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NOTES TO ACCOUNTS

Aditya Birla Capital Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 20487.60 Cr. P/BV 2.19 Book Value (₹) 42.41
52 Week High/Low (₹) 133/78 FV/ML 10/1 P/E(X) 23.53
Bookclosure 27/08/2018 EPS (₹) 3.96 Div Yield (%) 0.00
Year End :2019-03 

Note:

1. Aggregate Amount of Quoted Investment Rs,235.88 Crore (31st March, 2018 Rs,235.88 Crore and 1st April, 2017 Rs,235.88 Crore) Market Value of Rs,195.91 Crore (31st March, 2018 Rs,208.58 Crore and 1st April, 2017 Rs,131.09 Crore).

2. Aggregate Book Value of Unquoted Investment ' 8,473.30 Crore (31st March, 2018 ' 7,687.24 Crore; 1st April, 2017 ' 4,906.34 Crore).

3. Aggregate Amount of Diminution in Value of Investment Rs,36.65 Crore (31st March, 2018 Rs,12.64 Crore; 1st April, 2017 Rs,12.64 Crore).

4. All above investments are in India itself.

2. Term/Right Attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs,10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of the equity shares held by the shareholders.

* During the previous year Pursuant to the Composite Scheme of Arrangement (the “Scheme”) amongst the erstwhile Aditya Birla Nuvo Limited (ABNL), Grasim Industries Limited (Grasim) and the Company 920,266,951 equity shares of Rs,10 each were issued to Grasim as fully paid up in exchange of the assets of the Financial Services Business.

4. Reclassification of Authorized Share Capital

During the previous year the Company had reclassified its Authorized Share Capital. The revised structure comprise of 4,000,000,000 Equity shares of Rs,10 each.

5. During the last five years there were no Bonus Shares were issued.

6. The shares reserved for issue under Employee Stock Option Plan (ESOP) of the Company (Refer Note No. 33 & 34).

29 Deferred Tax Liabilities/Assets

The Company has not recognized deferred tax assets on brought forward business losses, capital losses, unabsorbed depreciation and other deductible timing differences (net of future taxable capital gains) aggregating to ' 43.75 Crore (Rs,28.78 Crore as at 31st March, 2018; ' NIL as at 1st April, 2017) since there is no certainty that future taxable profits against which such losses can be utilized would be available.

A Deferred tax liability on mark to mark gain on investment in private equity funds of Rs,14 Crore as at 1st April, 2017 has not been recognized since the investments made by the private equity fund are diversified in short-term and long-term investments. These investments will carry different rates of income tax/exemptions at the time of exits.

30 Contingent Liabilities and Commitments

a) Contingent Liabilities

Aditya Birla MyUniverse Limited (formerly known as Aditya Birla Customer Services Limited) (ABMU), a subsidiary of the Company, has issued 0.001%-Compulsorily Convertible Preference Shares (CCPS) aggregating to Rs,60 Crore to International Finance Corporation (IFC) vide Shareholders' Agreement, dated 19th December, 2014, and Subscription Agreement dated 19th December, 2014 (SHA). Under the said SHA, the Company has granted to IFC an option to sell the shares to the Company at fair valuation from the period beginning on the expiry of 60 months of the subscription by IFC up to a maximum of 120 months from the date of subscription by IFC, in the event ABMU fails to provide an opportunity to IFC to exit from ABMU within 60 months from the date of subscription by IFC in the form of Listing, secondary sale or acquisition, etc. In the event ABMU fails to fulfill its obligation, the Company will be obligated to fulfill this obligation.

b) Capital Commitments

i) There is no capital commitment (' Nil as at 31st March, 2018; Rs,1.02 Crore as at 1st April, 2017) towards Intangible Assets under Development for Digital/Technology related projects.

ii) The Company has Rs,2.00 Crore commitments towards Equity Participation in any new formed Subsidiary Aditya Birla Capital Investments Private Limited.

