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Notes to Accounts of Aditya Birla Money Ltd.

Mar 31, 2017

1 Terms/right attached to Preference Shares

Preference shares carry a non-cumulative dividend of 8% per annum. Dividend amounts, declared if any, will be paid in Indian rupee.

In the year ended 31st March, 2011, the Company had allotted 800,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs.100/- each, fully paid-up at a premium of Rs.150/- per share to Aditya Birla Financial Services Limited, the Holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs.320/- per share.

The rights attached to the 800,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs.100/-each were varied to the extent and manner given below with the written consent of the Preference shareholders on 30th March 2015:

1. The period of redemption was extended by 39 months from March 2016 to June 2019 and

2. The redemption price of Redeemable Non-Convertible Non-Cumulative Preference Shares shall be varied from Rs.320/- (Face value Rs.100/- and Premium of Rs.220/- per share) to Rs.411/- (Face value Rs.100/- and Premium of Rs.311/- per share)

3. Same as what is mentioned herein above, all other terms and conditions of the said Preference shares remain the same.

During the year ended 31st March, 2014, the Company had allotted 200,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs.100/- each, fully paid-up at a premium of Rs.400/-per share to Aditya Birla Financial Services Limited, the Holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs.725/- per share.

4 Shares held by Holding Company

41,550,000 (Previous Year : 41,550,000) equity shares of Re.1/- each fully paid and 1,000,000 (Previous Year :

1,000,000) 8% Redeemable Non Convertible Non Cumulative Preference Shares Rs.100/- each fully paid-up are held by Aditya Birla Financial Services Limited, the Holding Company.

Pursuant to a Share Purchase agreement (''SPA'') between Aditya Birla Nuvo Limited (''ABNL'' or ''the Purchaser''), ultimate holding company and Mr. Prataph C Reddy and others ("Erstwhile Promoters") dated August 28, 2008, ABNL had agreed to acquire 31 million equity shares in Aditya Birla Money Limited ("the Company"). The transaction was completed on March 6, 2009.

As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harm less the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

Subsequent to the completion of the above transaction, the Purchaser noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets etc. Accordingly, ABNL based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of Rs.163,882,296 as Losses incurred on account of breach of representation / warranties in the SPA. Further, ABNL vide its letter dated March 5, 2011 made a separate claim of Rs.5,169,379 for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. ABNL invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011 with the Arbitration Tribunal.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which are have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company as at March 31, 2017 aggregating Rs.184,367,355/- (previous year: Rs.183,368,483/-) and disclosed the same in Short Term Loans & Advances under Note 11B of the Balance Sheet, as these amounts would be paid directly to the Company by the Erstwhile Promoters at the direction of ABNL as and when the settlement happens.

Both parties completed filing of documents. On 04th July 2012, a hearing was held and M/s. Delloitte Haskins & Sells were asked to act as auditors by the Arbitrators with a mandate to submit a report on whether from an accounting perspective, including the accounting treatment that has been given to the items set out in the Statement of Claim, the amounts as claimed are correct as per accounting practice.

The arbitral tribunal then directed the Claimants and Respondents to file their objections if any to the audit report submitted by Professional Accounting firm and had also directed the Respondent to file their list of witnesses (if any) by the end of April 2013. The Respondents filed their objections to the audit report and ABNL had also filed its reply to the said objections.

Arguments in rebuttal by the Claimant was completed on 25th October 2013 and written submissions were filed by 29th October 2013. The tribunal has reserved the award.

During FY 2014-15, Arbitral Tribunal has passed an award, allowing claim of Rs.99,190,697/-, which excluded premature claims pertaining to income tax, service tax, etc. Further, such award directed the Erstwhile Promoters to pay a sum of Rs.55,546,790/- (being 56% of Rs.99,190,697/-, as ABNL has purchased only 56% of shares), along with interest @ 14% from the date of award. This award was received by ABNL on 27th May 2014.

Subsequently, both the parties have filed petitions under Sec.34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the award and the same were admitted and pending on the file of the High Court of Madras.

In respect of such receivables, which exclude premature claims pertaining to income tax, service tax, etc., the Company has created adequate provision, which also includes claims not awarded by the Arbitral Tribunal to the extent of 44%. In respect of tax claims, the Company has obtained favorable orders for certain assessment years & is confident of recovering such amount in due course. Such amounts are fully recoverable from the income tax department.

Further in the month of October 2015, Supreme Court dismissed the appeal filed by the Company against SAT order directing the company to pay a sum of Rs.16,596,652/- together with interest thereon. Consequently SEBI served a notice of demand on the Company seeking payment of a sum of Rs.16,596,652/- towards turnover fee and a sum of Rs.37,638,304/- and in the month of October 2016, Rs.1,129,149/- towards interest thereon from the respective due dates of payment of the said Turnover Fee.

As the erstwhile promoters have agreed to indemnify ABNL to the extent of any losses resulting from or consequent upon the civil appeal pending before Supreme Court vide Civil Appeal No. 3441/2007 in the SPA, the demand was communicated to the erstwhile promoters and the erstwhile promoters have paid the total turnover fee of Rs.16,596,652/- to the Company against the payment made by the Company to SEBI.

The request of the Company to SEBI seeking waiver of the interest was not considered favorably and the review petition filed by the Company in Supreme Court was also dismissed. In the meanwhile SEBI issued a Recovery Certificate dated 12.01.2016 seeking to recover the interest amount and the Company remitted the above mentioned interest amount with SEBI under intimation to erstwhile promoters.

Based on legal opinion received by the Company in earlier year and internal assessment, the ultimate Company is confident of recovering the allowed claim through the legal process. Further, we conform that ABNL has committed to transfer any funds received on settlement of arbitration order to the company. Accordingly, in our opinion there is no uncertainty in recovery of such amounts and no additional provision is necessary.

5) Stamp duty

Hitherto, the Company had been collecting and remitting stamp duties with respect to states wherein the manner of payment of the same has been prescribed by the respective State Governments. From July 2011, the Company had started collecting stamp duty on contract notes for all states, including the states wherein the manner of payment has not yet been notified. The Company is evaluating various options of remitting the same, including remitting those amounts in the State of Tamil Nadu, as all the contract notes are executed at Tamil Nadu. Pending, the final determination of the manner of remittance, amount of Rs.10,572,030/- (Previous year: Rs.7,916,843/-) collected till March 31, 2017 has been disclosed under "Statutory Dues" under "Other Current Liabilities".

6) Capital and other commitment

a) Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is Nil (Previous year - Nil).

b) For commitments relating to lease arrangements, please refer note 28.

* Represents claims made on the Company by various customers alleging unauthorized trades, loss of profits etc. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

7) Managerial Remuneration

During an earlier year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs.3,094,634/- (Previous year: Rs.3,094,634/-) (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. P.B. Subramaniyan, the erstwhile whole time director (''Erstwhile Director'') of the Company for the period from April 1, 2008 to March 6, 2009.

During the earlier year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs.1,626,614/- (Previous year: Rs.1,626,614/-) and directed the Company to collect the same from the erstwhile Director. Further the Company has filed a civil suit in the High Court of Judicature at Madras vide C.S. No. 53/2016 seeking recovery of the excess remuneration paid to Mr. P.B. Subramaniyan. Pending the recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet.

8) Lease disclosures

Operating leases for premises:

Lease rentals in respect of premises taken on operating lease during the year ended March 31, 2017 amounts to Rs.49,361,872/- (Previous Year Rs.54,988,785/-).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2017 amounts to Rs.206,783,838/- (Previous Year Rs.195,563,389/-. Details of Lease Rentals payable within one year and thereafter are as under:

The company has entered into lease / license agreements in respect of immovable properties with different parties. Some of the agreements contain escalation clause related to lease rentals / license fees from 5% to 15% p.a.

Operating leases for computers:

The company has entered into commercial leases on computer desktops. These leases have an average life of three years with renewal option included in the contracts.

Lease rentals in respect of computers taken on operating lease during the year ended March 31, 2017 amounts to Rs.2,795,464/- (Previous Year Rs.3,854,039/-).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2017 amounts to Rs.2,500,954/- (Previous Year Rs.5,128,016/-). Details of Lease Rentals payable within one year and thereafter are as under:

9) Employment Benefit disclosures

The amounts charged to the Statement of Profit and Loss during the year for Provident Fund contribution aggregates to Rs.19,066,935/- (Previous year: Rs.20,903,826/-) and Employees'' State Insurance contribution aggregates to Rs.731,827/- (Previous year: Rs.795,644/-).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Aditya Birla NUVO Employee Gratuity Fund.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the Balance Sheet for the gratuity plan.

10) Related Party Transactions List of Related Parties

Ultimate Holding Company Aditya Birla Nuvo Limited

Holding Company Aditya Birla Financial Services Limited

Subsidiary Company Aditya Birla Commodities Broking Limited

Related parties under AS 18 with whom transactions have taken place during the year

Aditya Birla Finance Limited Aditya Birla Finance Limited (Wealth)

Aditya Birla Financial Shared Services Limited Birla Sun Life Insurance Company Limited Aditya Birla Customer Services Limited Fellow Subsidiaries Aditya Birla Insurance Brokers Limited

Aditya Birla Housing Finance Limited

Aditya Birla Idea Payment Bank Limited

Aditya Birla Health Insurance Company Limited

Aditya Birla Money Insurance Advisory Services Limited

Mr. Murali Krishnan L.R., Manager (Appointed as Manager with effect from 06.05.2016)

Ms. Sumathy Ravichandran, Chief Financial Officer (Appointed as Chief Financial Officer on 06.05.2016 and ceased to be Key Management Personnel the Chief Financial Officer with effect from 31.07.2016)

Mr. Pradeep Sharma, Chief Financial Officer

(Appointed as Chief Financial Officer with effect from 01.08.2016 )

Mr. Vikashh K Agarwal, Company Secretary

11) Foreign currency transactions

The Company did not enter into any foreign currency transactions in the current year and previous year.

