1.  Basis of Preparation of Financial Statements
 
 The accompanying financial statements are prepared in accordance with
 Generally Accepted Accounting Principles and provisions of the
 Companies Act, 1956 under the historical cost convention on the accrual
 basis of accounting. The accounting policies have been consistently
 applied by the company unless otherwise stated.
 
 2.  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 and
 disclosures of contingent liabilities on the date of the financial
 statements and the reported amounts of revenues and expenses during the
 reporting period. Actual results could differ from these estimates and
 the differences between actual results and estimates are recognised in
 the periods in which the results are known / materialize.
 
 3.  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.
 
 (b) One time non refundable subscription fees with a validity of
 maximum of one year for joining various special brokerage schemes are
 treated as income when the client agrees to join that particular scheme
 and renders payment for the same.  Brokerage reversible under the said
 schemes are reversed by making provision at the end of each quarter.
 However, actual credit for brokerage reversible to the client is given
 at the end of the validity period of the scheme opted.
 
 (c) Portfolio Management Fees is accounted on accrual basis as follows
 :- 
 
 (i) in case of fees based on fixed percentage of Assets Under
 Management, income is accrued at the end of each quarter or closure of
 Portfolio Account, whichever is earlier.
 
 (ii) in case of fees based on returns on Portfolio, income is accounted
 at the end of completion of one year by each client from the date of
 joining the Portfolio Management Scheme or closure of Portfolio
 Account, whichever is earlier.
 
 (d) Dividend including interim are accounted when the right to receive
 payment is established.
 
 (e) Profit/ (Loss) in proprietory trades in securities and derivatives
 comprises of profit/(loss) on sale of securities held as stock-
 in-trade, profit/(loss) on equity derivative instruments and
 profit/(loss) on currency futures transactions. Profit/(loss) on sale
 of securities is determined based on first-in-first-out (FIFO) basis of
 cost of securities sold. Profit/(loss) on equity derivative instruments
 is determined as explained in para 4 and 5 below. Profit/(loss) on
 Currency Futures transactions is also determined mutatis mutandis as
 explained in para 4 and 5 below.
 
 4.  Equity Index/Stock - Futures
 
 (i) Equity Index/Stock 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 Account, represents the net amount paid or received on
 the basis of movement in the prices of Index/Stock futures till the
 Balance Sheet date.
 
 (ii) As on the Balance Sheet date, Profit / Loss on open positions in
 Equity Index / Stock Futures is accounted for as follows:
 
 - Credit balance in the Mark-to-Market Margin – Equity Index / Stock
 Futures Account, being the anticipated profit, is ignored and no credit
 for the same is taken in the Profit and Loss account.
 
 - Debit balance in the Mark-to-Market Margin – Equity Index / Stock
 Futures Account, being the anticipated loss, is provided in the Profit
 and Loss account and is refected in Provision for Loss on Equity
 Index/Stock Futures Account under Current Liabilities.
 
 (iii) On final settlement or squaring-up of contracts for Equity Index
 / Stock 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 Account after adjustment of the provision for anticipated
 losses is recognized in the Profit and Loss account. When more than one
 contract in respect of the relevant series of Equity Index / Stock
 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.
 
 5.  Equity Index/Stock - Options
 
 (i) Equity Index/Stock Options Premium Account represents premium
 paid or received for buying or selling the options, respectively. Debit
 or Credit balance under the said account is disclosed under Loans and
 Advances or Current Liabilities as the case may be.
 
 (ii) At the time of final settlement
 
 Premium paid/received is recognised 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 recognised as Profit
 or Loss.
 
 (iii) At the time of squaring of
 
 Difference between the premium paid and received on squared of
 transactions is treated as Profit or Loss.
 
 (iv) At the Balance Sheet date
 
 In the case of long positions, provision is made for the amount by
 which the premium paid for those options exceeds the premium prevailing
 on the balance sheet date, and in the case of short positions, for the
 amount by which premium on the Balance Sheet date exceeds the premium
 received for those options, and is refected in Provision for Loss on
 Equity Index/ Stock Option Account under Current Liabilities.
 
 6.  Fixed Assets and Depreciation
 
 a) Fixed Assets are stated at cost of acquisition including incidental
 expenses related to such acquisition and installation less accumulated
 depreciation.
 
 b) Depreciation on Fixed Assets other than Improvements to Leasehold/
 Licensed Premises have been provided on written down value method at
 the rates prescribed under Schedule XIV to the Companies Act, 1956 as
 amended from time to time including pro rata depreciation on
 additions/deletions made during the year.
 
 c) Improvements to Leasehold/Licensed Premises are depreciated on a
 straight-line method over the Primary Lease Period or over a period of
 3 years whichever is less starting from the date when the
 Leasehold/Licensed Premises are put to use.
 
 7.  Intangible Assets and Amortization
 
 Items of expenditure that meet the recognition criteria as mentioned in
 Accounting Standard – 26 on Intangible Assets are classified as
 intangible assets and are amortized over the period of economic
 benefits.
 
 Softwares are stated at cost of acquisition and are amortized on
 straight line basis over a period of 3 years irrespective of the date
 of acquisition.
 
