2.12 Provisions and contingencies
Provisions are recognized 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. Provisions are measured at the best estimate of
the expenditure required to settle the present obligation at the reporting date.
Provisions are determined by discounting the expected future cash flows (representing the best estimate of the
expenditurerequired to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current
market assessmentsof the time value of money and the risks specific to the liability. The unwinding of the discount is
recognized as finance cost.Expected future operating losses are not provided for.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will beconfirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control ofthe Company or a present obligation that arises from past events where it is either not probable that an
outflow of resourceswill be required to settle the obligation or a reliable estimate ofthe amount cannot be made.
2.13 Employee benefits
(i) Short-term obligations
Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of
Profit and Loss for the year in which the related services are rendered. The Company recognizes the costs of
bonus payments when it has a present obligation to make such payments as a result of past events and a
reliable estimate of the obligation can be made.
(ii) Post-employment obligations
Defined contribution plan:
Contribution paid / payable to the recognized provident fund, which is a defined contribution scheme, is
charged to the Statement of Profit and Loss in the period in which they occur.
Defined benefits plan:
Gratuity is post-employment benefit and is in the nature of defined benefit plan. The liability recognized in the
Balance Sheet in respect of gratuity is the present value of defined benefit obligation at the Balance Sheet date
together with the adjustments for unrecognized actuarial gain or losses and the past service costs. The defined
benefit obligation is calculated at or near the Balance Sheet date by an independent actuary using the projected
unit credit method. Actuarial gains and losses comprise experience adjustment and the effects of changes in
actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive
income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
2.14 Dividend Distribution
Dividends paid is recognized in the period in which the interim dividends are approved by the Board of Directors, or in
respect of the final dividend when approved by shareholders.
2.15 Earnings per share
(a) Basic earnings per share
Basic earnings per share is calculated by dividing the net profit for the period (excluding other comprehensive
income) attributable to equity share holders of the Company by the weighted average number of equity shares
outstanding during the financial year, adjusted for bonus element in equity shares issued during theyear.
(b) Diluted earnings per share
Diluted earnings per share is computed by dividing the net profit for the period attributable to equity
shareholders by the weighted average number of shares outstanding during the period as adjusted for the
effects of all diluted potential equity shares except where the results are anti-dilutive.
2.16 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the
requirements.
2.17 Events after reporting date
Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the
reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the
balance sheet date of material size or nature are only disclosed.
2.18 Derivative financial instruments
Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is
entered into and are subsequently re-measured at fair value at the end of each reporting period. The resulting gain or
loss is recognized in standalone statement of profit and loss immediately.
2.19 Foreign currency transaction
Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Exchange differences
All exchange differences are accounted in the Statement of Profit and Loss.
2.20 Investment in subsidiaries and associates
Investment in subsidiaries are recognized at cost and is not adjusted to fair value at the end of each reporting period
as allowed by Ind AS 27 ‘Separate financial statement’. Cost of investment represents amount paid for acquisition of
the said investment and a proportionate recognition of the fair value of shares granted to employees of subsidiary
under a group share based payment arrangement.
The Company assesses at the end of each reporting period, if there are any indications that the said investment may
be impaired. If so, the Company estimates the recoverable value/amount of the investment and provides for
impairment, if any i.e. the deficit in the recoverable value over cost.
NOTE 3: KEY ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires management to make judgments, estimates and assumptions in the
application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates and underlying assumptions are reviewed on ongoing basis. Any
changes to accounting estimates are recognized prospectively. Information about critical judgments in applying
accounting policies, as well as estimates and assumptions that have the most significant effect on the amounts
recognised in the financial statements are included in the following notes:
(a) Provision and contingent liability: On an ongoing basis, Company reviews pending cases, claims by third
parties and other contingencies. For contingent losses that are considered probable, an estimated loss is
recorded as an accrual in financialstatements. For Contingencies losses that are considered possible are not
provided for but disclosed as Contingent liabilities in the financial statements. Contingencies the likelihood of
which is remote are not disclosed in the financial statements.Gain contingencies are not recognized until the
contingency has been resolved and amounts are received or receivable.
(b) Allowance for impairment of financial asset: Judgements are required in assessing the recoverability of
overdue and determining whether a provision against those is required. Factors considered include the aging
of past dues, value of collateral and any possible actions that can be taken to mitigate the risk of non-payment.
(c) Recognition of deferred tax assets: Deferred tax assets are recognised for unused tax-loss carry forwards,
deductible temporary differences and unused tax credit to the extent that realisation of the related tax benefit is
probable. The assessment of the probability with regard to the realisation of the tax benefit involves
assumptions based on the history of the entity and budgeted data for the future.