The Company has ' NIL as at 31st March, 2018 as commitments towards Equity Participation and

The Company has Rs,2.00 Crore as at 1st April, 2017 as commitments towards Equity Participation in Aditya Birla ARC Limited.

iii) Pursuant to the Shareholders' Agreement entered into with Sun Life of Canada by Aditya Birla Capital Limited, in respect of Aditya Birla Sun Life Insurance Company Limited, the Company agreed to infuse its share of capital from time to time to meet the solvency requirement prescribed by the regulatory authority.

Transfer of investments in Aditya Birla Sun Life Insurance Company Ltd., is restricted by the terms contained in Shareholder Agreements entered into by the Company.

31 Leases

The Company has entered into operating lease related to office premises and employee housing accommodation facility provided. The security deposits has been recognized at fair value as per Ind AS 109, at initial recognition the carrying value of the rent deposit is the present value of all expected future principal repayments discounted using market rates prevailing at the time of origination.

34 ABCL Incentive Plan 2017

The Scheme titled as “ABCL Incentive Scheme for Stock Options and Restricted Stock Units - 2017 (ABCL Incentive Scheme)” was approved by the shareholders through postal ballot on 10th April, 2017. The Nomination, Remuneration and Compensation Committee of the Company at their meeting held on 15th January, 2018, granted 1,465,927 ESOPs and 252,310 Restricted Stock Units (RSUs) (Collectively called as “Stock Options”) to the eligible grantees pursuant to the Composite Scheme of Arrangement between erstwhile Aditya Birla Nuvo Limited (now merged with Grasim Industries Limited), Grasim Industries Limited and Aditya Birla Capital Limited (formerly known as Aditya Birla Financial Services Limited). Out of the above, the Company; has granted 195,040 ESOPs and 45,060 RSUs under this Scheme to a Director of the Company. The Stock Options allotted under the Scheme are convertible into equal number of Equity Shares.

The vesting conditions and the vesting dates under the ABCL Incentive Scheme shall follow the same vesting conditions, as applicable to the Grantees under the corresponding Grasim Employee Benefit Scheme 2006 and 2013

35 Related Party Disclosures

Names of related parties where control exists

Holding Company

Grasim Industries Limited (Aditya Birla Nuvo Limited till 30th June, 2017)

Subsidiaries

Aditya Birla PE Advisors Private Limited (Formerly known as Aditya Birla Capital Advisors Private Limited)

Aditya Birla Capital Investments Private Limited (w.e.f. 12th October, 2018)

Aditya Birla MyUniverse Limited (Formerly known as Aditya Birla Customer Services Limited)

Aditya Birla Financial Shared Services Limited

Aditya Birla Trustee Company Private Limited

Aditya Birla Money Limited

Aditya Birla Money Mart Limited

Aditya Birla Insurance Brokers Limited

Aditya Birla Finance Limited

Aditya Birla Housing Finance Limited

Aditya Birla Health Insurance Co. Limited

ABCAP Trustee Company Private Limited

Aditya Birla Stressed Asset AMC Private Limited

Aditya Birla Commodities Broking Limited (Merge to Aditya Birla Money Limited w.e.f. 1st April, 2018)

Aditya Birla Money Insurance Advisory Services Limited (100% Subsidiary of Aditya Birla Money Mart Limited)

Aditya Birla Sun Life Insurance Company Limited (w.e.f. 23rd March, 2017) (Formerly known as Birla Sun Life Insurance Company imited) Aditya Birla Sun Life Pension Management Limited (100% Subsidiary of Birla Sun Life Insurance Company Limited- w.e.f. 23rd March, 2017) Aditya Birla ARC Limited (w.e.f. 10th March, 2017)

Joint Ventures

Aditya Birla Sun Life AMC Limited (Formerly known as Birla Sun Life Asset Management Company Limited)

Aditya Birla Sun Life AMC (Mauritius) Limited (100% Subsidiary of Aditya Birla Sun Life AMC Limited)