12) Stock options granted under ABML - Employee Stock Option Scheme - 2014

The objective of the Employee Stock Option Scheme is to attract and retain talent and align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability.

In accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (hereinafter referred to as ''SEBI ESOP Regulations'') and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method. The cumulative expense to be recognized for equity-settled transactions at each reporting date until the vesting date will reflect the extent to which the vesting period has expired and the company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit to be recognized in the Statement of Profit and Loss for a period to represent the movement in cumulative expense recognized as at the beginning and end of that period and is to be recognized in employee benefits expense. However, there is no expense that is incurred during the year by the Company for this purpose since the exercise price at which the options have been granted by the Company to eligible employees are at the market price of the Company and the market price of the shares under ESOP being more than the exercise price of the option. As per the ABML ESOP Scheme - 2014, 25% of the stock option granted got vested at the end of 12 months from the date of grant of option but none of the employees exercised the vested option till 31st March 2017.

Stock options granted under ABML - Employee Stock Option Scheme - 2014

In the earlier year, the Company had formulated the ABML Employee Stock Option Scheme - 2014 (ABML ESOP Scheme - 2014) with the approval of the shareholders at the Annual General Meeting dated September 09, 2014. The Scheme provides that the total number of options granted there under will be 27,70,000 and to follow the Market Value Method (Intrinsic Value) for valuation of the Options. Each option, on exercise, is convertible into one equity share of the Company having face value of Rs.1 each. Subsequently, the Nomination and Remuneration Committee of the Board of Directors on December 2, 2014 has granted 25,09,341 stock options to its eligible employees under the ABML ESOP Scheme - 2014 at an exercise price of Rs.34.25/-. The Exercise Price was based on the latest available closing price, prior to the December 2, 2014 (the date of grant by the Nomination & Remuneration Committee) on the recognized stock exchanges on which the shares of the Company are listed with the highest trading volume.

None of the employees have exercised the vested options.

The Company has granted options to the eligible employees at an exercise price of Rs.34.25 per share being the latest market price as per SEBI ESOP Regulations. In view of this, there being no intrinsic value (being the excess of the market price of share under ESOP over the exercise price of the option), on the date of grant, the Company is not required to account the accounting value of option as per SEBI ESOP Regulations.

Fair Valuation:

The fair value of the options on the date of grant has been done by an independent valuer using Black-Scholes Formula.

13) i) The Company has a process whereby periodically all long term contracts, if any, are assessed for material

foreseeable losses. As at the Balance Sheet date, there were no long term contracts (including derivative contracts).

ii) The Company''s pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Income Tax and other statutory authorities. The Company has reviewed all 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 results. Refer note 24 for details on contingent liabilities.

14) Portfolio Management Scheme

The Company holds several accounts under Portfolio Management Scheme (PMS). These accounts are held by the Company under fiduciary capacity and all services are rendered as per PMS Guidelines issued by the Security & Exchange Board of India (SEBI). In return for PMS services the Company is entitled to professional fee. The accounts of each PMS client is maintained by the company and is annually audited by an independent Chartered Accountant. Since the Company renders PMS services under fiduciary capacity, the financials of each PMS clients does not form part of the financials of the Company. This has been done based on the opinion obtained from the Expert Advisory Committee of the Institute of Chartered Accountants of India (ICAI). A brief summary of the aggregated quantum of the funds received, funds invested, services fee charged and the balance available in the PMS accounts are produced below.

The loans have been utilized by ABCBL for meeting their working capital requirements & which were subsequently repaid.

15) Specified Bank Notes:

In exercise of the powers conferred by sub-section (1) of Section 467 of the Companies Act, 2013 (18 of 2013) the Central Government has made Amendments to the Schedule III of the said Act. ,and in pursuant to the same, the below disclosure on details of Specified Bank Notes (SBN) held and transacted during the period from 8th November 2016 to 30th December 2016 is given.

Explanation : For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

16) Previous year figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2016

1 Term / right attached to Equity Shares

The Company has only one class of Equity shares having at par value of Re.1/- each per share. Each holder of Equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors, if any, 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 Equity shares will receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of the Equity shares held by the shareholders.

2 Term / right attached to Preference Shares

Preference shares carry a non-cumulative dividend of 8% per annum. Dividend amounts, declared if any, will be paid in Indian rupees.

In the year ended 31st March, 2011, the Company had allotted 800,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs.100/- each, fully paid-up at a premium of Rs.150/- per share to Aditya Birla Financial Services Limited, the Holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs.320/- per share.

The rights attached to the 800,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs.100/- each were varied to the extent and manner given below with the written consent of the Preference shareholders on 30th March 2015:

3 The period of redemption extended by 39 months from March 2016 to June 2019 and

4 The redemption price of Redeemable Non-Convertible Non-Cumulative Preference Shares shall be varied from Rs.320/-(Face value Rs.100/- and Premium of Rs.220/- per share) to Rs.411/- (Face value Rs.100/- and Premium of Rs.311/- per share)

5 Same as what is mentioned hereinabove, all other terms and conditions of the said Preference shares remain the same.

During the year ended 31st March, 2014, the Company had allotted 200,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs.100/- each, fully paid-up at a premium of Rs.400/- per share to Aditya Birla Financial Services Limited, the Holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs.725/- per share.

6 Shares held by Holding Company

41,550,000 (Previous Year : 41,550,000) equity shares of Re.1/- each fully paid and 1,000,000 (Previous Year : 1,000,000) 8% Redeemable Non Convertible Non Cumulative Preference Shares Rs.100/-each fully paid are held by Aditya Birla Financial Services Limited, the Holding Company.

NOTE: 7

SHORT-TERM BORROWINGS SECURED

A Repayable in 30 to 90 days from the date of draw down. The interest on this loan ranges from 7.6% to 10.70%.

# The bank borrowing is secured against pledge of fixed deposits.

NOTE: 8

TRADE PAYABLES

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

9) Assets forming part of claims made by the Ultimate Parent Company

Pursuant to a Share Purchase agreement (''SPA'') between Aditya Birla Nuvo Limited (''ABNL'' or ''the Purchaser''), ultimate holding company and Mr.Prataph C Reddy and others ("Erstwhile Promoters") dated August 28, 2008, ABNL had agreed to acquire 31 million equity shares in Aditya Birla Money Limited ("the Company"). The transaction was completed on March 6, 2009.

As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harm less the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

Subsequent to the completion of the above transaction, the Purchaser noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets etc. Accordingly, ABNL based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of Rs 163,882,296 as Losses incurred on account of breach of representation / warranties in the SPA. Further, ABNL vide its letter dated March 5, 2011 made a separate claim of Rs. 5,169,379 for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. ABNL invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011 with the Arbitration Tribunal.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which are have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company as at March 31, 2016 aggregating Rs. 183,368,483(previous year: Rs145,730,179) and disclosed the same in Short Term Loans & Advances under Note 11B of the Balance Sheet, as these amounts would be paid directly to the Company by the Erstwhile Promoters at the direction of ABNL as and when the settlement happens.

Both parties completed filing of documents. On 04 July 2012, a hearing was held and M/s. Delloitte Haskins & Sells were asked to act as auditors by the Arbitrators with a mandate to submit a report on whether from an accounting perspective, including the accounting treatment that has been given to the items set out in the Statement of Claim, the amounts as claimed are correct as per accounting practice.

The arbitral tribunal then directed the Claimants and Respondents to file their objections if any to the audit report submitted by Professional Accounting firm and had also directed the Respondent to file their list of witnesses (if any) by the end of April 2013. The Respondents filed their objections to the audit report and ABNL had also filed its reply to the said objections.

Arguments in rebuttal by the Claimant was completed on 25 October 2013 and written submissions were filed by 29 October 2013. The tribunal has reserved the award.

During FY 2014-15, Arbitral Tribunal has passed an award, allowing claim of Rs.99,190,697/-, which excluded premature claims pertaining to income tax, service tax, etc. Further, such award directed the Erstwhile Promoters to pay a sum of Rs. 55,546,790/- (being 56% of Rs.99,190,697/-, as ABNL has purchased only 56% of shares), along with interest @ 14% from the date of award. This award was received by ABNL on 27th May 2014.

In respect of such receivables, which exclude premature claims pertaining to income tax, service tax, etc., the Company has created adequate provision, which also includes claims not awarded by the Arbitral Tribunal to the extent of 44%. In respect of tax claims, the company has obtained favorable order for certain assessment years & is confident of recovering such amount in due course. Such amounts are fully recoverable from the income tax department.

Further in the month of October 2015, Supreme Court dismissed the appeal filed by the Company against SAT order directing the company to pay a sum of Rs.1,65,96,652/- together with interest thereon. Consequently SEBI served a notice of demand on the Company seeking payment of a sum of Rs.1,65,96,652/- towards turnover fee and a sum of Rs.3,76,38,304/- towards interest thereon from the respective due dates of payment of the said Turnover Fee.

