Nature & Purpose of Reserves :Securities Premium

Balance of Securities premium consist of issue of share over its face value. The balance will be utilised for issue of as per provisions of Section 52 of the Companies Act, 2013.

Share Option Outstanding Account

The share option outstanding account is used to record the value of equity-settled share based payment transactions with employees.

Retained earnings

Retained earnings comprises of the amounts that can be distributed by the Company as dividends to its equity share holders.

Other Comprehensive Income (OCI)

OCI includes remeasurement of defined employee benefit plan on account of actuarial gains and losses as per Ind AS 19 Employee Benefits and translation gain / loss.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

There are no amounts included in the fair value of plan assets for:

i) Company's own financial instrument

ii) Property occupied by or other assets used by the Company Discount Rate:

Discount Rate for this valuation is based on Yield to Maturity (YTM) available on Government bonds having similar term to decrement-adjusted estimated term of liabilities.

For valuation as at March 31, 2023 the estimated term of liabilities is 13.73 years, corresponding to which YTM on government bonds is 7.20%, after rounding to nearest 0.05%

Expected rate of return on assets:

It is the average long term rate of return expected on investments of the Trust Fund.

Salary Escalation Rate:

Salary escalation assumption is based on estimates of over all long-term salary growth rates after taking in to consideration expected earnings inflation as well as performance and seniority related increases.

Withdrawal Rate:

Assumptions regarding withdrawal rates is based on the estimates of expected long term employee turnover within the organisation.

Mortality Rate

It is based on Indian Assured Lives Mortality (2012-14) Ult. as issued by Institute of Actuaries of India for the actuarial valuation.

General Description fair value of the plan:

The Company has insurer Managed Fund.

Asset Liability Matching Strategy

The money contributed by the Company to the Gratuity fund to finance the liabilities of the plan has to be invested. The trustees of the plan have outsourced the investment management of the fund to an Insurance Company. The Insurance Company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset liability matching strategy. There is no compulsion on the part of the Company to fully prefund the liability of the Plan. The Company's philosophy is to fund these benefits based on its own liquidity and the level of underfunding of the plan.

For Representative Office at Dubai Defined Benefit Plans Gratuity:

The gratuity payable to employees is based on the employee's service and last drawn salary at the time of leaving the services of the Company and is in accordance with the Rules of the Company for payment of gratuity.

Inherent Risk

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employee in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

There are no amounts included in the fair value of plan assets for:

i) Company's own financial instrument

ii) Property occupied by or other assets used by the Company Discount Rate:

Discount Rate for this valuation is based on Yield to Maturity (YTM) available on Government bonds having similar term to decrement-adjusted estimated term of liabilities.

For valuation as at March 31,2023 the estimated term of liabilities is 14.02 years, corresponding to which YTM on Dubai bonds is 6.6%.

Expected rate of return on assets:

It is the average long term rate of return expected on investments of the Trust Fund.

Salary Escalation Rate:

Salary escalation assumption is based on estimates of over all long-term salary growth rates after taking in to consideration expected earnings inflation as well as performance and seniority related increases.

Withdrawal Rate:

Assumptions regarding withdrawal rates is based on the estimates of expected long term employee turnover within the organisation.

Mortality Rate

It is based on Indian Assured Lives Mortality (2012-14) Ult. as issued by Institute of Actuaries of India for the actuarial valuation.

C Defined Contribution Plans

Amount recognised as an expense under the head "Contribution to Provident and other Funds in Note 24 "Employee Benefit Expenses" of Statement of Profit and Loss towards Company's Contribution to Provident Fund is ' 819.34 Lakhs (2021-22'738.64 Lakhs).

D The Code on Social Security, 2020 (‘Code'), relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

For the current financial year and previous financial year tax is charged @ 25.17% (i.e. 22% Basic Tax, 10% Surcharge on Basic Tax and 4% Cess on Basic Tax and Surcharge).

28. OPERATING SEGMENTS

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. The CODM, who is responsible for allocating resources and assessing performance of operating segments, has been identified as CEO/CFO of the Company. The Company operates only in one business segment i.e. Services for distribution and sale of financial products within India, hence does not have any reportable segment as per Indian Accounting Standard 108 "operating segments"

32. SHARE BASED PAYMENTS Employees Share Option Plans

The Employee Stock Option Scheme (‘the Scheme') provides for grant of share options to the eligible employees and/or directors ("the Employees") of the Holding Company. The Share Options are granted at an exercise price, which is either equal to the fair market price, or at a premium, or at a discount to market price as may be determined by the Board. Each Share Option converts into two equity shares of the Company.