Aditya Birla Sun Life Asset Management Company Limited; Dubai (100% Subsidiary of Aditya Birla Sun Life AMC Limited)

Aditya Birla Sun Life Asset Management Company Pte. Limited; Singapore (100% Subsidiary of Aditya Birla Sun Life AMC Limited)

Aditya Birla Sun Life Trustee Private Limited (Formerly known as Birla Sun Life Trustee Company Private Limited)

Aditya Birla Wellness Private Limited (w.e.f. 23rd June, 2016)

Entity in which Key Managerial Personnel is exercise control

Aditya Birla Management Corporation Private Limited (from 1st January, 2019)

Fellow Subsidiaries

UltraTech Cement Limited

Parent Having Significant Influence

Vodafone Idea Limited (Associate of Ultimate Parent Company upto 31st August, 2018)

Aditya Birla Idea Payments Bank Limited

Trust-Employee Retirement Benefits

Provident Fund of Aditya Birla Nuvo Limited Aditya Birla Nuvo Employee Gratuity Fund Grasim Industries Limited Unit Indian Rayon Grasim Industries Limited - Employee's Gratuity Fund

Key Managerial Personnel

Mr. Ajay Srinivasan, (Chief Executive Officer)

Mrs. Pinky Mehta (Whole-time Director from 1st July, 2017 to 26th October, 2018) Independent Directors

Mr. Durga Prasad Rathi (Ceased to be a Director w.e.f. 23rd June, 2017)

Mrs. Vijayalakshmi Rajaram Iyer Mr. Arun Adhikari Mr. P. H. Ravikumar Mr. S. C. Bhargava

Refer Annexure 1 for the transactions with related parties.

36 Retirement Benefits

Disclosure in respect of Employee Benefits pursuant to Ind AS -19

iii) Funding Arrangement and Policy

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

The trustees of the plan are required to invest the funds as per the prescribed pattern of investments laid out in the income tax rules for such approved schemes. 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 to manage risk actively.

Estimated amount of contribution expected to be paid to the fund during the annual period being after the Balance Sheet date is Rs,1.48 Crore (Previous Year Rs,2.23 Crore).

37 Fair Values

The management assessed that Fair Values of Financial Assets and Liabilities are approximately their carrying values.

38 Financial Instruments - Accounting Classifications and Fair Value Measurements

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

Principles for Estimating Fair Value

The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in the table.

Fair Value Hierarchy

The table below analyses financial instruments carried at fair value, by valuation method at 31st March, 2019. The different levels have been defined as follows:

Level 1: Category includes financial assets and liabilities that are measured in whole or in significant part by reference to published quotes in an active market.

Level 2: Category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions. These include assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes and assets that are valued using the Company's own valuation models whereby the material assumptions are market observable. The majority of Company's over-the-counter derivatives and several other instruments not traded in active markets fall within this category.

Level 3: Category includes financial assets and liabilities measured using valuation techniques based on non-market observable inputs. This means that fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. However, the fair value measurement objective remains the same, that is, to estimate an exit price from the perspective of the Company. The main asset classes in this category are unlisted equity investments as well as unlisted funds.

The carrying amount of trade receivable, trade payable, debt securities, other financial liabilities, loans, other financial assets, cash and cash equivalents as at 31st March, 2019, 31st March, 2018 and 1st April, 2017 are considered to the same as fair values, due to their short-term nature. These are classified as Level 3 fair value hierarchy due to inclusion of unobservable inputs including counter party credit risk. During the reporting period ending 31st March, 2019, there were no transfers between Level 1 and Level 2 fair value measurements.

Assumptions to above:

* The fair valuation of preference shares is based on independent valuers report.

* The fair valuation of unquoted mutual funds units is done based on NAV of units.

* The fair valuation of Private Equity Fund is done based on certified NAV of funds.

