMCs, Stock exchanges. These carries limited credit risk based on the financial position of parties and Companyâs historical experience of dealing with these parties.

The management has established accounts receivable policy under which customer accounts are regularly monitored. The Company has a dedicated risk management team, which monitors the positions, exposures, and margins on a continuous basis.

(ii) Cash and cash equivalents, bank deposits, investments and Securities held for trade

The Company maintains its cash and cash equivalents, bank deposits, investment, and securities held for trade with reputed banks, financial institutions, and corporates. The credit risk on these instruments is limited because the counterparties are banks and high credit rated financial institutions and corporates assigned by credit rating agencies.

(iii) Security Deposits and Loans

This consists of loans given to Employees and Security Deposits given to lessors as well as to utility providers like Electricity companies. These carries limited credit risk based on the financial position of parties and Companyâs historical experience of dealing with these parties.

(iv) Expected Credit Loss (ECL):

The Company follows simplified ECL method in case of Trade Receivables and the Company recognises lifetime expected losses for all trade receivables that do not constitute a financing transaction. The Company assesses the provision for ECL on each reporting dates.

For the purpose of computation of ECL, the term default implies an event where amount due towards margin requirement and/or mark to market losses for which the client was unable to provide funds / collaterals, within 90 days of its due, to bridge the shortfall, the same is termed as margin call triggered.

The Company assesses allowance for expected credit losses for Loans and other financial assets. The ECL allowance is based upon 12 months expected credit losses. These carries very minimal credit risk based on the financial position of parties and Companyâs historical experience of dealing with these parties. Credit Risk on Other Financial assets is considered insignificant considering the nature of such assets and absence of counterparty risk.

(b) Market Risk:

Market risk is the risk of changes in market prices due to foreign exchange rates, interest rates which will affect the Companyâs income or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management of the Companyâs exposure to market risks.

(i) Foreign currency risk

The functional currency of the Company is INR. The Company does not have material foreign currency exposure. Hence, currency risk is very limited.

(ii) Price Risk :

Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investments, its issuer and market. The Companyâs exposure to price risk arises from diversified investments in mutual funds and Bonds, and Securities held for trade, and classified in the balance sheet at fair value through profit or loss.

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk primarily arises from investments in debt oriented mutual funds and debt securities. The Companyâs investments in debt oriented mutual funds and debt securities are primarily short-term, which do not expose it to significant interest rate risk. Additionally, since there are no external borrowings, the Company is not exposed to interest rate risk in with respect to borrowings.

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities that are settled by delivering cash or other financial assets. The Companyâs approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities. In doing this, management considers both normal and stressed conditions. The Company also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables.

The Company has established an appropriate liquidity risk management framework for the management of the Companyâs shortterm, medium-term, and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and by continuously monitoring cash flows, and by matching the maturity profiles of financial assets and liabilities.

(b) Defined Benefits Plans

The Company provides for retirement benefits in the form of Gratuity. The Companyâs gratuity scheme (funded) provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service subject to a ceiling of ''20 Lakhs. Vesting occurs upon completion of 5 years of service.The Company contributes gratuity liabilities to the Prudent Corporate Advisory Services Ltd Employeeâs Group Gratuity Fund ( the Trust ). Trustees administer contributions made to the Trusts and contributions are invested in Insurer Managed Funds.

The present value of the defined benefits plan was measured using the projected unit credit method.

Estimates of future salary increase takes into account: inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The plan exposes the Company to significant actuarial risks such as interest rate risk and inflation risk:

Inflation risk - A significant proportion of the defined benefit liability is linked to inflation. An increase in the inflation rate will increase the Companyâs liability.

Interest rate risk - The present value of the defined benefit liability is calculated using a discount rate prevailing market yields of Indian government securities. A decrease in discount rate will increase the Companyâs defined benefit liability.

(d) Asset - Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year -on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year.The Insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year ( subject to sufficiency of funds under the policy ).The policy thus mitigates the liquidity risk.

However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liablities . Thus, the company is exposed to movement in interest rate ( in particular , the significant fall in interest rates , which should result in a increase in liablity without corresponding increase in the asset)

Sensitivities have been calculated to show the movement in Defined Benefit Obligation in isolation and assuming there are no other changes in market conditions at the accounting date. In presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another as some of the assumptions may be correlated.

(c) Compensated absence:

The employees are entitled for leave for each year of service and part thereof, subject to the limits specified, the unavailed portion of such leaves can be accumulated or encashed during/at the end of the service period up to a maximum of 100 days. Expenses recognised in the Statement of Profit and Loss amounts to ''101.90 lakhs for the year ended March 31, 2025 (March 31, 2024: ''49.78 lakhs)

The current and non-current classification of obligations under defined benefit plans and other long-term benefits is done bases on the actuarial valuation reports.

38 Operating Segment

The Company determines Operating Segments as components of an entity for which discrete financial information is available that is evaluated regularly by chief operating decision maker (CODM), in deciding how to allocate resources and assessing performance.

The Companyâs activities revolve around distribution of Financial Products i.e. Mutual Funds, Bonds, Fixed Deposits, Insurance, Structured Products etc. Various financial products are aggregated into one reportable segment being agency nature of business under âFees and Commissionâ in accordance with aggregation criteria. Aggregation is done due to the similarities of the products and services provided to the customers and similarities in method used to provide services and regulatory environment. Considering the nature of Companyâs business, as well as based on reviews by CODM to make decisions about resource allocation and performance measurement, there is only one reportable segment in accordance with the requirements of Ind AS - 108 -ââOperating Segmentsââ, prescribed under Companies (Indian Accounting Standards) Rules, 2015.

