Accounting Policies of SMC Global Securities Ltd. Company

Mar 31, 2025

2 Material Accounting Policy
information

2.01 Revenue recognition

The company derives it''s revenue
primarily from the brokerage services,
clearing services, depository services,
Interest income, distribution of third
party financial products such as mutual
fund and initial public offerings, fund
management services, research
support services and also engages in
proprietary & commodity trading.

(I) Broking: I n these types of contract
performance obligation is to
provide the platform to traders for
trading in securities, commodities
and the performance obligation
satisfies point in time i.e. as and
when the trade is executed.
Revenue on commission/brokerage
on sale made on behalf of
principals is accounted for at the
time of purchase/sale made on
their behalf.

(ii) Distribution of third party

financial products: In these types
of contract performance
obligation is to sell the third party
financial products to the
subscriber and the performance
obligation satisfies point in time
i.e. as and when subscription is
ensured and target based
incentives are confirmed by
registrar / respective companies.
Unbilled revenue is the income
that has become due on account
of services rendered by the
company but pending to be billed.

(iii) Depository services: In these
types of contract performance
obligation is periodic

maintenance of customer account
as depository participant and the
performance obligation satisfies
over time i.e. over the period and
there is reasonable certainty of
recovery.

(iv) Proprietary trading: Ind AS 115

Revenue from Contract with
Customer is not applicable on this
business and hence the revenue is
recognised as per Ind AS 109
Financial Instruments i.e. as and
when trade is executed. Refer to
the Policy on Financial
Instruments w.r.t regular way
purchase and sales of Financial
Assets.

Commodity trading: In these
types of contracts the
performance obligation satisfies
in time i.e. when the sale is
executed or ownership is
transferred. Accordingly the
revenue is recognised on
whenever the transaction is
executed.

(v) Interest income: Interest income
on a financial asset at amortised
cost is recognised on a time
proportion basis taking into
account the amount outstanding
and the effective interest rate
(‘EIR’). The EIR is the rate that
exactly discounts estimated future
cash flows of the financial assets
through the expected life of the
financial asset or, where
appropriate, a shorter period, to
the net carrying amount of the
financial instrument. The internal
rate of return on financial assets
after netting off the fees received
and cost incurred approximates
the effective interest rate method
of return for the financial asset.
The future cash flows are
estimated taking into account all

the contractual terms of the
instrument.

The interest income is calculated
by applying the EIR to the gross
carrying amount of non-credit
impaired financial assets. For
credit impaired financial assets
the interest income is calculated
by applying the EIR to the
amortised cost of the credit-
impaired financial assets.

It also comprises of Interest on
delayed payment/margin trading
facility.

(vi) Portfolio and Fund management
services: In these types of
contracts the performance
obligation satisfies over time i.e.
the services are rendered on
continuous basis and the revenue
is recognised on periodical basis
and also considering performance
based criteria of fund (as
applicable).

(vii) Research support services: In

these types of contract
performance obligation is periodic
input to participants on the basis
of capital market analysis and the
performance obligation satisfies
over time i.e. over the period.

(viii) Incentives from exchange:

Incentives from exchange are
recognised on point in time basis.

(iX) Alternative Investment fund
management fees Income:

Performance obligations are
satisfied over a period of time and
alternate investment
management fee is recognized on
monthly basis in accordance with
Private Placement Memorandum.

2.02 Property, plant and equipment

Property, plant and equipment are

stated at cost, less accumulated
depreciation and impairment, if any.
The company depreciates property,
plant and equipment over their
estimated useful lives on written down
value method. The estimated useful
lives of assets are as follows:

Office building 60 years

Computer equipments 3-6 years

Office equipments 5 years

Furniture and fixtures 10 years

Vehicles 8-10 years

The useful lives for these assets is in
compliance with the useful lives as
indicated under Part C of Schedule II of
the Companies Act, 2013.

Addition to the, property plant and
equipment have been accounted only
when the item is in location and
condition necessary for its use.
Depreciation on asset added/sold/
discarded during the year is being
provided on prorata basis from / upto
the date on which such assets are
added/sold/discarded.

Advances paid towards the acquisition
of property, plant and equipment
outstanding at each balance sheet
date is classified as capital advances
under other non financial assets and
the assets not ready for use are
disclosed under ‘Capital work-in¬
progress’.

2.03 Intangible assets

Intangible assets are stated at cost less
accumulated amortization and
impairment, if any. Intangible assets are
amortized on a written down value
basis, from the date that they are
available for use. The rates used are as
follows:

Computer software 40%

Trade mark logo 40%

2.04 Income tax

The income tax expense comprises of
current and deferred tax.

The current tax is calculated on the
basis of the tax rates, laws and
regulations, which have been enacted
or substantively enacted as at the
reporting date. The payment made in
excess / (shortfall) of the Company’s
income tax obligation for the year are
recognised in the balance sheet as
current income tax assets / liabilities.

Deferred tax is recognised based on the
balance sheet approach, on temporary
differences arising between the tax
bases of assets and liabilities and their
carrying values in the financial
statements. Deferred tax assets are
recognised only to the extent that it is
probable that future taxable profit will
be available against which the
temporary differences can be utilised.
Deferred tax is determined using tax
rates that have been enacted or
substantively enacted at the reporting
date and are expected to apply when
the related deferred income tax asset is
realised or the deferred income tax
liability is settled.

Deferred tax assets and liabilities are
offset only if there is a legally
enforceable right to set off current tax
assets against current tax liabilities &
the deferred tax assets and the
deferred tax liabilities relate to income
taxes levied by the same taxation
authority.

2.05 Investment in subsidiaries

Investment in subsidiaries are
measured at cost less accumulated
impairment, if any.

The Company assesses at the end of
each reporting period if there are any

indications of impairment on such
investments. If so, the Company
estimates the recoverable amount of
the investment and provides for
impairment.

2.06 Financial instruments

(a) Initial recognition

The Company recognizes financial
assets and financial liabilities when it
becomes a party to the contractual
provisions of the instrument. All
financial assets and liabilities are
recognised at fair value on initial
recognition, except for trade
receivables which are initially
measured at transaction price.

