NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES

1.1. a) BASIS OF brPARATION OF FINANCIAL STATEMENTS:

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and in compliance with the Accounting Standard notified under the relevant provisions of the Companies Act, 2013.

b) USE OF ESTIMATES:

The Preparation of Financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known.

1.2. EMPLOYEE BENEFITS:

(a) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, bonus, incentives, etc. are recognized in the period in which the employee renders the related services.

(b) Post- Employment Benefits

(i) Defined Contribution Plans: The Company's contribution paid/payable under the Provident Fund Scheme is recognized as expense in the Statement of profit and loss during the period in which the employee renders the related service.

(ii) Defined Benefit Plans: The Company has taken Group Gratuity Cash Accumulation Policy issued by the Life Insurance Corporation of India (LIC). The brsent value of the obligation under such defined benefit plans is determined based on actuarial valuation as advised by LIC, using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the brsent value of the estimated future cash flows. The discount rates used for determining the brsent value of the obligation under defined benefit plans, are as advised by LIC. The Actuarial gains or losses are recognized immediately in the Statement of Profit 8t Loss.

1.3. PROVISION FOR CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision involving a substantial degree of estimation in measurement is recognized when there is a brsent obligation as a result of past events and is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Financial Statements. Contingent Assets are neither recognized nor disclosed in the financial statements.

1.4. REVENUE RECOGNITION

a) Brokerage from secondary market is recognized as per contracted rates on the execution of transactions on behalf of the clients on the trade date and is exclusive of Service Tax and Securities Transaction Tax(STT) wherever applicable.

b) Income from Sale of Shares and Securities is recognized on the date of billing of the relevant transactions.

c) Income from Depository operations is accounted on accrual basis.

d) Equity Index / Stock Future/Currency Futures

i) Equity Index / Stock Futures/ Currency Futures are marked to market on a daily basis. Debit or Credit balance disclosed under Loans and Advances or Current Liabilities, respectively, in the Mark to Market Margin Equity Index / Stock Futures/Currency Account, rebrsents the net amount paid or received on the basis of movement in the process of Index / Stock futures /Currency Futures till the balance sheet date.

ii) As on the Balance Sheet Date, Profit / Loss on open position in Equity Index /Stock Futures/Currency Futures is accounted as follows:

• Credit balance in the Mark-to-Market Margin Equity Index/ Stock Futures /Currency Futures Account being the anticipated profit is ignored and no credit for the same is taken in the Statement of Profit and Loss.

• Debit balance in the Mark-to-Market Margin Equity Index/ Stock Futures/Currency Futures Account, being the anticipated loss, is provided in the Statement of Profit and Loss.

iii) On final settlement or squaring up of contracts for Equity Index/ Stock Futures/ Currency Futures, the Profit or Loss is calculated as the difference between the settlement / squaring up price and the contract price. Accordingly, debit or credit balance pertaining to the settled /squared - up contract in Mark to Market Margin - Equity Index/ Stock Futures /Currency Futures Account after adjustment of the provision for anticipated losses is recognized in the statement of Profit and Loss. When more than one contract in respect of the relevant series of Equity Index/ Stock Futures /Currency Futures contract to which the squared up contract pertains is outstanding at the time of the squaring up of the contract, the contract price of the contract so squared up is determined using the weighted average cost method for calculating the Profit / Loss on Squaring up.

e) Option Contracts

i) At the time of final settlement Premium paid/ received is recognized as an expense/ income on exercise of Option. Further, difference between the final settlement price as on the exercise/ expiry date and the strike price is recognized as Income / Loss.

ii) At the time of squaring off difference between the brmium paid and received on squared off transaction is treated as Profit or Loss.

f) Income from Delay Pay in Charges and Interest is recognized on a time proportion basis.

g) Dividend income is recognized only when the right to receive is established.

h) Advisory fees and other income are accounted on accrual basis, net of service tax.