Nature of CSR activities:

1. Educational infrastructure & systems strengthening

2. Nurture women entrepreneurship & employability

3. General community infrastructure support & welfare initiatives

4. Nurturing aquatic & terrestrial ecosystems for better environment & reduced emissions

5. Public health infrastructure, capacity building & support programs

6. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare.

7. Training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are promoting education, art and culture, healthcare, destitute care, women entrepreneurship & employability and rehabilitation, environment sustainability, disaster relief and Public health. A CSR committee has been formed by the Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

As per notification issued by Ministry of Corporate Affairs dated January 22, 2021, where a company spends an amount in excess of requirement provided under sub-section (5) of section 135, such excess amount may be set off against the requirement to spend under sub-section (5) of section 135 up to immediate succeeding three financial years.

(i) Gross amount required to be spent during the year ''225.24 lakhs (previous year ''156.78 lakhs)

(ii) Excess amount to be set off against succeeding three financial years ''3.73 lakhs (previous year ''3.37 lakhs)

41 Recent accounting pronouncements

Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2025, MCA has notified Ind AS 117 - Insurance Contracts and amendments to Ind As 116 - Leases , relating to sale and lease back transactions, applicable from April 1, 2024. The Company has assessed that there is no significant impact on its financial statements. On May 9, 2025, MCA notifies the amendments to Ind AS 21 - Effects of Changes in Foreign Exchange Rates. These amendments aim to provide clearer guidance on assessing currency exchangeability and estimating exchange rates when currencies are not readily exchangeable. The amendments are effective for annual periods beginning on or after April 1, 2025. The Company is currently assessing the probable impact of these amendments on its financial statements.

42 Events Occuring After Balance Sheet Date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approved Standalone Financial Statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Standalone Financial Statements as of May 12, 2025 there is no significant events occured, except disclosed.

The Board of Directors have recommended a final dividend of ''2.5/- (face value of ''5/- each) (50%) per equity share for the year ended March 31, 2025 on 4,14,06,680 equity shares, amounting ''1035.17/- lakhs subject to the approval of the shareholders at the ensuing Annual General Meeting and is not recognised as a liability.

42(A) Amalgamation of Prudent Broking Services Private Limited with the Company w.e.f April 01, 2023.

On July 25, 2023, the Board of Directors of the Company approved the scheme of amalgamation of Prudent Broking Services Private Limited (âPBSPLâ), a wholly owned subsidiary, with Prudent Corporate Advisory Services Limited (âPCASLâ), effective from the appointed date of April 01, 2023 (the âAmalgamation Schemeâ).

The Company received approval for the Scheme from the Office of the Regional Director (âRDâ), North Western Region, Ministry of Corporate Affairs (âMCAâ), Ahmedabad (Gujarat) vide confirmation order dated August 02, 2024. This order approved the Scheme of Amalgamation between Prudent Broking Services Private Limited (Transferor Company) with Prudent Corporate Advisory Services Limited (Transferee Company) and their respective shareholders and creditors in terms of Section 233 of the Companies Act, 2013 read with Rule 25 of The Companies (Compromise, Arrangement and Amalgamation) Rules, 2016.

The Company has prepared the standalone financial statements for the year ended March 31, 2025, in accordance with the confirmation order received for the Amalgamation. Consequently, the standalone financial statements of PCASL now include equity broking business of erstwhile PBSPL for the year ended March 31, 2025 and March 31, 2024. Accordingly, the figures presented in the standalone financial statements are after giving effect to the said Scheme.

42(B) Compliance With Number Of Layers Of Companies:

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies ( Restriction on number of Layers) Rules, 2017.

43 Contingent Liabilities and Commitments

(a) Contingent liabilities

('' in lakhs)
Particulars	For the year ended March 31, 2025	For the year ended March 31, 2024
(1) Claims against the Company not acknowledged as debt:
(i) Disputed Income Tax demand (Refer below Note 1)	569.26	568.26
(ii) Disputed Goods and Services Tax demand (includes Interest and Penalty (Refer below Note 2)	91.55	108.61
Total	660.81	676.87
(2) Bank Guarantee with Exchanges as margin requirement	-	1,990.00
Total	-	1,990.00

Note-1.1 Under Income Tax Matters, the Company received assessment orders under Section 147 of the Income-tax Act, 1961 from the Assessment Unit, confirming the income tax demands of ''20.69 lakhs for the Assessment Year 2016-17 and ''9.10 lakhs for Assessment Year 2018-19 (interest thereon not ascertainable at present). In both the Assessment Year, tax demand was based on the denial of exemption for a portion of dividend income. The Company has filed appeals against these assessment orders before the Commissioner of Income Tax (Appeals) - NFAC, Delhi. As on the reporting date, both appeals remain pending adjudication. In respect of the demand raised for AY 2016-17, the Company has paid ''4.14 lakhs (being 20% of the disputed tax demand) under protest. The balance amount of ''16.55 lakhs has been adjusted by the Income Tax Department against the income tax refund due to the Company for AY 2022-23..

Note-1.2 Pursuant to a scheme of amalgamation sanctioned u/s 233 of the Companies Act 2013 for amalgamation of Prudent Broking Services Private Limited (âPBSPLâ) (Transferor Company) with the company with effect from April 01,2023(appointment date). Accordingly, all contingent liabilities and legal obligations of the erstwhile PBSPL have been vested into the Company. Prior to amalgamation, PBSPL had received an assessment order under Section 147 read with Section 144B of the Income-tax Act, 1961, dated

September 29, 2021, from the Assessment Unit of the Income Tax Department, raising a demand of ''538.47 lakhs for Assessment Year 2013-14. The demand pertains to addition of income made under Section 68 read with Section 115BBE of the Act. Against this order, PBSPL had filed an appeal on October 13, 2021, before the Commissioner of Income Tax (Appeals) NFAC, Delhi. PBSPL has deposited ''50.00 lakhs under protest, and the matter remains pending adjudication as on the reporting date.