Transaction costs that are directly
attributable to the acquisition or issue
of financial assets and financial
liabilities, that are not at fair value
through profit or loss, are adjusted
from the fair value of financial asset or
financial liabilities on initial
recognition. Regular way purchase and
sale of financial assets are accounted
for at trade date.

Transaction costs directly attributable
to the acquisition of financial assets or
financial liabilities at FVTPL are
recognised immediately in Statement
of profit and loss.

(b) Subsequent measurement

(i) Financial assets at amortised cost

A financial asset is subsequently
measured at amortised cost if it is held
within a business model whose
objective is to hold the asset in order to
collect contractual cash flows and the
contractual terms of the financial asset
give rise on specified dates to cash
flows that are solely payments of
principal and interest on the principal
amount outstanding. Advances,
security deposits, rental deposits, cash

and cash equivalents etc. are classified
for measurement at amortised cost.

(ii) Financial assets at fair value
through profit or loss

A financial asset which is not classified
at amortised cost are subsequently fair
valued through profit or loss. All
investment held for trading, derivative
financial instruments are measured at
fair value through profit and loss.

(iii) Financial liabilities

Financial liabilities are subsequently
carried at amortized cost using the
effective interest method, except for
contingent consideration recognised in
a business combination which is
subsequently measured at fair value
through profit and loss. For trade and
other payables maturing within one
year from the balance sheet date, the
carrying amounts approximate fair
value due to the short maturity of these
instruments.

(c) Derecognition of financial
instruments

The Company derecognizes a financial
asset when the contractual rights to
the cash flows from the financial asset
expire or it transfers the financial asset
and the transfer qualifies for
derecognition under Ind AS 109. A
financial liability (or a part of a
financial liability) is derecognised from
the Company''s balance sheet when the
obligation specified in the contract is
discharged or cancelled or expires.

(d) Impairment

The Company recognizes loss
allowances using the expected credit
loss (ECL) model for the financial
assets which are not fair valued
through profit or loss. Loss allowance
for trade receivables with no significant
financing component is measured at an

amount equal to lifetime ECL. For all
other financial assets, expected credit
losses are measured at an amount
equal to the 12-month ECL, unless
there has been a significant increase in
credit risk from initial recognition in
which case those are measured at
lifetime ECL. The amount of expected
credit losses (or reversal) that is
required to adjust the loss allowance at
the reporting date to the amount that
is required to be recognised is
recognised as an impairment gain or
loss in profit and loss.

When determining whether credit risk
of a financial asset has increased
significantly since initial recognition
and when estimating expected credit
losses, the Company considers
reasonable and supportable
information that is relevant and
available without undue cost or effort.
This includes both quantitative and
qualitative information and analysis,
including on historical experience and
forward looking information.

Loss allowances for financial assets
measured at amortised cost are
deducted from the gross carrying
amount of the assets.

Simplified approach-The company
follows ‘simplified approach’ for
recognition of impairment loss
allowance on loans, other receivables
and other financial assets. The
application of simplified approach
does not require the company to track
changes in credit risk. Rather, it
recognises impairment loss allowance
based on lifetime ECLs at each
reporting date, right from its initial
recognition. The company uses a
provision matrix to determine
impairment loss allowance. The
provision matrix is based on its
historically observed default rates over
the expected life of financial assets
and is adjusted for forward-looking
estimates. At every reporting date, the
historically observed default rates are
updated for changes in the forward
looking estimates.

(e) Securities for Trade

The Company deals in Equity Shares (in
addition to Derivatives) which is held
for the purpose of trading.Such
Securities for trade are valued at Fair
value in accordance with IndAS 109 and
such securities are classified at fair
value through Profit or loss

(f) Offsetting financial instruments

Financial assets and liabilities are
offset and the net amount is reported
in the balance sheet where there is a
legally enforceable right to offset the
recognised amounts and there is an
intention to settle on a net basis or
realise the asset and settle the liability
simultaneously. The legally enforceable
right must not be contingent on future
events and must be enforceable in the
normal course of business and in the
event of default, insolvency or
bankruptcy of the Company or the
counterparty

2.07 Employee benefits

(a) Defined contribution plans

Obligations for contributions to
defined contribution plans (provident
fund and employees state insurance)
are recognized as a employee benefit
expense in profit or loss in the years
during which services are rendered by
employees.

(b) Defined benefit plans

A defined benefit plan is a post¬
employment benefit plan other than a
defined contribution plan. The
Company’s gratuity scheme is a defined
benefit plan and in accordance with
Payment of Gratuity Act, 1972. As per
the plan, employee is entitled to get 15
days of basic salary for each completed
year of service with a condition of
minimum tenure of 5 years subject to a
maximum amount of INR 20.00 lakhs.

Defined benefit obligation (DBO) is
evaluated by actuary based on a number
of critical underlying assumptions such
as standard rates of inflation, mortality,
discount rate and anticipation of future
salary increases. Variation in these
assumptions may significantly impact
the DBO amount and the annual defined
benefit expenses.

Remeasurement of the net defined
benefit liability / asset recognised in
OCI are presented as a separate
component in SOCE.

(c) Short-term employee benefits

Short term benefits comprises of Salary
with allowances, Incentives, Bonus,
Personal accident and Medical benefit
policies etc. are expensed as the
related service is provided.

(d) Other long-term employee
benefits

Liability for leave encashment

The Company’s net obligation in
respect of long-term employee benefits
represents the present value of the
future benefits that employees have
earned in return for their service in the
current and prior periods. The
obligation is determined using
actuarial valuation techniques and is
discounted to reflect the time value of
money. Remeasurements, comprising
actuarial gains and losses, are
recognised in the statement of profit or
loss in the period in which they occur.
The valuation of the leave encashment
benefit is obtained from an
independent actuary. This benefit is
classified as a long-term benefit plan,
with settlement occurring upon
retirement or resignation, for
accumulated leave balance upto 45

days of last drawn basic salary.

2.08 Leases

The Company enters into hiring/service
arrangements for various
assets/services. This requires
significant judgements including but
not limited to, whether asset is
implicitly identified, substantive
substitution rights available with the
supplier, decision making rights with
respect to how the underlying asset
will be used, economic substance of
the arrangement, etc.

