Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2023
Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of g 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
Shares reserved for issue under options
I nformation relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 27.
Nature and purpose of reserve:
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share-based payments arrangement over the vesting period. (Refer Note. 27)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
ii) The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares / units is done considering the intrinsic value and the progression of share/ unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of g (3.11) Crores (Previous year g (4.09) Crores).
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset
management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
25. Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A. Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high.
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuously monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B. Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficient cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market risk is the risk of loss of future earnings, fair values or future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
i) Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
I nterest rate risk is the risk where the Company is exposed to the risk that fair value or future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarises the impact of increases / decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
27. Employee share-based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39. The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure is not appliable.
40. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
41. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
42. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
43. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
44. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company does not has any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
46. The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on September 29, 2020, which could impact the contributions made by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
47. As part of the long-term strategy to consolidate offshore operations, during the previous year, the activities undertaken by the Mauritius subsidiary were transferred to Singapore subsidiary and voluntary liquidation process was initiated. The liquidation process of Mauritius subsidiary got completed during the quarter ended June 30, 2022.
48. The figures for the corresponding previous period have been regrouped / reclassified wherever necessary, to make them comparable.
49. Events occurring after the reporting period
The Board of Directors have proposed final dividend of g 7.50/- per equity share of g 10/- each for the financial year 2022-23. This is in addition to the interim dividend of g 4.00/- per equity share declared by the Board of Directors on October 19, 2022.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2022
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
a) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.
The dividend proposed by the Board of Directors is subject to the approval of Shareholders at the ensuing Annual General Meeting, except in case of interim dividend.
b) Shares reserved for issue under options
Information relating to the Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 28.
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised only For limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,2013.
b) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
c) Share based options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under share based payments arrangement over the vesting period. (Refer Note. 28)
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at separation.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
These plans typically expose the Group to actuarial risks such as: Interest rate risk, salary risk, Investment risk, Asset Liability Matching risk, Mortality risk and Concentration risk.
i) Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.
ii) Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.
iii) Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.
iv) Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.
v) Mortality risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.
vi) Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance Company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.
The Company''s liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The Projected benefit obligation is calculated using Project Unit Credit Method. The valuation of the shares/ units is done considering the intrinsic value and the progression of share/unit price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 5 years.
iii) For the current year the Company has created provision of '' (4.09) crore (Previous year '' (19.60) crore).
25 Segment information
The Company is in the business of providing asset management services to the schemes of Nippon Mutual Fund and portfolio management service to clients. The primary segment is identified as asset management services. Portfolio management services does not qualify as reportable segment as per the criteria mentioned under Ind AS 108 and hence not disclosed separately.
26 Fair value measurement a) Fair value hierarchy
Fair value measurements are analysed by level in the fair value hierarchy as follows: (i) level one are measurements at quoted prices (unadjusted) in active markets for identical assets or liabilities, (ii) level two measurements are valuations techniques with all material inputs observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and (iii) level three measurements are valuations not based on observable market data (that is, unobservable inputs). Management applies judgement in categorising financial instruments using the fair value hierarchy. If a fair value measurement uses observable inputs that require significant adjustment, that measurement is a Level 3 measurement. The significance of a valuation input is assessed against the fair value measurement in its entirety.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: The Fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
27 Financial risk management
The Company activities expose it to credit risk, liquidity risk and market risk. The Company''s risk management is carried out by a Risk department under the policies approved by the Board of Directors. The Risk team identifies, evaluates and highlights financial risks in close cooperation with the other departments.
A Credit risk management
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. The Company is also exposed to other credit risks arising from investments in debt securities. Credit risk is the one of the largest risk for the Company''s business; management therefore carefully manages its exposure to credit risk.
1. The maximum exposure to credit risk at the reporting date is primarily from Cash & Cash Equivalents and Bank Fixed Deposit. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be high
2. The Company has extended loans to various parties. Credit risk on the loans has been managed by the Company through external credit assessments done, if any, by domestic credit rating agencies and continuosly monitoring the credit worthiness of the Company. The Company uses expected credit loss model to assess the impairment loss or gain. Refer note 6 for the same.
3. Exposures to customers'' outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. As the Company has a contractual right to such receivables as well as has the control over such funds due from customers, the Company does not estimate any credit risk in relation to such receivables. Further, management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour.
B Liquidity risk and funding management
Prudent liquidity risk management implies maintaining sufficient cash and liquid investments to meet payment obligations, when due, under all circumstances.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried in accordance with practice and limits set by the Company after giving due considerations to internal and external factors that could impact the liquidity position of the Company. Further, since the Company has no external borrowings and has sufficent cash and liquid investments to meet payment obligations, there is low liquidity risk.
Analysis of financial assets and liabilities by remaining contractual maturities
The table below summarises the maturity profile of the undiscounted cash flows of the Company''s financial assets and liabilities as at March 31. The amounts disclosed in the table are the contractual undiscounted cash flows.
Market Risk
Market risk is the risk of loss of Future earnings, Fair values or Future cash flows related to financial instrument that may result from adverse changes in market rates and prices (such as foreign exchange rates, interest rates, other prices). The Company is exposed to market risk primarily related to currency risk, interest rate risk and price risk.
Foreign currency risk
The Company has insignificant amount of foreign currency denominated assets and liabilities. Accordingly, there is no significant exposure to currency risk.
ii) Interest Rate Risk
Interest rate risk is the risk where the Company is exposed to the risk that Fair value or Future cash flows of its financial instruments will fluctuate as a result of change in market interest rates. Tax Free Bonds held by the Company and loans extended by the Company to various parties are at fixed rate of coupon and accordingly the Company does not perceive any interest rate risk.
iii) Price risk Exposure
Price risk is the risk that the value of the financial instrument will fluctuate as a result of changes in market prices and related market variables including interest rate for investments in debt oriented mutual funds and debt securities, caused by factors specific to an individual investment, its issuer and market. The Company''s exposure to price risk arises from diversified investments in mutual funds, preference shares held by the Company and classified in the balance sheet at fair value through profit or loss (note 7).
Sensitivity Analysis
The table below summarizes the impact of increases/decreases of the Net Asset Value (NAV) on the Company''s investment in Mutual fund and profit for the period. The analysis is based on the assumption that the NAV increased by 5% or decreased by 5% with all other variables held constant, and that all the Company''s investments in mutual funds moved in line with the NAV.
28 Employee share based payments
Employee stock option scheme (ESOS) (Equity settled)
The Company have ESOS 2017 and ESOS 2019 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till four years as per Plan. Each Option entitles the holder thereof to apply for and be allotted / transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
Fair value of options granted
The Fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The options granted for no consideration and will vest upon the completion of service condition as specified in scheme in graded manner. Vested options are exercisable for the period of five years after the vesting.
39 The Company do not have any transactions with struck off companies.
40 The Company has not borrowed any fund from bank or financial Institution or other lender hence disclosure in relation to Wilful defaulter is not appliable.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
46 The Company does not has any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
The Code on Social Security 2020, relating to employee benefits during employment and post-employment, has been notified in the Official Gazette on 29th Sep 2020, which could impact the contributions made by the company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified, and the rules are yet to be framed. Impact, if any, of the change will be assessed and accounted in period of notification of the relevant provisions.
Events occurring after the reporting period
The Board of Directors have proposed final dividend of '' 7.50/- per equity share of '' 10/- each for the financial year 202122. This is in addition to the interim dividend of '' 3.50/- per equity share declared by the Board of Directors on October 26, 2021.
The figures for the corresponding previous period have been regrouped/reclassified wherever necessary, to make them comparable.
Mar 31, 2018
1. BACKGROUND
Reliance Nippon Life Asset Management Limited (âthe Companyâ) was incorporated on 24 February 1995.
The Companyâs principal activity is to act as an investment manager to Reliance Mutual Fund (âthe Fundâ) and to provide Portfolio Management Services (âPMSâ) and advisory services to clients under Securities and Exchange Board of India (SEBI) Regulations. The Company is registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996. The Company manages the investment portfolio of the Fund and provides various administrative services to the Fund as laid down in the Investment Management Agreement dated 12 August 1997.
During the year ended 31 March 2018, the Company completed the Initial Public Offering (IPO) through an offer for sale and fresh issue of equity shares . The equity shares of the Company were listed on National Stock exchange of India Limited and Bombay Stock exchange Limited on 6 November 2017.
Terms / rights attached to equity shares :
The Company has one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Iv. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:
During the year ended March 31, 2015, the Company had issued 3,000,000 6% Non-Convertible Non-Cumulative Redeemable Preference shares of Rs.100 each amounting to Rs. 30 Crore for consideration other than cash. On 18 July 2017, the Company has redeemed the same out of free reserves.
(*) The Company does not have any outstanding dues towards small scale industrial undertakings as at March 31, 2018. The Company did not have any outstanding dues to any micro or small enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 at any point during the year that were outstanding for a period of more than 45 days from the date of acceptance (as certified by the Management).
2.1 Employees Stock Option Plan (ESOP) :
(i) Pursuant to a resolution dated 8 August 2017, shareholders approved Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017 (âESOP 2017â), to provide for grant of option to eligible employees of the companies and subsidiaries. Under the scheme, 49,44,246 equity shares (taking into account the effect of bonus issuance dated 11 August 2017) have been granted to the eligible employees and each option (after it is vested) is excisable for one equity share having face value of Rs 10 each for an exercise price of Rs 204.25. Vesting of the options shall take place over a maximum period of 4 years with a minimum vesting period of 1 year from the date of grant i.e. 8 August 2017. The exercise period would be maximum of 7 years from the date of grant of options.
(i)(c) The Company has chosen to account for the Plan by the Intrinsic Value Method. The total expense recognised for the period arising from stock option plan as per Intrinsic Value Method is Rs.Nil (PY Rs. NA). The net results for the year, had the Company adopted the Fair Value Method, would have been lower by Rs. 1.43 (PY Rs. NA) and accordingly basic and diluted EPS would have been lower by Rs. 0.02 and Rs. 0.02 respectively (PY impact Rs. NA and Rs. NA).
(ii) During the year, performance linked incentive/ ex-gratia of Rs. 27.50 Crore (P.Y. 20.00 Crore) was paid from Reliance Capital Asset Management Employees Benefits Trust out of its surplus funds as per Employee Benefit Scheme, 2016.
2.2 disclosure pursuant to Accounting Standard - 15 (Revised) â employee Benefitsâ :
A Defined Contribution Plans:
Contributions to fund made under âDefined Contribution Plansâ are recognized as expense in the Statement of profit and loss as follows:
B Defined Benefit Plans:
i. Reconciliation of opening and closing balances of the Present Value of the Defined Benefit Obligation :
The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
vii. General Descriptions of significant defined benefits plans:
a. gratuity Plan :
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act 1972 or as per the Companyâs Scheme whichever is more beneficial.
b. Leave Plan :
Encashment of leave can be availed by the employee for the balance in the earned account as on 1 January 2009. All carry forward earned leaves are available for availment but not encashment. Leave can be encashed subject to available balance of more than 15 days.
viii. Five-year information
Amounts for the current and the previous four years are as follows:
iii. The Companyâs liability towards the scheme is accounted for on the basis of an independent actuarial valuation performed at the year end. The valuation of the shares/units is performed considering the intrinsic value and the progression of share/unit price up to the exercise of the option.
Note
The Company did not have any other long-term contracts including derivative contracts for which there were any material foreseeable losses.
2.3 Related Party Disclosure:
A. List of Related Parties and their relationship:
i) Holding company
Reliance Capital Limited (upto 12 July 2017)
ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the period (Up to 12 July 2017)
iii) Major investing party
Reliance Capital Limited (Ceased to be holding Company w.e.f 13 July 2017)
Nippon Life Insurance Company
iv) Subsidiaries
Reliance Asset Management (Singapore) Pte Limited Reliance Asset Management (Mauritius) Limited Reliance AIF Management Company Limited Reliance Capital Pension Fund Limited (Up to 2 July 2017)
v) Associate
Reliance Capital Pension Fund Limited (Became an associate w.e.f 3 July 2017)
vi) Subsidiaries of holding company (Up to 12 July 2017)
Reliance Capital Trustee Co. Limited Reliance General Insurance Company Limited
Reliance Nippon Life Insurance Company Limited (formerly Reliance Life Insurance Company Limited) Reliance Commercial Finance Limited (formerly Reliance Gilts Limited)
Reliance Money Precious Metals Private Limited Reliance Home Finance Limited Reliance Securities Limited Reliance Commodities Limited Reliance Financial Limited Reliance Wealth Management Limited Reliance Money Solutions Private Limited Reliance Exchangenext Limited
Reliance Corporate Advisory Services Limited (formerly Reliance Spot Exchange Infrastructure Limited) Reliance Capital AIF Trustee Company Private Limited Reliance Health Insurance Limited (w.e.f. 4 May 2017)
Reliance Infocomm Infrastructure Limited Quant Capital Private Limited Quant Broking Private Limited Quant Securities Private Limited Quant Investment Services Private Limited
B. Significant influence: (up to 12 July 2017)
Enterprise over which individual described in clause A (ii) above has control
Reliance Communications Infrastructure Limited
Reliance IDC Limited
Reliance Communications Limited
Reliance Webstore Limited
Zapak Digital Entertainment Limited
C. Key management personnel:
Sundeep Sikka (Whole Time Director) w.e.f. 22 April 2016
2.4 Deferred Tax
In compliance with the Accounting Standard on âAccounting for Taxes on Incomeâ (AS-22) notified under Section 133 of the Act, the Company has made net deferred tax adjustment of Rs. 7.98 Crore (Previous Year - (Rs. 4.62 Crore)) as per details given below. The amount has been debited to the Statement of Profit and Loss.
2.5 Details of Loans given, investment made and guarantee given covered under section 186(4) of the Companies Act 2013:
i. Details of Investments made have been given as part of Notes 3.9A and 3.9B
ii. Loans given below:
* Maximum amount outstanding during the year is Rs. 24.35 Crore (Previous year - Rs. 12.30 Crore) as per additional disclosures pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
iii. The Company has not given any guarantee or provided any security in connection with loans to any body corporate or person.
2.6 The Company has issued bonus shares of 50 Equity shares for every one Equity share held on the record date i.e. 10 August 2017 through capitalisation of amount standing to the credit of Capital Redemption Reserve and Securities Premium account. Accordingly, the Company has issued 57,60,00,000 equity shares as bonus shares during the year ended March 31, 2018. The Earning Per Share figures for the year ended March 31, 2017 have been restated to give effect to the allotment of the bonus shares, as required by Accounting Standard (AS 20) - Earnings per share.
2.7 Corporate social responsibility (CSR)
a) Gross amount required to be spent by the company during the year was Rs. 10.18 Crore (PY Rs. 8.89 crore) as per calculation.
b) Amount spent for the year ended March 31, 2018:
2.8 Segment Reporting
The Company is in the business of providing asset management services to the fund and portfolio management service to clients. The primary segment is identified as asset management services. As such the Companyâs financial statements is largely reflective of the asset management business and there is no separate reportable segment.
Pursuant to Accounting Standard (AS) 17 Segment Reporting, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
2.9 Asset Management Right:
During the FY 2015-16, the Company and Reliance Capital Trustee Company Limited had jointly entered into a Scheme Transfer Agreement with Goldman Sachs Asset Management (India) Private Limited, Board of Trustees of Goldman Sachs Mutual Fund and Goldman Sachs Asset Management, L.P to acquire the right to manage and administer the schemes of Goldman Sachs Mutual Fund, the right to assume the trusteeship of the schemes of Goldman Sachs Trustee Company (India) Private Limited and takeover of the schemes of Goldman Sachs Mutual Fund respectively. The said transaction has been approved by the relevant regulatory authorities and the Unit holders of the Schemes of Goldman Sachs Mutual Fund in the FY 2016-17. The amount paid along with the incidental expenditure incurred thereon aggregating to Rs. 250.14 Crore has been treated as Asset management Right as intangible asset. The Asset management Right will be amortized over a period of 120 months. For the year ended March 31, 2018, an amount of Rs. 25.01 Crore has been amortized. Balance life of Asset Management Right is 103 months.
2.10 Pursuant to Initial Public offering (âIPOâ), sale of 6,12,00,000 equity shares of face value of Rs. 10 each at Rs. 252 per equity share consisting of fresh issue of 2,44,80,000 equity shares and offer for sale by Reliance Capital Limited and Nippon Life Insurance Company (âselling shareholdersâ) of 1,12,30,200 equity shares and 2,54,89,800 equity shares, respectively was completed.
2.11 The details of utilisation of IPO proceeds Rs. 588.85 Crore (net of IPO related expenses) are as follows:
2.12 The Company had estimated Rs. 51.26 Crore (inclusive of taxes) as IPO expenses. Of such IPO related expenses, certain expenses (such as Counsel Fees, Auditor Fees, Marketing, Printing & Stationery) aggregating to Rs. 18.20 Crore (inclusive of taxes) are directly attributable to the Company. Remaining IPO related expenses aggregating to Rs. 33.06 Crore (inclusive of taxes), have been allocated between the Company and selling shareholders in proportion to equity shares offered by them for sale. Expenses to be borne by the selling shareholder has been shared equally by both the shareholders. Selling shareholders have reimbursed Rs. 16.98 Crore to the Company. Till March 31, 2018, an amount of Rs. 51 Crore is paid against IPO related expenses and the balance will be paid in due course. As at March 31, 2018, the total expenses attributable to the Company of Rs 28.04 Crore has been adjusted against Securities Premium Account.
2.13 During the year the Company had declared and paid interim dividend of Rs. 5/- per equity share amounting to Rs. 368.29 Crore (PY: Nil) including dividend distribution tax. In addition, the Board has recommended final dividend of Rs. 1/- per equity share be paid on fully paid equity shares. The same is subject to approval of Shareholders at Annual General Meeting and has not been recorded as a liability in these financial statement in line with the Accounting Standards requirement. The total estimated equity dividend to be paid is Rs. 73.78 Crore (PY Rs. 298.10 crore) including dividend distribution tax.
2.14 Regrouping / Reclassification of Previous Year:
Expenses other than employee benefits expense, depreciation and amortization have been grouped under âOther expensesâ. Previous yearâs figures have been regrouped/ reclassified wherever necessary to conform current yearâs classification/ disclosure. Courier charges have been clubbed with Communication. Advertisement expenses have been clubbed with Marketing expenses and has been renamed as Marketing, advertisement and publicity expenses. Further, Marketing, advertisement and publicity expenses of Rs.6.03 Crore has been reclassified to Outsourced business services. Legal and professional fees of Rs. 10.06 Crore and Rs. 9.05 Crore has been reclassified to Information Technology and Outsourced business services respectively.
2.15 The amounts reflected as â0â in the Financial statements are values with less than rupees one crore.
Mar 31, 2018
1. BACKGROUND
Reliance Nippon Life Asset Management Limited (âthe Companyâ) was incorporated on 24 February 1995.
The Companyâs principal activity is to act as an investment manager to Reliance Mutual Fund (âthe Fundâ) and to provide Portfolio Management Services (âPMSâ) and advisory services to clients under Securities and Exchange Board of India (SEBI) Regulations. The Company is registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996. The Company manages the investment portfolio of the Fund and provides various administrative services to the Fund as laid down in the Investment Management Agreement dated 12 August 1997.