39 Financial Risk Management

The Company, being a Core Investment Company as per the Core Investment Companies (RBI) Directions 2016, is required to invest or lend majority of its funds to its subsidiaries and Joint Ventures. The Company's principal financial liabilities comprise borrowings and trade and other payables. The main purpose of these financial liabilities is to finance and support the Company's operations. The Company's principal financial assets include inter corporate deposits, loans, cash and cash equivalents and other receivables.

The Company is exposed to market risk, credit risk, liquidity risk and operational and business risk. The Company's senior management oversees the management of these risks. The Company's senior management is supported by a Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Committee provides assurance to the Company's senior management that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The major risks are summarized below:

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. In the case of the Company, market risk primarily impacts financial instruments measured at fair value through profit or loss. These are primarily unquoted Compulsorily Convertible Preference Shares of subsidiaries and investments in mutual funds and other alternate funds where investments are not significant in relation to the size of its total investments. The fair value investments of these investments are regularly monitored.

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 does not have exposure to the risk of changes in market interest rate as it has debt obligations with fixed interest rates which are measured at amortized cost.

Credit Risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to a financial loss. The Company is exposed to credit risk from its financing activities towards inter corporate deposits to subsidiaries where no significant impact on credit risk has been identified.

Equity Price Risk

The Company's investments in non-listed equity securities are accounted at cost in the financial statements net of impairment. The expected cash flows from these entities are regularly monitored to identify impairment indicators.

Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company's corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management.

The Company manages its liquidity requirement by analyzing the maturity pattern of Company's cash flows of financial assets and financial liabilities. The Company's objective is to maintain a balance between continuity of funding and flexibility through issuance of equity shares, commercial papers, etc. The Company invests its surplus funds in debt schemes of mutual funds, which carry low mark to market risks. Also Refer Note No. 40 for maturity analysis of assets and liabilities.

40 Maturity Analysis of Assets and Liabilities

The table below shows an analysis of assets and liabilities analyzed according to when they are expected to be recovered or settled. Loans and advances to customers, the Company uses the same basis of expected repayment behavior as used for estimating the EIR. Issued debt reflect the contractual coupon amortizations.

Note: The current liabilities of the Company exceed its current assets. The Company has “AAA” long term rating from ICRA (which is the highest long term rating) and therefore high acceptability in the market. Given the track record of the company the management is confident to reduce the mismatch by raising long term funds through equity or other long term instrument(s) and planning accordingly.

41 Impairment on Financial Instruments Background of Expected Credit Loss

Expected Credit loss is a calculation of the present value of the amount expected to be lost on a financial asset, for financial reporting purposes. Credit risk is the potential that the obligor and counterparty will fail to meet its financial obligations to the lender. This requires an effective assessment and management of the credit risk at both individual and portfolio level

The key components of Credit Risk assessment are:

1. Probability of Default (PD): represents the likelihood of default over a defined time horizon.

2. Exposure at Default (EAD): represents how much the obligor is likely to be borrowing at the time of default.

3. Loss Given Default (LGD): represents the proportion of EAD that is likely to be lost post-default.

The definition of default is taken as 90 days past due for all retail and corporate loans.

Delinquency buckets have been considered as the basis for the staging of all loans in the following manner:

- 0-30 days past due loans classified as stage 1

- More than 30-90 days past due loans classified as stage 2 and

- Above 90 days past due loans classified as stage 3

EAD is the total amount outstanding including accrued interest as on the reporting date.

The ECL is computed as a product of PD, LGD and EAD.

Non-Individual Loans

1.1 Credit Quality of Assets

The Non-individual/corporate book is assessed at the loan type level and the provisioning is done at an account level. In certain cases, the assessment is done at an account level based on past experience for future cash flows from the project.

The 12 month PD has been applied on stage 1 loans. The PD term structure i.e Lifetime PD has been applied on the stage 2 loans according to the repayment schedule for stage 2 loans and PD is considered to be 1 for stage 3 loans

The increase in ECLs of the portfolio was driven by an increase in the gross size of the portfolio and movements between stages as a result of increases in credit risk.