The Company as a Lessee

As a lessee the Company has measured
lease liability at the present value of
the remaining lease payments,
discounted using the incremental
borrowing rate at the date of initial
application. After the commencement
date / transition date, the Company
measures the right-of-use (ROU) asset
applying a cost model, whereas the
Company measures the right-of-use
(ROU) asset at cost:

(a) less any accumulated depreciation
and any accumulated impairment
losses; and

(b) adjusted for any remeasurement of
the lease liability.

The Company recognises the finance
charges on lease expense on reducing
balance of lease liability. The ROU
asset is depreciated over the lease term
on straight line basis.

The Company applies the above policy
to all leases except:

(a) leases for which the lease term (as
defined in Ind AS 116) ends within 12
months of the acquisition date;

(b) leases for which the underlying
asset is of low value.

The Company as a Lessor

As a lessor the Company identifies
leases as operating and finance lease. A

lease is classified as a finance lease if
the Company transfers substantially all
the risks and rewards incidental to
ownership of an underlying asset.

At the commencement date, the
Company recognises assets held under
a finance lease in its balance sheet and
present them as a receivable at an
amount equal to the net investment in
the lease. After the initial recognition
the Company recognises finance
income over the lease term, based on a
pattern reflecting a constant periodic
rate of return on the lessor’s net
investment in the lease.

The lease payments on operating
leases are recognised as income on
straight-line basis.

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Mar 31, 2024

NOTE NO. 1

Basis of measurement

1.01 Company overview

SMC Global Securities Limited (CIN-L74899DL1994PLC063609) ("the company" or "SMC Global"), a limited liability company is domiciled in India, incorporated in the year 1994 having its registered office at 11/6B, Shanti Chambers, Pusa Road, New Delhi-110005. The Company''s equity shares are listed and traded on National Stock Exchange ("NSE") and Bombay Stock Exchange ("BSE") in India with effect from Feburary 24, 2021. The Company is a Trading-cum-Clearing member of the National Stock Exchange of India Limited ("NSE") & BSE Limited ("BSE") in Equity, Equity Derivative, Currency Derivative & Commodity Derivative segments of Exchange and Trading member in Metropolitan Stock Exchange of India Limited ("MSEI") in Currency Derivative Segment.

Further, the company is also a Trading-cum-Clearing member of the Multicommodity Exchange of India Ltd (MCX) and National Commodity Exchange of India Ltd. (NCDEX) in commodity segment of the Exchanges. The Company also holds depository participants registration of Central Depository Services (India) Limited (CDSL), National Securities Depository Limited (NSDL) and Comtrack. Further the company is also SEBI registered Research Analyst, Portfolio management service (PMS) and AMFI registered mutual fund distributor. The company is regulated by SEBI. The company has ten subsidiaries and one joint venture.

The company offers a wide range of services to meet client’s needs including brokerage services, clearing services, depository services, distribution of third party financial products such as mutual fund and initial public offerings, fund Management services, research support services and also engages in proprietary & commodity trading .

1.02 Statement of compliance

These standalone financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

1.03 Basis of preparation

These standalone financial statements are prepared under the historical cost convention on the accrual basis except for certain assets and liabilities which are measured at fair value / amortised cost / transaction price as stated in respective accounting policies / notes.

Functional and presentation currency

These financial statements are presented in Indian Rupees (‘INR’ or ‘Rs.’) which is also the Company’s functional currency. All amounts are rounded-off to the nearest lakhs, unless indicated otherwise

1.04 Use of estimates

The preparation of the financial statements, requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year. Actual results could differ from those estimates.

Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates.

Changes in estimates are reflected in the financial statements in the year in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Areas involving critical estimates and Judgements are:

Estimation of useful lives of property, plant and equipment (Refer note no.

2.02 below)

Estimation of current tax expenses (Refer note no. 2.04 below)

Estimation of allowance for imapirement of financial assets (Refer note no.2.06 below)

Estimation of employee defined benefit obligations (Refer note no.2.07 below)

Estimation of discount rate for lease assest (ROU assets) and lease liabilities (Refer note no. 2.08)

2. Material Accounting Policies information

2.01 Revenue recognition

The company derives it''s revenue primarily from the brokerage services, clearing services, depository services, distribution of third party financial products such as mutual fund and initial public offerings, fund management services, research support services and also engages in proprietary & commodity trading.

(i) Broking: In these types of contract performance obligation is to provide the platform to traders for trading in securities, commodities and the performance obligation satisfies point in time i.e. as and when the trade is executed. Revenue on commission /brokerage on sale made on behalf of principals is accounted for at the time of purchase/sale made on their behalf.

(ii) Distribution of third party financial products: In these types of contract performance obligation is to sell the third party financial products to the subscriber and the performance obligation satisfies point in time i.e. as and when subscription is ensured and target based incentives are confirmed by registrar / respective companies. Unbilled revenue is the income that has become due on account of services rendered by the company but pending to be billed.

(iii) Depository services: In these types of contract performance obligation is periodic maintenance of customer account as depository participant and the performance obligation satisfies over time i.e. over the period and there is reasonable

certainty of recovery.

(iv) Proprietary trading: Ind AS 115

Revenue from Contract with Customer is not applicable on this business and hence the revenue is recognised as per Ind AS 109 Financial Instruments i.e. as and when trade is executed. Refer to the Policy on Financial Instruments w.r.t regular way purchase and sales of Financial Assets.

Commodity trading: In these types of contracts the performance obligation satisfies in time i.e. when the sale is executed or ownership is transferred.

Accordingly the revenue is recognised on whenever the transaction is executed.

(v) Interest income: Interest income on a financial asset at amortised cost is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate (‘EIR’). The EIR is the rate that exactly discounts estimated future cash flows of the financial assets through the expected life of the financial asset or, where appropriate, a shorter period, to the net carrying amount of the financial instrument.

The internal rate of return on financial assets after netting off the fees received and cost incurred approximates the effective interest rate method of return for the financial asset. The future cash flows are estimated taking into account all the contractual terms of the instrument.

The interest income is calculated by applying the EIR to the gross carrying amount of non-credit impaired financial assets. For credit impaired financial assets the interest income is calculated by applying the EIR to the amortised cost of the credit-impaired financial assets.