ESOP Scheme 2017

During the financial year 2016-17, the Board had approved the Policy and the no. of options to be granted to the Employees that will vest in a graded manner and which can be exercised within a specified period. The Board had approved 3,20,000 Options at an exercise price of 10/- per option to the Employees.

Fair Value of Options granted

The estimated fair value of each stock option granted is ' 2.82 as on January 01,2017. The fair value has been calculated by applying Black-Scholes-Merton model. The model inputs the share price at respective grant dates, exercise price of ' 10 per option, Standard Deviation of 52.44%, life of option being 6 months from date of grant, and a risk-free interest rate of 6.51%.

Standard deviation has been derived based on the one year historical numbers of the peer group companies adjusted with appropriate illiquidity discount.

Nature of CSR activities :

The Company has primarily spent the CSR expenditure for the purpose:

Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

Training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports.

Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare.

The expenditure incurred during the year has been recommended by the CSR Committee and approved by the board of directors.

34. CAPITAL MANAGEMENT

For the purpose of Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to equity holders of company. The Company manages its capital to ensure that it continues as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance

35. BUSINESS COMBINATIONS

The Company had acquired following equity shares at fair value during earlier year(s). Purchase consideration for acquisition of shares in below mentioned entities was paid by mode of cash only. The acquisitions were made to enhance the presence in Wealth Management space. The other disclosures with respect to acquisition are as under.

AR Digital Wealth Private Limited (ARDWPL) is engaged in the business of Digital Wealth Management. The consideration paid for shares of ARDWPL in July 2016 was ' 252.00 Lakhs, in March 2018 was ' 690.25 Lakhs and in Financial Year 2018-19 was ' 4,204.81 Lakhs. The fair value per share for the aforesaid acquisitions was '10, ' 256 and ' 332 (Average price of 3 lots purchased during the year) respectively.

Freedom Wealth Solutions Private Limited (FWSPL) is engaged in the business of Wealth Management. The consideration paid for shares of FWSPL in September 2017 was ' 237.16 Lakhs. The fair value per share for the aforesaid acquisitions was ' 10.

Ffreedom Intermediary Infrastructure Private Limited (FIINFRA) is engaged in the business of providing IT enabled services. The consideration paid for shares of FIINFRA in 2019-20 was ' 3,598.95 Lakhs. The fair value per share for the aforesaid acquisitions was ' 434.

2,99,419 shares purchased on February 13, 2020 and 299,418 shares purchased on March 31,2020 were acquired from AR Digital Wealth Private Limited and 2,30,415 shares purchased on March 31, 2020 were acquired in a Right issue by Ffreedom Intermediary Infrastructure Private Limited.

(1) Current ratio increased due to increase in stock of un-quoted debentures.

(2) Debt equity ratio decreased due to repayment of debt during the 2022-23 of ' 833 Lakhs

(3) Profit for the 2023-23 increased hence debt service ratio has increased

(4) Working capital increased due to increase in un-quoted debenture stock and consequently net working capital to turnover has reduced.

Explanations to items included in computing the above ratios

1. Current Ratio: Current Asset (excluding assets held for sales) over Current Liabilities

2. Debt-Equity Ratio: Debt (includes Current & Non-Current Borrowings excluding lease liabilities) over total share holders equity (Includes average of opening and closing equity capital and other equity).

3. Debt Service Coverage Ratio: Earnings available for debt service (includes profit after tax, depreciation and finance cost) over debt service (includes interest on borrowings - car loan and property loan, principal repayment made and lease payments).

4. Return on Equity Ratio: Profit After Tax over Equity (includes average of opening and closing equity capital and other equity).

5. Net capital turnover ratio: Revenue from operations over average working capital (current assets net of current liabilities).

6. Net profit ratio: Profit After Tax over Revenue from operations

7. Return on Capital employed: Earnings Before Interest & Tax over Capital Employed (which includes tangible net worth and total debt).

Note:

a. Considering the nature of business activities, only ratios applicable to the Company are provided.

The Non-GAAP measures presented may not be comparable to similarly titled measures reported by other companies.

40. FINANCIAL INSTRUMENT - FAIR VALUES

Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.

a. Discounted cash flow method has been used to determine the fair value of unquoted equity shares of other companies. The discount rate is used based on management estimates.

b. The Company has made necessary adjustments to the observable and unobservable inputs used for the purpose of valuation

Fair value measurements using significant unobservable inputs (level 3)

The following table presents the changes in level 3 items for the year ended March 31,2023 and year ended March 31, 2022.