(d) Defined benefit plans: The cost of defined benefit plans and the present value of the defined benefit obligations
are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making
various assumptions that may differ from actual developments in the future. These include the determination of
the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation
and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions.
(e) Property, plant and equipment and Intangible Assets: Management reviews the estimated useful lives and
residual values of the assets annually in order to determine the amount of depreciation and amortization to be
recorded during any reporting period. The useful lives and residual values as per schedule II of the Companies
Act, 2013 or are based on the Company’s historical experience with similar assets and taking into account
anticipated technological changes, whichever is more appropriate.
During the Financial Year 2023-24 the Company has established a contributory trust named Arihant Alternate Capital
Trust under the provision of Indian Trusts Act, 1882 for the purpose of carrying out the activities of a Category III
Alternative Investment Fund (“AIF”) under theSecurities and Exchange Board of India(Alternative Investment Funds)
Regulations, 2012. Arihant Capital Markets Limited acting as the “Settlor” of the trust through its Authorized Signatory
The Company has incorporated a wholly owned subsidiary named “Arihant Elite Financial Solutions Limited” on March
22, 2025. As of the date of this financial statement, the allotment of shares in the subsidiary is pending, and the
necessary steps for operationalization are in progress. Accordingly, the said subsidiary has not been considered for
consolidation for the period under review.
15. Derivative Financial Instruments
(i) Equity linked derivatives 210 38 -
*Secured against pledge of securities, trade receivables and immovable property.
‘Details of Assets pledged as security
1. The Company availed overdraft facility from ICICI Bank amounting to ' 2,000 Lacs. Outstanding book balance of
overdraft is ' 0.00 Lacs (March 31,2024:' 11.20 Lacs). The facility was closed in June 2024.
The aforesaid overd raft limit is secured by way of first pari - passu charge on trade receivables of the company.
2. The Company availed overdraft facility from Axis Bank amounting to ' 6,000 Lacs. Outstanding book balance of
overdraft is ' 0.00 Lacs (March 31,2024:' 2100.08 Lacs).
The aforesaid overdraft limit is secured by way of first pari - passu charge on trade receivables of the company.
3. The Company availed loan against property from ICICI Bank amounting to ' 720 Lacs. Outstanding book balance
of loan is ' 0.00 Lacs (March 31,2024:' 299.81 Lacs).
The aforesaid loan is secured by way of first charge by way of equitable mortgage of building situated at 1011,
Solitaire Corporate Park, Building No.10, 1st Floor, Andheri Ghatkopar Link Road Chakala Andheri (EAST)
Mumbai in the name of the company.
4. The Company availed overdraft facility from IDFC FIRST Bank amounting to ' 5000 Lacs. Outstanding book
balance of overdraft is '1401.45 Lacs (March 31,2024:' 1510.09 Lacs)
The aforesaid overdraft limit is secured by way of first pari - passu charge on trade receivables of the company.
5. The Compnay availed Term loan from Piramal Enterprises Limited amounting to ' 5000.00 Lacs. Outstanding
book balance of Term Loan is ' 1260.49 Lacs.
The aforesaid term loan is secured byway of charge on MTF receivables of the company.
6. The Company availed Term loan from Tata Capital Limited amounting to ' 500.00 Lacs. Outstanding book balance
of Term Loan is ' 168.09 Lacs. The Company availed Working Capital Loan from Tata Capital Limited amounting
to ' 1500.00 Lacs.Outstanding book balance of Working Capital Loan is '1501.58 Lacs.
The aforesaid term loan & overdraft limit is secured by way of charge on MTF receivables of the company.
7. The Company availed Commercial Property Loan of' 700 Lacs from HDFC Bank .Outstanding book balance of
Loan is ' 644.39 Lacs.
The Aforesaid Loan Is Secured By Way Of First Charge By Way Of Equitable Mortgage Of Building Situated At 901
Solitaite Corporate Park Building No. 9 Chakala Andheri (East) Mumbai 400093 in the name of the company.
B. Nature and timing of satisfaction of the performance obligation
1. Broking Income - The Company provides trade execution and settlement services to the customers. There is only one
performance obligation of execution of the trade and settlement of the transaction which is satisfied at a point in time. The
brokerage charged is the transaction price and is recognised as revenue on settlement date basis.
2. Fees & Commission Income - Fees for subscription based services are received periodically but are recognised as
earned on a pro-rata basis over the term of the contract. Commissions from distribution of financial products are
recognised upon allotment of the securities to the applicant or as the case may be. Commissions and fees recognised as
aforesaid are exclusive of goods and service tax, securities transaction tax, stamp duties and other levies by SEBI and
stock exchanges.
3. Interest Income - Interest is earned on delayed payments from clients and amounts funded to them as well as on loans
and term deposit with bank. Interest income is recognised on a time proportion basis taking into account the amount
outstanding from customers or on the financial instrument and the rate applicable.