It also comprises of Interest on delayed payment/margin trading facility.

(vi) Portfolio and Fund management services: In these types of contracts the performance obligation satisfies over time i.e. the services are rendered on continuous basis and the revenue is recognised on periodical basis and also considering performance based criteria of fund (as applicable).

(vii) Research support services: In

these types of contract performance obligation is periodic input to participants on the basis of capital market analysis and the performance obligation satisfies over time i.e. over the period.

(viii) Incentives from exchange:

Incentives from exchange are recognised on point in time basis.

2.02 Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. The company depreciates property, plant and equipment over their estimated useful lives on written down value method. The estimated useful lives of assets are as follows:

Office building 60 Years

Computer equipments 3-6 Years

Office equipments 5 Years

Furniture and fixtures 10 Years

Vehicles 8-10 Years

The useful lives for these assets is in compliance with the useful lives as indicated under Part C of Schedule II of the Companies Act, 2013.

Addition to the, property plant and equipment have been accounted only when the item is in location and condition necessary for its use.

Depreciation on asset added /sold/ discarded during the year is being provided on prorata basis from / upto the date on which such assets are added/sold/discarded.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non financial assets and the assets not ready for use are disclosed under ‘Capital work-in-progress’.

2.03 Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment, if any. Intangible assets are amortized on a written down value basis, from the date that they are available for use. The rates used are as follows :

Computer software 40%

Trade mark logo 40%

2.04 Income tax

The income tax expense comprises of current and deferred tax.

The current tax is calculated on the basis of the tax rates, laws and regulations, which have been enacted or substantively enacted as at the reporting date. The payment made in excess / (shortfall) of the Company’s income tax obligation for the year are recognised in the balance sheet as current income tax assets / liabilities.

Deferred tax is recognised based on the balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying values in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will

be available against which the temporary differences can be utilised. Deferred

tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets and liabilities are offset only if there is a legally enforceable right to set off current tax assets against current tax liabilities & the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

2.05 Investment in subsidiaries

Investment in subsidiaries are measured at cost less accumulated impairment, if any.

The Company assesses at the end of each reporting period if there are any indications of impairment on such investments. If so, the Company estimates the recoverable amount of the investment and provides for impairment.

2.06 Financial instruments

(a) Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognised at fair value on initial recognition, except for trade receivables which are initially measured at transaction price.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are adjusted from the fair value of financial asset or financial liabilities on initial

recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Statement of profit and loss.

(b) Subsequent measurement

(i) Financial assets at amortised cost

Afinancial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Advances, security deposits, rental deposits, cash and cash equivalents etc. are classified for measurement at amortised cost.

(ii) Financial assets at fair value through profit or loss

A financial asset which is not classified at amortised cost are subsequently fair valued through profit or loss. All investment held for trading, derivative financial instruments are measured at fair value through profit and loss.

(iii) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognised in business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year

from the balance sheet date, the

carrying amounts approximate fair value due to the short maturity of these instruments.

(c) Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognised from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

(d) Impairment

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in profit and loss.

When determining whether credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, including on historical experience and forward looking information.

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Simplified approach-The company follows ‘simplified approach’ for recognition of impairment loss allowance on loans, other receivables and other financial assets. The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. The company uses a provision matrix to determine impairment loss allowance. The provision matrix is based on its historically observed default rates over the expected life of financial assets and is adjusted for forward-looking estimates. At every reporting date, the historically observed default rates are updated for changes in the forward looking estimates.

2.07 Employee benefits

(a) Defined contribution plans

Obligations for contributions to defined contribution plans (provident fund and employees state insurance) are recognized as a employee benefit expense in profit or loss in the years during which services are rendered by employees.

(b) Defined benefit plans

A defined benefit plan is a postemployment benefit plan other than a defined contribution plan. The Company’s gratuity scheme is a

defined benefit plan and in accordance with Payment of Gratuity Act, 1972. As per the plan, employee is entitled to get 15 days of basic salary for each completed year of service with a condition of minimum tenure of 5 years subject to a maximum amount of INR 20.00 lakhs.

Defined benefit obligation (DBO) is evaluted by actuary based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Remeasurement of the net defined benefit liability / asset recognised in OCI are presented as a separate component in SOCE.

(c) Short-term employee benefits

Short term benefits comprises of Salary with allowances, Incentives, Bonus, Personal accident and Medical benefit policies etc. are expensed as the related service is provided.

(d) Other long-term employee benefits Liability for leave encashment

The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior years. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the year in which they arise. The valuation of leave encashment are obtained from actuary.

2.08 Leases

The Company enters into

hiring/service arrangements for various assets/services. This requires significant judgements including but not limited to, whether asset is implicitly identified, substantive substitution rights available with the supplier, decision making rights with respect to how the underlying asset will be used, economic substance of the arrangement, etc.

The Company as a Lessee

As a lessee the Company has measured lease liability at the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. After the commencement date / transition date, the Company measures the right-of-use (ROU) asset

applying a cost model, whereas the Company measures the right-of-use (ROU) asset at cost:

(a) less any accumulated depreciation and any accumulated impairment losses; and

(b) adjusted for any remeasurement of the lease liability.

The Company recognises the finance charges on lease expense on reducing balance of lease liability. The ROU asset is depreciated over the lease term on straight line basis.

The Company applies the above policy to all leases except:

(a) leases for which the lease term (as defined in Ind AS 116) ends within 12 months of the acquisition date;

(b) leases for which the underlying asset is of low value.

The Company as a Lessor

As a lessor the Company identifies leases as operating and finance lease.

A lease is classified as a finance lease if the Company transfers substantially all the risks and rewards incidental to ownership of an underlying asset.

At the commencement date, the Company recognises assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease. After the initial recognition the Company recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.

The lease payments on operating leases are recognised as income on straight-line basis.

