1. Corporate Information

Shriram Asset Management Company Limited (‘the Company’) was incorporated under the Companies Act, 1956 on July 27, 1994 and received the Certificate of Commencement of Business on 5th December, 1994. The Company received permission from Securities and Exchange Board of India (SEBI) to act as the Asset Management Company of Shriram Mutual Fund on November 21, 1994 vide registration no. MF/017/94/4.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). The financial statements have been prepared under the historical cost convention or fair values as per the requirements of Ind AS. Accounting policies have been consistently applied to all periods presented, unless otherwise stated.

The preparation of financial statements requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosed amount of contingent liabilities.

The financial statements are presented in Indian Rupees (INR), except when otherwise indicated.

3. Presentation of financial statement

The financial statements of the Company are presented as per Schedule III (Division III) of the Companies Act, 2013. Financial assets and financial liabilities are generally reported on a gross basis except when, there is an unconditional legally enforceable right to offset the recognised amounts without being contingent on a future event and the parties intend to settle on a net basis in the following circumstances:

i. The normal course of business

ii. The event of default

iii. The event of insolvency or bankruptcy of the Company and/or its counterparties

4. Statement of compliance

These standalone or separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under Section 133 of the Companies Act, 2013 and the other relevant provisions of the Act.

The aforesaid financial statements have been approved by the board of directors in the meeting held on May 08, 2019.

The Company has no restrictions on the realisability of its investment properties or remittance of income and proceeds of disposal. Further, there are no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

4.1 Fair value of the Company’s investment properties

The fair value of the Company’s investment properties as at March 31, 2019 was arrived at on the basis of local enquiry carried out by the company.

4.2 Description of valuation techniques used and key inputs to valuation on investment properties

Properties, held to earn rentals and/or capital appreciation are classified as investment property and measured and reported at cost, including transaction costs. It is the value of the property at which it can be sold in open market at a particular time free from forced value or sentimental value. Investment properties (other than land) are depreciated using WDV method over their estimated useful lives. The useful life has been determined based on technical evaluation by management

4.3 Terms/rights 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 share is entitled to one vote per share. Dividend, as and when recommended by the Board of Directors, is subject to approval of the shareholders in their Annual General Meeting. The Directors have not recommended any dividend for the year ended March 31, 2019.

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

4.4 The entire lot of Redeemable Non Convertible Preference Shares (RNCPS) were issued to meet the minimum net worth requirement as defined under SEBI (Mutual Funds) Regulations, 1996 as amended from time to time. Hence these RNCPS form a part of the eligible net worth & has been accordingly presented as part of Share Capital. Fair Market Value (FMV) of these RNCPS (not being listed on any Stock Exchange and redeemable at par) is equivalent to its Face Value.

Terms/rights attached to Redeemable Non Convertible Preference Shares (RNCPS)

a) These RNCPS carry non cumulative dividend @ 0.01% and 6% p.a. Each holder of RNCPS is entitled to one vote per share only on resolutions placed before the Company which directly affect the rights attached to RNCPS. The RNCPS shall be redeemed by the Company at par on expiry of five years/ten years from the date of allotment /issue of Preference Shares as per norms attached with the issue.

b) The Company shall, however, has the right to redeem the RNCPS before the due date.

c) Subject to the applicable laws, and the approvals/consents as may be necessary or required, the date of redemption of RNCPS can be extended for such further term as may be mutually agreed to between the Company and the holder of RNCPS.

d) During the year no provision has been made for dividend on Preference Shares on account of the loss for the year and carry forward losses.

Notes:

i) Gratuity is payable as per Company’s scheme as detailed in the report.

ii) Actuarial gain/loss is accounted for in the period of occurrence under Other Comprehensive Income (OCI).

iii) All above figures of OCI are gross of taxation.

iv) Salary escalation and attrition rate are considered as advised by the Company; they appear to be in line with the Industry practice considering promotion and demand & supply of the employees.

v) Maturity Analysis of Benefit Payments is undiscounted cash flows considering future salary, attrition & death in respective year for members as mentioned above.

vi) Average Expected Future Service represents Estimated Term of Post - Employee Benefit Obligation.

Note: An amount of Rs. 22,785,000/- representing disputed redemption money on 35,00,000 units of “Risk Guardian 95” is held by the Company in trust to be paid to the rightful owner when the dispute is settled by the appropriate court/forum. This amount has been deployed in NCD now (earlier in subordinated bond) and along with interest accrued thereon, the present value of which is Rs. 12,85,38,265/- (net of tax). The disputed amount of Rs. 22,785,000/- along with interest accrued thereon has been recognised in the accounts as payable to the rightful owner.

4.5 Lease Rent

The Company has entered into agreements for operating leases in respect of office premises taken on lease. All these leases are cancellable.

a)The lease expenditure recognised in the Statement of Profit and Loss : Expenditure Rs. 16,20,168/-(Previous year Rs. 14,51,088/-)

b) Under these agreements refundable interest free deposits are given.

c) All these agreements have restriction on further leasing.

d) Agreements for office premises provide for revision in the rent.

5. Segment Reporting

Based on the guiding principles given in INDAS-108, issued by the Institute of Chartered Accountants of India, Company’s primary business : Investment manager of Shriram Mutual Fund. As the company’s business activity falls within a single primary business segment, the disclosure requirements of INDAS-108, are not applicable.

6. The Company does not have ‘suppliers’ registered under Micro, Small and Medium Enterprises Development (“MSMED”) Act, 2006. Accordingly, no disclosure relating to amounts unpaid as at the year end, together with interest paid/payable are required to be furnished.

7. There are no capital commitments as on March 31,2019 and March 31,2018.

8. In view of the Loss incurred during the period, no provision for Income Tax is considered necessary.

9. No dividend is proposed on 14,00,000 (Fourteen Lakhs) (0.01%) RNCPS of Rs. 100/- each fully paid up and 35,00,000 (Thirty Five Lakh) (6%) RNCpS of Rs. 100/- each fully paid up, in view of loss incurred by the Company.

10. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

# Shriram Value Services Limited (SVS) became Subsidiary of Shriram Capital Limited (Ultimate Holding Company w.e.f. February 28, 2019. Company’s transaction with SVS towards HR, IT and Network Support Services for the year amounts to Rs. 3,30,000/- against which an amount of Rs. 165,000/- is outstanding including the above mentioned amount of Rs. 27,500/-.

11. Corresponding figures for the previous periods have been regrouped wherever necessary to confirm the current period classification.