Further, PBSPL has also received penalty orders dated June 25, 2024, under section 271FAA of the Income-tax Act, 1961, for Assessment Years 2022-23 and 2023-24, each imposing a penalty of ''0.50 Lakhs. These penalties were levied for alleged furnishing of inaccurate information under Section 285BA(1)(k) of the Act. The Company has preferred appeals against these penalty orders before the Commissioner of Income Tax (Appeals) - NFAC, Delhi, on August 20, 2024, and the outcome are awaited.

Note-2.1 Under Goods and Service Tax Laws, the Company has received various demand orders,passed by Assistant Commissioner/ Deputy Commissioner of Central/State Tax in the states of Gujarat, Maharashtra, Telangana, and West Bengal for raising total demand of GST of ''91.55 lakhs (including interest and penalty specified in orders) on various matters like Input Tax Credit (ITC) disallowance due to mismatch with GSTR-2A, non-short reversal of ITC on exempt supplies, ineligible/blocked ITC availed. The Company has paid ''5.49 lakhs pre-deposit and the Company has filed an appeal with Appellate Authority of respective states and the same is yet to be concluded as on the reporting date. One of the orders amounting to ''40.78 lakhs has been confirmed by the Appellate Authority in West Bengal. However, the Company intends to pursue further appeal before the Appellate Tribunal.

Note-2.2 Company has received show cause notice in the state of Gujarat (FY 2019-20) for raising total demand of GST ''17.06 lakhs (excluding interest and penalty) on various matters like Input Tax Credit (ITC) disallowance due to mismatch with GSTR-2A, non-short reversal of ITC on exempt supplies, ineligible/blocked ITC availed, short payment of tax.The company has responded to such notice and received the favourable order in current year and accordingly these proceedings have been dropped. Most of the issues of litigation pertaining to Income Tax and Goods and Service Tax are based on interpretation of the respective Laws & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in the law as they are covered by judgements of respective judicial authorities which supports its contention. As such no material impact on the financial position and performance of the Company is envisaged. Therefore, no provision has been made in the financial statements, and the matters are being disclosed as contingent liabilities.

(b) Prudent Broking Services Private Limited (PBSPL) (âTrading memberâ) had entered into an agreement with IL&FS Securities Services Ltd (âISSLâ or âClearing Memberâ) for appointing ISSL as Companyâs Clearing Member for Derivative Segment. In July 2019, the National Stock Exchange(âNSEâ) disabled the terminals of ISSL citing shortfalls in payments by ISSL which resulted in the trading members not being able to place trades for its clients. Considering the IL&FS crisis, PBSPL filed a complaint with NSEâs Grievence Redressal Committee (GRC) on December 28, 2020 and GRC has accepted PBSPLâs claim of ''204.67 Lakhs in the committee meeting held on July 15, 2021 . Further, ANMI has filed an interlocutory application under Rule 31 of National Company Law Appellate Tribunal Rules, 2016 on behalf of Trading Members, which was admitted on December 01, 2021. The PBSPL has received the GRC order and directed ISSL to pay ''204.67 Lakhs. The PBSPL has received ''203.67 Lakhs against Derivative Segment on September 21, 2022 subsequently PBSPL has reversed the impairment provision amounting to ''203.67 Lakhs. Balance ''1 Lakhs against Debt Segment is still pending. (Refer Note 10).

(c) Capital commitments and other commitments

Based on the information available with the company, there is no capital commitments and other commitments as on March 31, 2025.

44 Other statutory information

(a) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

(b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(c ) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(d) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(e) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(f) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(g) The Company does not have any transactions with companies which are struck off.

(h) The Company has not taken any loan from bank or financial institutions. Consequently filling of quarterly returns or statements of current assets with bank or financial institutions is not applicable to Company.

45 Additional regulatory information required under (WB)(xiv) of Division III of Schedule III amendment, disclosure of ratios, is not applicable to the Company as it is in Distribution of Mutual Fund, Stock broking and other Financial and Non Financial Product Distribution business and not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.

46 Disclosure for maintenance of books with audit trail

The Ministry of Corporate Affairs(MCA) has issued a notification dated 24th March 2021 (Companies(Accounts) Amendments Rules,2021) which is effective from April 01,2023, states that every Company which uses accounting software for maintaining its books of account shall use only such accounting software which has a feature of recording audit trail of each and every transaction, and further creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

In respect of software related to Mutual Fund Business which is internally developed software by the Company, No audit trail was enabled for all relevant transactions at the database level to log any direct data changes but the Company has taken necessary action to safeguards all its data at transactions level.

47 The standalone financial statements were authorized for issue in accordance with a resolution of the Board of Directors on May 12, 2025.

Mar 31, 2024

J Provisions and contingent liabilities:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Standalone Statement of Profit and Loss net of any reimbursement. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.

Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are not recognised but are disclosed in the notes where an inflow of economic benefits is probable.

K Leases: Right-of-use assets and Lease liabilities

i) Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets (âRoU Assetsâ) at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in section 3 (C) Impairment of non-financial assets.

ii) Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

The Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are

recognised as revenue in the period in which they are earned

Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

L Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash and cash equivalents for the purpose of Statement of Cash Flow comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less.

M Earning per share

Basic earnings per share is computed by dividing the profit / (loss) for the period attributable to equity share holder by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit/(loss) for the period attributable to Equity Share holders and the weighted average number of shares outstanding during the period are adjusted for effects of all dilutive portential equity shares.