During the year ended 31 March 2018, the Company completed the Initial Public Offering (IPO) through an offer for sale and fresh issue of equity shares . The equity shares of the Company were listed on National Stock exchange of India Limited and Bombay Stock exchange Limited on 6 November 2017.
Terms / rights attached to equity shares :
The Company has one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Iv. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:
During the year ended March 31, 2015, the Company had issued 3,000,000 6% Non-Convertible Non-Cumulative Redeemable Preference shares of Rs.100 each amounting to Rs. 30 Crore for consideration other than cash. On 18 July 2017, the Company has redeemed the same out of free reserves.
(*) The Company does not have any outstanding dues towards small scale industrial undertakings as at March 31, 2018. The Company did not have any outstanding dues to any micro or small enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 at any point during the year that were outstanding for a period of more than 45 days from the date of acceptance (as certified by the Management).
2.1 Employees Stock Option Plan (ESOP) :
(i) Pursuant to a resolution dated 8 August 2017, shareholders approved Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017 (âESOP 2017â), to provide for grant of option to eligible employees of the companies and subsidiaries. Under the scheme, 49,44,246 equity shares (taking into account the effect of bonus issuance dated 11 August 2017) have been granted to the eligible employees and each option (after it is vested) is excisable for one equity share having face value of Rs 10 each for an exercise price of Rs 204.25. Vesting of the options shall take place over a maximum period of 4 years with a minimum vesting period of 1 year from the date of grant i.e. 8 August 2017. The exercise period would be maximum of 7 years from the date of grant of options.
(i)(c) The Company has chosen to account for the Plan by the Intrinsic Value Method. The total expense recognised for the period arising from stock option plan as per Intrinsic Value Method is Rs.Nil (PY Rs. NA). The net results for the year, had the Company adopted the Fair Value Method, would have been lower by Rs. 1.43 (PY Rs. NA) and accordingly basic and diluted EPS would have been lower by Rs. 0.02 and Rs. 0.02 respectively (PY impact Rs. NA and Rs. NA).
(ii) During the year, performance linked incentive/ ex-gratia of Rs. 27.50 Crore (P.Y. 20.00 Crore) was paid from Reliance Capital Asset Management Employees Benefits Trust out of its surplus funds as per Employee Benefit Scheme, 2016.
2.2 disclosure pursuant to Accounting Standard - 15 (Revised) â employee Benefitsâ :
A Defined Contribution Plans:
Contributions to fund made under âDefined Contribution Plansâ are recognized as expense in the Statement of profit and loss as follows:
B Defined Benefit Plans:
i. Reconciliation of opening and closing balances of the Present Value of the Defined Benefit Obligation :
The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
vii. General Descriptions of significant defined benefits plans:
a. gratuity Plan :
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act 1972 or as per the Companyâs Scheme whichever is more beneficial.
b. Leave Plan :
Encashment of leave can be availed by the employee for the balance in the earned account as on 1 January 2009. All carry forward earned leaves are available for availment but not encashment. Leave can be encashed subject to available balance of more than 15 days.
viii. Five-year information
Amounts for the current and the previous four years are as follows:
iii. The Companyâs liability towards the scheme is accounted for on the basis of an independent actuarial valuation performed at the year end. The valuation of the shares/units is performed considering the intrinsic value and the progression of share/unit price up to the exercise of the option.
Note
The Company did not have any other long-term contracts including derivative contracts for which there were any material foreseeable losses.
2.3 Related Party Disclosure:
A. List of Related Parties and their relationship:
i) Holding company
Reliance Capital Limited (upto 12 July 2017)
ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the period (Up to 12 July 2017)
iii) Major investing party
Reliance Capital Limited (Ceased to be holding Company w.e.f 13 July 2017)
Nippon Life Insurance Company
iv) Subsidiaries
Reliance Asset Management (Singapore) Pte Limited Reliance Asset Management (Mauritius) Limited Reliance AIF Management Company Limited Reliance Capital Pension Fund Limited (Up to 2 July 2017)
v) Associate
Reliance Capital Pension Fund Limited (Became an associate w.e.f 3 July 2017)
vi) Subsidiaries of holding company (Up to 12 July 2017)
Reliance Capital Trustee Co. Limited Reliance General Insurance Company Limited
Reliance Nippon Life Insurance Company Limited (formerly Reliance Life Insurance Company Limited) Reliance Commercial Finance Limited (formerly Reliance Gilts Limited)
Reliance Money Precious Metals Private Limited Reliance Home Finance Limited Reliance Securities Limited Reliance Commodities Limited Reliance Financial Limited Reliance Wealth Management Limited Reliance Money Solutions Private Limited Reliance Exchangenext Limited
Reliance Corporate Advisory Services Limited (formerly Reliance Spot Exchange Infrastructure Limited) Reliance Capital AIF Trustee Company Private Limited Reliance Health Insurance Limited (w.e.f. 4 May 2017)
Reliance Infocomm Infrastructure Limited Quant Capital Private Limited Quant Broking Private Limited Quant Securities Private Limited Quant Investment Services Private Limited
B. Significant influence: (up to 12 July 2017)
Enterprise over which individual described in clause A (ii) above has control
Reliance Communications Infrastructure Limited
Reliance IDC Limited
Reliance Communications Limited
Reliance Webstore Limited
Zapak Digital Entertainment Limited
C. Key management personnel:
Sundeep Sikka (Whole Time Director) w.e.f. 22 April 2016
2.4 Deferred Tax
In compliance with the Accounting Standard on âAccounting for Taxes on Incomeâ (AS-22) notified under Section 133 of the Act, the Company has made net deferred tax adjustment of Rs. 7.98 Crore (Previous Year - (Rs. 4.62 Crore)) as per details given below. The amount has been debited to the Statement of Profit and Loss.
2.5 Details of Loans given, investment made and guarantee given covered under section 186(4) of the Companies Act 2013:
i. Details of Investments made have been given as part of Notes 3.9A and 3.9B
ii. Loans given below:
* Maximum amount outstanding during the year is Rs. 24.35 Crore (Previous year - Rs. 12.30 Crore) as per additional disclosures pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
iii. The Company has not given any guarantee or provided any security in connection with loans to any body corporate or person.
2.6 The Company has issued bonus shares of 50 Equity shares for every one Equity share held on the record date i.e. 10 August 2017 through capitalisation of amount standing to the credit of Capital Redemption Reserve and Securities Premium account. Accordingly, the Company has issued 57,60,00,000 equity shares as bonus shares during the year ended March 31, 2018. The Earning Per Share figures for the year ended March 31, 2017 have been restated to give effect to the allotment of the bonus shares, as required by Accounting Standard (AS 20) - Earnings per share.
2.7 Corporate social responsibility (CSR)
a) Gross amount required to be spent by the company during the year was Rs. 10.18 Crore (PY Rs. 8.89 crore) as per calculation.
b) Amount spent for the year ended March 31, 2018:
2.8 Segment Reporting
The Company is in the business of providing asset management services to the fund and portfolio management service to clients. The primary segment is identified as asset management services. As such the Companyâs financial statements is largely reflective of the asset management business and there is no separate reportable segment.
Pursuant to Accounting Standard (AS) 17 Segment Reporting, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
2.9 Asset Management Right:
During the FY 2015-16, the Company and Reliance Capital Trustee Company Limited had jointly entered into a Scheme Transfer Agreement with Goldman Sachs Asset Management (India) Private Limited, Board of Trustees of Goldman Sachs Mutual Fund and Goldman Sachs Asset Management, L.P to acquire the right to manage and administer the schemes of Goldman Sachs Mutual Fund, the right to assume the trusteeship of the schemes of Goldman Sachs Trustee Company (India) Private Limited and takeover of the schemes of Goldman Sachs Mutual Fund respectively. The said transaction has been approved by the relevant regulatory authorities and the Unit holders of the Schemes of Goldman Sachs Mutual Fund in the FY 2016-17. The amount paid along with the incidental expenditure incurred thereon aggregating to Rs. 250.14 Crore has been treated as Asset management Right as intangible asset. The Asset management Right will be amortized over a period of 120 months. For the year ended March 31, 2018, an amount of Rs. 25.01 Crore has been amortized. Balance life of Asset Management Right is 103 months.
2.10 Pursuant to Initial Public offering (âIPOâ), sale of 6,12,00,000 equity shares of face value of Rs. 10 each at Rs. 252 per equity share consisting of fresh issue of 2,44,80,000 equity shares and offer for sale by Reliance Capital Limited and Nippon Life Insurance Company (âselling shareholdersâ) of 1,12,30,200 equity shares and 2,54,89,800 equity shares, respectively was completed.
2.11 The details of utilisation of IPO proceeds Rs. 588.85 Crore (net of IPO related expenses) are as follows:
2.12 The Company had estimated Rs. 51.26 Crore (inclusive of taxes) as IPO expenses. Of such IPO related expenses, certain expenses (such as Counsel Fees, Auditor Fees, Marketing, Printing & Stationery) aggregating to Rs. 18.20 Crore (inclusive of taxes) are directly attributable to the Company. Remaining IPO related expenses aggregating to Rs. 33.06 Crore (inclusive of taxes), have been allocated between the Company and selling shareholders in proportion to equity shares offered by them for sale. Expenses to be borne by the selling shareholder has been shared equally by both the shareholders. Selling shareholders have reimbursed Rs. 16.98 Crore to the Company. Till March 31, 2018, an amount of Rs. 51 Crore is paid against IPO related expenses and the balance will be paid in due course. As at March 31, 2018, the total expenses attributable to the Company of Rs 28.04 Crore has been adjusted against Securities Premium Account.
2.13 During the year the Company had declared and paid interim dividend of Rs. 5/- per equity share amounting to Rs. 368.29 Crore (PY: Nil) including dividend distribution tax. In addition, the Board has recommended final dividend of Rs. 1/- per equity share be paid on fully paid equity shares. The same is subject to approval of Shareholders at Annual General Meeting and has not been recorded as a liability in these financial statement in line with the Accounting Standards requirement. The total estimated equity dividend to be paid is Rs. 73.78 Crore (PY Rs. 298.10 crore) including dividend distribution tax.
2.14 Regrouping / Reclassification of Previous Year:
Expenses other than employee benefits expense, depreciation and amortization have been grouped under âOther expensesâ. Previous yearâs figures have been regrouped/ reclassified wherever necessary to conform current yearâs classification/ disclosure. Courier charges have been clubbed with Communication. Advertisement expenses have been clubbed with Marketing expenses and has been renamed as Marketing, advertisement and publicity expenses. Further, Marketing, advertisement and publicity expenses of Rs.6.03 Crore has been reclassified to Outsourced business services. Legal and professional fees of Rs. 10.06 Crore and Rs. 9.05 Crore has been reclassified to Information Technology and Outsourced business services respectively.
2.15 The amounts reflected as â0â in the Financial statements are values with less than rupees one crore.
Mar 31, 2018
1. BACKGROUND
Reliance Nippon Life Asset Management Limited (âthe Companyâ) was incorporated on 24 February 1995.
The Companyâs principal activity is to act as an investment manager to Reliance Mutual Fund (âthe Fundâ) and to provide Portfolio Management Services (âPMSâ) and advisory services to clients under Securities and Exchange Board of India (SEBI) Regulations. The Company is registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996. The Company manages the investment portfolio of the Fund and provides various administrative services to the Fund as laid down in the Investment Management Agreement dated 12 August 1997.
During the year ended 31 March 2018, the Company completed the Initial Public Offering (IPO) through an offer for sale and fresh issue of equity shares . The equity shares of the Company were listed on National Stock exchange of India Limited and Bombay Stock exchange Limited on 6 November 2017.
Terms / rights attached to equity shares :
The Company has one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Iv. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:
During the year ended March 31, 2015, the Company had issued 3,000,000 6% Non-Convertible Non-Cumulative Redeemable Preference shares of Rs.100 each amounting to Rs. 30 Crore for consideration other than cash. On 18 July 2017, the Company has redeemed the same out of free reserves.
(*) The Company does not have any outstanding dues towards small scale industrial undertakings as at March 31, 2018. The Company did not have any outstanding dues to any micro or small enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 at any point during the year that were outstanding for a period of more than 45 days from the date of acceptance (as certified by the Management).
2.1 Employees Stock Option Plan (ESOP) :
(i) Pursuant to a resolution dated 8 August 2017, shareholders approved Reliance Nippon Life Asset Management Limited - Employee Stock Option Plan 2017 (âESOP 2017â), to provide for grant of option to eligible employees of the companies and subsidiaries. Under the scheme, 49,44,246 equity shares (taking into account the effect of bonus issuance dated 11 August 2017) have been granted to the eligible employees and each option (after it is vested) is excisable for one equity share having face value of Rs 10 each for an exercise price of Rs 204.25. Vesting of the options shall take place over a maximum period of 4 years with a minimum vesting period of 1 year from the date of grant i.e. 8 August 2017. The exercise period would be maximum of 7 years from the date of grant of options.
(i)(c) The Company has chosen to account for the Plan by the Intrinsic Value Method. The total expense recognised for the period arising from stock option plan as per Intrinsic Value Method is Rs.Nil (PY Rs. NA). The net results for the year, had the Company adopted the Fair Value Method, would have been lower by Rs. 1.43 (PY Rs. NA) and accordingly basic and diluted EPS would have been lower by Rs. 0.02 and Rs. 0.02 respectively (PY impact Rs. NA and Rs. NA).
(ii) During the year, performance linked incentive/ ex-gratia of Rs. 27.50 Crore (P.Y. 20.00 Crore) was paid from Reliance Capital Asset Management Employees Benefits Trust out of its surplus funds as per Employee Benefit Scheme, 2016.
2.2 disclosure pursuant to Accounting Standard - 15 (Revised) â employee Benefitsâ :
A Defined Contribution Plans:
Contributions to fund made under âDefined Contribution Plansâ are recognized as expense in the Statement of profit and loss as follows:
B Defined Benefit Plans:
i. Reconciliation of opening and closing balances of the Present Value of the Defined Benefit Obligation :
The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
vii. General Descriptions of significant defined benefits plans:
a. gratuity Plan :
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act 1972 or as per the Companyâs Scheme whichever is more beneficial.
b. Leave Plan :
Encashment of leave can be availed by the employee for the balance in the earned account as on 1 January 2009. All carry forward earned leaves are available for availment but not encashment. Leave can be encashed subject to available balance of more than 15 days.
viii. Five-year information
Amounts for the current and the previous four years are as follows:
iii. The Companyâs liability towards the scheme is accounted for on the basis of an independent actuarial valuation performed at the year end. The valuation of the shares/units is performed considering the intrinsic value and the progression of share/unit price up to the exercise of the option.
Note
The Company did not have any other long-term contracts including derivative contracts for which there were any material foreseeable losses.
2.3 Related Party Disclosure:
A. List of Related Parties and their relationship:
i) Holding company
Reliance Capital Limited (upto 12 July 2017)
ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the period (Up to 12 July 2017)
iii) Major investing party
Reliance Capital Limited (Ceased to be holding Company w.e.f 13 July 2017)
Nippon Life Insurance Company
iv) Subsidiaries
Reliance Asset Management (Singapore) Pte Limited Reliance Asset Management (Mauritius) Limited Reliance AIF Management Company Limited Reliance Capital Pension Fund Limited (Up to 2 July 2017)
v) Associate
Reliance Capital Pension Fund Limited (Became an associate w.e.f 3 July 2017)
vi) Subsidiaries of holding company (Up to 12 July 2017)
Reliance Capital Trustee Co. Limited Reliance General Insurance Company Limited
Reliance Nippon Life Insurance Company Limited (formerly Reliance Life Insurance Company Limited) Reliance Commercial Finance Limited (formerly Reliance Gilts Limited)
Reliance Money Precious Metals Private Limited Reliance Home Finance Limited Reliance Securities Limited Reliance Commodities Limited Reliance Financial Limited Reliance Wealth Management Limited Reliance Money Solutions Private Limited Reliance Exchangenext Limited
Reliance Corporate Advisory Services Limited (formerly Reliance Spot Exchange Infrastructure Limited) Reliance Capital AIF Trustee Company Private Limited Reliance Health Insurance Limited (w.e.f. 4 May 2017)
Reliance Infocomm Infrastructure Limited Quant Capital Private Limited Quant Broking Private Limited Quant Securities Private Limited Quant Investment Services Private Limited
B. Significant influence: (up to 12 July 2017)
Enterprise over which individual described in clause A (ii) above has control
Reliance Communications Infrastructure Limited
Reliance IDC Limited
Reliance Communications Limited
Reliance Webstore Limited
Zapak Digital Entertainment Limited
C. Key management personnel:
Sundeep Sikka (Whole Time Director) w.e.f. 22 April 2016
2.4 Deferred Tax
In compliance with the Accounting Standard on âAccounting for Taxes on Incomeâ (AS-22) notified under Section 133 of the Act, the Company has made net deferred tax adjustment of Rs. 7.98 Crore (Previous Year - (Rs. 4.62 Crore)) as per details given below. The amount has been debited to the Statement of Profit and Loss.
2.5 Details of Loans given, investment made and guarantee given covered under section 186(4) of the Companies Act 2013:
i. Details of Investments made have been given as part of Notes 3.9A and 3.9B
ii. Loans given below:
* Maximum amount outstanding during the year is Rs. 24.35 Crore (Previous year - Rs. 12.30 Crore) as per additional disclosures pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
iii. The Company has not given any guarantee or provided any security in connection with loans to any body corporate or person.
2.6 The Company has issued bonus shares of 50 Equity shares for every one Equity share held on the record date i.e. 10 August 2017 through capitalisation of amount standing to the credit of Capital Redemption Reserve and Securities Premium account. Accordingly, the Company has issued 57,60,00,000 equity shares as bonus shares during the year ended March 31, 2018. The Earning Per Share figures for the year ended March 31, 2017 have been restated to give effect to the allotment of the bonus shares, as required by Accounting Standard (AS 20) - Earnings per share.
2.7 Corporate social responsibility (CSR)
a) Gross amount required to be spent by the company during the year was Rs. 10.18 Crore (PY Rs. 8.89 crore) as per calculation.
b) Amount spent for the year ended March 31, 2018:
2.8 Segment Reporting
The Company is in the business of providing asset management services to the fund and portfolio management service to clients. The primary segment is identified as asset management services. As such the Companyâs financial statements is largely reflective of the asset management business and there is no separate reportable segment.
Pursuant to Accounting Standard (AS) 17 Segment Reporting, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
2.9 Asset Management Right:
During the FY 2015-16, the Company and Reliance Capital Trustee Company Limited had jointly entered into a Scheme Transfer Agreement with Goldman Sachs Asset Management (India) Private Limited, Board of Trustees of Goldman Sachs Mutual Fund and Goldman Sachs Asset Management, L.P to acquire the right to manage and administer the schemes of Goldman Sachs Mutual Fund, the right to assume the trusteeship of the schemes of Goldman Sachs Trustee Company (India) Private Limited and takeover of the schemes of Goldman Sachs Mutual Fund respectively. The said transaction has been approved by the relevant regulatory authorities and the Unit holders of the Schemes of Goldman Sachs Mutual Fund in the FY 2016-17. The amount paid along with the incidental expenditure incurred thereon aggregating to Rs. 250.14 Crore has been treated as Asset management Right as intangible asset. The Asset management Right will be amortized over a period of 120 months. For the year ended March 31, 2018, an amount of Rs. 25.01 Crore has been amortized. Balance life of Asset Management Right is 103 months.