 Membership Rights in Stock Exchanges are amortized on straight- line
 basis over a period of 10 years.
 
 8.  Stock – in – Trade
 
 Stock – in – Trade of securities are valued at lower of the cost or
 market value on individual scrip by scrip basis. Cost is determined on
 First-in-First-Out (FIFO) basis.
 
 9.  Investments
 
 Investments that are readily realizable and intended to be held for not
 more than twelve months are classified as Current Investments. All
 other investments are classified as long term investments. Long Term
 Investments are stated at cost. However, provision for diminution in
 value is made to recognize a decline other than temporary in the value
 of the investments.
 
 Current Investments are stated at lower of cost and fair value and
 determined on an individual investment basis.
 
 10. Employee Benefits
 
 (i) Short Term Benefits
 
 All employee benefits including leave encashment (short term
 compensated absences) and statutory bonus/ performance bonus/
 incentives payable wholly within twelve months of rendering the service
 are classified as short term employee benefits and are charged to the
 Profit and Loss Account of the year.
 
 (ii) Long Term Benefits
 
 (a) Post Employment Benefits
 
 (i) Defned Contribution Plans:- Retirement/ Employee benefits in the
 form of Provident Fund, Employees State Insurance and labour welfare
 are considered as defned contribution plan and contributions to the
 respective funds administered by the Government are charged to the
 Profit and Loss account of the year when the contribution to the
 respective funds are due.
 
 (ii) Defned Benefit Plans :- Retirement benefits in the form of
 gratuity is considered as defned benefit obligation and is provided for
 on the basis of an actuarial valuation on projected unit credit method
 made as at the date of the Balance Sheet. The scheme is maintained and
 administered by an insurer to which the trustees make periodic
 contributions.  Actuarial gain/loss, if any are immediately recognized
 in the Profit and Loss account.
 
 (b) Other Long Term Benefits
 
 As per the present policy of the company, there are no other long term
 benefits to which its employees are entitled.
 
 11. Borrowing Cost
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to revenue.
 
 12. Assets on Operating Leases
 
 Lease payments under operating leases are recognized as expenses on
 accrual basis in accordance with the respective leave and license
 agreements.
 
 13. Share Issue Expenses
 
 Expenses incurred in connection with fresh issue of Share Capital are
 adjusted against Securities Premium account in the year in which they
 are incurred.
 
 14. Taxation
 
 Provision for Taxation has been made in accordance with the Income Tax
 Laws prevailing for the relevant assessment years.
 
 15. Deferred Taxation
 
 Deferred Tax resulting from timing differences between book and tax
 profits is accounted for under the liability method, at the tax rates
 that have been enacted or substantively enacted after the balance sheet
 date, to the extent that the timing difference are expected to
 crystallize as deferred tax charge/benefit in the profit and loss
 account and as deferred tax assets/ liabilities in the Balance Sheet.
 
 16. Contingencies and Events Occuring After The Balance Sheet Date
 
 Events occurring after the date of the Balance Sheet, which provide
 further evidence of conditions that existed at the Balance Sheet date
 or that arose subsequently, are considered up to the date of approval
 of accounts by the Board of Directors, where material.
 
 17. Impairment
 
 Where the recoverable amount of the fixed asset is lower than its
 carrying amount, a provision is made for the impairment loss.  Post
 impairment, depreciation is provided for on the revised carrying value
 of the asset over its remaining useful life.
 
 18. Provisions, Contingent Liabilities & Contingent Assets
 
 A provision is recognized when an enterprise has a present obligation
 as a result of past event(s) and it is probable that an outflow of
 resources embodying economic benefits will be required to settle the
 obligation(s), in respect of which a reliable estimate can be made for
 the amount of obligation. Contingent liabilities, if material, are
 disclosed by way of notes. Contingent assets are not recognized or
 disclosed in the financial statements.
 
 19. Foreign Currency Transactions
 
 Foreign currency transactions are accounted at the exchange rates
 prevailing on the date of the transaction. Foreign currency monetary
 items outstanding as at the Balance Sheet date are reported using the
 closing rate. Gains and losses resulting from the settlement of such
 transactions and translation of monetary assets and liabilities
 denominated in foreign currencies are recognized in the Profit and Loss
 Account.
 
 20. Employee Stock Compensation Cost
 
 The company follows the intrinsic value method as prescribed by the
 Guidance note on Accounting for Employee Share-based Payments issued
 by the Institute of Chartered Accountants of India to account for the
 compensation cost of its Stock based employee compensation plans.
 
 21. Stock Lending and Borrowing
 
 Borrowing/ Lending fees paid/received on stocks borrowed/lent under
 Stock Lending and Borrowing Mechanism is recognized on accrual basis.
 
 Amount deposited with Stock Exchanges for borrowed stocks has been
 shown under the head Current Assets, Loans and Advances and the same is
 reversed on return of such borrowed stock.
 
 Sale proceeds of borrowed stock has been shown as Current Liabilities
 and the same is reversed on squaring up of the transaction with
 resultant gain/loss being recognized in the Profit and Loss account.
 
 Provision is made for anticipated losses however anticipated profits
 are ignored for difference between sale price of borrowed stock and the
 price prevailing at the Balance Sheet date on such borrowed stock.