N Dividend on Ordinary Shares

The Company recognizes a liability to make cash to equity holders of the Company when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the Act, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

O Segment Reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the companyâs Chief Operating Decision Maker (âCODMâ) to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108 -Operating Segments, the CODM evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

P Cash flow statement

Cash flows are reported using the indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular operating, investing and financing activities of the Company are segregated based upon the available information.

Q Contract balances

Trade Receivables : A receivable represents the Companyâs right to an amount of consideration that is unconditional i.e. only the passage of time is required before payment of consideration due.

Contract Liability : A contract liability is the obligation to transfer goods and services to the customer for which the Company has received the consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognized as revenue when the Company performs obligations under the contract. The same is disclosed as âAdvance from customersâ under Other non-financial liabilities.

R Business Combination: Methods of Accounting for Common Control Business Combinations

A Common control business combination, involving entities or business in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and where control is not transitory, is accounted for in accordance with Appendix C to Ind AS 103 âBusiness Combinationâ The company accounts for Business combinations involving entities or businesses under common control are accounted for using the pooling of interest method as follows:

â¢ The assets and liabilities of the combining entities are reflected at their carrying amounts

â¢ No adjustments are made to reflect fair values, or recognize new assets or liabilities. Adjustments are made only to harmonize material accounting policies.

â¢ The financial information in the financial statements in respect of prior period are restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.

â¢ The identity of the reserves are preserved and appear in the financial statements of the transferee in same form in which they appeared in the financial statements of the transferor.

â¢ The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserves.

The amalgamation was accounted as a common control business combination in accordance with the accounting prescribed under âpooling of interestâ method in Appendix C of the Indian Accounting Standard (Ind AS) 103 - âBusiness Combinationsâ and as per the specific provisions of the Scheme. Accordingly, the Scheme has been given effect to in these financial statements and all assets, liabilities and reserves and income and expenditure of the Transferor companies stand transferred at carrying value and vested in the Transferee Company. The inter-corporate investments / deposits / loans and advances or any receivables and payables between and amongst the Amalgamated Company and the Amalgamating companies will stand eliminated by set-off against each other and be cancelled.

No shares were issued to give effect of the said amalgamation since the wholly owned subsidiary companies merged with the Parent/Holding Company. The difference between the equity share capital of the transferor companies and the carrying value of investments in the said transferor companies in the books of the transferee Company is recognised as capital reserve (refer statement of changes in equity). Pursuant to the scheme, the company has adjusted the debit balance of capital reserve (including capital reserve arising on account of amalgamation) and debit balance of amalgamation adjustment reserve account in the books of the Company post amalgamations against the Securities Premium Account of the Company, as per the terms of the Approved scheme.

As per the approved scheme of amalgamation, the amalgamating companies carried their respective business for and on behalf of the Company from the appointed date till the effective date.

34 Financial Risk Management, Objective and Policies

The Companyâs Management reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

(a) Credit Risk:

The carrying amounts of financial assets represent the maximum credit risk exposure. Credit risk assessment on various components is described below:

(i) Trade receivables

(ii) Cash and cash equivalents, bank deposits, investments and Securities held for trade

(iii) Security Deposits and Loans

(iv) Expected Credit Loss (ECL):

(b) Market Risk:

Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management of the Companyâs exposure to market risks.

(i) Foreign currency risk

The functional currency of the Company is INR. The Company does not have material foreign currency exposure. Hence, currency risk is very limited.

(ii) Price Risk :

(iii) Interest rate risk

(i) Gross amount required to be spent during the year '' 156.78 lakhs (previous year '' 107.37 lakhs)

(ii) Excess amount to be set off against succeeding three financial years '' 3.37 lakhs (previous year '' 2.51 lakhs)

41 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified and the rules thereunder are yet to be framed. Accordingly, the actual impact of this change will be assessed and accounted for when the notification becomes effective.

42 Standards issued but not effective

43 Events Occuring After Balance Sheet Date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approved Standalone Financial Statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Standalone Financial Statements as of August 08, 2024 there is no significant events occured, except disclosed.

The Board of Directors have recommended a final dividend of '' 2/- (face value of ''5/- each) (40%) per equity share for the year ended March 31, 2024 on 4,14,06,680 equity shares, amounting ''828.13/- lakhs subject to the approval of the shareholders at the ensuing Annual General Meeting and is not recognised as a liability.

43(A) Amalgamation of Prudent Broking Services Private Limited with the Company w.e.f April 01, 2023.

On July 25, 2023, the Board of Directors of Prudent Corporate Advisory Services Limited (âPCASLâ or âthe Companyâ) approved a Scheme of Amalgamation between Prudent Broking Services Private Limited (âPBSPLâ), a wholly owned subsidiary, and PCASL and their respective shareholders and creditors, effective from the appointed date of April 01, 2023 (the âAmalgamation Schemeâ). PBSPL is a Clearing member of National Stock Exchange of India (NSE), Bombay Stock Exchange Limited (BSE), Multi Commodity of India Limited (MCX), and Member of Metropolitan Stock Exchange of India Limited, (MSEI), National Commodities and Derivatives Exchange Limited (NCDEX) and a depository participant with Central Depository Services (India) Limited (CDSL). PBSPL is engaged in the business of stock, currency and commodity broking, providing margin trading facility, depository services and earns brokerage, fees, commission, research analysis, interest income and other investment related services to its clients.

The Company has received approval for the Scheme from the Office of the Regional Director (âRDâ), North Western Region, Ministry of Corporate Affairs (âMCAâ), Ahmedabad (Gujarat) vide confirmation order dated August 02, 2024. The Scheme has accordingly been given effect in these financial statements of the Company. The transaction being a common control transaction, as per the requirement of Appendix C of Ind AS 103 on Business Combination, the financial information in the financial statements in respect of prior periods has been restated as if the amalgamation has occurred from the beginning of the preceding period in the financial statements of PCASL. Accordingly, the equity of PCASL as at April 01, 2022, being the beginning date of the preceding period has been restated as under to reflect the impact of the merger of PBSPL.