2.10 Pursuant to Initial Public offering (âIPOâ), sale of 6,12,00,000 equity shares of face value of Rs. 10 each at Rs. 252 per equity share consisting of fresh issue of 2,44,80,000 equity shares and offer for sale by Reliance Capital Limited and Nippon Life Insurance Company (âselling shareholdersâ) of 1,12,30,200 equity shares and 2,54,89,800 equity shares, respectively was completed.
2.11 The details of utilisation of IPO proceeds Rs. 588.85 Crore (net of IPO related expenses) are as follows:
2.12 The Company had estimated Rs. 51.26 Crore (inclusive of taxes) as IPO expenses. Of such IPO related expenses, certain expenses (such as Counsel Fees, Auditor Fees, Marketing, Printing & Stationery) aggregating to Rs. 18.20 Crore (inclusive of taxes) are directly attributable to the Company. Remaining IPO related expenses aggregating to Rs. 33.06 Crore (inclusive of taxes), have been allocated between the Company and selling shareholders in proportion to equity shares offered by them for sale. Expenses to be borne by the selling shareholder has been shared equally by both the shareholders. Selling shareholders have reimbursed Rs. 16.98 Crore to the Company. Till March 31, 2018, an amount of Rs. 51 Crore is paid against IPO related expenses and the balance will be paid in due course. As at March 31, 2018, the total expenses attributable to the Company of Rs 28.04 Crore has been adjusted against Securities Premium Account.
2.13 During the year the Company had declared and paid interim dividend of Rs. 5/- per equity share amounting to Rs. 368.29 Crore (PY: Nil) including dividend distribution tax. In addition, the Board has recommended final dividend of Rs. 1/- per equity share be paid on fully paid equity shares. The same is subject to approval of Shareholders at Annual General Meeting and has not been recorded as a liability in these financial statement in line with the Accounting Standards requirement. The total estimated equity dividend to be paid is Rs. 73.78 Crore (PY Rs. 298.10 crore) including dividend distribution tax.
2.14 Regrouping / Reclassification of Previous Year:
Expenses other than employee benefits expense, depreciation and amortization have been grouped under âOther expensesâ. Previous yearâs figures have been regrouped/ reclassified wherever necessary to conform current yearâs classification/ disclosure. Courier charges have been clubbed with Communication. Advertisement expenses have been clubbed with Marketing expenses and has been renamed as Marketing, advertisement and publicity expenses. Further, Marketing, advertisement and publicity expenses of Rs.6.03 Crore has been reclassified to Outsourced business services. Legal and professional fees of Rs. 10.06 Crore and Rs. 9.05 Crore has been reclassified to Information Technology and Outsourced business services respectively.
2.15 The amounts reflected as â0â in the Financial statements are values with less than rupees one crore.
Mar 31, 2017
Notes:
* Includes provision for expenses, statutory payables, securitisation / assignment payable and other payables.
# Does not include any amounts, due and outstanding, to be transferred to the Investor Education and Protection Fund created pursuant to Section 125 of the Companies Act, 2013.
5. Pursuant to the event of merger or business combination of Yatra Online Inc. with Terrapin 3 Acquisition Corporation, the company has allotted 3023771 equity shares against conversion of 4200042 Series A, 27, 31,960 Series B & 1144946 Series C Preference share of Yatra Online Inc. subsequently these equity share are listed on New York Stock Exchange .
6. Investment in 38,85,24,405 (Previous year 38,85,24,405) equity shares of Reliance Nippon Life Insurance Company Limited and 9,000 (Previous year 9,000) equity shares of Reliance DigiTech Limited (formerly Reliance CWT India Limited) are carried at fair value i.e. at amount transferred under the Scheme of Amalgamation.
7. Pursuant to Scheme of Arrangement effective on February 7, 2017, Reliance Money Express Limited (RMEL) got merged with Reliance Securities Limited (RSL) on account which RSL issued preference shares to the extent of equity shares of RMEL.
8. The Company has been allotted Warrants without paying any consideration at the time of allotment.
9. The Company has entered into a joint venture with KGS Developers Limited in respect of real estate project development. The Company has invested Rs, 85 crore in the financial year 2008-09, current year outstanding is Rs, 69 crore and is entitled to share the Profit / Loss equally. However assets, liabilities, revenue and expenses related to the project were not included in the financial statements of the Company of the previous year as it does not meet the definition criteria of a Joint Venture under AS 27 ''''Financial Reporting of Interests in Joint Ventures". In the current year, as a part of the settlement award granted by the Arbitral Tribunal, the Company has been granted with the land of the real estate project. Accordingly, pending the transfer of land the amount has been re-classified as capex advances.
10. Investments include Rs, Nil (Previous year Rs, 67 crore) of equity shares given as collateral/pledge towards margin with brokers.
11. # Investments in Nil (Previous year 33 197) equity shares of Jindal Saw Limited amounting to Rs, Nil (Previous year Rs, 29 96 693) are given to comply with the margin requirements, thus these securities are not in the name of the Company.
In respect of balances with Scheduled Banks in Fixed deposit accounts, Rs, Nil (Previous year Rs, 42 crore) is kept as credit enhancement towards securitization / assignment transaction, Rs, 5 33 932 (Previous year Rs, 5 33 932) is kept as deposit with sales tax authority, Rs, 20 00 000 (Previous year Rs, 5 00 000) is kept as deposit with the Pension Fund Regulatory and Development Authority (PFRDA) and Rs, Nil (Previous year Rs, 32 crore) is kept as deposit with stock exchanges for margins.
1. Security clause / maturity profiles in respect to Secured Loans from banks / debentures
(i) Non convertible debentures (NCDs) are redeemable at par, in one or more installments, on various dates:
(a) NCDs amounting to Rs, 4 039 crore (Previous year Rs, 4 378 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company. Business receivables includes Fixed Asset, Current Assets, Investments and any other assets, against security not exceeding Rs, 4 288 crore (Previous year Rs, 4 935 crore).
(b) NCDs amounting to Rs, 9 790 crore (Previous year Rs, 4 992 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge, Ahmedabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company (except security towards securing Outstanding Term Loan and Cash Credit Limits). Business receivables includes Current Assets and Investments, against security not exceeding Rs, 9 915 crore (Previous year Rs, 5 317 crore).
(c) Unsecured NCDs amounting to Rs, 1 423 crore (Previous year Rs, 1 423 crore) are in respect to Tier II subordinate debts.
(d) Maturity profile and Rate of interest of Non Convertible Debentures are as set out below:
# Zero coupon deep discount non convertible debentures
(ii) Term Loans from banks includes Rs, Nil (Previous year Rs, 6 939 crore) are secured by pari passu first charge on all present and future book debts, receivables, bills, claims and loan assets of the Company''s commercial finance division.
2. The Company was a partner in Reliance Capital Partners and ceased to be a partner as on March 31, 2017
a) The firm consists of following partners and their balances:
b) Profit Sharing Ratio: The profit / (loss) is distributed between the partners on the basis of the weighted average capital. The loss for the current financial year is Rs, 0.39 crore (Previous year Profit Rs, 13 crore).
3. Tax on Proposed Dividend
In view of Section 115 - O of the Income Tax Act, 1961, the Company has reduced its dividend tax liabilities to the extent dividend received / receivable from its subsidiary company viz. Reliance Nippon Life Asset Management Limited:
4. Employees Stock Option Plans
a) The Company operated two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10. All options granted under the ESOS Plan A and ESOS Plan B have been surrendered and lapsed in the previous year. The Company managed the ESOS Plan A and ESOS Plan B through a Trust. Advance of Rs, 59 crore (net of written off Rs, 64 crore) Previous Year Rs, 59 crore (net of written off Rs, 64 crore) has been granted to Trust. Out of the said advance, Trust has purchased 16 00 000 equity shares for the above purpose.
b) The Company introduced ESOP 2015 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till five years as per Plan. Each Option entitles the holder thereof to apply for and be allotted/transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
The Company has chosen to account for the Plan by the Intrinic Value Method. The total expense recognized for the period arising from stock option plan as per Intrinic Value Method is Rs, Nil (Previous year Rs, Nil). Had the Company adopted fair value method the net results for the year would have been lower by Rs, 89 lakh (Previous year Rs, Nil) [net of tax saving Rs, 71 lakh (Previous year Rs, Nil)] and accordingly EPS (Both Basic and Diluted) would have been lower by Rs, 0.03 (Previous year Rs, 0.03).
c) Other employee benefits
Phantom Stock Option Scheme:
As a long term incentive plan to employees, the Company has initiated Phantom Stock Option Plan on October 15, 2015 which are cash settlement rights where the employees are entitled to get cash compensation based on a agreed formulae linked to market value of subsidiary company shares upon exercise of phantom stock options over notional or hypothetical shares,
Liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The valuation of the shares is done considering the Projected Unit Credit Method and the progression of share price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 6.77% and Expected Life of 4 years.
Vested Phantom Options can be exercised on continuation of employment any time upto 3 years from the date of last vesting and upon cessation of employment as per the terms of the Scheme. Settlement of Phantom Option is done in cash within 90 days from the date of exercise. For the current year the Company has created provision of Rs, 2 crore (Previous year Rs, 1 crore).
Notes:
i) The above figures are shown in rupees in crore with two decimals to be more representative.
ii) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
iii) General Descriptions of significant defined plans:
a) Gratuity plan
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1 972 or as per the Company''s Scheme whichever is more beneficial.
b) Leave plan
Encashment of leave can be availed by the employee for balance in the earned account as on January 1, 2009. All carry forward earned leaves with a maximum limit of 10 Days, are available for a ailment but not for encashment.
5. Segment reporting
As per paragraph 4 of Accounting Standard (AS) 17, on "Segment Reporting" notified by the Companies (Accounts) Rules, 2014, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 46 of the consolidated financial statements.
6. Related party disclosures
A. List of Related Parties and their relationship:
i) Major investing party
Reliance Inceptum Private Limited
ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the year.
iii) Subsidiaries
1 Reliance Nippon Life Asset Management Limited 15 Reliance Securities Limited (RSL)
(formerly Reliance Capital Asset Management Limited)
(RNLAML)
2 Reliance Asset Management (Mauritius) Limited 16 Reliance Commodities Limited (RCoL)
(RAMML)
3 Reliance Asset Management (Singapore) Pte. Limited 17 Reliance Financial Limited (RFL)
(RAMSL)
4 Reliance Capital Asset Management (UK) Limited 18 Reliance Money Express Limited (RMEL) (RCAMUL) (dissolved w.e.f. June 14, 2016) (ceased w.e.f. February 7, 2017)
5 Reliance Capital Pension Fund Limited (RCPFL) 19 Reliance Money Precious Metals Private Limited
(RMPMPL)
6 Reliance AIF Management Company Limited (RAMCL) 20 Reliance Money Solutions Private Limited
(RMSPL)
7 Reliance Capital Trustee Co. Limited (RCTC) 21 Reliance Wealth Management Limited (RWML)
8 Reliance General Insurance Company Limited (RGICL) 22 Quant Capital Private Limited (QCPL)
9 Reliance Nippon Life Insurance Company Limited 23 Quant Capital Finance and Investments Private (formerly Reliance Life Insurance Company Limited) Limited (QCFIPL) (ceased w.e.f. July 7, 2016) (RNLICL)
10 Reliance Commercial Finance Limited (formerly Reliance 24 Quant Broking Private Limited (QBPL)
Gilts Limited) (RCFL)
11 Reliance Home Finance Limited (RHFL) 25 Quant Commodity Broking Private Limited
(QCBPL) (ceased w.e.f. August 18, 2016)
12 Reliance Exchangenext Limited (RNext) 26 Quant Investment Services Private Limited
(QISPL)
13 Reliance Corporate Advisory Services Limited (RCASL) 27 Quant Securities Private Limited (QSPL)
(formerly Reliance Spot Exchange Infrastructure Limited)
14 Reliance Capital AIF Trustee Company Private Limited (RCATCPL)
iv) Partnership firm
Reliance Capital Partners (RCP) (ceased w.e.f. March 31, 2017)
v) Associates
1 Reliance Asset Reconstruction Company Limited (RARC) 3 Indian Commodity Exchange Limited (ICEX)
2 Ammolite Holdings Limited (AHL) 4 Quant Commodity Broking Private Limited QCBPL)
(w.e.f. from August 18, 2016)
vi) Key Managerial Personnel (KMP) and KMP Relatives
1 Shri Soumen Ghosh - Executive Director & Group CEO (ceased w.e.f. March 31, 2017)
2 Shri Amit Bapna - Chief Financial Officer
3 Shri V. R. Mohan - President & Company Secretary (superannuation w.e.f. March 31, 2017)
4 Smt. Caroline Ghosh - KMP Relative (ceased w.e.f. March 31, 2017)
5 Shri Vijay Singh Bapna - KMP Relative
6 Shri Atul Tandon - Company Secretary & Compliance Officer (w.e.f. February 10, 2017)
7 Shri Jai Anmol Ambani - Executive Director (w.e.f. September 27, 2016)
D. The nature and volume of material transactions for the year with above related parties are as follows:
Debentures (Borrowings)
Debentures redeemed during the year include Rs, 167 crore (Previous year Rs, 152 crore) to RSL, Rs, 40 crore (Previous year Rs, Nil) to RGICL and Rs, 39 crore (Previous year Rs, Nil) to RFL. Debentures as at March 31 2017 includes Rs, 9 crore (Previous year Rs, 12 crore) to RSL, Rs, 225 crore (Previous year Rs, 225 crore) to RGICL and Rs, 12 crore (Previous year Rs, Nil) to RFL. Accrued Interest on debentures as at March 31, 2017 include Rs, 14 crore (Previous year Rs, 10 crore) to RGICL.
Fixed Assets
Fixed assets purchased during the year, include Rs, Nil (Previous year Rs, 48,86,889) from RCIL. Fixed assets sold during the year include Rs, Nil (Previous year Rs, 6,06,392) to RMSPL and Rs, 3,28,811 (Previous year Rs, Nil) to Shri V. R. Mohan.
Investments
Investments subscribed / purchased during the year include Rs, 2,150 crore (Previous year Rs, 51 crore) from RCFL, Rs, Nil (Previous year Rs, 66 crore) from RFL, Rs, Nil (Previous year Rs, 25 crore) from RMSPL, Rs, 1,218 crore (Previous year Rs, Nil) from RCASL, Rs, 200 crore (Previous year Rs, Nil) from RhFL, Rs, Nil (Previous year Rs, 17 crore) from RMPMPL and includes Rs, 3 crore (Previous year Rs, Nil) from NCPL. Investments redeemed / sold during the year include Rs, 113 crore (Previous year Rs, Nil) to RNLICL, Rs, 126 crore (Previous year Rs, Nil) to RHFL, '' 859 crore (Previous year '' Nil) to
RCASL and includes Rs, Nil (Previous year Rs, 632 crore) to RBEPL. Investments Balance as at March 31, 2017 includes Rs, 1,837 crore (Previous year Rs, 1,742 crore) of RGICL, Rs, 521 crore (Previous year Rs, 321 crore) to RHFL, Rs, 175 crore (Previous year Rs, 150 crore) of RSL, Rs, 200 crore (Previous year Rs, 200 crore) of QCPL, Rs, 35 crore (Previous year Rs, 13 crore) of RNext [Net of written off Rs, 69 crore (Previous year Rs, 69 crore)], Rs, 5,077 crore (Previous year Rs, 5,077 crore) of RNLICL, Rs, 247 crore (Previous year Rs, 247 crore) of RNLAM and Rs, 1,218 crore (Previous year Rs, Nil) of RCASL, Rs, 2,213 crore (Previous year Rs, 63 crore) from RCFL Rs, 180 crore (Previous year Rs, 220 crore) of RCL [Net of provision of Rs, 113 crore (Previous year Rs, 73 crore)], Rs, 49 crore (Previous year Rs, 49 crore) of RARC, Rs, Nil (Previous year Rs, Nil) of AHL [Net of Provision Rs, 29 crore (Previous year Rs, 29 crore)].
Partnership Current Accounts
Withdrawal during the year (Net) include Rs, 76 crore (Previous year Rs, 253 crore) from RCP. Profit / (Loss) of Partnership firm during the year include Loss Rs, 39,13,466 (Previous year Profit Rs, 13 crore) from RCP.Balance as at March 31, 2017 Rs, Nil (Previous year Rs, 76 crore) of RCP.
Loans Given
Loans given during the year includes Rs, 5 crore (Previous year Rs, 23 crore) to RFL, Rs, Nil (Previous year Rs, 27 crore) to RMSPL, Rs, 1,104 crore (Previous year Rs, Nil) to RCASL, Rs, 60 crore (Previous year Rs, 65 crore) to RSL; Rs, 824 crore (Previous year Rs, 2,104 crore) to RCL, Rs, 300 crore (Previous year Rs, Nil) to RCIL, Rs, 155 crore (Previous year Rs, 140 crore) to RBEPL, Rs, 377 crore (Previous year Rs, 325 crore) to RIL. Loan Returned/Adjusted during the year include Rs, 10 crore (Previous year Rs, 18 crore) from RFL, Rs, Nil (Previous year Rs, 27 crore) from RMSPL, Rs, 802 crore (Previous year Rs, Nil) from RCASL, Rs, 60 crore (Previous year Rs, 65 crore) to RSL; Rs, Nil crore (Previous year Rs, 1,999 crore) to RCL, Rs, 569 crore (Previous year Rs, 80 crore) from RBEPL and Rs, 1 crore (Previous year Rs, 325 crore) from RIL. Loans as at March 31, 2017 include Rs, Nil (Previous year Rs, 5 crore) to RFL, Rs, Nil (Previous year Rs, Nil) to RNext [Net of Provision of Rs, 7 crore (Previous year Rs, 7 crore)], Rs, 302 crore (Previous year Rs, Nil) to RCASL, Rs, 376 crore (Previous year Rs, Nil) to RIL, Rs, 824 crore (Previous year Rs, 106 crore) to RCL, Rs, 300 crore (Previous year Rs, Nil) to RCIL, Rs, 155 crore (Previous year Rs, 709 crore) to RBEPL; Rs, Nil (Previous year Rs, 44,64,047) to Shri V. R. Mohan, Rs, Nil (Previous year Rs, 1 crore) to Shri Soumen Ghosh and Rs, Nil (Previous year Rs, 47,74,487) to Smt. Caroline Ghosh. Accrued Interest on loans as at March 31, 2017 includes Rs, 4 crore (Previous year Rs, 77 crore) from RBEPL, Rs, 1 crore (Previous year Rs, Nil) to RIL and Rs, 3 crore (Previous year Rs, Nil) to RCL.
Advances
Advances as at March 31, 2017 includes Rs, 1 crore (Previous year Rs, 93 crore) to RGICL, Rs, Nil (Previous year Rs, 1 crore) to RNLICL, Rs, 2 crore (Previous year Rs, Nil) to RSL, include Rs, Nil (Previous year Rs, 1 crore) to RCL, Rs, Nil [Previous year Rs, Nil (Net of Rs, 75 crore given & refunded)] to RCIL and Rs, 5,42,1 67 (Previous year Rs, 18,06,490) to RARC.