4. Depository Income - Income from services rendered on behalf of depository is recognised upon rendering of the
services, in accordance with the terms of contract.
5. Fees From Merchant Banking -The Company provides underwriting the issuance of securities services to companies to
raise capital through the IPO and FPO process, from initial planning to final listing on the stock exchange. Income is
recognised as revenue upon rendering of the services, in accordance with theterms of agreement with customer.
44. Employee benefits
A. The Company contributes to the following post-employment defined benefit plans
(i) Defined Contribution Plans:
The Company makes contributions towards Provident Fund and Employees State Insurance Fund to a definei
contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute <
specified percentage of payroll cost to the retirement benefit plan to fund the benefits. The contributions payable t
these plans by the Company are at rates specified in the rules of the schemes.
The Company recognised ' 44.03 Lacs (Previous Year' 34.57 Lacs) for provident fund contributions in the Statemen
of Profit and Loss.
The Company recognised ' 5.49 Lacs (Previous Year:' 5.41 Lacs) for Employees State Insurance Fund contribution ii
the Statement of Profit and Loss.
(ii) Defined Benefit Plan:
Gratuity
In accordance with Payment of Gratuity Act, the Company provides for gratuity, a defined benefit retirement plai
covering all employees. The plan provides a lump sum payment to vested employees at retirement or termination c
employment based on the respective employee’s salary and the years of employment with the Company subject t<
maximumof'20 lacs. (Previous Year'20 lacs).
The gratuity benefit is provided through unfunded plan and annual contributions are charged to the statement of profi
and loss. Under the scheme, the settlement obligation remains with the Company. Company accounts for the liability fo
future gratuity benefits based on an actuarial valuation. The net present value of the Company’s obligation towards th<
same is actuarially determined based on the projected unit credit method as at the Balance Sheet date.
B. Movement in Defined Benefit Liability
The following table shows a reconciliation from the opening balances to the closing balances for net defined benefi
(asset) liability and its components:
51. Additional Regulatory Information as per Companies Act, 2013
1. The company has not granted any Loans or Advances to promoters, directors, KMPs and the related parties (as
defined under Companies Act, 2013,) either severally or jointly with any other person.
2. The title deeds, comprising all the immovable properties are held in the name of company and no immovable
property is jointly held with others.
3. There is no Intangible assets underdevelopment.
4. There is no tangible assets(Capital-work-in progress) under development.
5. The company has not revalued its Property, Plant and Equipment and Intangible Assets.
6. No proceeding have been initiated or are pending against the company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
7. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
8. The company is not declared willfu l defaulter by any bank or financial I nstitution or other lender.
9. The company has not entered into transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956.
10. The company has not applied for any Scheme of Arrangements in terms of sections 230 to 237 of the Companies
Act, 2013.
11. Utilization of Borrowed funds and share premium:
(a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the company to or in any other person(s) or entity(ies), including foreign
entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, 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 provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
(b) No funds have been received by the company from any person(s) or entity(ies), including foreign entities
(“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall,
whether, 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 provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries."
12. The Company has not used the borrowings from banks and financial institutions for the purpose other than for
which it was taken.
13. The Company has no transactions relating to previously unrecorded income that have been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).
52. Disclosure relating to various ratios
Additional regulatory information required under clause (xvi) of Division III of Schedule III amendment, disclosure of
ratios, is not applicable to the Company as it is in broking business and not an NBFC registered under Section 45-IA of
Reserve Bankof India Act, 1934.
53. Fair value measurement
I. Accounting classification and fair values
The following table shows the carrying amount and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy:
Level 1 : Category include financial assets and liabilities that are measured in whole or significantly part by reference to
published quotes in an active market.
Level 2 : Category include financial assets and liabilities that are measured using a valuation technique based on
assumptions that are supported by prices from observable current market transactions.
Level 3 : Category include financial assets and liabilities that are measured using valuation technique based on non¬
market observable inputs. This means that fair value are determined in whole or in part using a valuation model based
on assumptions that are neither supported by prices from observable current market transactions in the same
instrument nor are they based on available market data.
II. Financial instruments not measured at fair value
Financial assets not measured at fair value includes cash and cash equivalents, bank balance, trade receivables, loans
and other financial assets. These are financial assets whose carrying amounts approximate fair value, due to their
short-term nature and also fixed deposit with maturity more than 12 months (included in other financial assets) are
measured at amortized cost.
Additionally, financial liabilities such as trade payables and other financial liabilities are not measured at FVTPL, whose
carrying amounts approximate fair value, because of their short-term nature.