42 Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

Based on the information received by the Company from “suppliers” regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, there are no amounts due to any suppliers covered under this Act as at the balance sheet date and hence, disclosures relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given. Auditors have relied on this.

43 During the current year, the Company has reassessed its value of investments in Aditya Birla Money Limited (“ABML”) based on the Company's last 2 years profitable business performance and future business plan. Considering investment of long term and strategic nature and based on independent valuation report obtained by the Company, no additional impairment provision is required to be made in the financial statements as at 31st March, 2019 in this regard.

In the previous years the Company had reassessed its value of investments in Aditya Birla Money Limited (“ABML”) and had made a provision of Rs,12.42 Crore as at 31st March, 2014 being 5% against equity shares and the same is carried as at 31st March, 2019.

44 During the previous year, the Company has issued and allotted 48,400,000 Equity Shares of Rs,10 each at a premium of Rs,135.40 per share which were subscribed by P I Opportunities Fund - 1 (AIF).

45 Composite Scheme of Arrangement:

The Composite Scheme of Arrangement (the “Scheme”) amongst the erstwhile Aditya Birla Nuvo Limited (“ABNL”), Grasim Industries Limited (“Grasim”) and Aditya Birla Capital Limited (formerly known as Aditya Birla Financial Services Limited) (“ABCL”), was approved by the National Company Law Tribunal Bench at Ahmadabad on 1st June, 2017.

Pursuant to the Scheme,

- ABCL has become a subsidiary of Grasim with effect from 1st July, 2017

- The Board of Directors of Grasim and ABCL executed the demerger of the financial services business (“Demerged Undertaking”) from amalgamated Grasim into ABCL effective on 4th July, 2017 and accordingly the financial services business of amalgamated Grasim has been demerged into ABCL with effect from 4th July, 2017.

- In accordance with the Scheme, the ABCL has,

- recorded transferred assets and liabilities pertaining to Demerged Undertaking at the respective carrying values as appearing in the books of account of Grasim on the date of demerger;

- issued 920,266,951 Equity Shares of Rs,10 each, which have been issued and recorded at face value, to the shareholders' of Grasim as on record date; and

- difference between the value of assets and liabilities pertaining to Demerged Undertaking, after adjusting the amount credited to share capital, has been recognized as Capital Reserve.

# The Company also paid a sum of Rs,25 Crore towards stamp duty.

- Further, to fulfil the Company's commitments under the Scheme, the Board of Directors of the Company have approved the issuance of stock options and restricted stock units under the ABCL Incentive Scheme for Stock Options and Restricted Stock Units 2017 (the “ABCL Incentive Scheme”) for granting of stock options and restricted stock options to the eligible grantees of Grasim Employee Stock Option Scheme 2006and Grasim Employee Stock Option Scheme 2013 (the “Grasim Employee Benefit Schemes”) in the same ratio as the ratio in which shares were issued to the shareholders of Grasim. Under the arrangement, the Company is obligated to issue equity shares not exceeding 1,718,237 at the face value of Rs,10 each against 1,465,927 stock options and 252,310 restricted stock units granted by it to eligible employees of Grasim who held grants of stock options and restricted stock options of Grasim Employee Benefit Schemes. The stock options and restricted stock options thus granted under the ABCL Incentive Scheme would be deemed to be held by the eligible employees of Grasim for determining the minimum vesting period and the vesting conditions and dates for stock options and restricted share units under the ABCL Incentive Scheme would follow the same vesting conditions as applicable to the grantees of for stock options and restricted share units under the Grasim Employee Benefit Schemes. Accordingly, ' 7.37 Crore representing the pro-rata amount of the vested Employee Stock Options Reserve created by Grasim against the Grasim Employee Benefit Schemes has been transferred to the Company against which sum the Company will be entitled to an equivalent cash reimbursement. The balance pro-rata amount of Employee Stock Options Reserve would be transferred to the Company by Grasim upon vesting of the stock options and restricted stock options of Grasim Employee Benefit Schemes with a corresponding cash reimbursement.