As the erstwhile promoters have agreed to indemnify ABNL to the extent of any losses resulting from or consequent upon the civil appeal pending before Supreme Court vide Civil Appeal No. 3441/2007 in the SPA, the demand was communicated to the erstwhile promoters and the erstwhile promoters have paid the total turnover fee of Rs.1,65,96,652/- to the Company against the payment made by the Company to SEBI.

The request of the Company to SEBI seeking waiver of the interest was not considered favourably and the review petition filed by the Company in Supreme Court was also dismissed. In the meanwhile SEBI issued a Recovery Certificate dated 12.01.2016 seeking to recover the interest amount and the Company remitted the above mentioned interest amount with SEBI under intimation to erstwhile promoters.

Based on legal opinion received by the company in previous year and internal assessment, the ultimate company is confident of recovering the allowed claim through the legal process. Further, we conform that ABNL has committed to transfer any funds received on settlement of arbitration order to the company. Accordingly in our opinion there is no uncertainty in recovery of such amounts and no additional provision is necessary.

10) Stamp duty

Hitherto, the Company had been collecting and remitting stamp duties with respect to states wherein the manner of payment of the same has been prescribed by the respective state governments. From July 2011, the Company had started collecting stamp duty on contract notes for all states, including the states wherein the manner of payment has not yet been notified. The Company is evaluating various options of remitting the same, including remitting those amounts in the State of Tamil Nadu, as all the contract notes are executed at Tamil Nadu. Pending, the final determination of the manner of remittance, amount of Rs.7,916,843/-(Previous year: Rs.5,171,148/-)collected till March 31, 2016 has been disclosed under Statutory Dues under Other Current Liabilities.

11) Capital and other commitment

a) Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is Nil/- (Previous year - 784,500/-).

b) For commitments relating to lease arrangements, please refer note 28.

* Represents claims made on the Company by various customers alleging unauthorized trades, loss of profits etc. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

12) Managerial Remuneration

During an earlier year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs.3,094,634 (Previous year: Rs.3,094,634) (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. P.B. Subramaniyan, the erstwhile whole time director (''Erstwhile Director'') of the Company for the period from April 1, 2008 to March 6, 2009.

During the previous year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs 1,626,614/-(Previous year: Rs.1,626,614/-) and directed the Company to collect the same from the Erstwhile Director.

During the year the Company has filed a civil suit in the High Court of Judicature at Madras vide C.S. No. 53/2016 seeking recovery of the excess remuneration paid to Mr. P.B. Subramaniyan. Pending the recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet.

Operating leases for premises:

Lease rentals in respect of premises taken on operating lease during the year ended March 31, 2016 amounts to Rs.5,49,88,785/-(Previous Year Rs.46,787,739).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2016 amounts to Rs.195,563,389/-(Previous Year Rs. 199,862,731). Details of Lease Rentals payable within one year and thereafter are as under:

The company has entered into lease / license agreements in respect of immovable properties with different parties. Some of the agreements contain escalation clause related to lease rentals / license fees from 5% to 15% p.a.

Operating leases for computers:

The company has entered into commercial leases on computer desktops. These leases have an average life of three years with renewal option included in the contracts.

Lease rentals in respect of computers taken on operating lease during the year ended March 31, 2016 amounts to Rs.3,854,039 (Previous Year Rs.4,363,471).

The amounts charged to the Statement of profit and loss during the year for Provident fund contribution aggregates to Rs.20,903,826 (Previous year - Rs.16,147,817) and employees'' state insurance contribution aggregates to Rs.795,644 (Previous year - Rs.1,038,349).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Aditya Birla Nuvo Employee Gratuity Fund.

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

13) Foreign currency transactions

The Company did not enter into any foreign currency transactions in the current year and previous year.

14) Stock options granted under ABML - Employee Stock Option Scheme - 2014

The objective of the Employee Stock Option Scheme is to attract and retain talent and align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability.

In accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (hereinafter referred to as ''SEBI ESOP Regulations'') and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method. The cumulative expense to be recognized for equity-settled transactions at each reporting date until the vesting date will reflect the extent to which the vesting period has expired and the company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit to be recognized in the statement of profit and loss for a period to represent the movement in cumulative expense recognized as at the beginning and end of that period and is to be recognized in employee benefits expense. However, there is no expense that is incurred during the year by the Company for this purpose since the exercise price at which the options have been granted by the Company to eligible employees are at the market price of the Company and the market price of the shares under ESOP being more than the exercise price of the option. As per the ABML ESOP Scheme - 2014, 25% of the stock option granted got vested at the end of 12 month from the date of grand of option but none of the employees exercised the vested option till 31st March 2016.

Stock options granted under ABML - Employee Stock Option Scheme - 2014

In the previous year, the Company had formulated the ABML Employee Stock Option Scheme - 2014 (ABML ESOP Scheme - 2014) with the approval of the shareholders at the Annual General Meeting dated September 09, 2014. The Scheme provides that the total number of options granted there under will be 27,70,000 and to follow the Market Value Method (Intrinsic Value) for valuation of the Options. Each option, on exercise, is convertible into one equity share of the Company having face value of Re.1/- each. Subsequently, the Nomination and Remuneration Committee of the Board of Directors on December 2, 2014 has granted 25,09,341 stock options to its eligible employees under the ABML ESOP Scheme - 2014 at an exercise price of Rs.34.25/-. The Exercise Price was based on the latest available closing price, prior to the December 2, 2014 (the date of grant by the Nomination & Remuneration Committee) on the recognized stock exchanges on which the shares of the Company are listed with the highest trading volume.

No. of Share vested during the year on 2nd December 2015 is 612,225 and none of the employees have exercised the vested options.

The Company has granted options to the eligible employees at an exercise price of Rs. 34.25 per share being the latest market price as per SEBI ESOP Regulations. In view of this, there being no intrinsic value (being the excess of the market price of share under ESOP over the exercise price of the option), on the date of grant, the Company is not required to account the accounting value of option as per SEBI ESOP Regulations.

Fair Valuation:

The fair value of the options on the date of grant (Rs.19.28) has been done by an independent valuer using Black-Scholes Formula.

15) i)The Company has a process whereby periodically all long term contracts, if any, are assessed for material foreseeable losses. As at the balance sheet date, there were no long term contracts (including derivative contracts).

ii) The Company''s pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Income Tax and other statutory authorities. The Company has reviewed all 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 results. Refer note 24 for details on contingent liabilities. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of Rs.12,314,612 as at 31st March 2016.

16) Portfolio Management Scheme

The Company holds several accounts under Portfolio Management Scheme (PMS). These accounts are held by the company under fiduciary capacity and all services are rendered as per PMS Guidelines issued by the Security & Exchange Board of India (SEBI). In return for PMS services the Company is entitled to professional fee. The accounts of each PMS client is maintained by the company and is annually audited by an independent Chartered Accountant. Since the company renders PMS services under fiduciary capacity, the financials of each PMS clients does not form part of the financials of the Company. This has been done based on the opinion obtained from the Expert Advisory Committee of the Institute of Chartered Accountants of India (ICAI). A brief summary of the aggregated quantum of the funds received, funds invested, services fee charged and the balance available in the PMS accounts are produced below.

The loans have been utilized by ABCBL for meeting their working capital requirements & which was subsequently repaid.

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2015

1. Term / right attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Re.1/- 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 Equity Shares will receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of the Equity Shares held by the shareholders.

2. Term / right attached to Preference Shares

Preference Share carry non cumulative dividend of 8% per annum. The company declares and pays dividends in Indian rupees.

In the year ended 31st March, 2011, the Company had allotted 800,000 8% Redeemable Non Convertible Non Cumulative Preference Shares of Rs.100/- each, fully paid up at a premium of Rs.150/- per share to Aditya Birla Financial Services Limited, the holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs.320/- per share.

In the year ended 31st March, 2014, the Company had allotted 200,000 8% Redeemable Non Convertible Non Cumulative Preference Shares of Rs.100/- each, fully paid up at a premium of Rs.400/- per share to Aditya Birla Financial Services Limited, the holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs.725/- per share.

During the year, the rights attached to the 800,000 8% Redeemable Non Convertible Non Cumulative Preference Shares of Rs. 100/- each were varied to the extent and manner given below with the written consent of the preference shareholders dated 30th March 2015:

1. The period of redemption extended by 39 months from March 2016 to June 2019 and

2. The redemption price of Redeemable Non Convertible Non Cumulative Preference Shares shall be varied from Rs.320/- (Face value Rs.100/- and Premium of Rs.220/- per share) to Rs.411/- (Face value Rs.100/- and Premium of Rs.311/- per share)

3. Same as what is mentioned here in above, all other terms and conditions of the said Preference Shares remain the same.

3. Shares held by Holding Company

41,550,000 (Previous Year : 41,550,000) equity shares of Re.1/- each fully paid and 1,000,000 (Previous Year : 1,000,000) 8% Redeemable Non Convertible Non Cumulative Preference Shares Rs.100/-each fully paid are held by Aditya Birla Financial Services Limited, the Holding Company.

4. Assets forming part of claims made by the Ultimate Parent Company

Pursuant to a Share Purchase agreement ('SPA') between Aditya Birla Nuvo Limited ('ABNL' or 'the Purchaser'), ultimate Holding Company and Mr.Prataph C Reddy and others ("Erstwhile Promoters") dated August 28, 2008, ABNL had agreed to acquire 31 million Equity Shares in Aditya Birla Money Limited ("the Company"). The transaction was completed on March 6, 2009.