Note-1.1 The Assessment Unit of Income Tax has issued an order under Section 147 of the Income Tax Act, 1961, confirming the income tax demand of '' 20.69 lakhs for the Assessment Year 2016-17 and '' 9.10 lakhs for Assessment Year 2018-19. In both the Assessment Year, tax demanded was based on the denial of exemption for a portion of dividend income. The company has paid '' 4.14 lakhs under protest for AY 2016-17. Further, the company has filed an appeal against these assessment orders during the current year, and both matters are currently pending with the National Faceless Appeal Centre (NFAC). Based on prior experience management is reasonably confident that during the current year, no material impact on the financial position or performance of the company is envisaged.â

Note-1.2 The PBSPL, has received an assessment order under Section 147 read with Section 144B of the Income Tax Act, 1961, passed by the Assessment Unit of the Income Tax Department on September 29, 2021. The order demands an additional tax liability of 7538.47 lakhs for the Assessment Year 2013-14. This demand arises from an addition made under Section 68 read with Section 115BBE of the Income Tax Act.PBSPL has contested the order by filing an appeal before the Commissioner of Income Tax (Appeals) on October 13, 2021. In connection with the appeal, PBSPL has deposited 750.00 lakhs under protest. The matter is currently pending before the National Faceless Appeal Centre (NFAC).

Note-1.3 The PBSPL has also received notices under Section 148 for the reopening of assessments under Section 147 read with Section 144B of the Income Tax Act, 1961 for the Assessment Years 2014-15, 2015-16, 2016-17, and 2017-18. These notices were issued on grounds similar to those in the Assessment Year 2013-14. PBSPL responded by filing writ petitions with the Gujarat High Court, which resulted in a stay on the proceedings. Subsequently, based on a Supreme Courtjudgment, the Income TaxDepartment was permittedto reissue notices under Section 148A(b). PBSPL received these notices for all the aforementioned years in June 2022 and filed its replies on June 27, 2022. Favorable orders have since been received by PBSPL, stating that these matters are not fit cases for the issuance of notices under Section 148 of the Income Tax Act. Consequently, the assessments for all these years have been dropped.

Note-2.1 The Company has received various assessment order from Assistant Commissioner/Deputy Commissioner of Central/State Tax in the state of Gujarat, Maharashtra, Telangana, and West Bengal for raising total demand of GST of '' 91.55 lakhs (including interest and penalty specified in orders) on various matters like Input Tax Credit (ITC) disallowance due to mismatch with GSTR-2A, non-short reversal of ITC on exempt supplies, ineligible/blocked ITC availed. The Company has paid '' 4.65 lakhs under protest during the current year.The Company has filed an appeal with Appellate Authority and the same is yet to be concluded as on the reporting date. 21

Note-2.2 The Company has received show cause notice in the state of Gujarat (FY 2019-20) for raising total demand of GST '' 17.06 lakhs (excludinginterest and penalty) onvarious matters like Input Tax Credit(ITC) disallowance due to mismatch with GSTR-2A, non-shortreversal ofITC on exempt supplies, ineligible/blocked ITC availed, short payment of tax but didnât receive further demand order and the same is yet to be concluded as on the reporting date. Accordingly, the Company has disclosed such demand amount under as contingent liabilities. Most of the issues of litigation pertaining to the GST Act are based on the interpretation of the respective laws and rules thereunder. Management has been opined by its legal counsel that many of the issues raised by tax authorities will not be sustainable in the law as they are covered by judgements of respective judicial authorities, which supports its contention. During the current year, no material impact on the financial position or performance of the company is envisaged.

(b) Prudent Broking Services Private Limited (PBSPL) (âTrading memberâ) had entered into an agreement with IL&FS Securities Services Ltd (âISSLâ or âClearing Memberâ) for appointing ISSL as Companyâs Clearing Member for Derivative Segment. As a part of the agreement, the Trading Member had to place margins with Clearing Member for trading memberâs client open positions. As at year end March 2019, this margin amount placed by PBSPL with ISSL amounted to '' 213.91 Lakhs. In July 2019, the National Stock Exchange(âNSEâ) disabled the terminals of ISSL citing shortfalls in payments by ISSL which resulted in the trading members not being able to place trades for its clients. Considering the IL&FS crisis, PBSPL obtained NOC from ISSL and appointed Axis Bank Limited as its Clearing Member. Since the margin amount had not been released by ISSL, PBSPL and other trading members along with the Association of National Exchanges Members of India (ANMI) filed an Interlocutory Application in the Supreme Court of India on September 26, 2019 requesting the release of the funds by ISSL. The Supreme Court dismissed this interlocutory application in December 2020 and asked the parties to file case with lower authorities. Thereafter, PBSPL filed a complaint with NSEâs Grievence Redressal Committee (GRC) on December 28, 2020. GRC has accepted PBSPLâs claim of '' 204.67 Lakhs in the committee meeting held on July 15, 2021 . Further, ANMI has filed an interlocutory application under Rule 31 of National Company Law Appellate Tribunal Rules, 2016 on behalf of Trading Members, which was admitted on December 01, 2021 and the matter is still pending. Considering the facts of the case, the management of PBSPL has already provided Rs 213.91 Lakhs as impairment allowance in F.Y. 2020-21, The PBSPL has received the GRC order and directed ISSL to pay '' 204.67 Lakhs. The PBSPL has received '' 203.67 Lakhs against Derivative Segment on September 21, 2022 subsequently PBSPL has reversed the impairment provision amounting to ''203.67 Lakhs. Balance '' 1 Lakhs against Debt Segment is still pending. (Refer Note 10 and 27(A)).