1.5 FIXED ASSETS AND DEbrCIATION

a) Fixed Assets are stated at cost of acquisition including incidental expenses related to such acquisition and installation less accumulated debrciation.

b) Debrciation is provided under the Straight Line Method (SLM) based on the useful life of the assets as brscribed in Schedule II to the Companies Act, 2013.

c) Membership Rights in Stock Exchanges are amortized on straight- line basis over a period of 20 years according to the Management decision on the basis of its useful life.

d) Other Intangible assets are stated at cost and are amortized on straight-line basis over the period of 6 years on the basis of useful life determined as per the economic benefit of the asset.

1.6 INVESTMENTS

Investments are stated at cost of acquisition since they are long term in nature.

1.7 STOCK-IN-TRADE

Stock in- trade of shares St securities are valued at lower of the cost or market value on individual scrip by scrip basis.

1.8 TAXES ON INCOME

a) Tax on income for the current period is determined on the basis of estimated taxable income in accordance with the provisions of the IncomeTaxAct, 1961.

b) Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes St accounting income that originate in one period and are capable of reversal in one or more subsequent period.

c) Deferred Tax assets are recognized and carried forward only to the extent that there is a reasonable certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.9 IMPAIRMENT OF ASSETS

At each balance sheet date, the management reviews the carrying amount of all the assets to determine whether there is any indication that those assets were impaired . If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. And the impairment loss, if any, is debited to the Statement of Profit and Loss.

NOTE 24: OTHER NOTES TO FINANCIAL STATEMENTS 1. Contingent Liabilities:

a) Contingent liabilities for Bank Guarantee issued in favour of NSE / BSE is Rs. 4,50,00,000/- (Previous year was Rs. 3,00,00,000/-).

2. In the opinion of Management the current assets, loans and advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated and provisions for all known liabilities have been made. Balance of Sundry Debtors and Sundry Creditors are subject to confirmations.

6. There are no amounts payable to any micro, small and medium (SMEs) scale industrial undertaking as identified by the management from the information available with the company and relied upon by the Auditors.

7. Shares and Securities received from or on behalf of clients, held by the Company as collateral in its own name in a fiduciary capacity, and/or are lodged with the exchanges/F 6t 0 Clearing Member towards additional base capital / exposure and / or pledged to bank against overdraft facility.

8. In the current year, various expenses like advertisement, salary, rent and other expenses has been allocated and accounted for in respective expenses head on proportionate basis to the Subsidiary Company Swastika Commodities Private Limited and Swastika Fin-Mart Private Limited and the payment from Subsidiary Company has been received against the same.

9. Interest expenses is netted off by the amount of Rs. 44,15,096/- (Previous year Rs.52,45,505/-) allocated to the Swastika Commodities Private Limited (a 100% Subsidiary Company) on account of utilization of the funds on behalf of the common clients of the Company and Swastika Commodities Private Limited.

12. During the current year, the company has implemented Schedule II of the Companies Act, 2013 and accordingly computed the debrciation based on revised useful life of the fixed assets as brscribed under Schedule II of the Act. The carrying value of the fixed assets which have completed their useful life as on 1st April,2014 have been charged off against the Statement of Profit and Loss at Rs. 20.62 lacs.

Had there not been any change in useful life of the fixed assets, the debrciation would have been lower by Rs. 43.35 lacs and therefore the profit would have been higher by Rs. 43.35 lacs.

13. In the opinion of the management, fixed assets are not found to be impaired and therefore, no provision for impairment loss is made for the year.

14. The management is of the view that the diminution in the value of Long-term Investment is temporary in nature and therefore, no provision for the same has been made in the books of accounts for the year.

15. Short term borrowing includes amount received from Sub-brokers / Business Associates as security deposit for business purpose amounting to Rs. 14,345,199/- (F.Y. Rs. 19,248,198/-)

16. Previous year figures have been reclassified wherever necessary to confirm to the Classification for the year.

As per our separate report attached

For R.S. Bansal & Co.

Chartered Accountants FRN : 000939C

Vijay Bansal

Partner

M. No. 075344

For & on behalf of the Board of Directors Swastika Investmart Limited

Sunil Nyati Managing Director DIN : 00015963

Anita Nyati Whole Time Director DIN : 01454595

Parth Nyati Chief Financial Officer

Shikha Bansal Company Secretary

Place :Indore

Date :May 25, 2015