As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harm less the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

Subsequent to the completion of the above transaction, the Purchaser noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets etc. Accordingly, ABNL based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of Rs.163,882,296 as Losses incurred on account of breach of representation / warranties in the SPA. Further, ABNL vide its letter dated March 5, 2011 made a separate claim of Rs.5,169,379 for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. ABNL invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011 with the Arbitration Tribunal.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which are have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company as at March 31,2015 aggregating Rs.145,730,179 (previous year: Rs.145,779,681) and disclosed the same in Short Term Loans & Advances under Note 11B of the Balance Sheet, as these amounts would be paid directly to the Company by the Erstwhile Promoters at the direction of ABNL as and when the settlement happens.

Both parties completed filing of documents. On 04 July 2012, a hearing was held and M/s. Deloitte Haskins & Sells were asked to act as auditors by the Arbitrators with a mandate to submit a report on whether from an accounting perspective, including the accounting treatment that has been given to the items set out in the Statement of Claim, the amounts as claimed are correct as per accounting practice.

The arbitral tribunal then directed the Claimants and Respondents to file their objections if any to the audit report submitted by Professional Accounting firm and had also directed the Respondent to file their list of witnesses (if any) by the end of April 2013. The Respondents filed their objections to the audit report and ABNL had also filed its reply to the said objections.

Arguments in rebuttal by the Claimant was completed on 25 October 2013 and written submissions were filed by 29 October 2013. The tribunal has reserved the award.

During the current year, Arbitral Tribunal has passed an award, allowing claim of Rs.99,190,697, which excluded premature claims pertaining to income tax, service tax, etc. Further, such award directed the Erstwhile Promoters to pay a sum of Rs.55,546,790 (being 56% of Rs.99,190,697, as ABNL has purchased only 56% of shares), along with interest @ 14% from the date of award. This award was received by ABNL on 27th May 2014.

Subsequently, during the year both parties have filed petitions under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the award and the same are admitted and pending on the file of the High Court of Madras.

In respect of such receivables, which exclude premature claims pertaining to income tax, service tax, etc., the Company has created adequate provision, which also includes claims not awarded by the Arbitral Tribunal to the extent of 44%. In respect of tax claims, the company has obtained favorable order for certain assessment years & is confident of recovering such amount in due course. Such amounts are fully recoverable from the income tax department.

Based on legal opinion received by the company in previous year and internal assessment, the ultimate company is confident of recovering the allowed claim through the legal process. Further, we conform that ABNL has committed to transfer any funds received on settlement of arbitration order to the company. Accordingly in our opinion there is no uncertainty in recovery of such amounts and no additional provision is necessary.

5.) Stamp Duty

Hitherto, the Company had been collecting and remitting stamp duties with respect to states wherein the manner of payment of the same has been prescribed by the respective state governments. From July 2011, the Company had started collecting stamp duty on contract notes for all states, including the states wherein the manner of payment has not yet been notified. The Company is evaluating various options of remitting the same, including remitting those amounts in the State of Tamil Nadu, as all the contract notes are executed at Tamil Nadu. Pending, the final determination of the manner of remittance, amount of Rs.5,171,148 (Previous year: Rs.2,085,659) collected till March 31, 2015 has been disclosed under Statutory Dues under Other Current Liabilities.

6. Capital and other commitment

a) Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is Rs.784,500 (Previous year - NIL).

b) For commitments relating to lease arrangements, please refer Note 28.

7. Contingent Liabilities

Particulars March 31, 2015 March 31, 2014

Disputed tax and other statutory liabilities not provided for:

(a) Income tax & Interest on Tax - for various assessment years in 45,545,425 45,545,425 respect of which Company has gone on appeal. (Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities).

(b) Service tax - for various assessment years in respect of which Company has 7,957,873 7,957,873 gone on appeal. (Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities).

(c) Provident fund - for the period from March 2009 to May 2011 for non- 14,036,578 14,036,578 inclusion of certain components like allowances etc. while computing and remitting the employer and employees' contribution to provident fund. (Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities).

(d) Karnataka Stamp duty for the period from 2003 - 2008. Based on judicial 9,060,000 9,060,000 pronouncements, the claim of the Company is likely to be accepted by the judicial authorities

Contingent liability not provided for on account of:

(a) Disputed claim of SEBI towards turnover fees contested by the Company at 27,656,667 27,656,667 Ho'nble Supreme Court. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Claims against the Company not acknowledged as debts* 83,122,581 38,865,918

* Represents claims made on the Company by various customers alleging unauthorized trades, loss of profits etc. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

8. Managerial Remuneration

During an earlier year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs.3,094,634 (Previous year:Rs.3,094,634) (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. PB. Subramaniyan, the erstwhile whole time director ('Erstwhile Director') of the Company for the period from April 1,2008 to March 6, 2009.

During the previous year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs.1,626,614/-(Previous year: Rs.1,626,614/-) and directed the Company to collect the same from the Erstwhile Director.

The Company has commenced the process of recovery from the Erstwhile Director. Pending the recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet. The Company is evaluating various alternative options including seeking a condonation / compounding if these amounts are not recoverable from the Erstwhile Director.

9. Operating leases for computers:

The company has entered into commercial leases on computer desktops. These leases have an average life of three years with renewal option included in the contracts.

Lease rentals in respect of computers taken on operating lease during the year ended March 31, 2015 amounts to Rs.4,103,985 (Previous Year Rs.4,559,985).

10. Employment Benefit disclosures

The amounts charged to the Statement of profit and loss during the year for Provident fund contribution aggregates to Rs.16,147,817 (Previous year - Rs.12,530,378) and employees' state insurance contribution aggregates to Rs.1,038,349 (Previous year -Rs.1,249,568).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Aditya Birla Nuvo Employee Gratuity Fund.

11. Related Party Transactions List of Related Parties

Ultimate Holding Company Aditya Birla Nuvo Limited

Holding Company Aditya Birla Financial Services Limited

Subsidiary Company Aditya Birla Commodities Broking Limited

Related Parties under AS 18 with whom transactions have taken place during the year

Aditya Birla Finance Limited Aditya Birla Money Mart Limited

Fellow Subsidiary Aditya Birla Financial Shared Services Limited

Birla Sun Life Insurance Company Limited Aditya Birla Customer Services Limited

Additional Related Parties as per Companies Act 2013 with whom transactions have taken place during the year

Mr. Sudhakar Ramasubramanian, Managing Director

Key Management Personnel Mr. Srinivas Subudhi, Chief Financial Officer (w.e.f. 15-5-2014)

Mr. Vikashh K Agarwal, Company Secretary (w.e.f. 28-1-2015)

12. Foreign currency transactions

The Company did not enter into any foreign currency transactions in the current year and previous year.

13. Stock options granted under ABML - Employee Stock Option Scheme - 2014

The objective of the Employee Stock Option Scheme is to attract and retain talent and align the interest of employees with the Company as well as to motivate them to contribute to its growth and profitability.

In accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended by Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (hereinafter referred to as 'SEBI ESOP Regulations') and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method. The cumulative expense to be recognized for equity-settled transactions at each reporting date until the vesting date will reflect the extent to which the vesting period has expired and the company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit to be recognized in the statement of profit and loss for a period to represent the movement in cumulative expense recognized as at the beginning and end of that period and is to be recognized in employee benefits expense. However, there is no expense that is incurred during the year by the Company for this purpose since the exercise price at which the options have been granted by the Company to eligible employees are at the market price of the Company and further, the vesting of options is due only in the upcoming years.

Stock options granted under ABML - Employee Stock Option Scheme - 2014

During the year, the Company had formulated the ABML Employee Stock Option Scheme - 2014 (ABML ESOP Scheme - 2014) with the approval of the shareholders at the Annual General Meeting dated September 09, 2014. The Scheme provides that the total number of options granted there under will be 27,70,000 and to follow the Market Value Method (Intrinsic Value) for valuation of the Options. Each option, on exercise, is convertible into one equity share of the Company having face value of Rs. 1 each. Subsequently, the Nomination and Remuneration Committee of the Board of Directors on December 2, 2014 has granted 25,09,341 stock options to its eligible employees under the ABML ESOP Scheme - 2014 at an exercise price of Rs. 34.25. The Exercise Price was based on the latest available closing price, prior to the December 2, 2014 (the date of grant by the Nomination & Remuneration Committee) on the recognized stock exchanges on which the shares of the Company are listed with the highest trading volume.

14. i) The Company has a process whereby periodically all long term contracts, if any, are assessed for material foreseeable losses. As at the Balance Sheet date, there were no long term contracts (including derivative contracts)

ii) The Company's pending litigations comprise of claims against the Company primarily by the customers and proceedings pending with Income Tax and other statutory authorities. The Company has reviewed all 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 results. Refer note 24 for details on contingent liabilities. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of Rs.12,314,612 as at 31st March 2015.

15. Previous year figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year's classification.


Mar 31, 2014

NOTE: 1. Basis of preparation

The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Companies Accounting Standards Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 15/2013 dated 13 September 2013, issued by the ministry of corporate affairs, in respect of Section 133 of the Companies Act, 2013.