Income
Interest & Finance Income (including Premium on Preference Shares) includes Rs, 1 crore (Previous year Rs, 1 crore) from RSL, Rs, 98,630 (Previous year Rs, 3,63,616) from RFL, Rs, 3 crore (Previous year Rs, Nil) from RCASL, Rs, Nil (Previous year Rs, 1 crore) from RMSPL; Rs, 3 crore (Previous year Rs, 24 crore) from RCL, Rs, 28 crore (Previous year Rs, 91 crore) from RBEPL Rs, Nil (Previous year Rs, 3,29,535) from Shri V. R. Mohan, Rs, Nil (Previous year Rs, 9,96,021) from Shri Soumen Ghosh, Rs, Nil (Previous year Rs, 6,62,387) from Smt. Caroline Ghosh and Rs, Nil (Previous year Rs, 1,62,534) from Shri Vijay Singh Bapna. Rent income include Rs, 9,00,000 (Previous year Rs, 9,00,000) from RCIL. Dividend Income includes Rs, 126 crore (Previous year Rs, 81 crore) from RNLAM, Rs, Nil (Previous year Rs, 46 crore) from RNLICL and Rs, 1 crore (Previous year Rs, 1 crore) from RARC. Reimbursement of Expenditure include Rs, 7 crore (Previous year Rs, 7 crore) from RGICL, Rs, 3 crore (Previous year Rs, 2 crore) from RNLAM, Rs, 2 crore (Previous year Rs, 2 crore) from RSL, Rs, 14,51,114 (Previous year Rs, 8 crore) from RHFL, Rs, 9 crore (Previous year Rs, 10 crore) from RNLICL, Rs, 4,93,380 (Previous year Rs, 11,69,618) from RCIL and Rs, 7,20,996 (Previous year Rs, Nil) from RARC. Management Fees include Rs, 6 crore (Previous year Rs, 6 crore) from RGICL, Rs, 6 crore (Previous year Rs, 6 crore) from RNLAM, Rs, 6 crore (Previous year Rs, 6 crore) from RSL, Rs, 3 crore (Previous year Rs, 3 crore) from RHFL and Rs, 6 crore (Previous year Rs, 6 crore) from RNLICL. Income transferred as per Business Transfer Agreement includes Rs, 1 crore (Previous year Rs, 1 crore) to RHFL. Other operating incomes includes Rs, 5,20,000 (Previous year Rs, 29,63,000) from RARC.
Expenditure
Finance cost includes Rs, 24 crore (Previous year Rs, 23 crore) to RGICL, Rs, 10 crore (Previous year Rs, Nil) to RFL, Rs, 52 crore (Previous year Rs, 54 crore) to RSL, and Rs, Nil (Previous year Rs, 3 crore) to RNLICL. Insurance includes Rs, 3 crore (Previous year Rs, 3 crore) to RGICL and [Rs, 22,78,1 25 (Previous year Rs, 48,17,137) to RNLICL. Rent include Rs, Nil (Previous year Rs, 1 crore) to RCL. Brokerage paid during the year Rs, 1 crore (Previous year Rs, 1 crore) to RSL. Expense transferred as per Business Transfer Agreement include Rs, 1 crore (Previous year Rs, 1 crore) to RHFL. Reimbursement of Expenditure includes Rs, Nil (Previous year Rs, 1 crore) to RGICL and Rs, 1 crore (Previous year Rs, Nil) to RSL. Provision / (Reversal) for diminution in value of investments includes Rs, Nil (Previous year reversal Rs, 69 crore) of RNext, Rs, Nil (Previous year reversal Rs, 8 crore) of RMPMPL and reversal of Rs, 3 crore (Previous year Rs, Nil) of RCFL Rs, 40 crore (Previous year Rs, Nil) of RCL. Investments written off include Rs, Nil (Previous year Rs, 69 crore) of RNext, Rs, Nil (Previous year Rs, 8 crore) of RMPMPL. Valuation Expenses include Rs, Nil (Previous year Rs, 38,57,142 ) paid to RHFL. Employee benefit expenses include Rs, 1 crore (Previous year Rs, 1 crore) to Shri V. R. Mohan, Rs, 8 crore (Previous year Rs, 8 crore) to Shri Soumen Ghosh, Rs, 3 crore (Previous year Rs, 3 crore) to Shri Amit Bapna, Rs, 9,88,038 (Previous year Rs, Nil) to Shri Atul Tandon and Rs, 1 crore (Previous year Rs, Nil) to Shri Jai Anmol Ambani.
Contingent Liability
Guarantees to Banks and Financial Institutions on behalf of third parties include Rs, 50 crore (Previous year Rs, 50 crore) for RBEPL, Rs, 550 crore (Previous year Rs, Nil) for RIL, Rs, 118 crore (Previous year Rs, Nil) to RCL and Rs, 118 crore (Previous year Rs, Nil) to RCIL.
Shares given as collateral
Shares given as collateral include Rs, Nil (Previous year Rs, 29,96,529) to RSL.
Shares given as pledge
Shares given as pledge include Rs, Nil (Previous year Rs, 67 crore) to RSL.
Notes :
i) Figures in bracket indicate previous year figures.
ii) Expenses incurred towards public utilities services such as communication and electricity charges have not been considered for related party transaction.
iii) The above discloses transactions entered during the period of existence of related party relationship. The balances and transactions are not disclosed before existence of related party relationship and after cessation of related party relationship.
iv) In regard to transactions with Reliance Commercial Finance Limited till effective date of demerger Refer note no. 38(iv).
v) Director Sitting Fee of Rs, 2,40,000 (Previous year Rs, 1,60,000) has been paid to Shri Anil D. Ambani, an individual having control.
vi) The Company has provided security amounting to Rs, 707 crore for the Listed Secured Non-Convertible Debentures of its wholly-owned subsidiary viz. Reliance Home Finance Limited by way of first pari passu hypothecation charge on all present and future book debts and business receivables of the Company (except security created / to be created towards securing term loans and cash credit limits). Business receivables includes current assets and investments.
vii) Shri Jai Anmol Ambani was paid sitting fees of Rs, 40,000 for attending the board meeting held on September 13, 2016, prior to his appointment as Executive Director w.e.f September 27, 2016.
7. Leases
The Company has given assets on Operating lease (Refer Note No. 14). Disclosure as per Accounting Standard (AS-19), on "Leases" notified by the Companies (Accounts) Rules 2014:
8 Scheme of Arrangement (Demerger) between the Company and Reliance Commercial Finance Limited
The Board of Directors of the Company at its meeting held on February 25, 201 6 has considered and approved a Scheme of Arrangement (Demerger) between the Company, and its wholly owned subsidiary viz. Reliance Commercial Finance Limited (formerly Reliance Gilts Limited). The Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1 956 (the ''Scheme'') for demerger of Commercial Finance Business of the Company to its wholly owned subsidiary viz. Reliance Commercial Finance Limited has been approved by the Hon''ble High Court of Judicature at Bombay. The Scheme has become effective on March 24, 2017 upon filing with the Registrar of Companies, Maharashtra at Mumbai with effect from April 1, 2016 i.e. Appointed Date.
Hence, in accordance with the Scheme:-
i. On Scheme becoming effective with effect from Appointed Date, the Company has transferred all the assets aggregating to Rs, 12,473 crore and liabilities aggregating to Rs, 1 2, 473 crore as appearing in the books of Company related to commercial finance business at their respective book value as on Appointed Date. The net assets taken over include:
ii There is no difference between value of assets and liabilities of the Company''s commercial finance business as transferred under Scheme, accordingly there is no capital reserve or goodwill.
iii As per the Scheme approved by the Hon''ble High Court of Judicature at Bombay with effect from the Appointed Date and up to and including the effective date, the Company shall be deemed to have been carrying on all business and activities relating to Commercial Finance Business for and on account of and in trust of Commercial Finance Business. All profits accruing to Commercial Finance Business or losses arising or incurred by the Company in relation to the Commercial Finance Business for the period commencing from the Appointed Date to the Effective Date shall, for all purposes, be treated as the profits or losses, as the case may be, of Commercial Finance Business.
iv During the period, from the Appointed Date to the Effective Date, the Company received the inter division balance amounting to Rs, 2,874 crore (average balance during the year Rs, 829 crore) on which the Company has recieved interest of Rs, 91crore from Reliance Commercial Finance Limited. During this period, the Company has also received reimbursement of expenses amounting to Rs, 2 crore and management fees amounting to Rs, 3 crore.
Accordingly, aforesaid Commercial Finance Business was considered as discontinuing operations during previous year.
9 The Board of Directors of the Company at their meeting held on October 28, 2016 has approved a Scheme of Arrangement (''Scheme'') for demerger of Real Estate Lending Business of the Company into its wholly owned subsidiary viz. Reliance Home Finance Limited (RHFL) with effect from April 1, 2017, the Appointed Date. The Scheme is subject to requisite approvals, including the sanction of National Company Law Tribunal. Upon the scheme getting approved, RHFL shall issue and allot, at par, to all equity shareholders of the Company, 1 (One) fully paid Equity Share of RHFL for every 1 (One) equity share of '' 10 each fully paid up held in the Company. RHFL will list its equity shares on the Stock Exchanges.
10 Core Investment Company (âCIC'')
(i) On the Scheme of Demerger becoming effective on March 24, 201 7, the Company has positioned itself as a Core Investment Company (''CIC'') and in terms of the Core Investment Companies (Reserve Bank) Directions, 2016 (RBI CIC Directions) would make an application for obtaining Certificate of Registration within 3 months based on the Audited Financial Statements as of March 31, 2017.
The Company was in compliance with the RBI Directions applicable to Systemically Important Non-Banking Financial Company until March 24, 201 7 and has taken necessary measures so as to comply with the prudential norms applicable to CIC and has commenced adherence to those norms e.g. Concentration norms, Leverage ratio, Capital to Risk Assets Ratio (CRAR) etc. as of March 31, 2017. Accordingly, the Company has prepared and presented its financial statements and disclosures for the year ended March 31, 2017 as per RBI Directions applicable to CIC. The above is in line with the Company''s communications with RBI.
a) Housing loans / loans against property and construction finance granted are secured by equitable registered mortgage of property and / or undertaking to create a security and other loans and advances are secured by way of hypothecation and/or pledging of the underlying asset.
b) In case of loans & advances given in para (2) above, Provision for NPA & Doubtful Debts is '' 7 crore (Previous year '' 99 crore) (3) Break up of Leased Assets and stock on hire and other assets counting towards AFC activities
a) Companies in same group means companies under the same management as per section 370(1 B) of the Companies Act, 1956.
b) In case of unquoted investments, in the absence of market value, book value has been considered.
c) Capital contribution in Partnership Firm and unincorporated joint venture have not been considered for the purpose of companies in the same group and other related party:
d) Investments are classified between non-current and current investments (including current portion of long term investments) as required under revised Schedule III, as per Companies Act, 2013.
e) Gross Non Performing Assets and Net Non Performing Assets given above includes loans & advances and bonds & debentures.
(a) All quoted investments have been included in 1 day to 30/31 days (one month) bucket considering its liquidity. All unquoted equity shares / warrants including investment in subsidiaries have been included in ''Over 5 years''. The maturity pattern has been prepared in line with various regulations issued by RBI from time to time, best practices and based upon best estimate of the management with regard to the timing of various cash flows.
(b) The classification of Assets and Liabilities into current and non-current is carried out based on their residual maturity profile as per requirement of Schedule III to the Companies Act, 2013. The above maturity pattern of assets and liabilities has been prepared by the Company after taking into consideration guidelines for assets-liabilities management (ALM) system as per CIC directions issued by RBI, best practices and best estimate of the Assets-Liability Committee / management with regard to the timing of various cash flows, which has been relied upon by the auditors.
(c) Assets does not include Cash and Bank Balances amounting to Rs, 4 211 crore (Previous year Rs, 1 670 crore).
(iii) Business Transfer Agreement
In terms of Business Transfer Agreement (BTA) dated April 26, 2010, further amended on January 31, 2011 with its subsidiary company i.e. Reliance Home Finance Limited the Company hold loan assets of Rs, 3 crore (Previous year Rs, 5 crore) related to Reliance Home Finance Limited in the trust capacity as on March 31, 2017.
Figures in bracket indicate previous year figures.
11. Corporate Social Responsibility Expenditure
As per Section 135 of the Companies Act, 2013 the Company is under obligation to incur Rs, 13 crore (Previous year Rs, 10 crore) and has incurred the same in cash, being 2% of the average net profit during the three immediately preceding financial years, calculated in the manner as stated in the Act towards Corporate Social Responsibility through a non-profit centre engaged in the provision of health care for the purpose other than construction / acquisition of asset.
12. Remittance in foreign currency on account of dividend
The Company has paid dividend in respect of shares held by non residents on repatriation basis. This, inter-alia, includes portfolio investment, where the amount is also credited to Non Resident External Account (NRE A/c). The total amount remittable in this respect is specified below:
13. During the year, the Company had no specified bank notes or no other denomination note as defined in the MCA notification
G.S.R. 308(E) dated March 30, 2017 and there were no transaction during the period from November 8, 2016 to December 30, 2016.
14. During the year ended March 31, 2017, the Company has changed its basis for determining the provision for diminution in value of investments other than temporary on long term quoted investments. As a result of such change, the charge in the statement of profit & loss for provision for diminution in value of investments for the year ended March 31, 2017, is lower by Rs, 33 crore.
15. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards there are no foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.
16. In the opinion of management, all the assets other than fixed assets and noncurrent investments are approximately of the value stated if realized in the ordinary course of business.
Mar 31, 2017
1.1 Employees Stock Options Plan (ESOP):
(i) a) Pursuant to the shareholderâs resolution date 20 September 2007 the Company had introduced Employee Stock Option Plan I-2007 under which the Company may grant options to its employees from time to time. The grant of options to the employees under the ESOP scheme was on the basis of their performance and other eligibility criteria. The plan had been attended and restated vide shareholderâs resolution stated 3 February 2011.
b) On 21 December 2007, the Company issued 200,000 equity shares at a price Rs. 2,000 per equity share to Reliance Capital Asset Management Employee Benefits Trust (âThe Trustâ) pursuant to the above plan.
(ii) a) Pursuant to the shareholderâs resolution dated 3 February 2011, the company introduced Employee Stock Option Plan II â 2011 under which the Company may grant options to its employees from time to time. The grant of options to the employees under the ESOP scheme was on the basis of their performance and other eligibility criteria.
b) On 30 March 2011, the Company issued 50,000 equity shares at a price Rs. 3,009 per equity share to the Trust.
(iii) All above options were planned to be settled in cash or equity at the time of exercise and had maximum period of 7 years from the date of testing. The options existing during the year were as follows:
1.2. Disclosure pursuant to Accounting Standard â 15 (Revised) â Employee Benefitsâ:
A. Defined Contribution Plans:
Amount of Rs. 63,746,646 (PY Rs. 56,145,001) is recognised as an expense for provident fund and supers nation fund included in âEmployee Benefit Expenseâ refer note â3.18â of the statement of profit and loss.
B. Defined Benefit Plans:
i. Reconciliation of opening and closing balances of the present Value of the Defined Benefit Obligation:
ii. Changes in the fair value of Plan Assets and the reconciliation thereof.
iii. Amount Recognised in the Balance Sheet including a reconciliation of the present value of the defined obligation in (i) and the fair value of the plan assets in (ii) to the assets and liabilities recognised in the balance sheet.
iv. Amount recognised in the statement of profit & loss are as follows:
1.3. Related Party Disclosure:
A. List of Related Parties and their relationship:
i) Holding Company
Reliance Capital Limited
ii) Subsidiary of Holding Company
Reliance Asset Management (Singapore) pte, Limited
Reliance Asset Management (Mauritius) Limited
Reliance Capital Pension Fund Limited
Reliance ALF Management Company Limited
Reliance Capital Trustee Co, Limited
Reliance General Insurance Company Limited
Reliance Nippon Life Insurance Company Limited (formerly Reliance Life Insurance Company Limited)
Reliance Commercial Finance Limited (formerly Reliance Gilts Limited)
Reliance Money Precious Metals Private Limited
Reliance Home Finance Limited
Reliance Securities Limited
Reliance Commodities Limited
Reliance Financial Limited
Reliance Wealth Management Limited
Reliance Money Solutions Private Limited
Reliance Exchange next Limited
Reliance Spot Exchange Infrastructure Limited
Reliance Capital ALF Trustee Company Private Limited
Quant Capital Private Limited
Quant Broking Private Limited
Quant Securities Private Limited
Quant Investment Services Private Limited
1.4. Corporate social responsibility (CSR)
a) Gross amount required to be spent by the company during the year was Rs.88,859,500 (PY Rs. 76,722,003) as per calculation.
b) Amount spent during the year on.
1.5. Segment Reporting
The Company is in the business of providing asset management services to the fund and portfolio management service to clients. The primary segment is identified as asset management services. As such the Companyâs financial statements is largely reflective of the asset management business and there is no separate reportable segment.
Pursuant to Accounting Standard (AS) 17 Segment Reporting, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
1.6. Dividend remittances in foreign currency:
The Company remits the dividend to all shareholders including non-resident shareholders in Indian Rupees (INR)
1.7. Asset Management Right:
During the previous year, the Company and Reliance Capital Trustee company Limited had jointly entered into a scheme Transfer Agreement with Goldman Sachs Asset Management (India) Private Limited, Board of Trustes of Goldman Sachs Mutual Fund and Goldman Sachs Asset Management, L P so acquire the right to manage and administer the schemes of Goldman Sachs Mutual Fund and the right to assuage the trusteeship of the schemes of Goldman sachs Trustee Company (India) Private Limited and Lakeview of the schemes of Goldman Sachs Mutual Fund respectively. The said transaction has been approved by the relevant regulatory authorities and the Unit holders of the Schemes of Goldman Sachs Mutual Fund in the Current Year. The amount paid along with the incidental expenditure incurred thereon aggregating to Rs. 2,501,379,375 has been treated as Assets Management Right as intangible asset. The Asset management Right will be amortized over a period of 120 months. For the year ended March 31, 2017, an amount of Rs. 101,425,794 has been amortized Balance life of Asset Management Rights is 115 Months.
1.8. International Subsidiaries:
During the year the UK subsidiary of the Company has been struck off by the Companies House, Register of Companies London, as per the application made by the Company in previous year. The company has written off the investment cost entirely for non recoverability which was fully provided in the previous year.
1.9. The Company has developed a system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Management is of the opinion that all relevant transactions are at armâs length so that the aforesaid legislation will not have any impact on the financial statement, particularly on the amount of tax expense and that of provision for taxation.
1.10. Previous yearâs figures have been regrouped / reclassified, wherever required.
Mar 31, 2017
1.1 Employees Stock Options Plan (ESOP):
(i) a) Pursuant to the shareholderâs resolution date 20 September 2007 the Company had introduced Employee Stock Option Plan I-2007 under which the Company may grant options to its employees from time to time. The grant of options to the employees under the ESOP scheme was on the basis of their performance and other eligibility criteria. The plan had been attended and restated vide shareholderâs resolution stated 3 February 2011.
b) On 21 December 2007, the Company issued 200,000 equity shares at a price Rs. 2,000 per equity share to Reliance Capital Asset Management Employee Benefits Trust (âThe Trustâ) pursuant to the above plan.