Based on the information available with the company, there is no capital commitments and other commitments as on March 31, 2024.

45 On October 20, 2022 the Company acquired Mutual Fund Assets under Management (âAUMâ) of iFAST Financial India Private Limited (iFAST). The Company has paid '' 226.23/- lakhs (excluding taxes) as consideration for the same. The said AUM has been transferred from iFAST ARN to the Companyâs ARN in the same month . Based on the analysis performed by the management of the Company, the said transaction has been accounted for as an asset acquisition w.e.f. October 1, 2022. Based on the analysis performed by the management of the Company, it has concluded that the acquisition does not qualify as a âBusinessâ as per the definition provided in Ind AS 103 âBusiness Combinationâ Consequently, the said acquisition is accounted for as an asset acquisition. As required under Ind-AS 38, the Company has considered various factors such as its ability to retain the customers and generate revenue over a sustainable period, technical and technological changes expected, the industry growth prospects and the leverage of its existing physical and digital infrastructure to serve these customers and concluded that the cost of acquiring the customer folios should be amortized over a 10 year period on a straight line basis.

46 Other statutory information

(a) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

(b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(c) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(f) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(g) The Company does not have any transactions with companies which are struck off.

47 Additional regulatory information required under (WB)(xiv) of Division III of Schedule III amendment, disclosure of ratios, is not applicable to the Company as it is in Distribution of Mutual Fund, Stock broking and other Financial and Non Financial Product Distribution business and not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.

48 Disclosure for maintenance of books with audit trail

In respect of primary accounting software used from April 01, 2023 to June 30, 2023, there was no feature of recording the audit trail (edit log). Thereafter, the Company has upgraded to advanced version of the accounting software having feature of recording audit trail for all transactions, and creating an edit log of each change made along with the date when such changes were made and also audit trail cannot be disabled.

In respect of software related to Mutual Fund Business which is internally developed software by the Company, the audit trail feature related to who has made the changes in the rate master was not enabled throughout the year at user name level but it is enabled at computer system level. W.e.f April 01, 2024, the same has been updated and now recording of audit trail feature at user name level is enabled. Further no audit trail was enabled for all relevant transactions at the database level to log any direct data changes.

Further, no instance of audit trail feature being tampered with was noted in respect of accounting software for which the audit trail feature was enabled and operating.

49 The standalone financial statements were authorized for issue in accordance with a resolution of the Board of Directors on August 08, 2024.

For Deloitte Haskins & Sells For and on behalf of the Board of Directors of

Chartered Accountants Prudent Corporate Advisory Services Limited

Hardik Sutaria Sanjay Shah Shirish Patel Chirag Shah

Partner Chairman and Managing Director Whole Time Director and CEO Whole Time Director

DIN : 00239810 DIN : 00239732 DIN : 01480310

Chirag Kothari Kunal Chauhan

Chief Financial Officer Company Secretary

Place : Ahmedabad Place : Ahmedabad

Date: August 08, 2024 Date: August 08, 2024

Mar 31, 2023

Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.

The expense relating to payment not included in the measurement of the lease liability mainly pertains to the short term leases.

(ii) Rights, preferences and restrictions attached to Equity shares

The Company has only one class of equity shares having a par value of '' 5/- per share. Each shareholder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

# Pursuant to the Board resolution dated, July 22, 2021 and Shareholdersâ resolution dated July 23, 2021, the Company has issued 19 bonus shares of face value '' 10 each for every 1 existing fully paid up preference share of face value '' 10 each and accordingly 29,773 bonus shares were issued, which were allotted on August 3, 2021 (the âBonus Issueâ) by capitalizing the Retained earnings of our Company. Further, each preference share of face value of '' 10 each of the Company has been split into two preference shares of face value of INR '' 5 each (the âSplitâ).

** The Company had allotted 62,680 Equity Shares of '' 5 each to Wagner Limited as fully paid up pursuant to conversion of Non Cummulative Compulsory Convertible Preference Shares. In accordance with the terms of the shareholdersâ agreement, the NCCCPS were converted into Equity Shares in the ratio of 1:1 without payment of any additional conversion price. Accordingly, no additional consideration was paid by Wagner Limited at the time of conversion of the NCCCPS into Equity Shares.

(ii) Rights, preferences and restrictions attached to Preference shares

The Company had outstanding Nil - 0.000001 % Non-Cumulative Compulsory Convertible Preference Shares (âNCCCPSâ) of '' 10 each issued at a premium of '' 6,027.68 per share. Each holder of preference shares has a right to vote only on resolutions placed before the Company which directly affects the right attached to preference shareholders. The Preference shares have been converted into Equity Shares in the ratio of 1:1 after bonus and split on November 30, 2021.

The description of the nature and purpose of each reserve within Other equity is as follows:

(i) Securities Premium

Securities premium is received by the Company on issue of shares at premium. This balance will be utilised in accordance with the provisions of Section 52 of the Act towards issuance of fully paid bonus shares, write-off of preliminary expenses, commission/discount expenses on issue of shares/debentures, premium payable on redemption of redeemable preference shares/debentures and buy back of its own shares/securities under Section 68 of the Act.

(ii) General Reserves

General reserve is a free reserve, retained from the Companyâs profits and can be utilized upon fulfilling certain conditions in accordance with statute of the relevant Act.