2.09 Statement of cash flows

Cash flows from operating activites are reported using the indirect method where by the profit after tax is adjusted for the effect of the transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

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Mar 31, 2023

NOTE NO. 1

Significant accounting policies and measurement basis

1.01 Company overview

SMC Global Securities Limited (CIN-L74899DL1994PLC063609) ("the company" or "SMC Global"), a limited liability company is domiciled in India, incorporated in the year 1994 having its registered office at 11/6B, Shanti Chambers, Pusa Road, New Delhi-110005. The Company''s equity shares are listed and traded on National Stock Exchange ("NSE") and Bombay Stock Exchange ("BSE") in India with effect from Feburary 24, 2021. The Company is a trading and clearing member of the National Stock Exchange of India Limited ("NSE"), BSE Limited ("BSE") and Metropolitan Stock Exchange of India Limited ("MSEI") in the capital market. Further, the company is a trading member of NSE, BSE and MSEI in the futures and options of currency, commodity and equity derivative segment. The Company also holds depository participants registration of Central Depository Services (India) Limited and National Securities Depository Limited, participants of NCDEX, Comtrack, AMFI registered mutual fund distribution and portfolio management service (PMS) registration from Securities and Exchange Board of India ("SEBI"). The company is regulated by SEBI. The company has ten subsidiaries and one joint venture.

The company offers a wide range of services to meet client’s needs including brokerage services, clearing services, depository services, distribution of third party financial products such as mutual fund and initial public offerings, fund management services, research support services and also engages in proprietary & commodity trading.

1.02 Statement of compliance

These standalone financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.

1.03 Basis of preparation

These standalone financial statements are prepared under the historical cost convention on the accrual basis except for certain assets and liabilities which are measured at fair value / amortised cost / transaction price as stated in respective accounting policies / notes.

Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Functional and presentation currency

These financial statements are presented in Indian Rupees (‘INR’ or ?) which is also the Company’s functional currency. All amounts are rounded-off to the nearest lakhs, unless indicated otherwise

1.04 Use of estimates

The preparation of the financial statements, requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the year in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.05 Revenue recognition

The company derives it''s revenue primarily from the brokerage services, clearing services, depository services, distribution of third party financial products such as mutual fund and initial public offerings, fund management services, research support services and also engages in proprietary & commodity trading. The company follows Ind AS 115 Revenue from Contract with Customer, which prescribed the core principle to recognise revenue. This core principle is delivered in a five-step model framework:

participant and the performance obligation satisfies over time i.e. over the period and there is reasonable certainty of recovery.

(iv) Proprietary trading: Ind AS 115

Revenue from Contract with Customer is not applicable on this business and hence the revenue is recognised as per Ind AS 109 Financial Instruments i.e. as and when trade is executed.

(v) Interest income: Interest income on a financial asset at amortised cost is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate (‘EIR’). The EIR is the rate that exactly discounts estimated future cash flows of the financial assets through the expected life of the financial asset or, where appropriate, a shorter period, to the net carrying amount of the financial instrument. The internal rate of return on financial assets after netting off the fees received and cost incurred approximates the effective interest rate method of return for the financial asset. The future cash flows are estimated taking into account all the contractual terms of the instrument.

The interest income is calculated by applying the EIR to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortised cost of the financial asset before adjusting for any expected credit loss allowance).

For credit impaired financial assets the interest income is calculated by applying the EIR to the amortised cost of the credit-impaired financial assets (i.e. the gross carrying amount less the allowance for ECLs).

(a) Identify the contract(s) with a customer.

(b) Identify the performance obligations in the contract.

(c) Determine the transaction price.

(d) Allocate the transaction price to the performance obligations in the contract.

(e) Recognise revenue when (or as) the entity satisfies a performance obligation.

Based on the above principle the company recognise the revenue as follows:

(I) Broking: In these types of contract performance obligation is to provide the platform to traders for trading in securities, commodities and the performance obligation satisfies point in time i.e. as and when the trade is executed. Revenue on commission/brokerage on sale made on behalf of principals is accounted for at the time of purchase/sale made on their behalf.

(ii) Distribution of third party financial products: In these types of contract performance obligation is to sell the third party financial products to the subscriber and the performance obligation satisfies point in time i.e. as and when subscription is ensured and target based incentives are confirmed by registrar/ respective companies. Unbilled revenue is the income that has become due on account of services rendered by the company but pending to be billed.

(iii) Depository services: In these types of contract performance obligation is periodic maintenance of customer account as depository

It also comprises of Interest on delayed payment/margin trading facility.

(vi) Commodity trading: In these types of contracts the performance obligation satisfies in time i.e. when the sale is executed or ownership is transferred. Accordingly the revenue is recognised on whenever the transaction is executed.

(vii) Fund management services: In

these types of contracts the performance obligation satisfies over time i.e. the services are rendered on continuous basis and the revenue is recognised on periodical basis and also considering performance based criteria of fund (as applicable).

(viii) Dividend: Dividend income is recognised when the shareholders right to receive payment is established.

(ix) Research support services: In

these types of contract performance obligation is periodic input to participants on the basis of capital market analysis and the performance obligation satisfies over time i.e. over the period.

(x) Incentives from exchange:

Incentives from exchange are recognised on point in time basis.

1.06 Inventories

The Company mainly has inventory of commodities (agri and non-agri), which is held for the purpose of trading. The Company measures Inventories at fair value less cost to sell.

1.07 Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any.

with these will flow to the company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognised in the statement of profit and loss when incurred. The cost & related accumulated depreciation are eliminated from the financial statements upon sale and the resultant gains or losses are recognised in profit or loss.

1.08 Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment, if any. Cost includes taxes, duties, identifiable direct expenses, expense on installation and net of GST credit thereon. Intangible assets are amortized on a written down value basis, from the date that they are available for use. The rates used are as follows :

Computer software 40%

Trade mark logo 40%

1.09 Impairment of Assets other than financial assets

At each reporting date, the Company reviews the carrying amounts of its property, plant and equipment, intangible assets and right of use assets and investment in subsidiaries to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated. For impairment testing, assets that do not generate independent cash flows are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash generating Units (''CGUs''). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the

Cost includes taxes, duties, identifiable direct expenses, expense on installation and net of applicable GST credit thereon. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The company depreciates property, plant and equipment over their estimated useful lives on written down value method. The estimated useful lives of assets are as follows:

Office building 60 years

Computer equipment 3-6 years

Office equipment 5 years

Furniture and fixtures 10 Years

Vehicles 8-10 years

The useful lives for these assets is in compliance with the useful lives as indicated under Part C of Schedule II of the Companies Act, 2013.