(ii) a) Pursuant to the shareholderâs resolution dated 3 February 2011, the company introduced Employee Stock Option Plan II â 2011 under which the Company may grant options to its employees from time to time. The grant of options to the employees under the ESOP scheme was on the basis of their performance and other eligibility criteria.
b) On 30 March 2011, the Company issued 50,000 equity shares at a price Rs. 3,009 per equity share to the Trust.
(iii) All above options were planned to be settled in cash or equity at the time of exercise and had maximum period of 7 years from the date of testing. The options existing during the year were as follows:
1.2. Disclosure pursuant to Accounting Standard â 15 (Revised) â Employee Benefitsâ:
A. Defined Contribution Plans:
Amount of Rs. 63,746,646 (PY Rs. 56,145,001) is recognised as an expense for provident fund and supers nation fund included in âEmployee Benefit Expenseâ refer note â3.18â of the statement of profit and loss.
B. Defined Benefit Plans:
i. Reconciliation of opening and closing balances of the present Value of the Defined Benefit Obligation:
ii. Changes in the fair value of Plan Assets and the reconciliation thereof.
iii. Amount Recognised in the Balance Sheet including a reconciliation of the present value of the defined obligation in (i) and the fair value of the plan assets in (ii) to the assets and liabilities recognised in the balance sheet.
iv. Amount recognised in the statement of profit & loss are as follows:
1.3. Related Party Disclosure:
A. List of Related Parties and their relationship:
i) Holding Company
Reliance Capital Limited
ii) Subsidiary of Holding Company
Reliance Asset Management (Singapore) pte, Limited
Reliance Asset Management (Mauritius) Limited
Reliance Capital Pension Fund Limited
Reliance ALF Management Company Limited
Reliance Capital Trustee Co, Limited
Reliance General Insurance Company Limited
Reliance Nippon Life Insurance Company Limited (formerly Reliance Life Insurance Company Limited)
Reliance Commercial Finance Limited (formerly Reliance Gilts Limited)
Reliance Money Precious Metals Private Limited
Reliance Home Finance Limited
Reliance Securities Limited
Reliance Commodities Limited
Reliance Financial Limited
Reliance Wealth Management Limited
Reliance Money Solutions Private Limited
Reliance Exchange next Limited
Reliance Spot Exchange Infrastructure Limited
Reliance Capital ALF Trustee Company Private Limited
Quant Capital Private Limited
Quant Broking Private Limited
Quant Securities Private Limited
Quant Investment Services Private Limited
1.4. Corporate social responsibility (CSR)
a) Gross amount required to be spent by the company during the year was Rs.88,859,500 (PY Rs. 76,722,003) as per calculation.
b) Amount spent during the year on.
1.5. Segment Reporting
The Company is in the business of providing asset management services to the fund and portfolio management service to clients. The primary segment is identified as asset management services. As such the Companyâs financial statements is largely reflective of the asset management business and there is no separate reportable segment.
Pursuant to Accounting Standard (AS) 17 Segment Reporting, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
1.6. Dividend remittances in foreign currency:
The Company remits the dividend to all shareholders including non-resident shareholders in Indian Rupees (INR)
1.7. Asset Management Right:
During the previous year, the Company and Reliance Capital Trustee company Limited had jointly entered into a scheme Transfer Agreement with Goldman Sachs Asset Management (India) Private Limited, Board of Trustes of Goldman Sachs Mutual Fund and Goldman Sachs Asset Management, L P so acquire the right to manage and administer the schemes of Goldman Sachs Mutual Fund and the right to assuage the trusteeship of the schemes of Goldman sachs Trustee Company (India) Private Limited and Lakeview of the schemes of Goldman Sachs Mutual Fund respectively. The said transaction has been approved by the relevant regulatory authorities and the Unit holders of the Schemes of Goldman Sachs Mutual Fund in the Current Year. The amount paid along with the incidental expenditure incurred thereon aggregating to Rs. 2,501,379,375 has been treated as Assets Management Right as intangible asset. The Asset management Right will be amortized over a period of 120 months. For the year ended March 31, 2017, an amount of Rs. 101,425,794 has been amortized Balance life of Asset Management Rights is 115 Months.
1.8. International Subsidiaries:
During the year the UK subsidiary of the Company has been struck off by the Companies House, Register of Companies London, as per the application made by the Company in previous year. The company has written off the investment cost entirely for non recoverability which was fully provided in the previous year.
1.9. The Company has developed a system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Management is of the opinion that all relevant transactions are at armâs length so that the aforesaid legislation will not have any impact on the financial statement, particularly on the amount of tax expense and that of provision for taxation.
1.10. Previous yearâs figures have been regrouped / reclassified, wherever required.
Mar 31, 2017
1.1 Employees Stock Options Plan (ESOP):
(i) a) Pursuant to the shareholderâs resolution date 20 September 2007 the Company had introduced Employee Stock Option Plan I-2007 under which the Company may grant options to its employees from time to time. The grant of options to the employees under the ESOP scheme was on the basis of their performance and other eligibility criteria. The plan had been attended and restated vide shareholderâs resolution stated 3 February 2011.
b) On 21 December 2007, the Company issued 200,000 equity shares at a price Rs. 2,000 per equity share to Reliance Capital Asset Management Employee Benefits Trust (âThe Trustâ) pursuant to the above plan.
(ii) a) Pursuant to the shareholderâs resolution dated 3 February 2011, the company introduced Employee Stock Option Plan II â 2011 under which the Company may grant options to its employees from time to time. The grant of options to the employees under the ESOP scheme was on the basis of their performance and other eligibility criteria.
b) On 30 March 2011, the Company issued 50,000 equity shares at a price Rs. 3,009 per equity share to the Trust.
(iii) All above options were planned to be settled in cash or equity at the time of exercise and had maximum period of 7 years from the date of testing. The options existing during the year were as follows:
1.2. Disclosure pursuant to Accounting Standard â 15 (Revised) â Employee Benefitsâ:
A. Defined Contribution Plans:
Amount of Rs. 63,746,646 (PY Rs. 56,145,001) is recognised as an expense for provident fund and supers nation fund included in âEmployee Benefit Expenseâ refer note â3.18â of the statement of profit and loss.
B. Defined Benefit Plans:
i. Reconciliation of opening and closing balances of the present Value of the Defined Benefit Obligation:
ii. Changes in the fair value of Plan Assets and the reconciliation thereof.
iii. Amount Recognised in the Balance Sheet including a reconciliation of the present value of the defined obligation in (i) and the fair value of the plan assets in (ii) to the assets and liabilities recognised in the balance sheet.
iv. Amount recognised in the statement of profit & loss are as follows:
1.3. Related Party Disclosure:
A. List of Related Parties and their relationship:
i) Holding Company
Reliance Capital Limited
ii) Subsidiary of Holding Company
Reliance Asset Management (Singapore) pte, Limited
Reliance Asset Management (Mauritius) Limited
Reliance Capital Pension Fund Limited
Reliance ALF Management Company Limited
Reliance Capital Trustee Co, Limited
Reliance General Insurance Company Limited
Reliance Nippon Life Insurance Company Limited (formerly Reliance Life Insurance Company Limited)
Reliance Commercial Finance Limited (formerly Reliance Gilts Limited)
Reliance Money Precious Metals Private Limited
Reliance Home Finance Limited
Reliance Securities Limited
Reliance Commodities Limited
Reliance Financial Limited
Reliance Wealth Management Limited
Reliance Money Solutions Private Limited
Reliance Exchange next Limited
Reliance Spot Exchange Infrastructure Limited
Reliance Capital ALF Trustee Company Private Limited
Quant Capital Private Limited
Quant Broking Private Limited
Quant Securities Private Limited
Quant Investment Services Private Limited
1.4. Corporate social responsibility (CSR)
a) Gross amount required to be spent by the company during the year was Rs.88,859,500 (PY Rs. 76,722,003) as per calculation.
b) Amount spent during the year on.
1.5. Segment Reporting
The Company is in the business of providing asset management services to the fund and portfolio management service to clients. The primary segment is identified as asset management services. As such the Companyâs financial statements is largely reflective of the asset management business and there is no separate reportable segment.
Pursuant to Accounting Standard (AS) 17 Segment Reporting, no segment disclosure has been made in these financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
1.6. Dividend remittances in foreign currency:
The Company remits the dividend to all shareholders including non-resident shareholders in Indian Rupees (INR)
1.7. Asset Management Right:
During the previous year, the Company and Reliance Capital Trustee company Limited had jointly entered into a scheme Transfer Agreement with Goldman Sachs Asset Management (India) Private Limited, Board of Trustes of Goldman Sachs Mutual Fund and Goldman Sachs Asset Management, L P so acquire the right to manage and administer the schemes of Goldman Sachs Mutual Fund and the right to assuage the trusteeship of the schemes of Goldman sachs Trustee Company (India) Private Limited and Lakeview of the schemes of Goldman Sachs Mutual Fund respectively. The said transaction has been approved by the relevant regulatory authorities and the Unit holders of the Schemes of Goldman Sachs Mutual Fund in the Current Year. The amount paid along with the incidental expenditure incurred thereon aggregating to Rs. 2,501,379,375 has been treated as Assets Management Right as intangible asset. The Asset management Right will be amortized over a period of 120 months. For the year ended March 31, 2017, an amount of Rs. 101,425,794 has been amortized Balance life of Asset Management Rights is 115 Months.
1.8. International Subsidiaries:
During the year the UK subsidiary of the Company has been struck off by the Companies House, Register of Companies London, as per the application made by the Company in previous year. The company has written off the investment cost entirely for non recoverability which was fully provided in the previous year.
1.9. The Company has developed a system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Management is of the opinion that all relevant transactions are at armâs length so that the aforesaid legislation will not have any impact on the financial statement, particularly on the amount of tax expense and that of provision for taxation.
1.10. Previous yearâs figures have been regrouped / reclassified, wherever required.
Mar 31, 2016
1. Security clause / maturity profiles in respect to Secured Loans from banks / debentures
(i) Non convertible debentures (NCDs) are redeemable at par, in one or more installments, on various dates:
(a) NCDs amounting to Rs, 4,378 crore (Previous year Rs, 4,686 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellis bridge, Ahmadabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company, Business receivables includes Fixed Asset, Current Assets, Investments and any other assets, against security not exceeding Rs, 4,628 crore (Previous year Rs, 4,935 crore).
(b) NCDs amounting to Rs, 4,992 crore (Previous year Rs, 5,184 crore) are secured by way of first pari passu legal mortgage and charge over the premises situated at Avdesh House, near Pritam Nagar, Ellis bridge, Ahmadabad and additional first pari passu charge by way of hypothecation on present and future book debts / business receivables of the Company (except security towards securing Outstanding Term Loan and Cash Credit Limits). Business receivables includes Current Assets and Investments, against security not exceeding Rs, 5,317 crore (Previous year Rs, 5,509 crore).
(c) Unsecured NCDs amounting to Rs, 1,423 crore (Previous year Rs, 1,423 crore) are in respect to Tier II subordinate debts.
2. Tax on Proposed Dividend
In view of Section 115 - O of the Income Tax Act, 1961, the Company has reduced its dividend tax liabilities to the extent dividend received / receivable from its subsidiary company viz. Reliance Capital Asset Management Limited:
3. Employees Stock Option Plans
a) The Company operated two Employee Stock Option Plans; ESOS Plan A and ESOS Plan B introduced in the financial year 2009-10. All options granted under the ESOS Plan A and ESOS Plan B have been surrendered and lapsed. The Company managed the ESOS Plan A and ESOS Plan B through a Trust. Advance of Rs, 59 crore (net of written off Rs, 64 crore) Previous Year Rs, 62 crore (net of written off Rs, 64 crore) has been granted to Trust. Out of the said advance, Trust has purchased
16 00 000 equity shares for the above purpose.
b) The Company introduced ESOS 2015 which covers eligible employees of the Company and its subsidiaries. The vesting of the options is from expiry of one year till five years as per Plan. Each Option entitles the holder thereof to apply for and be allotted/transferred one Equity Share of the Company upon payment of the exercise price during the exercise period.
b) Defined benefit plans
The following tables summaries the components of the net employee benefit expenses recognized in the Statement of Profit and Loss, the fund status and amount recognized in the balance sheet for the gratuity benefit plan and leave encashment plan.
c) Other employee benefits
Phantom Stock Option Scheme:
As a long term incentive plan to employees, the Company has initiated Phantom Stock Option Plan on October 15, 2015 which are cash settlement rights where the employees are entitled to get cash compensation based on a agreed formulae linked to market value of subsidiary company shares upon exercise of phantom stock options over notional or hypothetical shares,
Liability towards the scheme is accounted for on the basis of an independent actuarial valuation done at the year end. The valuation of the shares is done considering the Project Unit Credit Method and the progression of share price up to the exercise of the option. Fair Value of Phantom Stock Options was estimated on the date of grant on the assumptions of Discount Rate of 7.72% and Expected Life of 5 years.
Vested Phantom Options can be exercised on continuation of employment any time up to 3 years from the date of last vesting and upon cessation of employment as per the terms of the Scheme. Settlement of Phantom Option is done in cash within 90 days from the date of exercise. For the current year the Company has created provision of Rs, 1 crore.
Notes:
i) The above figures are shown in rupees in crore with two decimals to be more representative.
ii) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
iii) General Descriptions of significant defined plans:
a) Gratuity plan
Gratuity is payable to all eligible employees of the Company on superannuation, death and permanent disablement, in terms of the provisions of the Payment of Gratuity Act, 1 972 or as per the Company''s Scheme whichever is more beneficial.
b) Leave plan
Encashment of leave can be availed by the employee for balance in the earned account as on January 1, 2009. All carry forward earned leaves with a maximum limit of 10 Days, are available for a ailment but not for encashment.
4. Segment reporting
As per paragraph 4 of Accounting Standard (AS-17), on "Segment Reporting" notified by the Companies (Accounts) Rules, 2014, where a single financial report contains both consolidated financial statements and the separate financial statements of the holding company, segment reporting needs to be presented only on the basis of consolidated financial statements. In view of this, segment information has been presented at Note No. 44 of the consolidated financial statements.
5. Related party disclosures
A. List of Related Parties and their relationship:
i) Major investing party
Reliance Inceptum Private Limited
ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the year.
iii) Subsidiaries
1 Reliance Capital Asset Management Limited 15 Reliance Securities Limited
2 Reliance Asset Management (Mauritius) Limited 16 Reliance Commodities Limited
3 Reliance Asset Management (Singapore) Pte. Limited 17 Reliance Financial Limited
4 Reliance Capital Asset Management (UK) Limited 18 Reliance Money Express Limited (formerly Reliance Capital Asset Management (UK) Plc)
5 Reliance Capital Pension Fund Limited 19 Reliance Money Precious Metals Private Limited
6 Reliance AIF Management Company Limited 20 Reliance Money Solutions Private Limited
7 Reliance Capital Trustee Co. Limited 21 Reliance Wealth Management Limited
8 Reliance General Insurance Company Limited 22 Quant Capital Private Limited
9 Reliance Life Insurance Company Limited 23 Quant Capital Finance and Investments Private (w.e.f. March 30, 201 6) Limited
10 Reliance Gilts Limited 24 Quant Broking Private Limited
11 Reliance Home Finance Limited 25 Quant Commodity Broking Private Limited
12 Reliance Exchange next Limited 26 Quant Investment Services Private Limited
13 Reliance Spot Exchange Infrastructure Limited 27 Quant Securities Private Limited
14 Reliance Capital AIF Trustee Company Private Limited
iv) Partnership firm
Reliance Capital Partners
v) Associates
1 Reliance Life Insurance Company Limited 3 Indian Commodity Exchange Limited (ceased w.e.f. March 30, 201 6)
2 Reliance Asset Reconstruction Company Limited 4 Ammonite Holdings Limited
vi) Key Managerial Personnel (KMP) and KMP Relatives
1 Shri Soumen Ghosh - Executive Director & Group CEO
2 Shri Amit Bapna - Chief Financial Officer
3 Shri V. R. Mohan - President & Company Secretary
4 Smt. Caroline Ghosh - KMP Relative
5 Shri Vijay Singh Bapna - KMP Relative
B. Other related parties with whom transactions have taken place during the year
Enterprise over which individual described in clause A (ii) above has control or significant influence.
1 Reliance Power Limited 6 Reliance Infocomm Infrastructure Limited
2 Reliance Communications Limited 7 Reliance Infratel Limited
3 Zapak Mobile Games Private Limited 8 Reliance IDC Limited
4 Reliance Big Entertainment Private Limited 9 Reliance Webstore Limited
5 Reliance Communications Infrastructure Limited 10 Reliance Transport & Travels Private Limited
(ceased w.e.f. November 28, 2015)
Smt. Caroline Ghosh loan Rs, 47 74 487 (Previous year Rs, 1 crore) and interest income Rs, 6 62 387 (Previous year Rs, 6 90 661)
Shri Vijay Singh Bapna interest income Rs, 1 62 534 (Previous year Rs, 5 40 423)
Notes :
i) Figures in bracket indicate previous year figures.
ii) Expenses incurred towards public utilities services such as communication and electricity charges have not been considered for related party transaction.
iii) The above discloses transactions entered during the period of existence of related party relationship. The balances and transactions are not disclosed before existence of related party relationship and after cessation of related party relationship.
iv) Director Sitting Fees of Rs, 1 60 000 (Previous year Rs, 2 60 000) has been paid to Shri Anil D. Ambani, an individual having control.
v) In accordance with Para 7 of Accounting Standard (AS-23) on Accounting for Investments in Associates in Consolidated Financial statement as per the Companies (Accounts) Rules, 2014, the Company''s stake in Sula Vineyards Private Limited though in excess of 20% of their shareholdings have not been accounted for as associates in the preparation of consolidated financial statement as the Company does not have any "Significant Influence" on these companies, as defined by Accounting Standard (AS-18) on Related Party Disclosures as per the Companies (Accounts) Rules, 2014 and hence the transaction with these parties have not been considered for Related Party Disclosures.
6. Discontinuing operations
The Board of Directors of the Company at its Meeting held on February 25, 2016 has considered and approved a Scheme of Arrangement (Demerger) between the Company, and its wholly owned subsidiary Reliance Gilts Limited. As per the Scheme the Commercial Finance Business of the Company would be demerged and transferred to Reliance Gilts Limited. The Appointed Date in respect of the Scheme is April 1, 2016. The Scheme is subject to requisite approvals, including sanction of the Hon''ble High Court of Judicature at Bombay. Accordingly, aforesaid Commercial Finance Division has been considered as discontinuing operations. Post Demerger the Company would be applying to the Reserve Bank of India for registering itself as a Core Investment Company.
a) Housing loans / loans against property and construction finance granted are secured by equitable registered mortgage of property and / or undertaking to create a security and other loans and advances are secured by way of hypothecation and/or pledging of the underlying asset.
b) In case of loans & advances given in para (2) above, Provision for NPA & Doubtful Debts is Rs, 99 crore (Previous year Rs, 103 crore)
a) Companies in same group means companies under the same management as per Section 370(1 B) of the Companies Act, 1956.
b) In case of unquoted investments, in the absence of market value book value has been considered.
c) Capital contribution in Partnership Firm and unincorporated Joint venture have not been considered for the purpose of companies in the same group and other related party.
d) Investments are classified between non-current and current investments (including current portion of long term investments) as required under Schedule III of Companies Act, 2013.
e) Gross Non-Performing Assets and Net Non Performing Assets given above includes loans & advances and bonds & debentures.