1A Reconciliation of the number of Equity shares outstanding at the beginning and at the end of the period

Sl. Description As at March 31, 2014 As at March 31, 2013 NO. No. of Amount No. of Amount shares Shares

1 At the beginning 55,400,000 55,400,000 55,400,000 55,400,000 of the year

2 Issued during --- --- --- --- the year

3 Outstanding at 55,400,000 55,400,000 55,400,000 55,400,000 the end of the year

1B Reconciliation of the number of Preference shares outstanding at the beginning and at the end of the period

Sl. Description As at March 31, 2014 As at March 31, 2013 No. No. of shares Amount No. of Shares Amount

1 At the beginning 800,000 80,000,000 800,000 80,000,000 of the year

2 Issued during 200,000 20,000,000 --- --- the year

3 Outstanding at 1,000,000 100,000,000 800,000 80,000,000 the end of the year

2 Term / right attached to Equity shares

The Company has only one class of equity shares having a par value of Re. 1/- 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 equity shares will receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of the equity shares held by the shareholders.

3 Term / right attached to preference shares

Preference shares carry non cumulative dividend of 8% per annum. The company declares and pays dividends in Indian rupees.

In the year ended 31st March, 2011, the Company had allotted 800,000 8% Redeemable Non Convertible Non Cumulative Preference Shares of Rs. 100/- each, fully paid up at a premium of Rs. 150/- per share to Aditya Birla Financial Services Private Limited, the holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs. 320/- per share.

In the year ended 31st March, 2014, the Company had allotted 200,000 8% Redeemable Non Convertible

Non Cumulative Preference Shares of Rs. 100/- each, fully paid up at a premium of Rs. 400/- per share to Aditya Birla Financial Services Private Limited, the holding Company. These Preference Shares are redeemable at the end of 5 years from the date of issue at a price of Rs. 725/- per share.

4 shares held by Holding company

41,550,000 (Previous Year : 41,550,000) equity shares of Re. 1/- each fully paid and 1,000,000 (Previous Year : 800,000) 8% Redeemable Non Convertible Non Cumulative Preference Shares Rs. 100/- each fully paid are held by Aditya Birla Financial Services Private Limited, the Holding Company.

5 shares in the company held by each shareholder holding more than 5 percent shares and the number of shares held are as under :

i) Equity Shares Capital

As at March 31, As at March 31, 2014 2013 Sl. Name of Share No. of % of total No. of % of total No. Holder Shares paid-up Shares paid-up held equity held equity share share capital capital

1 Aditya Birla Financial Services Private Limited 41,550,000 75.00 41,550,000 75.00

2 PCR Investments Ltd 3,385,320 6.11 3,385,320 6.11

As per records of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

ii) preference share capital

As at March 31, As at March 31, 2014 2013 Sl. Name of Share No. of % of total No. of % of total No. Holder Shares paid-up Shares paid-up held equity held equity share share capital capital

1 Aditya Birla Financial Services 1,000,000 100 800,000 100 Private Limited

5) Assets forming part of claims made by the Ultimate Parent Company

Pursuant to a Share Purchase agreement (''SPA'') between Aditya Birla Nuvo Limited (''ABNL'' or ''the Purchaser''), ultimate holding company and Mr. Prataph C Reddy and others ("Erstwhile Promoters") dated August 28, 2008, ABNL had agreed to acquire 31 million equity shares in Aditya Birla Money Limited ("the Company"). The transaction was completed on March 6, 2009.

As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harm less the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

Subsequent to the completion of the above transaction, the Purchaser noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets etc. Accordingly, ABNL based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of Rs.163,882,296 as Losses incurred on account of breach of representation / warranties in the SPA. Further, ABNL vide its letter dated March 5, 2011 made a separate claim of Rs.5,169,379 for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. ABNL invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011 with the Arbitration Tribunal.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which are have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company as at March 31, 2014 aggregating Rs.145,779,681 (previous year: Rs.145,779,681) and disclosed the same in Short Term Loans & Advances under Note 11B of the Balance Sheet, as these amounts would be paid directly to the Company by the Erstwhile Promoters at the direction of ABNL as and when the settlement happens.

Both parties completed filing of documents. On July 04, 2012, a hearing was held and Professional Accounting firm were asked to act as auditors by the Arbitrators with a mandate to submit a report on whether from an accounting perspective, including the accounting treatment that has been given to the items set out in the Statement of Claim, the amounts as claimed are correct as per accounting practice.

The arbitral tribunal then directed the Claimants and Respondents to file their objections if any to the audit report submitted by Professional Accounting firm and had also directed the Respondent to file their list of witnesses (if any) by the end of April 2013. The Respondents filed their objections to the audit report and ABNL had also filed its reply to the said objections.

Arguments in rebuttal by the Claimant was completed on October 25, 2013 and written submissions were filed by October 29, 2013. The tribunal has reserved the award.

Based on legal opinion received and internal assessment, ABNL is confident of recovering the entire dues through the arbitration process and passing the benefit thereof to the Company against which these loss assets can be set-off in the future. Accordingly, the Company is of strong view that these amounts are recoverable.

6) Stamp duty

Hitherto, the Company had been collecting and remitting stamp duties with respect to states wherein the manner of payment of the same has been prescribed by the respective state governments. From July 2011, the Company had started collecting stamp duty on contract notes for all states, including the states wherein the manner of payment has not yet been notified. The Company is evaluating various options of remitting the same, including remitting those amounts in the State of Tamil Nadu, as all the contract notes are executed at Tamil Nadu. Pending, the final determination of the manner of remittance, amount of Rs.4,741,664/- (Previous year: Rs.4,560,042/-) collected till March 31, 2014 has been disclosed under Statutory Dues under Other Current Liabilities.

7) Capital and other commitment

a) Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is NIL (Previous year: Rs.2,709,050).

b) For commitments relating to lease arrangements, please refer Note 28.

8) Contingent Liabilities

Particulars March 31, 2014 March 31, 2013

Disputed tax and other statutory liabilities not provided for:

(a) Income tax & Interest 45,545,425 45,158,745 on Tax - for various assessment years in respect of which Company has gone on appeal. (Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities).

(b) Service tax - for various 7,957,873 7,957,873 assessment years in respect of which Company has gone on appeal. (Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities).

(c) Provident fund - for the 14,036,578 14,036,578 period from March 2009 to May 2011 for non inclusion of certain components like allowances etc. while computing and remitting the employer and employees'' contribution to provident fund. (Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities).

(d) Karnataka Stamp duty for 9,060,000 9,060,000 the period from 2003-2008. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities

Contingent liability not provided for on account of:

(a) Disputed claim of SEBI towards 27,656,667 27,656,667 turnover fees contested by the Company at Ho''nble Supreme Court. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Claims against the Company 38,865,918 35,883,562 not acknowledged as debts*

* Represents claims made on the Company by various customers alleging unauthorized trades, loss of profits etc. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

9) Managerial Remuneration

During an earlier year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs.3,094,634 (Previous year: Rs.3,094,634) (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. P.B. Subramaniyan, the erstwhile whole time director (''Erstwhile Director'') of the Company for the period from April 1, 2008 to March 6, 2009.

During the previous year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs.1,534,634 (Previous year: Rs.1,534,634) and directed the Company to collect the same from the Erstwhile Director.

The Company has commenced the process of recovery from the Erstwhile Director. Pending the recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet. The Company is evaluating various alternative options including seeking a condonation / compounding if these amounts are not recoverable from the Erstwhile Director.

10) Earnings Per share

Particulars March 31, 2014 March 31, 2013

Net Profit / (loss) as per Statement of profit and A (82,041,851) (126,655,904)

Weighted average number of equity shares B 55,400,000 55,400,000

Earnings / (loss) per share- Basic and Diluted A/B (1.48) (2.29)

Nominal value of Equity Share (in Rs.) Re 1/- Re 1/-

11) Lease disclosures

Operating leases for premises

Lease rentals in respect of premises taken on operating lease during the year ended March 31, 2014 amounts to Rs.35,078,962 (Previous Year: Rs.35,606,663).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2014 amounts to Rs.198,687,177/- (Previous Year: Rs.182,036,682). Details of Lease Rentals payable within one year and thereafter are as under:

The company has entered into lease / license agreements in respect of immovable properties with different parties. Some of the agreements contain escalation clause related to lease rentals / license fees from 5% to 15% p.a.

Operating Leases for computers

The company has entered into commercial leases on computer desktops. These leases have an average life of three years with renewal option included in the contracts.

Lease rentals in respect of computers taken on operating lease during the year ended March 31, 2014 amounts to Rs.4,559,985 (Previous Year: Rs.4,559,985).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2014 amounts to Rs.2,112,280. Details of Lease Rentals payable within one year and thereafter are as under:

12) Employment Benefit disclosures

The amounts charged to the Statement of profit and loss during the year for Provident fund contribution aggregates to Rs.12,530,378 (Previous year: Rs.13,497,945) and employees'' state insurance contribution aggregates to Rs.1,249,568 (Previous year: Rs.2,511,222).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Aditya Birla Nuvo Employee Gratuity Fund.

The following table summarises the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the balance sheet for gratuity plan.

13) Foreign currency transactions

The Company did not enter into any foreign currency transactions in the current year and previous year.

14) Additional information pursuant to provisions of paragraphs 5(ii)(a), 5(ii)(b) and paragraphs 5(viii) (a) and 5(viii) (c) Part II of the Revised Schedule VI to the Companies Act, 1956 has not been provided as these are not relevant having regard to the nature of the business of the Company.