Investment in Equity Shares of Subsidiaries of ' 8,746.01 Lakhs (PY ' 8,983.17 Lakhs) have been measured at cost. The Board of Directors at their meeting held on March 20, 2023, has approved sale of the entire shareholding in Freedom Wealth Solutions Private Limited. An active programmeme to locate the buyer and complete planned sale has been initiated. It is highly probable that the said sale transaction will be completed in the next 12 months. Accordingly the investment in Freedom Wealth Solution Private Limited is classified as assets held for sale as on March 31, 2023.

(i) The fair value of the financial assets and liabilities are included at the amount at which the instrument can be exchanged in the current transaction between willing parties, other than in a forced or liquidation sale.

(ii) Financial instruments carried at amortised cost such as cash and margin money deposits, trade and other receivables, trade payables, borrowings and other current financial instruments approximate at their fair values largely due to short term maturities of these instruments.

41. FINANCIAL INSTRUMENTS - RISK MANAGEMENT Risk management framework

The Company's activities expose it to a variety of financial risks, including market risk, credit risk, liquidity risk and currency risk. The Company's primary risk management focus is to minimise potential adverse effects on revenue. The Company's risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company's risk assessment and management policies and processes.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages liquidity risk by maintaining sufficient cash and marketable securities. The cash flows, funding requirements and liquidity of Company is regularly monitored by Management of the Company. The objective is to optimise the efficiency and effectiveness of Company's capital resources.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers, security deposits and investment securities.

Customer credit risk is managed by company as per its policy, procedures and control relating to customer credit risk. Credit quality of a customer credit risk is assessed based on an extensive credit rating scoreboard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and all possible steps taken to timely realise them.

The credit risk on Fixed Deposits with Banks, Bank Balances, Investments in Mutual Fund is limited because the counterparties are Banks, Exchanges and Mutual Fund houses who are structured market players.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market Risk comprises three types of risk: a.) Interest Rate Risk, b.) Currency Risk and

c.) Other Price Risk such as equity price risk etc.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt included in borrowings.

Currency Risk

The Company has a Foreign Representative Office in Dubai since March 07, 2021 vide its approval from UAE Government and renewed till March 06, 2024. The Company has Fixed Assets, Current Assets, Current liabilities and Expenses of Foreign Representative office situated at Dubai (UAE):

The Company is exposed to foreign exchange risk arising from foreign currency transactions with respect to the AED. Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee.

42. DIVIDENDS

The final dividends on shares is recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. Income Tax consequences of dividends on financial instruments classifies as equity will be recognised according to where the entity originally recognised those past transactions or events that generated distributable profits.

The Company declares and pay the dividends in Indian rupee. Companies are required to pay/distribute dividend after deducting applicable withholding income taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

During the year ended March 31,2023 on account of the final dividend for 2021-22, and interim for 2022-23 the Company has incurred net cash outflow of ' 4,585.71 Lakhs.

The Board of Directors in their meeting on April 12, 2023 recommend a final dividend of ' 7 per equity share for the financial year ended March 31, 2023. This pay-out is subject to the approval of shareholders in the Annual General Meeting (AGM) of the Company and if approved would result in a net cash outflow of approximately ' 2,918.18 Lakhs.

43. COST SHARING

Anand Rathi Financial Services Limited, Anand Rathi Global Finance Limited, Anand Rathi Share & Stock Brokers Limited, Anand Rathi Advisors Limited and AR Digital Wealth Private Limited incurs expenditure in the nature of Business support costs, etc. which is for the benefit of the Company. The cost so expended is reimbursed by the Company on the basis of number of employees, time spent by employees, actual billings, etc. Accordingly, the expenditure noted under the head ‘Business Support charges' in Note No. 26 are inclusive of the reimbursements.

44. ADDITIONAL REGULATORY INFORMATION

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(entities), 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 like on behalf of the Ultimate Beneficiaries, other than those disclosed in the notes to accounts

b) No funds have been received by the Company from any person(s) or entity(entities), 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, other than those disclosed in the notes to accounts

c) The Company does not have any transactions during the year with the struck off companies or balance at the end of year with such companies.

d) The Company does not have any Benami property and no proceedings have been initiated or pending against the Company for holding any Benami property, under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder

e) The Company has not traded or invested in Crypto currency or Virtual Currency during the current and previous financial year.

f) The Company has not undertaken any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

g) The Company has not been declared a ‘Wilful Defaulter' by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

45. The figures of the previous years have been regrouped / rearranged wherever necessary. There are no significant

regrouping / re-classification during the year under report.