Depreciation methods, useful lives and residual values are reviewed at each year end.

Addition to the, property plant and equipment have been accounted only when the item is in location and condition necessary for its use. Depreciation on asset added / sold / discarded during the year is being provided on prorata basis from / upto the date on which such assets are added / sold / discarded.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non financial assets and the assets not ready for use are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated

estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss.

1.10 Income tax

The income tax expense comprises of current and deferred tax. Tax on item recognised in profit or loss is recognised in profit or loss and for items recognised in other comprehensive income or equity, the corresponding tax is recognised in other comprehensive income or equity respectively.

The current tax is calculated on the basis of the tax rates, laws and regulations, which have been enacted or substantively enacted as at the reporting date. The payment made in excess / (shortfall) of the Company’s income tax obligation for the year are recognised in the balance sheet as current income tax assets / liabilities.

Deferred tax is recognised based on the balance sheet approach, on temporary differences arising between the tax bases of assets and liabilities and their carrying values in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax is determined using tax rates that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets and liabilities are offset only if there is a legally enforceable right to set off current tax assets against current tax liabilities & the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

1.11 Investment in subsidiaries

Investment in subsidiaries are measured at cost less accumulated impairment, if any.

The Company assesses at the end of each reporting period if there are any indications of impairment on such investments. If so, the Company estimates the recoverable amount of the investment and provides for impairment (refer note no. 1.09).

1.12 Financial instruments

(a) Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognised at fair value on initial recognition, except for trade receivables which are initially measured at transaction price.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are adjusted from the fair value of financial asset or financial liabilities on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Statement of profit and loss.

(b) Subsequent measurement

(i) Financial assets at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Advances, security deposits, rental deposits, cash and cash equivalents etc. are classified for measurement at amortised cost.

(ii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss. All investment held for trading, derivative financial instruments are measured at fair value through profit and loss.

(iii) Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognised in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

(c) Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognised from the

Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

(d) Impairment

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in statement of profit and loss.

When determining whether credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, including on historical experience and forward looking information.

1.13 Foreign currency translations

Items included in financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (‘the functional currency’). The financial statements are presented in Indian rupee (INR).

Foreign currency transactions are

translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognized in Statement of profit and loss.

1.14 Employee benefits

(a) Defined contribution plans

Obligations for contributions to defined contribution plans (provident fund and employees state insurance) are recognized as a employee benefit expense in statement of profit or loss in the years during which services are rendered by employees.

(b) Defined benefit plans

A defined benefit plan is a postemployment benefit plan other than a defined contribution plan. The Company’s gratuity scheme is a defined benefit plan and in accordance with Payment of Gratuity Act, 1972. As per the plan, employee is entitled to get 15 days of basic salary for each completed year of service with a condition of minimum tenure of 5 years subject to a maximum amount of INR 20.00 lakhs.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements. Defined benefit obligation (DBO) is based on a number

of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Company determines net interest on the net defined benefit liability (asset) by multiplying the net defined benefit liability (asset) by the discount rate.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in statement of profit or loss.

(c) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(d) Other long-term employee benefits liability for long service leave

The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior years. That benefit is discounted to determine its present value. Remeasurements are recognised in statement of profit or loss in the year in which they arise. The valuation of the long service leave are obtained from actuary.

1.15 Leases

The Company enters into hiring/service arrangements for various assets/services. The Company evaluates whether a contract contains a lease or not, in accordance with the principles of Ind AS 116. This requires significant judgements including but not limited to, whether asset is implicitly identified, substantive substitution rights available with the supplier, decision making rights with respect to how the underlying asset will be used, economic substance of the arrangement, etc.

The Company as a Lessee

As a lessee the Company has measured lease liability at the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. After the commencement date / transition date, the Company measures the right-of-use asset applying a cost model, whereas the Company measures the right-of-use asset at cost:

(a) less any accumulated depreciation and any accumulated impairment losses; and

(b) adjusted for any remeasurement of the lease liability.

The Company recognises the finance charges on lease expense on reducing balance of lease liability. The lease asset is depreciated over the lease term on straight line basis.

The Company applies the above policy to all leases except:

(a) leases for which the lease term (as defined in Ind AS 116) ends within 12 months of the acquisition date;

(b) leases for which the underlying asset is of low value.

The Company as a Lessor

As a lessor the Company identifies leases as operating and finance lease. A lease is classified as a finance lease if the Company transfers substantially all the risks and rewards incidental to ownership of an underlying asset.

At the commencement date, the Company recognises assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease. After the initial recognition the Company recognises finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the lease.

The lease payments on operating leases are recognised as income on straightline basis.

1.16 Borrowing costs

Borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalized as part of the cost of such qualifying assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the statement of profit and loss. Expenses related to borrowing cost are accounted using effective interest rate.

1.17 Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits, other short-term, highly liquid investments with original 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.

Bank deposits having maturity more than 12 months have been classified as other bank balances.

1.18 Provision, contingent liabilities and contingent assets

Provisions are recognized only when there is a present obligation, as a result of past events and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.

Contingent liability is disclosed for:

(a) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

(b) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are disclosed where an inflow of economic benefit is probable.

1.19 Statement of cash flows

Cash flows are reported using the indirect method where by the profit after tax is adjusted for the effect of the transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

1.20 Dividend

The Company recognises a liability to make cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the board for interim dividend and by the shareholders in case of final dividend. A corresponding amount is recognised directly in equity.

1.21 Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted-average number of equity shares outstanding during the year. The weighted-average number of equity shares outstanding during the year is adjusted for events including a bonus issue.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.22 Standards issued but not yet effective

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 vide notification no. G.S.R 242(E) dated 31st March 2023. Given below are the amendment made to Ind AS 1, Ind AS 8, Ind AS 12 in brief and their possible impact on the financial statements of the company. Rest of the amendments are consequential in nature and have no material impact on the financial statements:

“Ind AS 1 - Presentation of Financial Statements:

Disclosure of Accounting Policies, amended paragraphs 7, 10, 114, 117 and 122, added paragraphs 117A-117E and deleted paragraphs 118, 119 and 121. The amendments to Ind AS 1 are applicable for annual reporting periods beginning on or after 1 April 2023.