15) Previous year figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2013

1. Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Companies Accounting Standards Rules, 2006, (as amended) the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2) Assets forming part of claims made by the Ultimate Parent Company

Pursuant to a Share Purchase agreement (''SPA'') between Aditya Birla Nuvo Limited (''ABNL'' or ''the Purchaser''), ultimate holding company and Mr. Prataph C Reddy and others ("Erstwhile Promoters") dated August 28, 2008, ABNL had agreed to acquire 31 million equity shares in Aditya Birla Money Limited ("the Company"). The transaction was completed on March 6, 2009.

As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harm less the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

Subsequent to the completion of the above transaction, the Purchaser noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets etc. Accordingly, ABNL based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of Rs. 163,882,296 as Losses incurred on account of breach of representation / warranties in the SPA. Further, ABNL vide its letter dated March 5, 2011 made a separate claim of Rs.5,169,379 for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. ABNL invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011 with the Arbitration Tribunal.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which are have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company as at March 31, 2013 aggregating Rs.145,779,681 (previous year: Rs.147,092,501) and disclosed the same in Short Term Loans & Advances under Note 11B of the Balance Sheet, as these amounts would be paid directly to the Company by the Erstwhile Promoters at the direction of ABNL as and when the settlement happens.

Both parties have completed filing of documents and draft issues have been submitted and approved. On 04th July 2012, a hearing was held and M/s. Deloitte Haskins & Sells were asked to act as auditors by the Arbitrators with a mandate to submit a report on whether from an accounting perspective; including the accounting treatment that has been given to the items set out in the Statement of Claim, the amounts as claimed are correct as per accounting practice.

The arbitral tribunal had directed the Claimants and Respondents to file their objections if any to the audit report submitted by M/s. Deloitte Haskins & Sells and had also directed the Respondent to file their list of witnesses (if any) by the end of April 2013 and has posted the next hearing to 06th June 2013. The Respondents filed their objections to the audit report and ABNL had also filed its reply to the said objections.

Based on legal opinion received and internal assessment, ABNL is confident of recovering the entire dues through the arbitration process and passing the benefit thereof to the Company against which these loss assets can be set-off in the future. Accordingly, the Company is of strong view that these amounts are recoverable.

3) Stamp duty

Hitherto, the Company had been collecting and remitting stamp duties with respect to states wherein the manner of payment of the same has been prescribed by the respective State Governments. From July 2011, the Company had started collecting stamp duty on contract notes for all states, including the states wherein the manner of payment has not yet been notified. The Company is evaluating various options of remitting the same, including remitting those amounts in the State of Tamil Nadu, as all the contract notes are executed at Tamil Nadu. Pending, the final determination of the manner of remittance, amount of Rs.4,560,042 (Previous year - Rs.4,738,697) collected till March 31, 2013 has been disclosed under Statutory Dues under Other Current Liabilities.

4) Capital and other commitment

a) Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is Rs 2,709,050 (Previous year - Rs 745,801).

b) For commitments relating to lease arrangements, please refer note 28.

5) Managerial Remuneration

During an earlier year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs.3,094,634 (Previous year - Rs.3,094,634) (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. P.B. Subramaniyan, the erstwhile whole-time director (''Erstwhile Director'') of the Company for the period from April 1, 2008 to March 6, 2009.

During the previous year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs.1,534,634 (Previous year - Rs.1,534,634) and directed the Company to collect the same from the Erstwhile Director.

The Company has commenced the process of recovery from the Erstwhile Director. Pending the recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet. The Company is evaluating various alternative options including seeking a condonation / compounding if these amounts are not recoverable from the Erstwhile Director.

6) Lease Disclosures

Operating Leases for Premises:

Lease rentals in respect of premises taken on operating lease during the year ended March 31, 2013 amounts to Rs.35,606,663 (Previous Year - Rs.46,569,848).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2013 amounts to Rs.182,036,682 (Previous Year - Rs. 115,442,089). Details of Lease Rentals payable within one year and thereafter are as under:

Operating Leases for Computers:

The company has entered into commercial leases on computer desktops. These leases have an average life of three years with renewal option included in the contracts.

Lease rentals in respect of computers taken on operating lease during the year ended March 31, 2013 amounts to Rs.4,559,985 (Previous Year - Rs.2,447,705).

7) Employment Benefit Disclosures

The amounts charged to the Statement of profit and loss during the year for Provident fund contribution aggregates to Rs.13,497,945 (Previous Year - Rs.15,537,797) and employees'' state insurance contribution aggregates to Rs.2,511,222 (Previous Year - Rs.2,584,475).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Aditya Birla NUVO Employee Gratuity Fund.

The following tables summaries the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

8) Foreign Currency Transactions

The Company did not enter into any foreign currency transactions in the current year and previous year.

9) Additional information pursuant to provisions of paragraphs 5(ii)(a), 5(ii)(b) and paragraphs 5(viii) (a) and 5(viii) (c) Part II of the Revised Schedule VI to the Companies Act, 1956 has not been provided as these are not relevant having regard to the nature of the business of the Company.

10) Previous Year Figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.


Mar 31, 2012

1. Basis of preparation

The financial statements have been prepared in accordance with generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Companies Accounting Standards Rules, 2006, (as amended) the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for change in accounting policy explained below.

2 Term/right attached to equity shares

The company has only one class of equity shares having a par value of Re.1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees.

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

3 Term of redemption of Preference Shares

The company has allotted 800,000 8% Redeemable Non Convertible Non Cumulative Preference Shares of Rs.100/- each, fully paid up at a premium of Rs.150/- per share to Aditya Birla Financial Services Private Limited, the holding company. These Preference Shares are redeemable at the end of 5 years at Rs.320/- per share.

4 41,550,000 (Previous Year - 41,550,000) equity shares of Re.1/- each fully paid up are held by Aditya Birla Financial Services Private Limited, the holding Company; and 800,000 (Previous Year - 800,000) 8% Redeemable Non Convertible Non Cumulative preference shares Rs.100/- each fully paid are held by Aditya Birla Financial Services Private Limited.

5 Shares in the Company held by each shareholder holding more than 5 percent shares specifying the number of shares held.

RESERVES & SURPLUS

*General Reserve : Under the Companies Act, a general reserve is created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers is to ensure that if a dividend distribution in a given year is more than 10% of the paid up capital of the company for that year, then the total dividend distribution is less than the total distributable results for that year.

(Note : The Company has recognized deferred tax assets on carried forward losses and unabsorbed depreciation only to the extent of the deferred tax liabilities which are given above, and not on the entire amount on account of prudence.)

There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

2) Assets forming part of claims made by the Ultimate Parent Company

Pursuant to a Share Purchase agreement ('SPA') between Aditya Birla Nuvo Limited ('ABNL' or 'the Purchaser') and Mr.Prathap C Reddy and others ("Erstwhile Promoters") dated August 28, 2008, ABNL had agreed to acquire 31 million equity shares in Aditya Birla Money Limited ("the Company"). The transaction was completed on March 6, 2009.

As per the SPA, the Erstwhile Promoters had agreed to indemnify and hold harm less the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representations or warranties, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

Subsequent to the completion of the above transaction, the Purchaser noted several breaches of representations and warranties including but not limited to non-recovery of debtors, irrecoverable advances, missing fixed assets etc. Accordingly, ABNL based on its internal assessment of the recoverability of receivables, fixed assets, other assets and matters relating to tax and other contingencies arrived at an amount of Rs.163,882,296 as Losses incurred on account of breach of representation / warranties in the SPA. Further, ABNL vide its letter dated March 5, 2011 made a separate claim of Rs.5,169,379 for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. ABNL invoked the arbitration mechanism and filed their Statement of Claim on February 26, 2011 with the Arbitration Tribunal.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company as at March 31, 2012 aggregating Rs.147,092,501 (previous year: Rs.152,102,658) and disclosed the same in Advances recoverable in cash or kind under Schedule 13B of the Balance Sheet, as these amounts would be paid directly to the Company by the Erstwhile Promoters at the direction of ABNL as and when the settlement happens. Based on legal opinion received and internal assessment, ABNL is confident of recovering the entire dues through the arbitration process and passing the benefit thereof to the Company against which these loss assets can be set-off in the future. Accordingly, the Company is of the view that these amounts are recoverable and hence not written off in the books of accounts of the Company.

3) Stamp duty

Hitherto, the Company had been collecting and remitting stamp duties with respect to states wherein the manner of payment of the same has been prescribed by the respective state governments. From July 2011, the Company had started collecting stamp duty on contract notes for all states, including the states wherein the manner of payment has not yet been notified. The Company is evaluating various options of remitting the same, including remitting those amounts in the State of Tamil Nadu, as all the contract notes are executed at Tamil Nadu. Pending, the final determination of the manner of remittance, amount of Rs.4,738,697 collected till March 31, 2012 has been disclosed under Statutory Dues under Other Current Liabilities.

4) Capital and other commitment

a) Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is Rs.745,801 (Previous year - Rs.4,882,875).

b) For commitments relating to lease arrangements, please refer note 32.

5) Contingent liabilities

Particulars March 31, 2012 March 31, 2011

Disputed tax and other statutory liabilities not provided for:

(a) Income tax & Interest Tax - for various assessment 36,666,168 35,579,720 years in respect of which Company has gone on appeal. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities.

(b) Service tax - for various assessment years in respect 7,957,873 7,930,877 of which Company has gone on appeal. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities.

