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.
a. Term/right attached to equity shares
The Company has only one class of equity shares having a par value of I 5 per share. Each holder of equity shares is entitled to
one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the
Company after distributions of all preferential amounts. However, no such preferential amount exist currently. The distribution
will be in the proporation to the number of equity shares held by the shareholders.
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
transfered 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
accordancewithapplicableregulations.Thepurposeofthesetransferswastoensurethatifadividenddistributioninagivenyearismorethan10%
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.
NOTE: 25 EMPLOYEE BENEFITS
In accordance with the Indian Accounting Standard (Ind AS) 19 "Employee Benefits", the Company has classified the various benefits
provided to the employees as under:
a. Defined Contribution Plan
Defined Contribution Plan - The Company has recognized the following amounts in the Statement of Profit and Loss Account
which are included under contribution to Provident Fund and other fund.
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 ? 11.67 crores (Previous
year ? 1.27 crores) has been charged to the Statement of Profit and Loss. The balance sum of ? 16.70 crores will be recovered in
future years as at 31st March, 2026.
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.
A. Sensitivity Analysis:
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase
and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions
occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis are
given below:
d. Labour Codes
The Government of India has implemented four new Labour Codes ("Codes"), including the Code on Wages, 2019, with effect from
21st November, 2025. The Company has assessed the incremental impact of these changes based on an actuarial valuation and
has recognised a charge amounting to ? 2.82 crores in the Statement of Profit and Loss for the year ended 31st March, 2026 and
reported it under "Exceptional Items".
The Company has assessed its employee benefit obligations and is in compliance with the new Codes. It continues to recognise
the benefits in accordance with the extant laws of the new Codes, Company's policy and applicable Indian accounting standards.
The Government is in the process of notifying the related rules under the new Codes. The impact of these rules will be evaluated
and accounted for in accordance with the applicable Indian accounting standards in the period in which they are notified and will
be in compliance with the new Codes.
NOTE: 28 SEGMENT INFORMATION
The CEO of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - "Operating Segments".
The CODM evaluates the Company's performance and allocates resources. The Company's operations predominantly relate to providing
asset management services, portfolio management and other advisory services. In the opinion of the CODM and Management, the risks
and rewards attached to the business are similar in nature. Hence the separate Segment under Ind AS 108 on "Operating Segments"
is not required to be reported as the Company's business is restricted to single Operating Segment i.e., Asset Management Services.
There is only one customer contributing in excess of 10% of the Company's total revenue in the following years:
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, 2026.
NOTE: 31 FAIR VALUES OF FINANCIAL INSTRUMENTS
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the
fair value hierarchy:
*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% for assessing interest rate impact on portfolio.
• Close Ended Schemes, FOFs, Real Estate Fund and HTM security have been excluded from Sensitivity Analysis.
(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.
C. Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations or at a reasonable price. The
Company's Finance 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.
Maturity profile of Financial liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based
on contractual undiscounted payments.
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
Fair Valuation
The fair value at grant date is independently determined by valuer using Black-Scholes Merton Model which takes into account the
exercise price, the term of the option, the share price at grant date and historical volatility of the Peer companies and Index, the expected
dividend yield and the risk-free interest rate for the term of the option.
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
a) The Company did not enable audit trail on database feature in Sun System due to application performance consideration in
FY 23-24 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.
b) The Company did not retain audit trail logs in the Expenzing system for the period from April 2025 to September 2025 to capture
any direct data changes made at the database layer. Further no instance of audit trail feature being tampered with was noted in
respect of the software.
c) The Company, for the Happay system for FY 2025-26, was unable to substantiate whether audit trail feature was enabled for
delete operations in master data at the application level. Further, in the absence of a Service Organization Control (SOC) report for
the period from 18th March, 2026 to 31st March, 2026, the Company was unable to demonstrate whether the audit trail feature
at the database layer was enabled and operated for all relevant transactions during that period. Further no instance of audit trail
feature being tampered with was noted in respect of the software. Also, the Company did not enable daily backup of Happay
system which is required to be maintained in electronic mode.
NOTE: 47 EVENTS AFTER THE REPORTING PERIOD
The Board of Directors have proposed a final dividend of I 25.50 per equity share (face value of I 5 each) for the year ended 31st March,
2026, subject to the approval of the shareholders at the ensuing Annual General Meeting.
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