(iii) Retained Earnings

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (âOrdinanceâ) issued by the Ministry of Law and Justice (Legislative Department) on September 20, 2019, effective from April 01, 2019, domestic companies have the option to pay Corporate income tax rate at 22% plus applicable surcharge and cess (âNew tax rateâ) subject to certain conditions.In the previous year, based on the assessment done, the Company has chosen to exercise the option of New tax rate. Accordingly, the Company made the provision for current tax and deferred tax at the rate of 25.17% including applicable Surcharge and Cess.

âPursuant to the Board resolution dated, July 22, 2021 and Shareholdersâ resolution dated July 23, 2021, the Company had issued 19 bonus shares of face value '' 10 each for every 1 existing fully paid up equity share and preference share of face value '' 10 each and accordingly 1,96,68,173 bonus shares were issued, which were allotted on August 3, 2021 (the âBonus Issueâ). Further, pursuant to the resolution of the Board of Directors dated July 22, 2021 and shareholdersâ resolution dated July 23, 2021, each equity share and preference share of face value of '' 10 each of the Company had been split into two equity shares and two preference shares of face value of '' 5 each (the âSplitâ). As required under Ind AS 33 âEarnings per shareâ the effect of such Split and Bonus issue are required to be adjusted for the purpose of computing earnings per share for all the periods presented retrospectively. As a result, the effect of the Split and the Bonus issue have been considered in these Financial Information for the purpose of calculation of earnings per share for the year ended March 31, 2022.

Further, 62,680 Equity shares of '' 5 Each had been alloted to Wagner Limited on November 30, 2021 as fully paid up pursuant to conversion of Non Cummulative Compulsorily Convertible Preference Shares (NCCCPS). As required under Ind AS 33 âEarnings per shareâ, the effect of such conversion is required to be adjusted for the purpose of computing earnings per share for the year ended March 31, 2022.

33 Financial Instruments (i) Capital Management

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

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

Level 3: unobservable inputs for the asset or liability.

Fair value of the Companyâs financial assets and financial liabilities that are measured at fair value on a recurring basis.

(b) Financial Instrument measured at Amortised Cost

34 Financial Risk Management, Objective and Policies

The Companyâs Management reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

(a) Credit Risk:

The carrying amounts of financial assets represent the maximum credit risk exposure. Credit risk assessment on various components is described below:

(i) Trade receivables

The Companyâs trade receivables primarily include receivables from asset management companies (AMCs) for services provided. These carries limited credit risk based on the financial position of parties and Companyâs historical experience of dealing with these parties.

(ii) Cash and cash equivalents, bank deposits, investments and Securities held for trade

(iii) Security Deposits and Loans

(b) Market Risk:

Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management of the Companyâs exposure to market risks.

(i) Foreign currency risk

The functional currency of the Company is INR. The Company does not have material foreign currency exposure. Hence, currency risk is very limited.

(ii) Price Risk :

The Company has established an appropriate liquidity risk management framework for the management of the Companyâs short-term, medium-term, and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves and by continuously monitoring cash flows, and by matching the maturity profiles of financial assets and liabilities.

(b) Defined Benefits Plans

The Company provides for retirement benefits in the form of Gratuity. The Companyâs gratuity scheme (funded) provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service subject to a ceiling of '' 20 Lakhs. Vesting occurs upon completion of 5 years of service.The Company contributes gratuity liblities to the Prudent Corporate Advisory Services Ltd Employeeâs Group Gratuity Fund ( the Trust ). Trustees administaror contributions made to the Trusts and contributions are invested in Insurer Managed Funds.

The present value of the defined benefits plan was measured using the projected unit credit method.

The following tables set out the status of the gratuity plan and amounts recognised in the financial statements:

The plan exposes the Company to significant actuarial risks such as interest rate risk and inflation risk:

Inflation risk - A significant proportion of the defined benefit liability is linked to inflation. An increase in the inflation rate will increase the Companyâs liability.

Expenses recognised in the Statement of Profit and Loss amounts to '' 45.58 Lakhs for the year ended March 31, 2023 (March 31, 2022: '' 47.88 lakhs)

The current and non-current classification of obligations under defined benefit plans and other long-term benefits is done bases on the actuarial valuation reports.

Note:-

As part of the IPO, there was offloading of shares through Offer For Sale (âOFSâ) by Mr. Shirish Patel and Wagner Limited (âSelling Shareholdersâ) totalling to '' 1,342.56 Lakhs and '' 41,485.84 Lakhs respectively. The Share issue expense attributable to Selling Shareholders have been incurred total of '' 2,769.18 Lakhs out of which '' 459.44 have been incurred by the Company up to March 31, 2022 and balance amount during the current financial year up to March 31,2023. The entire shares issue expenses (Except Listing Fees) is recoverable from the Selling Shareholders in the ratio of their offloading, as per agreement.

The Company has recovered the entire expenses from the Selling Shareholders during the year ended March 31, 2023 (Refer Note-10)

Terms and conditions of transactions with related parties

As the liabilities for defined benefit obligations and compensated absences are provided based on actuarial valuation for the company as a whole, the amount pertaining to Key management personnel has not been included.

*- Figure nullified in conversion of Rs. in Lakhs

38 Operating Segment

Considering the nature of Companyâs business, as well as based on reviews by CODM to make decisions about resource allocation and performance measurement, there is only one reportable segment in accordance with the requirements of Ind AS - 108 - ââOperating Segmentsââ, prescribed under Companies (Indian Accounting Standards) Rules, 2015.

Nature of CSR activities:

1. COVID 19 Support & rehabilitation program

2. Educational infrastructure & systems strengthening

3. Nurture women entrepreneurship & employability

4. General community infrastructure support & welfare initiatives

5. Nurturing aquatic & terrestrial ecosystems for better environment & reduced emissions

6. Public health infrastructure, capacity building & support programs

(i) Gross amount required to be spent during the year ''99.81 lakhs (previous year '' 73.06 lakhs)

(ii) Excess amount to be set off against succeeding three financial years ''2.57 Lakhs (previous year '' 1.87 lakhs)

42 Standards issued but not effectiveInd AS 1 - Presentation of Financial Statements -

This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors -

This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.

