1.  Basis of preparation of financial statements: the financial
 statements have been prepared under historical cost convention on an
 accrual basis in compliance with all material aspects of the applicable
 accounting Standards in India and the relevant provisions of the
 companies act, 1956. the accounting policies have been consistently
 applied by the company.
 
 2.  Use of estimates:
 
 The presentation of financial statements in conformity with the
 generally accepted accounting principles requires the management to
 make estimates and assumptions that affect the reported amount of
 assets and liabilities on the date of the financial statements and the
 reported amount of revenues and expenses during the reporting period.
 Difference between the actual result and estimates are recognised in
 the period in which the results are known / materialised.
 
 3.  Fixed assets and Depreciation:
 
 Fixed assets are stated at cost of acquisition less accumulated
 depreciation and impairment loss, if any thereon. Depreciation is
 charged using the straight line method based on the useful life of
 fixed assets as estimated by the management as specified below, or the
 rates specified in accordance with the provisions of schedule XIV of
 the companies act, 1956, which-ever is higher. in the case of transfer
 of used fixed assets from group companies, depreciation is charged over
 the remaining useful life of the asset.
 
 Depreciation is charged from the month in which new assets are put to
 use. no depreciation is charged from the month in which assets are sold
 individual assets / group of similar assets costing up to Rs 5,000 has
 been depreciated in full in the year of purchase. estimated useful life
 of the assets is as under:
 
 4.  translation of foreign currency items :
 
 Foreign currency transactions are recorded at the rates of exchange
 prevailing on the date of the transaction. exchange differences, if
 any, arising out of transactions settled during the year are recognised
 in the Profit and loss account. monetary assets and liabilities
 denominated in foreign currencies as at the balance sheet date are
 translated at the closing exchange rate on that date. the exchange
 differences, if any, are recognised in the Profit and loss account and
 related assets and liabilities are accordingly restated in the Balance
 Sheet.
 
 5.  Revenue Recognition:
 
 Brokerage income earned on secondary market operations is accounted on
 trade dates. Dividend income is accounted for when the right to receive
 the payment is established. Depository related, investment banking
 related and income in respect of other heads is accounted on accrual
 basis.
 
 income from arbitrage comprises profit/loss on sale of securities held
 as stock-in-trade and profit/loss on equity derivative instruments is
 accounted as per following;
 
 (a) Profit/loss on sale of securities is determined based on the FiFO
 cost of the securities sold.
 
 (b) Profit/loss on arbitrage transactions is accounted for as explained
 below :-
 
 Initial and additional margin paid over and above initial margin, for
 entering into contracts for equity index/Stock Futures and or equity
 index/stock options which are released on final settlement/squaring-up
 of underlying contracts are disclosed under current assets, loans and
 advances. “mark-to-market margin- equity index/Stock Futures
 representing the amounts paid in respect of mark to market margin is
 disclosed under loans and advances.
 
 Equity index/Stock Option Premium account represents premium paid or
 received for buying or selling the options, respectively.
 
 On final settlement or squaring up of contracts for equity index /
 stock futures, the realised profit or loss after adjusting the
 unrealised loss already accounted, if any, is recognised in the Profit
 and loss account.
 
 On settlement or squaring up of equity index / stock options before
 expiry, the premium prevailing in “equity index/Stock Option Premium
 account on that date is recognised in the Profit and loss account.
 
 As at the balance sheet date, the mark to market / Unrealised Profit /
 (loss) on all outstanding arbitrage portfolio comprising of Securities
 and equity Derivatives positions is determined on scrip basis (e.g.
 nifty, SBI, HDFC) with net unrealised losses on scrip basis being
 recognised in the Profit and loss and the net unrealised gains on scrip
 basis are ignored
 
 6.  Retirement Benefits:
 
 The companys contribution towards Provident Fund and Family Pension
 Fund, which are defined contribution, are accounted for on an accrual
 basis and recognised in the Profit & loss account.
 
 The company has provided compensated absences on the basis of actuarial
 valuation.
 
 Gratuity is post employment benefit and is in the nature of Defined
 Benefit Plan. the liability recognised 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 unrecognised
 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.
 
 7.  Deferred employee Stock compensation:
 
 The stock options granted by the company are accounted for as per the
 accounting treatment prescribed by employee Stock Option Scheme and
 employee Stock Purchase Guidelines, 1999 issued by Securities and
 exchange Board of india and the guidance note on accounting for Stock
 Options issued by the institute of chartered accountant of India,
 whereby the intrinsic value of the options are recognised as deferred
 employee compensation. the deferred employee compensation is charged to
 the Profit and loss account on a straight line basis over the vesting
 period of the options. the employee Stock Options Outstanding account,
 net of unamortised Deferred employee compensation is shown separately
 as part of Reserves and Surplus.
 
 8.  Provisions, contingent liabilities and contingent assets:
 
 The company creates a provision when there is present obligation as a
 result of a past event that probably requires an outflow of resources
 and a reliable estimate can be made of the amount of the obligation. a
 disclosure for a contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources. When there is a possible obligation or
 a present obligation in respect of which the likelihood of outflow of
 resources is remote, no provision or disclosure is made.
 
 Provisions are reviewed at each balance sheet date and adjusted to
 reflect the current best estimate. if it is no longer probable that the
 outflow of resources would be required to settle the obligation, the
 provision is reversed.
 
 contingent assets are neither recognised nor disclosed in the financial
 statements.
 
 9.  Taxes on income:
 
 Provision for current tax is computed based on estimated tax liability
 computed after adjusting for allowance, disallowance and exemptions in
 accordance with the applicable tax laws.
 
 Deferred tax is recognised for all timing differences between
 accounting income & taxable income and is quantified using enacted /
 substantially enacted tax rates as at the balance sheet date. Deferred
 tax assets are recognised subject to the management judgement that the
 realisation is virtually / reasonably certain and are reviewed as at
 each balance sheet date
 
 10.  Operating leases:
 
 Lease rentals in respect of operating lease arrangements are charged to
 the Profit & loss account in accordance with accounting Standard 19 -
 leases, issued by the institute of chartered accountants of India.
 
 11.  Investments:
 
 Investments are classified into current and long-term investments.
 investments which are intended to be held for one year or more are
 classified as long term investments and investment that are intended to
 be held for less than one year are classified as current investments.
 current investments are stated at lower of cost or market / fair value.
 long-term investments are carried at cost.  Provision for diminution in
 value of long term investments is made, if in the opinion of the
 management such diminution is other than temporary. For investment in
 mutual Funds, the net assets Value (NAV) declared by the mutual Funds
 is considered as the fair value.
 
 12.  Stock in trade:
 
 Closing stock is valued at cost or market value whichever is lower.
 cost is computed on FiFO basis. the comparison of cost and market value
 for arbitrage portfolio is done separately for each scrip.