xxi. Provisions, Contingent Liabilities and
Contingent Assets
A provision is recognised when the Company has a present
obligation (legal or constructive) as a result of past events
and it is probable that an outflow of resources will be
required to settle the obligation in respect of which a
reliable estimate can be made. When some or all of the
economic benefits required to settle a provision are
expected to be recovered from a third party, a receivable
is recognized as an asset if it is virtually certain that
reimbursement will be received and the amount of the
receivable can be measured reliably. The expense relating
to a provision is presented in the statement of profit and
loss net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within
the control of the Company or a present obligation that
arises from past events where it is either not probable
that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot be
made. Claims against the Company, where the possibility
of any outflow of resources in settlement is remote are
not disclosed as contingent liabilities. A contingent asset
is not recognised but disclosed in the financial statements
where an inflow of economic benefit is virtually certain.
xxii. Share Based Payments
Employees (including senior executives) of the Group
receive remuneration in the form of share-based payments,
whereby employees render services as consideration for
equity instruments (equity-settled transactions).
The Company measures the cost of equity-settled
transactions with employees using Black-Scholes Model
to determine the fair value of the liability incurred on
the grant date. Estimating fair value for share-based
payment transactions requires determination of the
most appropriate valuation model, which is dependent on
the terms and conditions of the grant. This estimate also
requires determination of the most appropriate inputs
to the valuation model including the expected life of the
share option, volatility and dividend yield, and making
assumptions about them.
Equity-settled share-based payments to employees are
measured by reference to the fair value of the equity
instruments at the grant date using Black- Scholes Model.
The fair value, determined at the grant date of the equity-
settled share-based payments, is charged to profit and
loss on the straight-line basis over the vesting period of
the option, based on the Company's estimate of equity
instruments that will eventually vest, with a corresponding
increase in equity.
In case of forfeiture/lapse stock option, which is not vested,
amortised portion is reversed by credit to employee
compensation expense. In situation where the stock option
expires unexercised, the related balance standing to the
credit of the Employee Stock Options Outstanding Account
is transferred within equity.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share
Also, a separate Employee stock options scheme (ESOP)
("the scheme") has been established by Aditya Birla Capital
Limited ("ABCL") (Entity having significant influence). The
scheme provides that employees are granted an option to
subscribe to equity shares of ABCL that vest in a graded
manner. The options may be exercised within a specified
period. Measurement and disclosure of Employee share-
based payment plan is done in accordance with Ind AS 102
Share Based Payments.
ABCL follows the Black-Scholes Merton Value method to
account for its stock-based employee compensation plans.
The cost incurred by the ABCL, in respect of options granted
to employees of the Company is charged to the Statement
of Profit and Loss during the year and recovered by them.
xxiii. Cash Dividend to equity holders of the
Company
The Company recognises a liability to make cash
distributions to equity holders of the Company when the
distribution is authorised and the distribution is no longer
at the discretion of the Company. As per the corporate laws
in India, a distribution is authorised when it is approved by
the shareholders except in the case of interim dividend. A
corresponding amount is recognised directly in equity.
xxiv. Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker (CODM). The CODM's function is to allocate
the resources of the Company and assess the performance
of the operating segments of the Company.
xxv. Standards notified but not yet effective:
There are no standards that are notified and not yet
effective as on the date.
Nature and Purpose of the reserves
Securities premium:
Securities Premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such
as issuance of bonus shares in accordance with the provisions of Section 52 of Companies Act, 2013. The securities premium also
includes amount transferred from Share options outstanding account upon exercise of options by employees and subsequent
allotment of shares to them.
General reserve:
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified
percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution
in a given year is more than 10% of the paid up share capital of the Company for that year, then the total dividend distribution is
less than total distributable reserve for that year.
Consequent to introduction of the Companies Act 2013, the requirement to mandatorily transfer a specified percentage of net
profit to general reserve has been withdrawn. However the amount previously transferred to the general reserve can be utilised
only in accordance with the specific requirements of the Companies Act, 2013.
Retained earnings:
Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to the
Shareholders, net of utilisation as permitted under applicable regulations.
Share option outstanding account:
The grant date fair value of equity-settled share-based payment transactions with employees and directors are recognised in the
Statement of Profit and Loss with the corresponding credit to this account over the vesting period.
Share application pending allotment:
Until the shares are allotted, the amount received is shown under the Share Application Money Pending Allotment.