(e) The Company invests in Pass Through Certificates (PTCs) and purchases loans through the direct assignment route. In some of the securitization transactions, the Company also has invested in the assets securitized by it, which, however, is restricted to the maximum limit prescribed by RBI from time to time.
(f) During the financial year 2015, Company has entered into two agreements for assignment of receivables. As per deeds of assignment, the Company has agreed to purchase the receivables and other rights for a consideration of Rs, 100 crore. The said receivables are included in loans givens.
(g) Business Transfer Agreement
In terms of Business Transfer Agreement (BTA) dated April 26, 2010 further amended on January 31, 2011 with its subsidiary company i.e. Reliance Home Finance Limited the Company hold loan assets of Rs, 5 crore (Previous year Rs, 5 crore) related to Reliance Home Finance Limited in the trust capacity as on March 31, 2016.
Notes:
(a) All quoted investments have been included in 1 day to 30/31 days (one month) bucket considering its liquidity. All unquoted equity shares / warrants including investment in subsidiaries have been included in Over 5 years''. The maturity pattern has been prepared in line with various regulations issued by RBI from time to time, best practices and based upon best estimate of the management with regard to the timing of various cash flows.
(b) The classification of Assets and Liabilities into current and non-current is carried out based on their residual maturity profile as per requirement of Schedule III to the Companies Act, 2013. The above maturity pattern of assets and liabilities has been prepared by the Company after taking into consideration guidelines for assets-liabilities management (ALM) system in non-banking financial companies issued by RBI, best practices and best estimate of the Assets-Liability Committee / management with regard to the timing of various cash flows, which has been relied upon by the auditors.
i) For the exposure to real estate only loans secured by way of mortgage/hypothecation of housing properties, commercial properties and land are considered.
ii) In computing the above information, certain estimates, assumptions and adjustments have been made by the Management which have been relied upon by the auditors.
iii) For the exposure to capital market Company has followed capital market exposure as defined under RBI regulations.
XVI. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards there are no foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.
XVIII. Details of financing of parent company products
There is no parent company, hence no products are financed.
XIX. Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC
There are no Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the Company,
Moreover as per prudential norms ceiling on the investment in shares of another company shall not be applicable to a non-banking financial company in respect of investment in the equity capital of an insurance company up to the extent specifically permitted, in writing, by the Reserve Bank of India. The Company has made an application to RBI for its investments in insurance companies.
XX. Unsecured Advances
There are no advances against intangible assets.
XXI. Policy on dealing with Related Party Transactions
The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the link http:// www.reliancecapital.co.in/pdf/Policy_for_Related_Party_Transaction.pdf.
XXIII. Overseas Assets (for those with Joint Ventures and Subsidiaries abroad)
There are no overseas assets other than those disclosed in investments.
XXIV. Off-balance Sheet SPVs sponsored (which are required to be consolidated as per accounting norms)
There are no off-balance Sheet SPVs sponsored by the Company which are required to be consolidated as per accounting
7. Corporate Social Responsibility Expenditure
As per Section 135 of the Companies Act, 2013 the Company is under obligation to incur '' 10 crore (Previous year '' 12 crore) and has incurred the same in cash, being 2% of the average net profit during the three immediately preceding financial years, calculated in the manner as stated in the Act towards Corporate Social Responsibility through a non-profit centre engaged in the provision of health care for the purpose other than construction / acquisition of asset.
8. In the opinion of management, all the assets other than fixed assets and noncurrent investments are approximately of the value stated if realized in the ordinary course of business.
Mar 31, 2015
1. Background
Reliance Capital Limited (''the Company'') is registered as a Non-Banking
Financial Company (''NBFC'') as defined under Section 45-IA of the Reserve
Bank of India Act, 1934. The Company is principally engaged in lending
and investing activities.
2. During the year, Reliance Land Private Limited and Reliance Share
and Stock Brokers Private Limited ceased to be associate of the
company.
3. The Company has been allotted Warrants without paying any
consideration at the time of allotment.
4. The Company has entered into a joint venture with KGS Developers
Limited in respect of real estate project development. The Company has
invested Rs. 85 crore and is entitled to share the Profit / Loss
equally. However assets, liabilities, revenue and expenses related to
the project are not included in the financial statements of the Company
as it does not meet the definition criteria of a Joint Venture under AS
27 ''''Financial Reporting of Interests in Joint Ventures ".
5. Investments includes Rs. 61 crore (Previous year Rs. 9 crore) of
equity shares given as collateral/pledge towards margin with brokers.
6. Investments in 22,90,393 equity shares of TV18 Broadcast Limited
amounting to Rs. 5 crore (Previous year Rs. Nil) and 33197 equity
shares of Jindal Saw Limited amounting to Rs. 29,96,693 (Previous Year
Rs. Nil) are given to comply with the margin requirements thus these
securities are not held in the name of Company.
7. During the year, Nippon Life Insurance Company (NLIC), has
acquired 9% equity shareholding in Reliance Capital Asset Management
Limited (subsidiary of the Company).
8 Security clause / maturity profiles in respect to Secured Loans from
banks / debentures
(i) Non convertible debentures (NCDs) are redeemable at par, in one or
more instalments, on various dates:
(a) NCDs amounting to Rs. 4,686 crore (Previous year Rs. 5,447 crore)
are secured by way of first pari passu legal mortgage and charge over
the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge,
Ahmedabad and additional first pari passu charge by way of hypothecation
on present and future book debts / business receivables of the Company.
Business receivables includes Fixed Asset, Current Assets, Investments
and any other assets, against security not exceeding Rs. 4,935 crore
(Previous year Rs. 5,697 crore).
(b) NCDs amounting to Rs. 5,184 crore (Previous year Rs. 2,453 crore)
are secured by way of first pari passu legal mortgage and charge over
the premises situated at Avdesh House, near Pritam Nagar, Ellisbridge,
Ahmedabad and additional first pari passu charge by way of hypothecation
on present and future book debts / business receivables of the Company
(except security towards securing Outstanding Term Loan and Cash Credit
Limits). Business receivables includes Current Assets and Investments,
against security not exceeding Rs. 5,509 crore (Previous year Rs. 2,778
crore).
(c) Unsecured NCDs amounting to Rs. 1,423 crore(Previous year Rs. 1,173
crore) are in respect to Tier II subordinate debts.
(d) Maturity profile and Rate of interest of Long Term NCDs are as set
out below:
9 Tax on Proposed Dividend
In view of Section 115- O of the Income Ta x Act, 1961, the Company has
reduced its dividend tax liabilities to the extent dividend received /
receivable from its subsidiary company. During the year Company has
received the following dividend from Reliance Capital Asset Management
Limited (RCAM) :
10 Employees Stock Option Plans
The Company operates two Employee Stock Option Plans; ESOS Plan A and
ESOS Plan B introduced in the financial year 2009-10, which cover
eligible employees of the Company, the Holding Company and its
subsidiaries. The vesting of the options is from expiry of one year and
ranges till four to five years as per Plan under the respective ESOS(s).
Each Option entitles the holder thereof to apply for and be allotted /
transferred one Equity Share of the Company of Rs. 10 each upon payment
of the exercise price during the exercise period. The Company
implements and manages the ESOS plan through a trust. Advance of Rs. 62
crore (net of diminution Rs. 64 crore) [Previous year Rs. 64 crore (net
of diminution Rs. 64 crore)] has been granted to Trust. Out of the
said advance Trust has purchased 16,00,000 (Previous year 16,00,000)
Equity Shares for the above purpose. Details of scheme of Employee
Stock Option Plans are as under :
-Notes:
i) The above figures are shown in rupees in crore with two decimals to
be more representative.
ii) The estimates of future salary increases considered in actuarial
valuation takes into account inflation, seniority, promotion and other
relevant factors.
iii) General Descriptions of significant defined plans:
a) Gratuity plan
Gratuity is payable to all eligible employees of the Company on
superannuation, death and permanent disablement, in terms of the
provisions of the Payment of Gratuity Act 1972 or as per the Company''s
Scheme whichever is more beneficial.
b) Leave plan
Encashment of leave can be availed by the employee for balance in the
earned account as on January 1, 2009. All carry forward earned leaves
with a maximum limit of 10 Days, are available for a ailment but not
for encashment.
11 Segment reporting
As per paragraph 4 of Accounting Standard (AS-17), on "Segment
Reporting " notified by the Companies (Accounting Standards) Rules 2006,
where a single financial report contains both consolidated financial
statements and the separate financial statements of the holding company,
segment reporting needs to be presented only on the basis of
consolidated financial statements. In view of this, segment information
has been presented at Note No. 40 of the consolidated financial
statements..
12 Related party disclosures
A. List of Related Parties and their relationship:
i) Holding Company Reliance Innovators Private Limited (ceased
w.e.f. March 27, 2015)
ii) Subsidiary of Holding Company*
Reliance Inceptum Private Limited (Formerly AAA Enterprises Private
Limited)
*ceased w.e.f. March 27, 2015, thereafter Major Investing Party.
-Notes :
i) Figures in bracket indicate previous year figures.
ii) Expenses incurred towards public utilities services such as
telephone and electricity charges have not been considered for related
party transaction.
iii) The above discloses transactions entered during the period of
existence of related party relationship. The balances and transactions
are not disclosed before existence of related party relationship and
after cessation of related party relationship.
iv) In addition to the above Director Sitting Fees of Rs. 2 60 000
(Previous year Rs. 80 000) has been paid to Shri Anil D. Ambani, an
individual having control.
v) The Company has, during the previous year, sold part of its holding
in unlisted equity shares of: Reliance Land Private Limited
representing 45% stake (No. of shares 45 00 000, carrying value Rs. 4
crore) and Reliance Share & Stock Brokers Private Limited representing
45% stake (No. of shares 45 00 000, carrying value Rs. 4 crore).
Considering that these shares were sold to Company''s wholly owned
subsidiaries and do not impact the economic interests of the Company''s
shareholders, the consideration for the sale were fixed at a price equal
to or slightly above their cost and not at their fair values (not
ascertained) which are significantly higher.
13 Leases
The Company has given assets on Operating lease (refer Note No. 14).
Disclosure as per Accounting Standard (AS-19), on "Leases " notified by
the Companies (Accounting Standards) Rules 2006:
Mar 31, 2014
1. Background
Reliance Capital Limited (''the Company'') is registered as a Non-Banking
Financial Company (''NBFC'') as Defined under Section 45-IA of the Reserve
Bank of India Act, 1934. The Company is principally engaged in lending
and investing activities.
2. Investments includes Rs. 9 crore (Previous year Rs. 63 crore) of equity
shares given as collateral towards margin with brokers.
3. The Company has been allotted Warrants without paying any
consideration at the time of allotment.
4. The Company has entered into a joint venture with KGS Developers
Limited in respect of real estate project development. The Company has
invested Rs. 85 crore and is entitled to share the profit / Loss equally.
However assets, liabilities, revenue and expenses related to the
project are not included in the financial statements of the Company as
it does not meet the defnition criteria of a Joint Venture under AS 27
''''Financial Reporting of Interests in Joint Ventures".
5. Investment in 38,85,24,405 (Previous year 38,85,24,405) equity
shares of Reliance Life Insurance Company Limited, 9,000 (Previous year
9,000) equity shares of Reliance CWT India Limited and 30,000 (Previous
year 30,000) equity shares of Viscount Management Services Limited are
carried at fair value i.e. at amount transferred under the scheme of
amalgamation..
6. During the year the Company has alloted 794,478 equity shares and
236,917 preference shares of Grover Vineyards Limited as per Scheme of
Amalgamation of Grover Vineyards Limited and Vallee De Vine Private
Limited. After the Amalgamation, Grover Vineyards Limited has change
its name to Grover Zampa Vineyards Limited.
7. During the year Reliance Venture Asset Management Private Limited,
Reliance Capital (Singapore) Pte. Limited and Reliance Financial
Advisory Services Limited (Formerly Reliance Investment Banking
Services Limited) ceased to be subsidiaries of the Company.
8. Reliance Broadcast Network Limited got delisted from stock
exchanges during the year, hence disclosed under the unquoted
investments.
9. Ventura Textiles Limited has been suspended from stock exchanges
during the year.
10 Security clause / maturity profles in respect to Secured Loans from
banks / debentures
(i) Non convertible debentures (NCDs) are redeemable at par, in one or
more installments, on various dates:
(a) NCDs amounting to Rs. 5,447 crore (Previous year Rs. 2,922 crore) are
secured by way of first pari passu legal mortgage and charge over the
premises situated at Avdesh House, near Pritam Nagar, Ellisbridge,
Ahmedabad and additional first pari passu charge by way of hypothecation
on present and future book debts / business receivables of the Company.
Business receivables includes Fixed Asset, Current Assets, Investments
and any other assets, against security not exceeding Rs. 5,697 crore
(Previous year Rs. 2,480 crore).
(b) NCDs amounting to Rs. 2,453 crore (Previous year Rs. 3,494 crore) are
secured by way of first pari passu legal mortgage and charge over the
premises situated at Avdesh House, near Pritam Nagar, Ellisbridge,
Ahmedabad and additional first pari passu charge by way of hypothecation
on present and future book debts / business receivables of the Company
(except security towards securing Outstanding Term Loan and Cash Credit
Limits). Business receivables includes Current Assets and Investments,
against security not exceeding Rs. 2,778 crore (Previous year Rs. 3,760
crore).
(c) The Company is in the process of creating security on the remaining
NCDs amounting to Rs. Nil (Previous year Rs. 567 crore).
11 Amalgamation
Scheme of Amalgamation between Company, Reliance Equities International
Private Limited (REIPL) and Emerging Money Mall Limited (EMML)
The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of
the Companies Act, 1956 between Company, REIPL and EMML has been
sanctioned by the Hon''ble High Court of Judicature at Bombay vide Order
dated March 22, 2013. The scheme became effective on April 17, 2013 on
fling with the Registrar of Companies (RoC) with effect from March 31,
2013 i.e. Appointed Date.
REIPL was incorporated with the main object of providing broking
services to institutional investors and EMML was incorporated with the
main object of e-commerce. The amalgamation has been accounted for
under the "Purchase method" as prescribed by Accounting Standard
(AS-14) on "Accounting for Amalgamation" notifed under the Companies
(Accounting Standards) Rules, 2006. The Company has carried out the
accounting treatment prescribed in the Scheme as sanctioned by the
Hon''ble High Court of Judicature at Bombay. The required disclosures as
per paragraph 42 of Accounting Standard (AS-14) ''Accounting for
Amalgamations'' as prescribed under the Companies (Accounting Standards)
Rules, 2006 has been provided. Hence, in accordance with the Scheme:-
(i) As entire issued, subscribed and paid up share capital of REIPL and
EMML was held by the Company, no shares of the Company have been
allotted in lieu or exchange of its holding in REIPL and EMML.
Consequent to the Scheme the share capital of REIPL and EMML stands
cancelled.
(iii) All Inter-company balances including liabilities on account of
loans and advances amounting to Rs. 186 crore on Appointed Date also
stand cancelled. Consequent upon the above Scheme of Amalgamation,
there has been a reduction of Rs. 69 crore in the value of investments in
Viscount Management Services Limited which has been debited to Capital
Reserve.
(iv) Difference aggregating to Rs. 846 crore after recording both above
said items being the excess arising on transfer under the Scheme of
assets and liabilities has been credited to Capital Reserve. The
reserve created pursuant to the Scheme shall for all regulatory and
accounting purposes be considered to be part of the owned funds / net
worth of the Company.
(v) In accordance with the provisions of the Scheme of Amalgamation of
Reliance Commercial Finance Private Limited (RCFPL) with the Company
("the 2011 Scheme") sanctioned by the Hon''ble High Court of Judicature
at Bombay vide order dated April 29,2011, an equivalent amount,
equivalent to the investments written off amounting to Rs. 680 crore
determined as an exceptional item by the Board of Directors of the
Company, has been withdrawn from General Reserve to offset the same and
credited to the Statement of profit and Loss so that there is no impact
on profit before tax for the year.
Had both the Schemes not prescribed the above accounting treatment and
Company has followed accounting treatment prescribed under Accounting
Standard (AS - 14), the General reserve would have been higher by Rs. 680
crore and the balance in the statement of profit and loss would have
been lower by Rs. 680 crore for the year ended March 31, 2013.
12 Business Transfer Agreement
In terms of Business Transfer Agreement (BTA) dated April 26, 2010
further amended on January 31, 2011 with its subsidiary company i.e.
Reliance Home Finance Limited the Company hold loan assets of Rs. 8 crore
(Previous year Rs. 11 crore) related to Reliance Home Finance Limited in
the trust capacity as on March 31, 2014.
13 The Company is a partner in Reliance Capital Partners
a) The frm consists of following partners and their balances:
14 Employees Stock Option Plans
The Company operates two Employees Stock Option Plans; ESOS Plan A and
ESOS Plan B introduced in the financial year 2009-10, which cover
eligible employees of the Company, the Holding Company and its
subsidiaries. The vesting of the options is from expiry of one year and
ranges till four to five years as per Plan under the respective ESOS(s).
Each Option entitles the holder thereof to apply for and be allotted /
transferred one Equity Share of the Company of Rs. 10 each upon payment
of the exercise price during the exercise period. The Company
implements and manages the ESOS plan through a trust. Advance of Rs. 64
crore (net of diminution Rs. 64 crore) [Previous year Rs. 64 crore (net of
diminution Rs. 64 crore)] has been granted to Trust. Out of the said
advance Trust has purchased 16,00,000 (Previous year 16,00,000) Equity
Shares for the above purpose.
b) Defined benefit plans
The following tables summarise the components of the net employee
benefit expenses recognised in the Statement of profit and Loss, the fund
status and amount recognised in the balance sheet for the gratuity
benefit plan and leave encashment plan.
15 Segment reporting
As per paragraph 4 of Accounting Standard (AS - 17), on "Segment
Reporting" notifed by the Companies (Accounting Standards) Rules 2006,
where a single financial report contains both consolidated financial
statements and the separate financial statements of the holding company,
segment reporting needs to be presented only on the basis of
consolidated financial statements. In view of this, segment information
has been presented at Note No. 41 of the consolidated financial
statements.