54. Financial risk management
The company has a risk management framework, appropriate to the size of the Company and environment under which
it operates. The objective of its risk management framework is to ensure that various risks are identified, measured and
mitigated and also that policies, procedures and standards are established to address these risks and ensure a
systematic response in the case of crystallization of such risks. The board of Directors reviews these policies and
processes regularly and is periodically informed about the risk assessment, impact of risk on the business and
mitigation plans. The Company is exposed to following risk -
A. Credit risk
Credit risk is the risk that the Company will incur a loss because its customers or counterparties fail to discharge their
contractual obligation. The Company manages and controls credit risk by setting limits on the amount of risk it is willing
to accept for individual counterparties, and by monitoring exposures in relations to such limits.
The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of
financial instruments presented in the financial statements.
Deposits with banks are considered to have negligible risk or nil risk, as they are maintained with high rated banks /
financial institutions as approved by the Board of directors.
The management has established accounts receivable policy under which customer accounts are regularly
monitored.
Expected Credit Loss (ECL):
The Company applies the Ind AS 109 Simplified approach for trade receivables which requires expected lifetime losses
to be recognised .For other assets , the Company uses 12 month ECL approach to measuring expected credit losses
(ECLs) where there is no significant increase in credit risk of borrower. If there is significant increase in credit risk full
lifetime ECL approach is used.
Inputs considered in the ECL model
In assessing the impairment of financial assets under Expected Credit Loss (ECL) Model, the assets have been
segmented into three stages. The three stages reflect the general pattern of credit deterioration of a financial
instrument. The differences in accounting between stages, relate to the recognition of expected credit losses.
Stage 1 : Financial assets for which credit risk has not increased significantly and that are also not credit impaired
Stage 2 : Financial assets for which credit risk has increased significantly but not credit impaired
Stage 3 : Financial assets for which credit risk has increased significantly and are credit impaired
B. Liquidity risk
Liquidity risk is the risk that the entity will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The entity’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the entity’s reputation.
Prudent liquidity risk management requires sufficient cash and marketable securities and availability of funds through
adequate committed credit facilities to meet obligations when due and to close out market positions.
Ultimate responsibility for liquidity risk management rests with the board of directors, for the management of the
Company’s short, medium and long-term funding and liquidity management requirements. The Company manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The table below provide details regarding the contractual maturities of significant financial liabilities as of
March 31,2025
C. Market risk
Market Risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in
market variables such as interest rates, foreign exchange rates, etc. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while maximizing the return.
(i) Currency risk
Currency Risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.
The company's all transactions are denominated in Indian rupees only. Hence, the Company is not significantly
exposed to currency rate risk.
(ii) Interest rate risk
Interest Rate Risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate as result of
changes in market interest rates. The Company’s Loans are primarily in fixed interest rates. Hence, the Company is not
significantly exposed to interest rate risk.
(iii) Market price risks
The Company is exposed to market price risk, which arises from FVTPL investments. The management monitors the
proportion of these investments in its investment portfolio based on market indices. Material investments within the
portfolio are managed on an individual basis and all buy and sell decisions are approved by the appropriate authority.
55. Capital Management
The company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that
they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal
capital structure to reduce the cost of capital.
The company monitors its capital by using gearing ratio, which is net debt to total equity. Net debt includes borrowings
net of cash and bank balances and total equity comprises of Equity share capital, general reserve and retained
earnings.
Reasons for not spending two percent of the average net profit as per sub-section (5) of Section 135.
During fiscal 2025, the Company has spent ?82.34 lacs on various projects including surplus of' 0.25 lacs. The unspent
balance of' 36.54 lacs is towards ongoing projects and has been transferred to the unspent CSR account and will be
spent in accordance with the CSR Rules.
58. Events after Reporting Date
There were no significant events after the end of the reporting period which require any adjustment or disclosure in the
financial statements other than as stated below:
The Board of Directors have recommended a final dividend of' 0.50 per equity share for the financial year ended March
31,2025. Payment of the final dividend is subject to its approval by the shareholders, in the ensuing Annual General
Meeting of the Company.
59. Previous year figures have been regrouped/reclassified wherever necessary.
60. Approval of Financial Statements
The financial statements are approved for issue by the Board of Directors in their meeting held on May 10,2025
For and on behalf of the Board
For Arora Banthia &Tulsiyan
Ashok Kumar Jain Arpit Jain Mahesh Pancholi Uttam Maheshwari
Chartered Accountants Managing Director Joint Managing Director Company Secretary Chief Financial Officer
Firm Reg No: 007028C DIN-00184729 &CEO Membership No. : F7143 Membership No. : 41913
DIN-06544441
CA. AjayTulsiyan
Partner
Membership No.: 074868
UDIN: 25074868BMUIJE5992
Indore, 10th May,2025
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