NOTE: 24 MANAGEMENT RIGHTS
During financial year ended 31st March, 2015 Aditya Birla Sun Life Trustee Company Private Limited took over the mutual fund
schemes from ING Trust Company Private Limited and simultaneously the Company acquired the right to manage the said schemes
from ING Asset Management (India) Private Limited.
The consideration paid to acquire the right to manage the said schemes along with the incidental expenditure incurred
thereon aggregating to ? 3.79 crores has been treated as Investment Management Right. The Investment Management
Right has been amortized fully over a period of 120 months. For the year ended 31st March, 2025, an amount of ? 0.20 crores
(Previous year ? 0.38 crores) has been amortised.
Above figures are excluding contribution to PF and Other Funds of ? 1.65 crores (Previous year ? 1.00 crores) reimbursed to
related parties - Aditya Birla Financial Shared Services Limited & Aditya Birla Capital Limited.
b. Share based payments
Pursuant to ESOP Plan by ABCL, stock options were granted to the employees of the Company during the year. Total cost
incurred by ABCL till date is being recovered from the Company over the period of vesting of the ESOP grants. A sum of
? 1.27 crores (Previous year ? 0.48 crores) has been charged to the Statement of Profit and Loss. The balance sum of
? 6.03 crores will be recovered in future years as at 31st March, 2025.
c. Gratuity (Defined Benefit Plan)
The following table sets out the status of the gratuity plan as required under IND AS 19 as certified by actuary. Reconciliation
of opening and closing balances of the present value of the defined benefit obligation.
NOTE: 30 CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to
maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements
of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares.
No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2025.
* The management assessed that investments in subsidiaries, cash and cash equivalents, trade receivables, other financial assets, trade payables, lease
liabilities and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Accordingly,
fair value hierarchy for these financial instruments have not been presented above.
Valuation techniques used to determine fair value:
- Mutual Funds: Net Asset Value (NAV) declared by the mutual fund at which units are issued or redeemed
Alternative Investment Funds: Net Asset Value (NAV) provided by issuer fund which is arrived at based on valuation from
independent valuer for unlisted portfolio companies, quoted price of listed portfolio companies and price of recent investments
- Debt Securities:
- Fair value of debt securities which are actively traded bonds, is derived on the basis of quoted price available on the
National Stock Exchange
- Fair value of Non-Convertible Debentures, is derived on the basis of Fair Valuation report obtained from an Independent
Registered Valuer.
- Equity Instruments: On the basis of Networth of the Company
In order to assess Level 3 valuations as per Company's investment policy, the management reviews the performance of the investee
companies (including unlisted portfolio companies of venture capital funds and alternative investment funds) on a regular basis
by tracking their latest available financial statements/financial information, valuation report of independent valuers, recent
transaction results etc. which are considered in valuation process.
NOTE: 32 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's principal financial liabilities comprise trade and other payables. The Company's principal financial assets include trade
and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments
in mutual fund units, debt and equity instruments.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management
of these risks. The Company's financial risk management is an integral part of how to plan and execute its business strategies. The
Company's financial risk management policy is set by Risk Management Committee and the auditors have relied on the same. The
Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
A. Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result
from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company
is exposed to market risk primarily related to interest rate risk and price risk.
(i) 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 sensitivity of the portfolio towards the interest rate is mentioned in the
table below
Sensitivity
The following table demonstrates the sensitivity to:
• Interest Rate Risk is basis impact on debt portfolios for 1% change in interest rates.
• Hybrid funds considered at 100% as a conservative basis for assessing interest rate impact on portfolio. (which form
approximately 1% of the entire portfolio of schemes).
(ii) Foreign Currency Risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no
significant exposure to currency risk.
(iii) Price Risk
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and
related market variables including interest rate for investments in debt oriented mutual funds and debt securities,
caused by factors specific to an individual investment, its issuer and market.
The Company's exposure to price risk arises from investments in Units of mutual funds, alternative investment funds,
etc which are classified as financial asset at Fair Value through Profit and Loss and is as follows:
B. Credit Risk
Credit Risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company's has clearly defined policies to mitigate counterparty risks. Cash and liquid investments
are held primarily in mutual funds and banks with good credit ratings. Defined limits are in place for exposure to individual
counterparties in case of mutual fund houses and banks.
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control
relating to customer credit risk management. Company has major receivable from mutual fund schemes.