(c) Provident fund – for the period from Mar 2009 to 14,036,578 — May 2011 for non inclusion of certain components like allowances etc. while computing and remitting the employer and employees' contribution to provident fund. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities

(d) Karnataka Stamp duty for the period from 2003- 9,060,000 9,060,000 2008. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities

Contingent liability not provided for on account of:

(a) Disputed claim of SEBI towards turnover fees 27,656,667 27,656,667 contested by the Company at Ho'nble Supreme Court. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Claims against the Company not acknowledged as 45,710,102 23,279,527 debts*

* Represents claims made on the Company by various customers alleging unauthorised trades, loss of profits etc. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

6) Managerial Remuneration

During an earlier year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs 3,094,634 (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. P.B. Subramaniyan, the erstwhile whole time director ('Erstwhile Director') of the Company for the period from April 1, 2008 to March 6, 2009.

During the previous year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs 1,534,634 and directed the Company to collect the same from the Erstwhile Director.

The Company has commenced the process of recovery from the Erstwhile Director. Pending the recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet. The Company is evaluating various alternative options including seeking a condonation / compounding if these amounts are not recoverable from the Erstwhile Director.

7) Change in estimated useful life of assets

During the current year, the Company has changed its estimated useful life of batteries from 20 years to 4 years. This change in estimated useful life has resulted in provision of additional depreciation by Rs. 1,020,080 and the profit before tax of the Company is lower by the corresponding number.

Further, during the current year, the Company has reassessed its useful life of furniture and fixtures fitted to the premises and changed the same from 15 years to rates based on the lease period, taking into account the secondary lease period. This change in estimated useful life has resulted in provision of additional depreciation by Rs. 6,836,389 and the profit before tax of the Company is lower by the corresponding number.

8) Lease disclosures

Operating leases for premises:

Lease rentals in respect of premises taken on operating lease during the year ended March 31, 2012 amounts to Rs. 46,569,848 (Previous Year Rs. 73,039,934).

Future obligations towards lease rentals under non-cancellable lease agreements as on March 31, 2012 amounts to Rs. 115,442,089 (Previous Year Rs. 151,127,416). Details of Lease Rentals payable within one year and thereafter are as under:

The company has entered into lease / license agreements in respect of immovable properties with different parties. Some of the agreements contain escalation clause related to lease rentals / license fees from 5% to 15% p.a.

Operating leases for computers:

Lease rentals in respect of computers taken on operating lease during the year ended March 31, 2012 amounts to Rs. 2,447,705 (Previous Year - Nil).

Future obligations towards lease rentals under non cancellable lease agreements as on March 31, 2012 amounts to Rs. 11,844,584 (Previous Year - Nil). Details of Lease Rentals payable within one year and thereafter are as under:

9) Employment benefit disclosures

The amounts charged to the Profit and loss account during the year for Provident fund contribution aggregates to Rs.15,537,797 (Previous year – Rs.14,907,704) and employees' state insurance contribution aggregates to Rs.2,584,475 (Previous year - 3,495,973).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

Details of plan assets

The plan assets represent Company's proportionate share in the Aditya Birla Nuvo Gratuity Fund managed by the ultimate parent company for the employees of the group. The details of plan assets are as under:

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

There is no experience adjustment for the year ended March 31, 2008.

The Company does not expect to contribute additional amount to the fund in the next year.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

10) Additional information pursuant to provisions of paragraphs 5(ii)(a), 5(ii)(b) and paragraphs 5(viii) (a) to 5(viii) (c) Part II of the Revised Schedule VI to the Companies Act, 1956 has not been provided as these are not relevant having regard to the nature of the business of the Company.

11) Comparatives

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

A) AMOUNTS RECEIVABLE FROM ERSTWHILE PROMOTERS

Pursuant to a Share Purchase agreement (‘SPA’) between Aditya Birla Nuvo Limited (‘ABNL’) and Mr Prataph C Reddy and others (“Erstwhile Promoters”) dated August 28, 2008, ABNL had agreed to acquire 31 Lakhs equity shares in Aditya Birla Money Limited (“the Company”). The transaction was completed on March 6, 2009.

As per clause 12.1 of the SPA, the Erstwhile Promoters had agreed to indemnify and hold harmless the Purchaser to the extent of any Losses, resulting from or consequent upon or relating to such breach of representation or warranty, covenants or agreement including but not limited to the recoveries of receivables and other assets in the books of the Company, contingencies on tax and related matters etc.

In connection with the above, the Company based on its internal assessment of the recoverability of receivables, fixed assets and others assets and matters relating to tax and other contingencies have arrived at a total claim of Rs 163,882,296/- and has accordingly raised on the erstwhile promoters to remit such monies to the Company. While, the erstwhile promoters have not accepted the claim in its entirety it has however in respect of one particular claim relating to service tax liabilities remitted a sum of Rs 19,047,324/- during the year. The erstwhile promoters have not remitted nor have they denied these amounts as due to the Company and ABNL.

In accordance with the terms of the SPA, the Company and ABNL have served a notice to the erstwhile promoters that they are invoking the arbitration mechanism for the resolution of the claims made. An Arbitral Tribunal was constituted and ABNL and the Company had filed their Statement of Claim on February 26, 2011.

In addition to the above, the Company vide its letter dated March 5, 2011 made a separate claim of Rs 5,169,379/- for amounts becoming due and payable on accounts of various cases initiated by the customers of the Company. Accordingly, as at March 31, 2011, the total claim made by the Company is about Rs 169,051,665/-.

Pending the final outcome of the arbitration proceedings, the Company has identified all such receivables, assets etc which are have not been recovered and other items which are the subject matter of the claim to the extent they are in the books of accounts of the Company aggregating Rs 138,829,722/- and disclosed the same in Advances recoverable in cash or kind under Loans and Advances in Schedule 9 of the Balance Sheet and the balance claims relating to contingencies which have devolved on the Company have been included under note 2(b) of Schedule 18 below on contingencies.

Based on legal opinion received and internal assessment, management is of the view that these amounts are recoverable from the erstwhile promoters and the Company is confident of recovering the entire dues through the arbitration process.

b) COMMITMENTS AND CONTINGENCIES

Commitments

Estimated amount of contracts remaining to be executed on capital account, net of advances and not provided for is Rs 4,882,875/- (Previous year - Rs. 11,053,000/-).

Contingent Liabilities

Particulars March 31, 2011 March 31, 2010

Bank Guarantees placed with exchanges 150,000,000 92,000,000

Disputed Tax Liability not provided for:

(a) Income Tax - for various assessment years in respect 35,579,720 26,900,000 of which Company has gone on appeal. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities.

(b) Service Tax-for various assessment years in respect 7,930,877 21,900,000 of which Company has gone on appeal. Based on judicial pronouncements, the claim of the Company is likely to be accepted by the judicial authorities.

Particulars March 31, 2011 March 31, 2010

Contingent Liability not provided for on account of:

(a) Disputed claim of SEBI towards turnover fees 27,656,667 27,656,667 contested by the Company at Hon’ble Supreme Court. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

(b) Claims against the Company not acknowledged as debts* 23,279,527 39,400,000

* Represents claims made on the Company by various customers alleging unauthorised trades, loss of profits etc. The Company has been advised by its legal counsel that it is possible, but not probable, the action will succeed and accordingly no provision for any liability has been made in these financial statements.

c) MANAGERIAL REMUNERATION

During the previous year the Company had made an application to the Central Government under Section 309 (5B) of the Companies Act, 1956 for seeking waiver of excess managerial remuneration amounting to Rs 3,094,634/- (excluding statutory contribution to provident fund, gratuity and leave encashment which are exempted under Schedule VI) paid to Mr. P.B. Subramaniyan, the Erstwhile whole time director (’Erstwhile Director’) of the Company for the period from April 1, 2008 to March 6, 2009.

During the current year, the Company has received an order from the Central Government (CG) whereby the CG has rejected excess remuneration of Rs 1,534,634/- and directed the Company to collect the same from the Erstwhile Director.

The Company has commenced the process of recovery from the Erstwhile Director. Pending the

recovery of the same, it has been shown as advances recoverable by the Company in the Balance Sheet. The Company is evaluating various alternative options including seeking a condonation / compounding if these amounts are not recoverable from the Erstwhile Director.

d) ISSUE OF 8% REDEEMABLE NON CONVERTIBLE NON CUMULATIVE PREFERENCE SHARES

The Company has allotted 800,000 8% Redeemable Non Convertible Non Cumulative Preference Shares (‘RNCNCPS’) of Rs 100/- each, fully paid up at a premium of Rs 150/- per share to Aditya Birla Financial Services Private Limited, its holding company.

The RNCNCPS are redeemable at the end of 5 years at Rs 320/- per share (face value Rs 100/- and a premium of Rs 220/- per share)

e) EXCEPTIONAL ITEMS

The company has borne one time loss of Rs 81,548,101/-, net of recovery, on account of certain trades of its clients which have not been recovered from them.

j) LEASE DISCLOSURES

Operating leases

Lease rentals in respect of premises taken on operating lease during the year ended March 31, 2011 amounts to Rs.63,728,019/- (Previous Year Rs.Rs.42,348,809/-).