The amendment seeks to replace significant accounting policies with material accounting policy information and provides guidance on material accounting policy information. The amendments require complete review of existing disclosure of accounting policies and may involve redrafting, removing some of the accounting policies now being disclosed or adding new accounting policy disclosures. The company is reviewing its accounting policy disclosure to change the same as per the amendments."

"Ind AS 8 - Accounting Policies,

Changes in Accounting Estimates and Errors:

Definition of Accounting Estimates amended paragraphs 5, 32, 34, 38 and 48 and added paragraphs 32A, 32B and 34A. These amendments are applicable for annual reporting periods beginning on or after 1 April 2023. The amendment replaces the definition of changes in accounting estimates with a new

definition of accounting estimates and provides guidance on that definition, what are regarded as changes in accounting estimates and how to apply changes in accounting estimates. The amendments shall be applied to changes in accounting estimates and changes in accounting policies that occur on or after 1 April 2023. Therefore, the amendments have no impact on the financial position, financial performance or the cash flows of the entity in the current and previous year."

"Ind AS 12- Income Tax:

Deferred Tax related to Assets and Liabilities arising from a Single Transaction, amended paragraphs 15,

22 and 24 and added paragraph 22A. The amendment clarifies that in case, where at the time of initial recognition, equal amount of taxable and deductible temporary differences arise, the initial recognition exemption does not apply and the company shall recognise deferred tax liability and deferred tax asset on gross basis on that date of initial recognition depending on the applicable tax law. This happens typically when a lease liability and right-of-use asset is recognised initially or when decommissioning obligations are initially recognised and the same is added to the cost of the item of property, plant and equipment. If the

application of this requirement results in unequal amount of deferred tax asset and deferred tax liability, the difference shall be recognised in profit or loss. These amendments are to be applied for annual reporting periods beginning on or after 1 April 2023 to transactions that occur on or after the beginning of 1 April 2022. The amendment also requires deferred tax assets and deferred tax liabilities to be recognised on 1 April 2022 based on the carrying amounts of the lease liability and right-of-use asset as on 1 April 2022 and recognise any difference in opening balance of retained earnings or another component of equity, where appropriate, if the company has applied the initial recognition exemption requirements earlier or had recognised deferred tax assets and deferred tax liabilities on net basis. The same is also required for decommissioning obligations recognised initially and added to the cost of the item of property, plant and equipment. As the company has recognised deferred tax assets and deferred tax liabilities on gross basis on lease liability and right-of use assets, the amendment has no impact of the financial statements. Further, the requirements relating to decommissioning obligations are not applicable to the company."

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Mar 31, 2012

I) BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention following the going concern concept and on accrual basis of accounting, in conformity with the accounting principles generally accepted in India and comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

II) USE OF ESTIMATES

The presentation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which results are known / materialized.

III) FIXED ASSETS

In accordance with AS-10 Rs.Accounting for Fixed AssetsRs., fixed assets including intangible assets are stated at cost of acquisition including taxes, duties, identifiable direct expenses and expenses on installation, and are net of CENVAT Credit claimed thereon.

Additions to the fixed assets have been accounted for on the date of installation and its use irrespective of date of invoice.

IV) DEPRECIATION

In accordance with AS-6 Rs.DepreciationRs., depreciation on fixed assets including intangible assets is computed on Written down value method in accordance with the rates prescribed in schedule-XIV of the Companies Act, 1956 and is on the pro-rata basis with respect to the date of addition/installation/its put to use. No depreciation has been provided on Goodwill.

Depreciation on Assets of value not exceeding Rs. 5000/- is being provided at the normal rate prescribed in the schedule.

V) INVESTMENTS

In accordance with AS-13 Rs.Accounting for InvestmentsRs., investments are classified into non- current investments and current investments. Non-current investments are stated at cost and provision, wherever required, has been made to recognize any decline other than temporary in the value of such investments. Current investments if any are carried at lower of the cost and fair value and provision, wherever required, has been made to recognize any decline in carrying value.

VI) INVENTORIES

a) Inventories of stocks and shares are valued at market value.

b) Closing stock of shares includes stocks pledged against secured loan from banks and kept as margin/securities with stock exchange and does not include stocks held on behalf of clients/constituents.

VII) REVENUE RECOGNITION (AS-9)

a) Revenue on account of trading in securities is recognized on the basis of each trade executed at the stock exchange during the financial year.

b) In respect of non delivery based transactions such as derivatives, the profit & loss is accounted for at the completion of each settlement, however in case of an open settlement the net result of transactions which are squared up on FIFO Basis is recognized as Profit/Loss in the account.

c) Revenue from broking activities is accounted for on the trade date of transaction.

d) Income from interest on fixed deposits is recognized on accrual basis.

e) Dividend from investment is accounted for as income when the right to receive dividend is established.

f) Depository income is accounted for on accrual basis.

g) In respect of other heads of income the company follows the practice of recognizing income on accrual basis.

h) Revenue excludes service tax.

VIII) FOREIGN CURRENCY TRANSACTIONS

Revenue and expenses are recorded at the exchange rate prevailing on the date of the transaction. Monetary items denominated in foreign currencies are restated at the exchange rate prevailing on the balance sheet date. Exchange differences arising on settlement of the transaction and on account of restatement of monetary items are recognized in the Statement of Profit and Loss.

IX) EMPLOYEE BENEFITS

a) Provident Fund is a defined contribution scheme and the contributions as required by the statute are charged to the Statement of Profit and Loss as incurred.

b) Gratuity Liability is a defined obligation and is partly funded. The Company accounts for liability for future gratuity benefits based on an actuarial valuation as at the Balance Sheet date.

c) The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by an employee is recognized during the period when the employee renders the services.

d) Unveiled Leave Liability is a defined obligation and is not funded. The company accounts for liability for future benefits based on actuarial valuation as at the Balance Sheet date.

X) LEASES

Lease Rentals in respect of operating lease arrangements are charged to the Statement of Profit & Loss in accordance with the Accounting Standard - 19 on Accounting for Leases issued by the Institute of Chartered Accountants of India.