46 With effect from 11th October, 2017, 64,422,405 Global Depositary Shares (GDSs) representing 64,422,405 Equity Shares of Rs,10/- each have been admitted for trading on the Luxembourg Stock Exchange.

47 During the previous year, the Company has approved the grant of 24,062,864 Employee Stock Options (ESOPs) and 5,742,636 Restricted Stock Units (RSUs) in accordance with the Employee Stock Option Scheme, 2017 to its employees and employees of subsidiary companies. Further, in continuation to existing Scheme the Company additionally grant 300,000 RSUs and ESOPs 1,623,834 to employees of subsidiary companies.

48 The Company has investment in Equity Shares and Preference Shares of Aditya Birla MyUniverse Limited (“ABMU”) of ' 71.11 Crore (Previous year ' 71.11 Crore) and of Rs,60 Crore (Previous year Rs,60 Crore) respectively and Loan given to ABCSL-Employee Welfare Trust of Rs,10.11 Crore (Previous year Rs,10.11 Crore). Further, the Investee Company's is making substantial losses and its net worth has been eroded.

During the current year, the Company has made an assessment of its investments in Equity Shares of Aditya Birla MyUniverse Limited ' 71.11 Crore and Loan given to ABCSL-Employee Welfare Trust Rs,10.11 Crore. Based on such assessments, board approved business plan and independent valuation report, an amount of Rs,24.01 Crore and Rs,6.31 Crore (Previous year ' 0.62 Crore) has been provided as impairment loss respectively.

49 The Company has investment in 0.1%-Compulsory Convertible Debentures (CCD) of Aditya Birla Money Mart Limited (“ABMML”) of Rs,33.75 Crore (Previous year Rs,30.96 Crore). The Investee Company (ABMML) is making losses and its net worth has been eroded. Considering the plans and the investment being strategic and long-term in nature, diminution in the value of the said investment has been considered as temporary and hence no provision is required to be made in financial statements as at 31st March, 2019 in this regard.

50 The Company has Long-term incentive plan for selective employees. Long-term Incentive Plan includes future encashment or availment, at the option of the employee subject to the rules framed by the Company which are expected to be availed or encashed beyond 12 months from the end of the year and long term incentive payable to employees on fulfillment of criteria prescribed by the Company. On the basis of proposed scheme the Company has made provision of ' 8.26 Crore.

51 The Company has short-term rating viz. “(ICRA) A1 ” and “(CRISIL) A1 ” accordingly the Company raised funds through Commercial Paper to mitigate working capital requirements.

52 During the current year, the Company has let out its property on rent. Further, the Company has reclassified its property under Investment Property as per Ind AS 40. There is no change in method of calculation of depreciation, rate and useful life as specified earlier.

Investment Property Fair Value

The Company has carried out the valuation activity through the Independent valuer to assess fair value of its Investment Property. As per report provided by independent valuer the fair value is Rs,16.03 Crore as on 31st March, 2019. The fair value of Investment Property have been derived using the Direct Comparison Method based on recent market prices without any significant adjustments being made observable data. Accordingly, fair value estimates for Investment Property is classified as level 3.

The Company has no restrictions on the reliability of its Investment Property and has no contractual obligations to purchase, construct or develop Investment Property.

Information regarding Income & Expenditure of Investment property

53 During the current year, the Company has provided; services to its subsidiaries and other financial services group companies (“Group”), such as strategy and business planning, risk and compliance, technology and operational support, marketing and public relations, human resources, etc. The Company has allocated the cost to the respective companies on the basis of time spent by senior management employees.

54 The Company's pending litigations comprise of claims by or against the Company primarily by the employees/customers/suppliers, etc. and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where Provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial statements and appropriate disclosure for contingent liabilities is given refer Note No. 30.

