Accounting Convention
 
 The financial statements are prepared under the historical cost
 convention on accrual basis and in accordance with the Companies Act,
 1956, and the Accounting Standards specified in Rule 3 of Companies
 (Accounting Standards) Rules, 2006.
 
 Use of Estimates
 
 The preparation of the financial statements in conformity with the
 accounting standards generally accepted in India requires, the
 management to make estimates that affect the reported amount of assets
 and liabilities, disclosure of contingent liabilities as at the date of
 the financial statement and reported amounts of revenues and expenses
 for the year. Actual results could differ from these estimates.
 
 Fixed Assets and Depreciation
 
 Fixed assets are stated at cost less accumulated depreciation.  Cost
 includes cost of purchase and other costs attributable to bringing the
 assets to working condition for intended use.
 
 Depreciation on fixed assets, other than improvements to leasehold
 premises and V-Sat equipments, capitalised upto 31s1 March 2007 is
 provided under the straight line method at the rates specified in
 Schedule XIV of the Companies Act, 1956. Fixed assets, other than
 improvements to leasehold premises and V-Sat equipments, acquired on or
 after 1st April 2007 are depreciated under the straight line method
 over the useful life estimated by the management, which are lower than
 the useful life considered in Schedule XIV, as follows:
 
 Improvements to leased office premises are depreciated over a period of
 5 years irrespective of the lease period, on the assumption that lease
 agreements will be renewed and the
 
 premises will be occupied for a minimum period of five years. If the
 premises are vacated before the expiry of five-year period, the
 un-amortised leasehold improvement costs are fully written off in the
 year of vacation. V-Sat equipments are depreciated over a period of 5
 years.
 
 Additions to fixed assets are depreciated from the date of addition and
 deletions are depreciated upto the date of sale, on pro-rata basis.
 
 Intangible Assets and Amortisation
 
 Computer software is considered as intangible asset. Computer softwares
 capitalised upto 31st March 2007 are amortised over a period of 6 years
 and softwares capitalised on or after 1st April 2007 are amortised over
 a period of 5 years.
 
 Investments
 
 Investments are classified as long-term or current based on their
 nature and intended holding period. Long-term investments are stated at
 cost less provision for diminution, other than temporary, in value.
 Current investments are stated at lower of cost and market value / net
 asset value.
 
 Income
 
 Brokerage income is recognized on the trade date of transaction, upon
 confirmation of the transactions by stock exchanges and clients. Income
 from depository services, penal charges and portfolio management
 services are recognised on the basis of agreements entered into with
 clients and when the right to receive the income is established.
 Commission income from financial products distribution is recognised on
 the basis of agreement entered with principals and when the right to
 receive the income is established. Interest income from margin funding
 business is recognised on loans given to clients on time proportion
 basis.  Other interest incomes are recognised on time proportion basis.
 Dividend income is recognised when the right to receive the income is
 established.
 
 Employee Benefits
 
 Post-employment Benefit Plans
 
 Contributions to defined contribution retirement benefit schemes are
 recognised as expense when employees have rendered services entitling
 them to contributions.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using the Projected Unit Credit Method, with actuarial
 valuation being carried out at each balance sheet date. Actuarial
 
 gains and losses are recognised in full in the profit and loss account
 of the period in which they occur. Past service cost is recognised
 immediately to the extent that the benefits are already vested, and
 otherwise is amortised on a straight-line basis over the average period
 until the benefits become vested.
 
 The retirement benefit obligation recognised in the balance sheet
 represents the present value of the defined benefit obligation as
 adjusted for unrecognised past service cost, and as reduced by the fair
 value of plan assets. Any asset resulting from this calculation is
 limited to the present value of available refunds and reductions in
 future contributions to the scheme.
 
 Short-term employee benefits
 
 The undiscounted amount of short-term employee benefits expected to be
 paid in exchange for the services rendered by employees is recognised
 during the period when the employees renders the service. These
 benefits include compensated absences such as paid annual leave and
 performance incentives.
 
 Long-term employee benefits
 
 Compensated absences which are not expected to occur within the twelve
 months after the end of the period in which the employee renders the
 related services are recognised as a liability at the present value of
 the defined benefit obligation at the balance sheet date.
 
 Leases
 
 Operating lease rentals are charged to Profit and Loss Account of the
 period to which they relate.
 
 Taxes on income
 
 Current tax is determined on the taxable income for the year as per the
 provisions of the Income Tax Act, 1961.  Deferred tax is recognised,
 subject to the consideration of prudence, on timing differences, being
 the difference between taxable income and accounting income that
 originate in one period and are capable of reversal in one or more
 subsequent periods.  Deferred tax assets and liabilities are measured
 using the tax rates and tax laws that have been enacted or
 substantively enacted by the balance sheet date. Deferred tax assets
 are recognised and carried forward only to the extent there is
 reasonable certainty that sufficient future taxable income will be
 available against which such asset items can be realised.
 
 Impairment of Assets
 
 Impairment is ascertained at each Balance Sheet date in respect of the
 Companys fixed assets. An impairment loss is recognised whenever the
 carrying amount of an asset exceeds its recoverable amount. The
 recoverable amount is the greater of the net selling price and value in
 use. In assessing the value in use, the estimated
 
 future cash flows are discounted to their present value, based on an
 appropriate discount factor. Reversal of impairment loss is recognised
 as income in the Profit and Loss Account.
 
 Provisions, Contingent Liabilities and Continent Assets
 
 A Provision is recognized, in terms of Accounting Standard 29 -
 Provisions, Contingent Liabilities and Contingent Assets notified by
 the Companies (Accounting Standards) Rules, 2006, when there is a
 present obligation as a result of a past event, and it is probable that
 an outflow of resources will be required to settle the obligation,
 which can be reliably estimated. Provision is not discounted to its
 present value and is determined based on the best estimate required to
 settle the obligation at the balance sheet date. Provisions are
 reviewed at each balance sheet date and adjusted to reflect the best
 current estimate.
 
 Contingent Liabilities are recognised only when there is a possible
 obligation arising from past events, due to occurrence or non-
 occurrence of one or more uncertain future events, not wholly within
 the control of the Company, or where any present obligation cannot be
 measured in terms of future outflow of resources, or where a reliable
 estimate of the obligation cannot be made.  Obligations are assessed on
 an ongoing basis and only those having a largely probable outflow of
 resources are provided for.
 
 Contingent Assets are not recognised in the financial statements.
 
 Employee Stock Option
 
 The employee share based compensation costs under the Employee Stock
 Option Schemes are accounted under the intrinsic value method, wherein
 the difference between the market price of the share on the grant date
 or as near thereto and exercise price is considered as intrinsic value
 of options and amortised on straight-line basis over the vesting
 period.