16 Related party disclosures
A. List of Related Parties and their relationship: i) Holding Company
Reliance Innoventures Private Limited
ii) Subsidiary of Holding Company
AAA Enterprises Private Limited
iii) Individual Promoter
Shri Anil D. Ambani, the person having control during the year
iv) Subsidiaries
1 Reliance Capital Asset Management Limited
2 Reliance Capital Asset Management (UK) Plc
3 Reliance Asset Management (Malaysia) SDN BHD
4 Reliance Asset Management (Mauritius) Limited
5 Reliance Asset Management (Singapore) Pte. Limited
6 Reliance Capital Pension Fund Limited
7 Reliance AIF Management Company Limited (w.e.f. September 30, 2013)
8 Reliance Capital Trustee Co. Limited
9 Reliance General Insurance Company Limited
10 Reliance Gilts Limited
11 Reliance Home Finance Limited
12 Reliance Equity Advisors (India) Limited
13 Reliance Consultants (Mauritius) Limited
14 Reliance Alternative Investments Services Private Limited
15 Reliance Exchangenext Limited
16 Reliance Spot Exchange Infrastructure Limited
17 Indian Agri Services Private Limited
18 Reliance Securities Limited
19 Reliance Composite Insurance Broking Limited
20 Reliance Commodities Limited
21 Reliance Financial Limited
22 Reliance Financial Advisory Services Limited (formerly Reliance
Investment Banking Services Limited) (ceased w.e.f. March 29, 2014)
23 Reliance Wealth Management Limited
24 Reliance Money Express Limited
25 Reliance Money Precious Metals Private Limited
26 Reliance Money Solutions Private Limited (w.e.f. December 2, 2013)
27 Reliance Venture Asset Management Private Limited (ceased w.e.f
March 29, 2014)
28 Reliance Capital (Singapore) Pte Limited (ceased w.e.f March 26,
2014)
29 Reliance Capital AIF Trustee Company Private Limited (w.e.f. April
11, 2013)
30 Quant Capital Private Limited
31 Quant Broking Private Limited
32 Quant Capital Advisors Private Limited
33 Quant Securities Private Limited
34 Quant Commodity Broking Private Limited
35 Quant Commodities Private Limited
36 Quant Investments Services Private Limited
37 QOPPA Trading Private Limited (ceased w.e.f. March 26, 2014)
38 QCAP Trade Private Limited (ceased w.e.f. March 26, 2014)
39 Quant Alternative Asset Management Private Limited (ceased w.e.f.
March 26, 2014)
40 Quant Capital Finance and Investments Private Limited
41 Quant Capital Securities Private Limited (w.e.f. August 22, 2013)
(ceased w.e.f. March 26, 2014)
42 QCAP Securities Private Limited (w.e.f. August 22, 2013) (ceased
w.e.f. March 26, 2014)
v) Partnership frm
Reliance Capital Partners vi) Associates
1 Ammolite Holdings Limited
2 Indian Commodity Exchange Limited
3 Reliance Asset Reconstruction Company Limited
4 Reliance Land Private Limited
5 Reliance Life Insurance Company Limited
6 Reliance Share & Stock Brokers Private Limited
vii) Fellow subsidiaries
1 AAA Entertainment Private Limited
2 Big Flicks Private Limited
3 Zapak Mobile Games Private Limited (formerly Jump Games Private
Limited)
4 Reliance Big Entertainment Private Limited
5 Reliance Communications Infrastructure Limited
6 Reliance Infratel Limited
7 Reliance Globalcom Limited
8 Reliance Communications Limited
9 Reliance Infocomm Infrastructure Limited
10 Reliance Webstore Limited
11 Zapak Digital Entertainment Limited
viii) Key management personnel
Shri V. R. Mohan - President & Company Secretary
B. Other related parties with whom transactions have taken place
during the year
i) Enterprise over which individual described in clause A (iii) above
has control Reliance Power Limited Reliance Cleangen Limited Jharkhand
Integrated Power Limited
iv) In addition to the above, Commission of Rs. Nil (Previous year Rs. Nil)
and Director Sitting Fees of Rs. 80 000 (Previous year Rs. 1 20 000) has
been paid to Shri Anil D. Ambani, an individual having control. v) The
Company has, during the year, sold part of its holding in unlisted
equity shares of: Reliance Land Private Limited representing 45% stake
(No. of shares 45 00 000, carrying value Rs. 4 crore) and Reliance Share
& Stock Brokers Private Limited representing 45% stake (No. of shares
45 00 000, carrying value Rs. 4 crore).
Considering that these shares were sold to Company''s wholly owned
subsidiaries and do not impact the economic interests of the Company''s
shareholders, the consideration for the sale were fixed at a price equal
to or slightly above their cost and not at their fair values (not
ascertained) which are significantly higher.
17 During the previous year Nippon Life Insurance Company (NLIC) has
acquired 26% equity shareholding in Reliance Capital Asset Management
Company Limited (RCAM). The Company has waived its entitlement of bonus
shares issued by RCAM.
18 Contingent Liabilities and Commitments (As certified by the
Management)
(Rs. in crore)
Particulars March 31, 2014 March 31, 2013
Contingent Liabilities
i) Guarantees to Banks and Financial
Institutions on behalf of third parties 2 416 1 281
ii) Claims against the Company not
acknowledged as debt 12 20
Commitments
iii) Estimated amount of contracts
remaining to be executed on capital account 85 38
(net of advances)
iv) Undrawn Committed Credit lines 678 434
v) Uncalled amount of Investments 7 56
19 In the opinion of management, all the assets other than fixed assets
and non current investments are approximately of the value stated if
realised in the ordinary course of business.
Mar 31, 2013
1. Background
Reliance Capital Limited (''the Company'') is registered as a Non-Banking
Financial Company (''NBFC'') as defined under Section 45-IA of the
Reserve Bank of India Act, 1934. The Company is principally engaged in
lending and investing activities.
2 Security clause / maturity profiles in respect to Secured Loans from
banks / debentures
(i) Non convertible debentures (NCDs) are redeemable at par, in one or
more installments, on various dates.
(a) NCDs amounting to Rs. Nil (Previous year Rs. 5 crore) are secured
by way of first pari passu legal mortgage and charge over the premises
situated at Avdesh House near Pritam Nagar, Ellisbridge, Ahmedabad and
additional first pari passu charge by way of hypothecation on business
receivables and loan assets of the commercial finance division, against
security not exceeding Rs. Nil (Previous year Rs. 6 crore).
(b) NCDs amounting to Rs. 5,849 crore (Previous year Rs. 5,686 crore)
are secured by way of first pari passu legal mortgage and charge over
the premises situated at Avdesh House near Pritam Nagar, Ellisbridge,
Ahmedabad and additional first pari passu charge by way of
hypothecation on present and future book debts / business receivables
of the Company. Business receivables includes Fixed Asset, Current
Assets, Investments and any other assets, against security not
exceeding Rs. 6,341 crore (Previous year Rs. 6,111 crore).
(c) The Company is in the process of creating security on the remaining
NCDs amounting to Rs. 567 crore (Previous year Rs. 75 crore).
(d) Maturity profile and Rate of interest of Long Term NCDs are as set
out below:
3 Amalgamation
I Scheme of Amalgamation between Company, Reliance Equities
International Private Limited (REIPL) and Emerging Money Mall Limited
(EMML)
The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of
the Companies Act, 1956 between Company, REIPL and EMML has been
sanctioned by the Hon''ble High Court of Judicature at Bombay vide Order
dated March 22, 2013. The scheme became effective on April 17, 2013 on
filing with the Registrar of Companies (RoC) with effect from March 31,
2013 i.e. Appointed Date.
REIPL was incorporated with the main object of providing broking
services to institutional investors and EMML was incorporated with the
main object of e-commerce. The amalgamation has been accounted for
under the "Purchase method" as prescribed by Accounting Standard
(AS-14) on "Accounting for Amalgamation" notified under the Companies
(Accounting Standards) Rules, 2006. The Company has carried out the
accounting treatment prescribed in the Scheme as sanctioned by the
Hon''ble High Court of Judicature at Bombay. The required disclosures as
per paragraph 42 of Accounting Standard (AS-14) ''Accounting for
Amalgamations'' as prescribed under the Companies (Accounting Standards)
Rules, 2006 has been provided.
Hence, in accordance with the Scheme:-
(i) As entire issued, subscribed and paid up share capital of REIPL and
EMML was held by the Company, no shares of the Company have been
allotted in lieu or exchange of its holding in REIPL and EMML.
Consequent to the Scheme the share capital of REIPL and EMML stands
cancelled.
(ii) On Scheme becoming effective with effect from Appointed Date, the
Company has written off its cancelled investments amounting to Rs. 680
crore in REIPL and EMML to the Statement of Profit and Loss of the
Company for the year and recorded all the assets aggregating to Rs.
1,103 crore and liabilities aggregating to Rs. 188 crore as appearing
in the books of REIPL and EMML at their respective fair value as
decided by the Board of Directors of the Company. The net assets taken
over include:
(iii) All Inter-company balances including liabilities on account of
loans and advances amounting to Rs. 186 crore on Appointed Date also
stand cancelled. Consequent upon the above Scheme of Amalgamation,
there has been a reduction of Rs. 69 crore in the value of investments
in Viscount Management Services Limited which has been debited to
Capital Reserve.
(iv) Difference aggregating to Rs. 846 crore after recording both above
said items being the excess arising on transfer under the Scheme of
assets and liabilities has been credited to Capital Reserve. The
reserve created pursuant to the Scheme shall for all regulatory and
accounting purposes be considered to be part of the owned funds / net
worth of the Company
(v) In accordance with the provisions of the Scheme of Amalgamation of
Reliance Commercial Finance Private Limited (RCFPL) with the Company
("the 2011 Scheme") sanctioned by the Hon''ble High Court of Judicature
at Bombay vide order dated April 29,201 1, an equivalent amount,
equivalent to the investments written off amounting to Rs. 680 crore
determined as an exceptional item by the Board of Directors of the
Company, has been withdrawn from General Reserve to offset the same and
credited to the Statement of Profit and Loss so that there is no impact
on profit before tax for the year.
Had both the Schemes not prescribed the above accounting treatment and
Company has followed accounting treatment prescribed under Accounting
Standard (AS - 14), the General reserve would have been higher by Rs.
680 crore and the balance in the statement of profit and loss would
have been lower by Rs.680 crore.
II Scheme of Amalgamation between Company and Viscount Management
Services (Alpha) Limited (VMSAL)
The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of
the Companies Act, 1956 between Company and VMSAL was sanctioned by the
Hon''ble High Court of Judicature at Bombay vide Order dated January 20,
201 2. The scheme became effective on March 12, 2012 on filing with the
Registrar of Companies (RoC) with effect from October 1, 2011 i.e.
Appointed Date.
VMSAL was incorporated with the main object of business consultancy
service. The amalgamation has been accounted for under the "Purchase
method" as prescribed by Accounting Standard (AS-14) on "Accounting for
Amalgamation" notified under the Companies (Accounting Standards)
Rules, 2006. The Company has carried out the accounting treatment
prescribed in the Scheme as sanctioned by the Hon''ble High Court of
Judicature at Bombay. The required disclosures as per paragraph 42 of
Accounting Standard (AS-14) ''Accounting for Amalgamations'' as
prescribed under the Companies (Accounting Standards) Rules, 2006 has
been provided.
Hence, in accordance with the Scheme:-
(i) Before Scheme becomes effective the entire issued, subscribed and
paid up share capital was held by the Company No shares of the Company
have been allotted in lieu or exchange of its holding in VMSAL and
share capital of VMSAL stands cancelled.
(ii) On Scheme becoming effective with effect from Appointed Date, the
Company has recorded all the assets aggregating to Rs. 5,839 crore and
liabilities aggregating to Rs. 1,385 crore as appearing in the books of
VMSAL at their respective fair value as decided by the Board of
Directors of the Company. The net assets taken over include:
(iii) All inter-company balances including liabilities on account of
debentures and inter-company investments amounting to Rs. 1,385 crore
on appointed date stands cancelled. The excess amount of investments
amounting to Rs. 679 crore has been debited to general reserve toward
inter-company investments cancellation.
(iv) Difference aggregating to Rs. 3,774 crore after recording both
above said items being the excess arising on transfer of assets and
liabilities has been credited to General Reserve.
(v) Difference in accounting method between the Company and VMSAL
amounitng to Rs. 62 crore has been credited to General Reserve pursuant
to the Scheme.
Had the Scheme not prescribed the above accounting treatments, the
difference of Rs. 3,837 crore would have been credited to Capital
Reserve instead of General Reserve and General Reserve would have been
lower by equivalent amount.
III In accordance with the provisions of the Scheme of Amalgamation of
Reliance Commercial Finance Private Limited (RCFPL) with the Company
("the Scheme") sanctioned by the Hon''ble High Court of Judicature at
Bombay vide order dated April 29, 201 1, the loss on sale of long term
investments amounting to Rs. 149 crore determined as an exceptional
item by the Board of Directors of the Company has been debited in the
statement of profit and loss for the previous year ended March 31,
2012. As per the Scheme and legal opinion obtained by the Company
equivalent amount has been withdrawn from General Reserve to adjust the
same, which has been disclosed accordingly. Had such losses not been
met from General Reserve, the Company would have reflected a profit
before tax of Rs. 472 crore and Profit after tax for the year would
have been Rs. 370 crore.
4 Business Transfer Agreement
In terms of Business Transfer Agreement (BTA) dated April 26, 2010
further amended on January 31, 2011 with its subsidiary company i.e.
Reliance Home Finance Limited, the Company hold loan assets of Rs. 11
crore (Previous year Rs. 42 crore) related to Reliance Home Finance
Limited in a trust capacity as on March 31, 2013.
5 Employee Stock Option Plans
The Company operates two Employee Stock Option Plans; ESOS Plan A and
ESOS Plan B introduced in the financial year 2009-10, which cover
eligible employees of the Company, the Holding Company and its
subsidiaries. The vesting of the options is from expiry of one year and
ranges till four to five years as per Plan under the respective
ESOS(s). Each Option entitles the holder thereof to apply for and be
allotted / transferred one Equity Share of the Company of Rs. 10 each
upon payment of the exercise price during the exercise period. The
Company implements and manages the ESOS plan through a trust. Advance
of Rs. 64 crore (net of diminution Rs. 64 crore) [Previous year Rs. 130
crore (net of diminution Rs. Nil)] has been granted to Trust. Out of
the said advance Trust has purchased 16,00,000 (Previous year
16,00,000) Equity Shares for the above purpose.
6 Segment reporting
As per paragraph 4 of Accounting Standard (AS-17), on "Segment
Reporting" notified by the Companies (Accounting Standards) Rules 2006,
where a single financial report contains both consolidated financial
statements and the separate financial statements of the holding
company, segment reporting needs to be presented only on the basis of
consolidated financial statements. In view of this, segment information
has been presented at Note No. 40 of the consolidated financial
statements.
7 Related party disclosures
A. List of Related Parties and their relationship:
i) Holding Company
Reliance Innoventures Private Limited
ii) Subsidiary of Holding Company
AAA Enterprises Private Limited
iii) Individual Promoter
Shri Anil D. Ambani, the person having control during the year
iv) Subsidiaries
Reliance Capital Asset Management Limited
Reliance Capital Asset Management (UK) Plc
Reliance Asset Management (Malaysia) SDN BHD
Reliance Asset Management (Mauritius) Limited
Reliance Asset Management (Singapore) Pte. Limited
Reliance Capital Pension Fund Limited
Reliance Capital Trustee Company Limited
Reliance General Insurance Company Limited
Reliance Gilts Limited
Reliance Home Finance Limited
Reliance Equity Advisors (India) Limited
Reliance Consultants (Mauritius) Limited
Reliance Exchangenext Limited
Reliance Spot Exchange Infrastructure Limited
Indian Agri Services Private Limited (w.e.f April 30, 2012)
Reliance Securities Limited
Reliance Wealth Management Limited
Reliance Financial Limited
Reliance Money Precious Metals Private Limited
Reliance Commodities Limited
Reliance Investment Banking Services Limited
Reliance Money Express Limited
Reliance Composite Insurance Broking Limited
Reliance Alternative Investments Services Private Limited
Reliance Capital (Singapore) Pte Limited
Reliance Venture Asset Management Private Limited
Reliance Equities International Private Limited
(merged with the company w.e.f. March 31, 2013)
Emerging Money Mall Limited (w.e.f. February 20, 2013)
(merged with the company w.e.f. March 31, 2013)
QOPPA Trading Private Limited
Quant Broking Private Limited
Quant Capital Advisors Private Limited
Quant Capital Finance And Investments Private Limited
Quant Capital Private Limited
Quant Commodities Private Limited
Quant Commodity Broking Private Limited
Quant Investments Services Private Limited
Quant Securities Private Limited
QCAP Trade Private Limited
Quant Alternative Asset Management Private Limited (w.e.f. October 12,
2012)
v) Partnership firm
Reliance Capital Partners
Reliance Capital Infrastructure Partners (dissolved w.e.f. December 31,
2012)
vi) Associates
Ammolite Holdings Limited
Indian Commodity Exchange Limited
Reliance Asset Reconstruction Company Limited
Reliance Land Private Limited
Reliance Life Insurance Company Limited
Reliance Share & Stock Brokers Private Limited
vii) Fellow subsidiaries
AAA Entertainment Private Limited
Big Flicks Private Limited
Jump Games Private Limited
Reliance Big Entertainment Private Limited
Reliance Communications Infrastructure Limited
Reliance Communications Limited
Reliance Infocomm Infrastructure Private Limited
Reliance Webstore Limited
Zapak Digital Entertainment Limited
viii) Key management personnel
Shri V. R. Mohan - President & Company Secretary
B. Other related parties with whom transactions have taken place
during the year:
i) Enterprise over which individual described in clause A (iii) above
has control Reliance Power Limited
8 During the year Nippon Life Insurance Company (NLIC) has acquired
26% equity shareholding in Reliance Capital Asset Management Company
Limited (RCAM). The Company has waived its entitlement of bonus shares
issued by RCAM.
9 The gold loans outstanding as at March 31, 2013 as a percentage of
total assets is at 0.22% (previous year 0.19%).
10 During the year, the Company reported to Reserve Bank of India (RBI)
fraud in disbursal of commercial vehicle loans amounting to Rs. 6
crore, as on March 31, 2013, Rs. 2 crore was recovered and write-off /
provision was made for the balance amount of Rs. 4 crore.
11 Contingent Liabilities and Commitments (As Certified by the
Management)
(Rs. in crore)
Particulars March 31, 2013 March 31, 2012
Contingent Liabilities
i) Guarantees to Banks and Financial
Institutions on behalf of third parties 1 281 983
ii) Claims against the Company not
acknowledge as debt 20 22
Commitments
iii) Estimated amount of contracts
remaining to be executed on capital account (net 38 81
of advances)
iv) Undrawn Committed Credit lines 434 253
v) Uncalled amount of Investments 56 79
12 In the opinion of management, all the assets other than fixed assets
and non current investments are approximately of the value stated if
realised in the ordinary course of business.
Mar 31, 2012
1 Background
Reliance Capital Limited ('the Company') is registered as a Non-Banking
Financial Company ('NBFC') as defned under Section 45-IA of the Reserve
Bank of India Act, 1934. The Company is principally engaged in lending
and investing activities.
2 The financial statements for the year ended March 31, 2011 had been
prepared as per the then applicable, Schedule VI to the Companies Act,
1956. Consequent to the notifcation of Revised Schedule VI under the
Companies Act, 1956, the financial statements for the year ended March
31, 2012 have been prepared as per Revised Schedule VI. Accordingly,
the previous year's fgures have also been reclassifed to conform to
this year's classifcation. The adoption of the Revised Schedule VI for
the previous year's fgures does not impact recognition and measurement
principles followed for preparation of financial statements.
The figures for current year includes fgures of Viscount Management
Services (Alpha) Limited (VMSAL) which is amalgamated with the Company
with effect from October 1, 2011 i.e. the Appointed Date and therefore
to that extent not strictly comparable to that of Previous year's
Figures.
3 Amalagamation
I Scheme of Amalgamation between Company and Viscount Management
Services (Alpha) Limited (VMSAL)
The Scheme of Amalgamation ("the Scheme") under Sections 391 to 394 of
the Companies Act, 1956 between Company and Viscount Management
Services (Alpha) Limited (VMSAL) has been sanctioned by the Hon'ble
High Court of judicature at Bombay vide Order dated January 20, 2012.