Expected Credit Loss on Financial Assets
The Company continuously monitors all financial assets subject to ECLs. In order to determine whether an instrument is subject
to 12 month ECL or life time ECL, the company assesses whether there has been a significant increase in credit risk or the
asset has become credit impaired since initial recognition. For trade receivables, the company applies a simplified approach
in calculating ECLs. Therefore, the company does not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. The company has determined based on historical experience and expectations
that the ECL on its trade receivables is insignificant and was not recorded. The company applies following quantitative and
qualitative criteria to assess whether there is significant increase in credit risk or the asset has been credit impaired:
• Historical trend of collection from counterparty
• Company's contractual rights with respect to recovery of dues from counterparty
• Credit rating of counterparty and any relevant information available in public domain
ECL is a probability weighted estimate of credit losses. It is measured as the present value of cash shortfalls (i.e., the difference
between the cash flows due to the company in accordance with contract and the cash flows that the Company expects to
receive).
The Company has three types of financial assets that are subject to the expected credit loss:
• Cash and cash equivalent
• Trade and other receivables
• Investment in debt securities measured at amortised cost
Trade and Other Receivables:
Exposures to customers' outstanding at the end of each reporting period are reviewed by the Company to determine incurred
and expected credit losses. Historical trends of collection from counterparties on timely basis reflects low level of credit risk.
As the Company has a contractual right to such receivables as well as the control over such funds due from customers, the
Company does not estimate any credit risk in relation to such receivables.
Cash and Cash Equivalents:
The Company holds cash and cash equivalents and other bank balances as per note 3 and 4. The credit worthiness of such
banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
Investment in Debt Securities measured at amortised cost:
Funds are invested after taking into account parameters like safety, liquidity and post tax returns etc. The Company avoids
concentration of credit risk by spreading them over several counterparties with good credit rating profile and sound financial
position. The Company's exposure and credit ratings of its counterparties are monitored on an ongoing basis.
NOTE: 35 EMPLOYEE STOCK OPTIONS SCHEME
At the Board Meeting held on 14th April, 2021 the Company approved the grant of not more than 46,08,000 Equity Shares by way
of grant of Stock Options and restricted Stock Units ("RSUs"). Out of these, the Nomination, Remuneration and Compensation
Committee has granted 32,32,899 ESOPs, 5,08,117 PRSU, 1,96,374 Long Term RSU & 2,46,863 RSU Founder under the Scheme
titled "Aditya Birla Sun Life AMC Limited Employee Stock Option Scheme 2021" in 4 categories of Long Term Incentive Plans ("LTIP")
identified as LTIP 1, LTIP 2, LTIP 3 & LTIP 4 respectively. The Scheme allows the Grant of Stock options to employees of the Company
(whether in India or abroad) that meet the eligibility criteria. Each option comprises one underlying Equity Share. There are no cash
settlement alternatives. The Group accounts for the employees stock option scheme as an equity-settled plan.
The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not applicable.
NOTE: 39
The Company does not have any transactions which were not recorded in the books of account but offered as income during the
year in the income tax assessment.
NOTE: 40
The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
NOTE: 41
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
NOTE: 42
The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
NOTE: 43
The Company has complied with the number of layers prescribed under section 186(1) and clause 87 of section 2 of the Companies
Act 2013.
NOTE: 44
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a. 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
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
a. 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
b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
NOTE: 46
The Company did not enable audit trail on database feature in Sun System due to application performance consideration in
FY 2023-24 however video recording via PAM (Privilege Access Management) tool was available for rolling 6 months period. This
was remediated by the company on 30th May, 2024.Further no instance of audit trail feature being tampered with was noted in
respect of the software.
NOTE: 47 EVENTS AFTER THE REPORTING PERIOD
The Board of Directors have proposed a final dividend of ? 24 per equity share (face value of ? 5 each) for the year ended March
31, 2025, subject to the approval of the shareholders at the ensuing Annual General Meeting.
As per our report of even date attached For and on behalf of the Board of Directors of
For S.R.Batliboi & Co LLP Aditya Birla Sun Life AMC Limited
Chartered Accountants
Firm's Registration No.: 301003E/E300005
Rutushtra Patell Vishakha Mulye A. Balasubramanian
Partner Director Managing Director and CEO
Membership No. 123596 DIN: 00203578 DIN: 02928193
Pradeep Sharma Prateek Savla
Chief Financial Officer Company Secretary
ACS No. 29500
Place: Mumbai Place: Mumbai
Date: 28th April, 2025 Date: 28th April, 2025
|