XI) MISCELLANEOUS EXPENDITURE

Deferred revenue expenditures are being written off in equal installment over a period of 5 years.

XII) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes to the Accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

XIII) BORROWING COSTS

In accordance with AS-16 on "Borrowing Cost", borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalized as part of the cost of such qualifying assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of profit and loss.

XIV) IMPAIRMENT OF ASSET

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, such assets are being subject to a test of recoverability based on discounted cash flows expected from use or disposal thereof. If the assets are impaired, the company recognizes an impairment loss as a difference between the carrying value and fair value net of cost of sale in accordance with AS-28 Rs.Impairment of AssetsRs..

None of the companyRs.s fixed assets are considered for impairment as on the balance sheet date.

XV) TAXATION

a) Provision of current Income Tax has been measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Wealth tax has been calculated as per applicable tax regulations applicable during the year.

c) The company has provided for deferred tax charge/credit that reflects the tax differences because of timing differences between accounting income and taxation income for the year. The deferred tax charge or credit and corresponding deferred tax liability or asset are recognized using the tax rates laid down by the law, that has been enacted or substantially enacted by the balance sheet date, in accordance with AS-22 Rs.Accounting for Taxes on IncomeRs..

XVI) OTHER ACCOUNTING POLICIES

Accounting policies not referred to otherwise are consistent with generally accepted accounting principles.

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Mar 31, 2011

I) BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention following the going concern concept and on accrual basis of accounting, in conformity with the accounting principles generally accepted in Indian and comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

II) USE OF ESTIMATES

The presentation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which results are known / materialized.

III) FIXED ASSETS

In accordance with AS-10 Accounting for Fixed Assets'', fixed assets (including computer software) are stated at cost of acquisition including taxes, duties, identifiable direct expenses and expenses on installation, and are net of CENVAT Credit claimed thereon. Additions to the fixed assets have been accounted tor on the date of installation and its use irrespective of date of invoice.

IV) DEPRECIATION

In accordance with AS-6 ''Depreciation'', depreciation on fixed assets (including computer software) is computed on Written down value method in accordance with the rates prescribed in schedule-XIV of the Companies Act, 1956 and is on the pro-rata basis with respect to the date of addition/installation/its put to use. No depreciation has been provided on Goodwill. Depreciation on Assets of value not exceeding Rs. 5000/- is being prevented at the normal rate prescribed in the schedule.

V INVESTMENTS

In accordance with AS-13 ''Accounting for Investments'', investments are classified into long- term investments and current investments. Long term investments are stated at cost and provision, wherever required, has been made to recognize any decline other than temporary in the value of such investments. Current investments if any are carried at lower of the cost and fair value and provision, wherever required, has been made to recognize any decline in carrying value.

VI) INVENTORIES

a) Inventories of stocks and shares are valued at market value.

b) Closing stock of shares includes stocks Pledged against secured loan from banks and kept as margin/securities with stock exchange.

VII) REVENUE RECOGNITION (AS-9)

a) Revenue on account of trading in securities is recognized on the basis of each trade executed at the stock exchange during the financial year.

b) In respect of non delivery based transactions such as derivatives, the profit & loss is accounted for at the completion of each settlement, however in case of an open settlement the net result of transactions which are squared up on FIFO Basis is recognized as Profit/Loss in the account.

c) Revenue from broking activities is accounted for on the trade date of transaction.

d) Income from interest on fixed deposits is recognized on accrual basis.

e) Dividend from investment is accounted for as income when the right to receive dividend is established.

f) Depository income is accounted for on receipt basis.

g) In respect of other heads of income the company follows the practice of recognizing income on accrual basis.

h) Revenue excludes service tax.

VIII) FOREIGN CURRENCY TRANSACTIONS

Revenue and expenses are recorded at the exchange rate prevailing on the date of the transaction. Monetary items denominated in foreign currencies are restated at the exchange rate prevailing on the balance sheet date. Exchange differences arising on settlement of the transaction and on account of restatement of monetary items are recognized in the Profit and Loss Account.

IX) EMPLOYEE BENEFITS

a) Provident Fund is a defined contribution scheme and the contribution as required by the statute are charged to the Profit and Loss Account as incurred.

b) Gratuity Liability is a defied obligation and is partly funded. The Company accounts for liability for future gratuity benefits based on an actuarial valuation as at the Balance Sheet date.

c) The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by an employee is recognized during the period when the employee renders the services.

d) Un availed Leave Liability is a defined obligation and is not funded. The company accounts for liability for future benefits based on actuarial valuation as at the Balance Sheet date.

X) LEASES

Lease Rentals in respect of operating lease arrangements are charged to the Profit & Loss Account in accordance with the Accounting Standard - 19 on Accounting for Leases issued by the Institute of Chartered Accountants of India.

XI) MISCELLANEOUS EXPENDITURE

Deferred revenue expenditures are being written off in equal installment over a period of 5 years.

XII) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes to the Accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.

XIII) BORROWING COSTS

In accordance with AS-16 on "Borrowing Cost", borrowing costs that are attributable to acquisition, construction or production of qualifying assets, are capitalized as part of the cost of such qualifying assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing costs are charged to the profit and loss account.

XIV) IMPAIRMENT OF ASSET

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, such assets are being subject to a test of recoverability based on discounted cash flows expected from use or disposal thereof. If the assets are impaired, the company recognizes an impairment loss as a difference between the carrying value and fair value net of cost of sale in accordance with AS-28 ''Impairment of Assets''. None of the company''s fixed assets are considered for impairment as on the balance sheet date.

XV) TAXATION

a) Provision of current Income Tax has been measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Wealth tax has been calculated as per applicable tax regulations applicable during the year.

c) The company has provided for deferred tax charge/credit, that reflects the tax differences because of timing differences between accounting income and taxation income for the year. The deferred tax charge or credit and corresponding deferred tax liability or asset are recognized using the tax rates I acid down by the law, that has been enacted or substantially enacted by the balance sheet date, in accordance with AS-22 ''Accounting tor Taxes on I come''.

XVI) OTHER ACCOUNTING POLICIES

Accounting policies not referred to otherwise are consistent with generally accepted accounting principles.