The company has entered into lease / license agreements in respect of immovable properties with different parties. Some of the agreements contain escalation clause related to lease rentals / license fees from 5% to 15% p.a.

k) EMPLOYMENT BENEFIT DISCLOSURES

The amounts charged to the Profit and loss account during the year for Provident fund contribution aggregates to Rs. 14,907,704/- (Previous year - Rs. 9,748,273/-) and employees’ state insurance contribution aggregates to Rs. 3,495,973/- (Previous year - Rs. 2,097,698/-).

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme has been funded during the current year.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

Details of plan assets

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Experience adjustments

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

l) RELATED PARTY TRANSACTIONS List of related parties

Ultimate holding Company Aditya Birla Nuvo Limited

Holding Company Aditya Birla Financial Services Private Limited

Subsidiary Company Aditya Birla Commodities Broking Limited

Entities under common control

Aditya Birla Finance Limited

Aditya Birla Money Mart Limited

Aditya Birla Financial Shared Services Limited

Birla Sun Life Insurance Company Limited

m) FOREIGN CURRENCY TRANSACTIONS

The Company did not enter into any foreign currency transactions in the current year and previous year.

n) Additional information pursuant to provisions of paragraphs 3(i) to 3(iii) except paragraph 3(ii)(c) and paragraphs 4C and 4D of Part II of the Schedule VI to the Companies Act, 1956 has not been provided as these are not relevant having regard to the nature of the business of the Company.

o) COMPARATIVES

Previous year figures have been audited by a firm other than S.R. Batliboi & Associates. Further previous year figures have been regrouped / reclassified wherever necessary to conform to current year’s classification.


Mar 31, 2010

1.1 CONTINGENT LIABILITY:

(Rs.in lacs)

PARTICULARS 31-Mar-2010 31-Mar-2009

1.2 Disputed tax liability not provided for:

Income Tax 269 182

Service Tax 219 --

1.3 Contingent Liability not provided for on account of:

(a) Disputed Claim of SEBI towards turnover fees contested before Supreme Court. 261 261

(b) Claims against the company not acknowledged as debts 394 195

Total 1,143 638

1.4 CHANGE IN HOLDING COMPANY

During the year 2009-10, Aditya Birla Financial Services Private Limited have on 23rd February 2010 acquired 4,15,50,000 shares of Re.1A each fully paid up representing 75% of total Paid up Share Capital of the Company from Aditya Birla Nuvo Limited (inter-se promoter transfer under Regulation 3(4) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1996. Necessary disclosure under SEBI (SAST) Regulations, 1997 and SEBI (Prohibition of Insider Trading), Regulations, 1992 have been made on 24th February 2010 to the Exchanges.

1.5 RELATED PARTY TRANSACTIONS

As per AS-18 on "Related Party Disclosures" issued by the ICAI, the disclosures of transactions with the related parties of the company are as follows:

A) LIST OF RELATED PARTIES AND THEIR RELATIONSHIP

(A) HOLDING COMPANY

ADITYA BIRLA NUVO LTD (upto February 23,2010),

ADITYA BIRLA FINANCIAL SERVICES PRIVATE LIMITED (ABFSPL) (w.e.f. February 23, 2010)

(B) SUBSIDIARY COMPANY

Aditya Birla Commodities Broking Limited (ABCBL) (formerly known as Apollo Sindhoori Commodities Trading Limited) (100% Subsidiary of ABML) (w.e.f. April 2,2004)

(C) FELLOW SUSIDIARY COMPANY (W.E.F. MARCH 6, 2009)

Aditya Birla Capital Advisors Private Limited (ABCAPL) (Subsidiary of ABFSPL) (w.e.f. November 4, 2008)

Aditya Birla Customers Services Private Limited (ABCSPL) (Subsidiary of ABFSPL) (w.e.f. December 11,2008)

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFSPL) (w.e.f. November 4,2008 and ceased to be a subsidiary w.e.f. March 13,2009)

Aditya Birla Trustee Company Private Limited (ABTCPL) (Subsidiary of ABFSPL) (w.e.f. November 28, 2008)

Aditya Birla Financial Shared Services Limited (ABFSSL) (Subsidiary of ABFSPL)(w.e.f. June 19, 2008)

Aditya Birla Money Mart Limited(ABMML) (formerly known as Birla Sun Life Distribution Company Limited) (Subsidiary of ABFSPL) (w.e.f. March 31,2009)

BSDL Insurance Advisory Services Limited (100 % Subsidiary of ABMML)

Aditya Birla Minacs Worldwide Limited.(ABMWL)

TransWorks Inc (TW Inc) (100% Subsidiary of ABMWL)

Aditya Birla Minacs Philippines Inc. (ABMPI) (100 % Subsidiary of ABMWL)

AV TransWorks Limited. (AVTL) (100 % Subsidiary of ABMWL)

Aditya Birla Minacs Worldwide Inc. (ABMWI) (100 % Subsidiary of AVTL) (formerly known as

Minacs Worldwide Inc.)

Compass BPO Limited, U.K. (w.e.f. March 9,2010 )

Compass BPO, Inc, U.S.A (w.e.f. March 9,2010)

Compass Business Process outsourcing Ltd, India (w.e.f. March 9,2010 )

Compass BPO FZE, U.A.E (w.e.f. March 9,2010)

Minacs Worldwide SA de CV (100 % Subsidiary of ABMWI)

Minacs Group(USA) Inc. (100% Subsidiary of ABMWI)

Minacs Limited (100 % Subsidiary of ABMWI)

Minacs Worldwide GmbH (100 % Subsidiary of Minacs Limited)

Minacs Worldwide Kft. (100 % Subsidiary of Minacs GmbH)

Aditya Vikram Global Trading House Limited (AVGTHL)

Aditya Birla Finance Limited (ABFL) (formerly known as Birla Global Finance Company Limited (BGFCL))

Birla Insurance Advisory & Broking Services Limited. (BIABSL) (50.01% Subsidiary of BGCFPL upto March 30, 2009 and of ABFL w.e.f March 31, 2009)

Birla Sun Life Insurance Company Limited (BSLICL)

Aditya Birla Capital Limited (ABCL) (formerly known as Laxminarayan Investment Limited)

Madura Garments International Brand Company Limited (MGIBCL) (on becoming Associate, ceased to be an subsidiary w.e.f. November 27, 2009)

LIL Investment Limited (w.e.f. July 27, 2009 and on becoming Associate, ceased to be an

subsidiary w.e.f. November 27, 2009)

Madura Garments Exports Limited (MGEL) (merged with the Company w.e.f. January 1, 2010)

Madura Garments Exports US, Inc. (ceased to be a Subsidiary from February 09,2010)

Madura Garments Lifestyle Retail Company Limited. (MGLRCL)

MG Lifestyle Clothing Company Private Limited (MGCCPL) (merged with the Company w.e.f. January 1,2010)

Peter England Fashions and Retail Company Limited. (PEFRL)

Aditya Birla Minacs IT Services Limited(ABMITS) (formerly known as PSI Data Systems Limited)

Birla Technologies Limited (100 % Subsidiary of ABMITS)

(D) Key Management Personnel

Mr.Sudhakar Ramasubramanian, Executive Director (upto January 04, 2010)

Mr. Kanwar Vivek, Managing Director (w.e.f. January 04,2010)

2.0 MANAGERIAL REMUNERATION

2.1.1 The Company has made an application to Central Government under section 309 (5B) of the Companies Act,1956 for seeking waiver of excess managerial remuneration amounting to Rs.30,94,634/- (Excluding statutory contribution to PF, Gratuity and leave encashment which are exempted under schedule XIII) paid to Mr. P. B. Subramaniyan, the erstwhile Whole-time Director (Executive Director) of the Company for the period from 1st April 2008 to 6th March 2009.

2.1.2 The Company has appointed Mr.Sudhakar Ramasubramanian, as Executive Director, who relinquished charge as Executive Director with effect from 4th January 2010. Mr.Kanwar Vivek was appointed as Managing Director for a period of 3 years, with effect from 4th January 2010. No remuneration was payable to them.

2.2 SEGMENT REPORTING

The Company is principally engaged in the business of Stock Broking and related activities. Accordingly, there are no reportable segments as per Accounting Standard 17 issued by The Institute of Chartered Accountants of India.

3. Estimated amount of capital contracts remaining to be executed on capital account (net of advances) and not provided for is Rs.110.53 Lacs (Previous Year Rs. 15.50 Lacs)

4. FOREIGN EXCHANGE TRANSACTIONS

The company has not entered into any foreign exchange transactions during the year.

5. Amounts shown under Sundry Debtors, Loans and Advances and Sundry Creditors are subject to confirmation from the parties concerned. However, in the opinion of the Board of Directors of the Company, the current assets, loans and advances have a value on realization, not less than the amounts at which they are stated in the Balance Sheet.

6. Information related to Micro, Small and Medium Enterprises Development Act 2006 (Act) is disclosed hereunder. The information given below has been determined to the extent such parties have been identified on the basis of information available with the Company

a) (i) Principal amount remaining unpaid to any supplier at the end of accounting year. NIL

(ii) Interest due on above. NIL

b) Amount of interest paid by the buyer in terms of section 16 of the Act, along with amount of the payment made beyond the appointed date during the year NIL

c) Amounts of interest accrued and remaining unpaid at the end of financial year NIL

d) Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the due date during the year) but without adding the interest specified under the Act. NIL

e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductable expenditure under section 23 of the Act. NIL

7. Previous years figures have been regrouped / reclassified wherever necessary to confirm to this years classification.

8. Figures have been rounded off to the nearest rupee.

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