55 Income Tax Disclosure

The Major Components of Income Tax Expense for the years ended 31st March, 2019 and 31st March, 2018 are:

56 The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses need to be provided as required under any law / accounting standards.

57 Disclosure as required under Annexure I of Master Direction - Core Investment Companies (Reserve Bank), Direction, 2016.

Schedule to the Balance Sheet of a non-deposit taking Core Investment Company (Refer Annexure 2).

Disclosure of details as required under Clause No. 19 of Master Direction - Core Investment Companies (Reserve Bank) Direction, 2016.

a) Provisions as per CIC Guidelines - The Company has provided an amount of ' 0.46 Crore as per guidelines.

b) Exposure to real estate sector, both direct and indirect - Nil

c) Maturity pattern of assets and liabilities

58 First time Adoption of Ind AS

These financial statements, for the year ended 31st March, 2019, are the first financial statements the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March, 2018, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013 (Previous GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March, 2019, together with the comparative period data as at and for the year ended 31st March, 2018, as described in the summary of significant accounting policies. In preparing these financial statements, the Company's opening balance sheet was prepared as at 1st April, 2017, the Company's date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements, including the balance sheet as at 1st April, 2017 and the financial statements as at and for the year ended 31st March, 2018.

Exemptions applied:

Ind AS 101 allows, first time adopters, certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

i) The Company has elected to apply Previous GAAP carrying amount of its equipments as deemed cost as on the date of transition to Ind AS, after making necessary adjustments, i.e. capitalization of equipments in accordance with Ind AS.

ii) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has done the assessment of lease in contracts based on conditions in prevailing as at the transition.

iii) The Company has elected to apply previous GAAP carrying amount of its investment in subsidiaries, associates and joint venture as deemed cost as on the date of transition to Ind AS.

Exceptions:

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements.

i) Estimates

The estimates at 1st April, 2017 and at 31st March, 2018 are consistent with those made for the same dates in accordance with Previous GAAP (after adjustments to reflect any differences if any, in accounting policies) apart from the following items where application of Previous GAAP did not require estimation:

- FVPTL / FVOCI - equity and debt instrument

- Impairment of financial assets based on expected credit loss model

The estimates used by the Company to present these amounts in accordance with the Ind AS reflect conditions as at the transition date and as at 1st April, 2017, the date of transition to Ind AS and as of 31st March, 2018.

ii) De-recognition of financial assets and financial liabilities

The Company has elected to apply the de-recognition requirements for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after date of transition to Ind AS.

iii) Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

Notes to Adjustments :

A. Investments

Under the Previous GAAP, the Company had accounted for long term investment measured at cost less provision for other than temporary diminution in the value of investments, Current investments were carried at lower of cost and fair value.

Under Ind AS, the Company has designated investments at amortized cost or fair value through profit and loss (FVTPL) resulting fair value changes of the investments is recognized in equity as at the date of transition and subsequently in the Statement of Profit and Loss for the year ended 31st March, 2018.

B. Share Based Payments

Under the previous GAAP, the cost of equity- settled employee share based plan were recognized using the intrinsic value method. Under Ind AS, the Cost of equity settled share based plan is recognized based on the fair value of the options as at the grant date. There is no impact on total equity.

C. Other Adjustments

Under the previous GAAP, security deposits are recorded at their transaction value. Under Ind AS, the same are required to be recognized at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposits has been recognized as deferred rent expenses. Security deposits measured subsequently at amortized cost and the difference between unwinding of deposits has been recognized as interest income on security deposits in equity as at the date of transition and subsequently in profit or loss for the year ended 31st March, 2018.

59 Reconciliation of Statement of Cash Flows

There were no material differences between statement of cash flows presented under Ind AS and Previous GAAP.

60 Segment Reporting

The main business of the Company is Investment activity, hence there are no separate reportable segments as per Ind AS 108 on ‘Operating Segment'.

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Attention Investors :
KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
Attention Investors :
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.
“Investment in securities market are subject to market risks, read all the related documents carefully before investing”.