Ind AS 12 - Income Taxes -

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.

43 Events Occuring After Balance Sheet Date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approved Standalone Financial Statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the Standalone Financial Statements as of May 24, 2023 there is no significant events occured, except disclosed.

1) The Board of Directors have recommended a final dividend of '' 1.5/- (face value of '' 5/- each) (30%) per equity share for the year ended March 31, 2023 on 4,14,06,680 equity shares, amounting '' 621.10/- Lakhs subject to the approval of the shareholders at the ensuing Annual General Meeting and is not recognised as a liability.

43 (A) The Board of Directors in its meeting held on January 09, 2023, based on the recommendations of the Audit Committee, has considered and approved the draft Scheme of Arrangement (âSchemeâ) between Prudent Broking Services Private Limited, a wholly owned subsidiary (âPBSPLâ) and the Company and their respective shareholders and creditors under section 233 of the Companies Act, 2013. Pursuant to the Scheme, the stock broking and depository business of PBSPL shall be demerged and transferred to the Company. Scheme was submitted to National Stock exchnage (NSE) and Bombay Stock exchange (BSE) for their prior approval which was received on March 27, 2023 and March 13, 2023 respectively. Thereafter the company has submitted scheme to Registrar of Companies (ROC), Gujarat on March 29, 2023 inviting their observations or suggetions pursuant to section 233 (1) (a) of the Companies Act, 2013, response from ROC is awaited.

43 (B) Compliance With Number Of Layers Of Companies:

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies ( Restriction on number of Layers) Rules, 2017.

44 Contingent Liabilities and Commitments		(''in lakhs)
(a) Contingent liabilities	For the year ended March 31, 2023	For the year ended March 31, 2022
Outstanding Balance of Corporate Guarantee	-	250.00
Total	-	250.00

1. The Company has received order u/s 148A(d) of Income Tax Act 1961 for re-opening of scrutiny assessment for AY 2016-17 and AY 2018-19 with approval of appropriate authority. The matter is pending with Income Tax Authorities. Based on prior experience management is reasonably confident that no liability will devolve on the company. During the current year, on assessment of facts and status on the above matter, the company has assessed that possibility of any outflow in settlement is remote. Accordingly the same has not been considered as contingent liability.

2. The Company has issued financial guarantee to bank on behalf of and in respect of making available loan facilities to Prudent Broking Services Private Limited (âPBSPLâ), a wholly owned subsidiary . PBSPL has not availed loan during the year and no outstanding at the end of the year against this guarantee.

(b) Capital commitments and other commitments

Based on the information available with the company, there is no capital commitments and other commitments as on March 31, 2023.

45 i) On October 21, 2021, the Company was selected as the highest bidder for acquiring the mutual fund folio of Karvy Stock Broking Limited (âKSBLâ). On October 27, 2021, the Company has paid ''15,100/- Lakhs (excluding taxes) for the above acquisition. Based on the analysis performed by the management of the Company, it has concluded that the acquisition does not qualify as a âBusinessâ as per the definition provided in Ind AS 103 âBusiness Combinationâ Consequently, the said acquisition is accounted for as an asset acquisition. As required under Ind-AS 38, the Company has considered various factors such as its ability to retain the customers and generate revenue over a sustainable period, technical and technological changes expected, the industry growth prospects and the leverage of its existing physical and digital infrastructure to serve these customers and concluded that the cost of acquiring the customer folios should be amortized over a 10 year period on a straight line basis. The transfer of AUM has been duly completed on November 28, 2021. Consequently, the figures of the comparative year are not comparable to the extent of revenue received from such acquired AUM and its consequetial expenses.

ii) On October 20, 2022 the Company acquired Mutual Fund Assets under Management (âAUMâ) of iFAST Financial India

Private Limited (iFAST). The Company has paid '' 226.23/- Lakhs (excluding taxes) as consideration for the same. The said AUM has been transferred from iFAST ARN to the Companyâs ARN in the same month . Based on the analysis performed by the management of the Company, the said transaction has been accounted for as an asset acquisition w.e.f. October 1, 2022. Based on the analysis performed by the management of the Company, it has concluded that the acquisition does not qualify as a âBusinessâ as per the definition provided in Ind AS 103 âBusiness Combinationâ Consequently, the said acquisition is accounted for as an asset acquisition. As required under Ind-AS 38, the Company has considered various factors such as its ability to retain the customers and generate revenue over a sustainable period, technical and technological changes expected, the industry growth prospects and the leverage of its existing physical and digital infrastructure to serve these customers and concluded that the cost of acquiring the customer folios should be amortized over a 10 year period on a straight line basis.

46 A show-cause notice dated September 28, 2020 was issued by the Joint Commissioner, Central Goods and Service Tax and Central Excise (âJoint Commissioner- CGST and C.Exâ) to Karvy Stock Broking Limited (âKSBLâ) for huge difference between gross value of services declared in ITR & ST 3 returns for F.Y. 2014-15. The matter was further taken up for adjudication, which remain unattended at the offices of KSBL.

Subsequently, a show-cause notice was sent to the Company on January 21, 2022 for complying with the tax liabilities of KSBL. The Company submitted that it had only acquired the mutual fund folios of KSBL through the bidding process and the transaction cannot be equated to a takeover of the business of KSBL. Further, it was also submitted that both our Company and KSBL are separate companies incorporated under the Companies Act and should therefore be treated as separate and distinct legal entities under applicable law. The matter is currently pending.

47. Other statutory information