The scheme has become effective on March 12, 2012 on fling with the
Registrar of Companies (RoC) with effect from October 1, 2011 i.e.
Appointed Date.
VMSAL was incorporated with the main object of business consultancy
service. The amalgamation has been accounted for under the "Purchase
method" as prescribed by Accounting Standard (AS-14) on "Accounting for
Amalgamation" notifed under the Companies (Accounting Standards) Rules,
2006. The Company has carried out the accounting treatment prescribed
in the Scheme as sanctioned by the Hon'ble High Court of Judicature at
Bombay. The required disclosures as per paragraph 42 of Accounting
Standard 14 (AS-14) 'Accounting for Amalgamations' as prescribed under
the Companies (Accounting Standards) Rules, 2006 has been provided.
Hence, in accordance with the Scheme:- (i) Before Scheme becomes
effective the entire issued, subscribed and paid up share capital was
held by the Company.
No shares of the Company have been allotted in lieu or exchange of its
holding in VMSAL and share capital of VMSAL stand cancelled.
(ii) On Scheme becoming effective with effect from Appointed Date, the
Company has recorded all the assets aggregating to Rs. 5,839 crore and
liabilities aggregating to Rs. 1,385 crore as appearing in the books of
VMSAL at their respective fair value as decided by the Board of
Directors of the Company. The net assets taken over include:
(iii) All Inter-company balances including liabilities on account of
debentures and inter- company investments amounting to Rs. 1,385 crore
on appointed date stand cancelled. The excess amount of investments
amounting to Rs. 679 crore has been debited to general reserve toward
inter- company investments cancellation.
(iv) Difference aggregating to Rs. 3,774 crore after recording both
above said items being the excess arising on transfer of assets and
liabilities has been credited to General Reserve.
(v) Difference in accounting method between the Company and VMSAL
amounting to Rs. 62 crore has been credited to General Reserve pursuant
to the Scheme.
Had the Scheme not prescribed the above accounting treatments, the
difference of Rs. 3,837 crore would have been credited to Capital
Reserve instead of General Reserve and General Reserve would have been
lower by equivalent amount.
II During the year, Nippon Life Insurance Company (NLIC) has acquired
26 per cent equity shareholding in Reliance Life Insurance Company
Limited, in terms of share subscription & share purchase agreement
entered into between the Company, Viscount Management Services (Alpha)
Limited (VMSAL), Viscount management Services Limited (VMSA), Reliance
Life Insurance Company Limited (RLIC) and Nippon Life Insurance Company
(NLIC).
III During the previous year, pursuant to the Scheme of Amalgamation
("the Scheme") under Sections 391 to 394 of the Companies Act, 1956
sanctioned by the Hon'ble High Court of judicature at Bombay vide order
dated April 29, 2011, fled with the Registrar of Companies on May 18,
2011, Reliance Commercial Finance Pvt. Ltd., wholly owned subsidiary of
the Company, was amalgamated into the Company with effect from April 1,
2010 i.e., the Appointed Date and in accordance with the provisions of
the said Scheme:
a) The Company has written off Rs. 329 crore in the Statement of profit
and loss and an equivalent amount is withdrawn from general reserve.
The Company has recorded all necessary accounting effects in the
previous year, along with the requisite disclosure in the notes to the
accounts and created General Reserve amounting to Rs. 1,04,484.
b) During the year, the loss on sale of long term investments amounting
to Rs. 149 crore determined as an exceptional item by the Board of
Directors of the Company, has been debited in the Statement of profit
and Loss for the year ended March 31, 2012. As per the Scheme and legal
opinion obtained by the Company an equivalent amount has been withdrawn
from General Reserve to adjust the same and credited to the Statement
of profit and Loss, which has been disclosed accordingly and is in
compliance with Revised Schedule VI of the Companies Act, 1956. Had
such losses not been met from General Reserve, the Company would have
refected a profit before tax of Rs. 472 crore and profit after tax for
the year would have been Rs. 370 crore.
4 Business Transfer Agreement
In terms of Business Transfer Agreement (BTA) dated April 26, 2010
further amended on January 31, 2011 with its subsidiary company i.e.
Reliance Home Finance Limited the Company hold loan assets of Rs. 42
crore (Previous year Rs. 135 crore), and liabilities Rs. Nil (Previous
year Rs. 1 crore), related to Reliance Home Finance Limited in a trust
capacity as on March 31, 2012 .
5 Employee Stock Option Plans
The Company operates two Employee Stock Option Plans; ESOS Plan A and
ESOS Plan B introduced in the financial year 2009-10, which cover
eligible employees of the Company, the Holding Company and its
subsidiaries. The vesting of the options is from expiry of one year and
ranges till four to five years as per Plan under the respective
ESOS(s). Each Option entitles the holder thereof to apply for and be
allotted / transferred one Equity Share of the Company of Rs. 10 each
upon payment of the exercise price during the exercise period. The
Company implements and manages the ESOS plan through a trust. Advance
of Rs. 130 crore (Previous year Rs. 130 crore) has been granted to
Trust. Out of the said advance Trust has purchased 16,00,000 (Previous
year 16,00,000) Equity Shares for the above purpose till March 31,
2012.
6 Segment reporting:
As per paragraph 4 of Accounting Standard (AS) 17, on "Segment
Reporting" notifed by the Companies (Accounting Standards) Rules 2006,
where a single financial report contains both consolidated financial
statements and the separate financial statements of the holding
company, segment reporting needs to be presented only on the basis of
consolidated financial statements. In view of this, segment information
has been presented at Note No. 38 of the consolidated financial
statements.
(Rs. in crore)
Fellow Partnership
Particulars Subsidiaries Assoc
-iates Total
Subsi
-diaries Firm
Contingent Liability
a) Guarantees to Banks
and Financial
i) Reliance Money Express
Limited - - - - -
(40) (-) (-) (-) (40)
ii) Ammolite Holdings
Limited - - 77 - 77
(-) (-) (80) (-) (80)
Key Managerial Personnel
a) Shri V. R. Mohan
- Employee beneft expenses Rs. 68 54 397 (Previous year Rs. 42 00 000)
- Loan given balance as at March 31, 2012 Rs. 4 49 751 (Previous year
Rs. 4 64 151)
Enterprise over which individual described in clause A (iii) above has
control
Reliance Power Limited
- Commercial Paper subscribed & redeemed Rs. 224 crore (Previous year
Nil)
- Investment balance as at March 31, 2012 Rs. 3 crore Notes :
i) Figures in bracket indicate previous year fgures.
ii) Expenses incurred towards public utilities services such as
telephone and electricity charges have not been considered for related
party transaction.
iii) The above disclosed transactions entered during the period of
existence of related party relationship. The balances and transactions
are not disclosed before existence of related party relationship and
after cessation of related party relationship.
iv) In addition to the above, Commission of Rs. Nil (Previous year Rs.
6 crore) and Director sitting fees of Rs. 1,00,000 (Previous year Rs.
80,000) has been paid to Shri Anil D. Ambani, an individual having
control.
v) Investments in Unilazer Media Limited though in excess of 20%, the
investment has been made with an intention to sell in near future. In
terms of the provisions of Accounting Standard (AS) 18 on "Related
Party Disclosures" as per Companies (Accounting Standard) Rules 2006 on
aforesaid Company, the company does not exercise any "significant
Infuence" hence the transactions with these parties as not considered
for related party disclosures.
vi) Pursuant to the Scheme of Amalgamation ("the Scheme") between
Company and Viscount Management Services (Alpha) Limited (VMSAL) [Refer
Note No. 29 (I) (a) (iii)] entire issued, subscribed and paid up share
capital of VMSAL was held by the Company and was cancelled. Therefore,
for the purpose of above disclosures the same has not been considered.
7 Contingent Liabilities and Commitments (As certified by the
Management)
(Rs. in crore)
Particulars March 31, 2012 March 31, 2011
Contingent Liabilities
i) Guarantees to Banks and Financial
Institutions on behalf of Third
parties 983 1 142
ii) Claims against the Company not
acknowledged as debt 22 13
Commitments
iii) Estimated amount of contracts
remaining to be executed
on capital account 81 71
(net of advances)
iv) Undrawn Committed Credit lines 253 421
v) Uncalled amount of Investments 79 355
8 In the opinion of management, all the assets other than fixed assets
and non current investments are approximately of the value stated if
realised in the ordinary course of business.
Mar 31, 2011
A. Background
Reliance Capital Limited. ('the Company') is registered as a
Non-Banking Financial Company ('NBFC') as defined under Section 45-IA of
the Reserve Bank of India Act, 1934. The Company is principally engaged
in lending and investment activities.
1. a) Previous Year's figures have been reworked, regrouped and
reclassified wherever necessary.
b) The figures for the current year includes figures of Reliance
Commercial Finance Pvt. Ltd. (Formerly Reliance Consumer Finance Pvt.
Ltd.) (RCFPL) which is amalgamated with the Company with effect from
April 1, 2010 and therefore to that extent not comparable to the
Previous Year's figures.
2. a) Pursuant to the Scheme of Amalgamation ("the Scheme") under
Sections 391 to 394 of the Companies Act, 1956 as sanctioned by the
Hon'ble High Court of judicature at Bombay vide Order dated April 29,
2011 and fled with the Registrar of Companies (RoC) Maharashtra on May
18, 2011, Reliance Commercial Finance Pvt. Ltd. (RCFPL) - (wholly
owned subsidiary of the Company whose core business was commercial
finance business) has been amalgamated with the Company with effect from
April 1, 2010 i.e., the Appointed Date.
b) The Amalgamation has been accounted for under the "Purchase Method"
as prescribed by Accounting Standard (AS) 14 "Accounting for
Amalgamation" prescribed by Companies (Accounting Standards) Rules,
2006.
c) In accordance with the said Scheme : i) All the assets, debts,
liabilities, duties and obligations of RCFPL have been vested in the
Company with effect from
April 1, 2010 and have been recorded at their respective book values
under the purchase method of accounting for Amalgamation. All
Intercompany balances and transactions during the year has been
cancelled. There were no difference in the accounting policies of RCFPL
and the Company.
ii) In accordance with the said Scheme, any excess / (shortfall)
arising on transfer of assets over liabilities have been credited /
(debited) to the General Reserve.
iv) As per Scheme of Amalgamation, investments in the shares of RCFPL
of Rs. 329 crore is written off in the profit & Loss Account and an
equivalent amount is withdrawn from the General Reserve. Had the scheme
not provided for the treatment the difference of Rs. 0.01 crore would
have been credited to Capital Reserve and General Reserve would have
been lower by Rs. 0.01 crore.
b) The Company invests in Pass Through certificates (PTCs) and purchases
loans through the direct assignment route. In some of the
securitisation transactions, the Company also has invested in the
assets securitised by it, which, however, is restricted to the maximum
limit prescribed by RBI from time to time.
c) During the year, Company has entered into an agreement with Reliance
Home Finance Pvt. Ltd., a subsidiary of the Company (Previous Year with
AU Financiers (India) Pvt. Ltd.) for loan assignment. As per deed of
assignment, for loans aggregating to Rs. 492.88 crore (Previous Year Rs.
8.16 crore), the Company has been assigned the right for future
receivables along with a power of attorney authorising the Company,
inter-alia, to obtain possession of the assets in case of default. The
above loans are secured against hypothecation of underlying assets.
3. The Company had entered into business transfer agreements (BTA) on
April 26, 2010 with its subsidiaries i.e. Reliance Home Finance Pvt.
Ltd. (RHFPL) and Reliance Commercial Finance Pvt. Ltd. (RCFPL) to
transfer the business of Commercial Finance Division (RCF) at book
value, such that the entire economic risk and reward of the RCF segment
passes to the purchasers from the commencement of business on the value
date i.e. April 1, 2010.
4. Owing to the amalgamation of Reliance Commercial Finance Pvt. Ltd.
(Formerly Reliance Consumer Finance Pvt. Ltd.) wholly owned subsidiary,
with the Company with effect from April 1, 2010, the business transfer
agreements (BTA) entered on April 26. 2010 stand cancelled.
The Company has amended the BTA with Reliance Home Finance Pvt. Ltd. on
January 31, 2011. As per the amended BTA with RHFPL :
a) The Company holds loan assets of Rs. 134.88 crore and liabilities of Rs.
1.14 crore of RHFPL in the capacity of trustee as on March 31, 2011.
b) During the year, the Company has transferred the following assets,
income and expenses : i) unamortized DSA Commission of Rs. 1.91 crore ii)
interest & other income of Rs. 46.68 crore iii) interest & other expenses
of Rs. 31.25 crore iv) DSA commission expenses of Rs. 1.87 crore
5. The Company operates two Employee Stock Option Plans; ESOS Plan A
and ESOS Plan B introduced in the financial year 2009- 10, which cover
eligible employees of the Holding Company, the Company and its
subsidiaries. The vesting of the options is from expiry of one year and
ranges till four to five years as per Plan under the respective ESOS(s).
Each Option entitles the holder thereof to apply for and be allotted /
transferred one Equity Share of the Company of Rs. 10 each upon payment
of the exercise price during the exercise period. The Company
implements and manages the ESOS plan through a trust. Advance of Rs.
130.41 crore (Previous Year Rs. 96.41crore) has been granted to Trust.
Out of the said advance, Trust has purchased 16,00,000 (Previous Year
11,00,000) Equity Shares on account of ESOS upto March 31, 2011.
The Company has chosen to account for the Plan by the Intrinsic Value
Method. The total expense recognised for the period arising from stock
option plan as per Intrinsic Value Method is Rs. Nil (Previous Year Rs.
Nil). Had the company adopted fair value method the net results for the
year would have been lower by Rs. 14.20 crore (Previous Year Rs. 2.53
crore) [net of tax saving Rs. 14.20 crore (Previous Year Rs. 2.11 crore)
and accordingly EPS (both Basic and Diluted) would have been lower by Rs.
0.57 (Previous Year Rs. 0.09).
6. Micro, small and medium enterprises :
During the current year, the management has carried out the process of
identification of enterprises, which have provided goods and services to
the Company and which qualify under the definition of medium and small
enterprises, as defined under Micro, Small and Medium Enterprises
Development Act, 2006. Based on the inputs received on above, there
have been no reporting cases of delays in payments to micro and small
enterprises or of interest payments due to delays in such payments.
7. The Company is a partner in the following firms: i) Reliance Capital
Partners:
a) The firm consists of following partners:
i) Reliance Capital Limited ii) Reliance Land Pvt. Ltd.
b) profit sharing ratio:
The profit is distributed between the partners on the basis of the
weighted average capital.
c) The profit of Rs. 39.58 crore is considered as profit of the current
financial year (Previous Year Loss of Rs. 1.04 crore). ii) Reliance
Capital Infrastructure Partners:
a) The firm consists of following partners:
i) Reliance Capital Limited ii) Reliance Infocomm Infrastructure Pvt.
Ltd. iii) Reliance Infraprojects Ltd.
b) profit sharing ratio:
The profit is distributed between the partners on the basis of the
weighted average capital.
c) The firm has not commenced operations as at March 31, 2011 and there
has been no contribution of capital upto March 31, 2011.
8. Tax on Proposed Dividend
As on April 27, 2011, the Reliance Capital Assets Management Ltd.
(RCAM), a subsidiary of the Company has proposed dividend of Rs. 161.40
crore (Dividend distribution tax thereon Rs. 26.18 crore) which is
subsequently approved by its shareholders in their general meeting held
on May 23, 2011. As on May 26, 2011 the Company has received dividend
of Rs. 149.99 crore from RCAM. In view of Section 115- O of the Income
Tax Act, 1961, the Company has reduced its dividend tax liabilities to
that extent.
9. Segment reporting:
As per paragraph 4 of Accounting Standard -17 (AS-17), on "Segment
Reporting" notified by the Companies (Accounting Standard) Rules 2006,
where a single financial report contains both consolidated financial
statements and the separate financial statements of the holding company,
segment reporting needs to be presented only on the basis of
consolidated financial statements. In view of this, segment information
has been presented at Note No. 17 of the abridged consolidated financial
statements.
10. Related party disclosures: (A) List of Related Parties: i) Holding
Company
Reliance Innoventures Pvt. Ltd. ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the year
11. a) Accrued Premium / Interest on Investments includes Rs. 61.08
crore due from Associates (Previous Year Rs. 24.95 crore).
b) Accrued Premium / Interest on Investments amounting to Rs. 126.36
crore are due within 1 Year. (Previous Year Rs. 45.31 crore).
12. In the financial year 2008-09, the Company has entered into a joint
venture with KGS Developers Ltd. in respect of real estate project
development. The Company has invested Rs. 85 crore and is entitled to
share the profit / Loss equally.
13. Contingent Liabilities and Commitments (As certified by the
Management)
(Rs. in crore)
Particulars March 31, 2011 March 31, 2010
Contingent Liabilities
i) Guarantees to Banks and Financial
Institutions on behalf of
subsidiaries and 1,142.48 235.00
Associates
ii) Claims against the Company not
acknowledged as debt 12.71 11.95
Commitments
iii) Estimated amount of contracts
remaining to be executed on capital
account 70.58 27.11
(net of advances)
iv) Uncalled amount of Investments 354.68 371.66
Mar 31, 2010
A. Background
Reliance Capital Limited. (the Company) is registered as a
Non-Banking Financial Company (NBFC) as defined under section 45-IA
of the Reserve Bank of India Act, 1934. The Company is principally
engaged in lending and investing activities.
1 Previous years figures have been reworked, regrouped and
reclassified wherever necessary.
2 During the year the Company has entered into a agreement with AU
Financiers (India) Pvt. Ltd. for loan assignment. As per deed of
assignment, for loans aggregating to Rs.8.16 crore (Previous year
Rs.Nil) the Company has been assigned the right to future receivables
along with a power of attorney authorizing the Company, inter-alia, to
obtain possession of the property in case of default. The above loans
are secured against hypothecation of underlying assets.
3 During the year, the company has sold the assets amounting to Rs.4.05
crore (Previous Year Rs.Nil) at cost. The same has been been accquired
in accordance with the requirement of RBI Circular:
DBOD.NO.BP.BC.16/21.04.048/05-06 dated July 13, 2005 on Guidelines on
Puchase / Sale of Non Performing Assets.
4 Subsequent to the Balance sheet date, on April 26, 2010, the Company
entered into business transfer agreement with its subsidiaries i.e.
Reliance Home Finance Private Limited (RHFPL) and Reliance Consumer
Finance Private Limited (RCFPL) (together referred to as the
purchasers) to transfer the business of Consumer Finance Division
(RCF) segment at book value such that the entire economic risk and
reward of the RCF segment passes to the purchasers from the
commencement of business on the value date i.e. April 1, 2010. Pursuant
to the provisions of Section 293(1)(a) and Section 192A of the Act, the
Company is in the process of obtaining shareholders approval.
As per the business transfer agreement entered into with the
purchasers, the Company has agreed to hold in trust for the benefit of
the purchasers any part of the assets and liabilities that has not been
transferred to the purchasers on the value date.
The assets and liabilities transferred to the purchasers as at April 1,
2010 are as follows : Total Assets Rs.6,239.83 crore Total Liabilities
Rs.5,986.75 crore
5 During the year the Company has introduced Employee Stock Option
Plan, under which it has granted 7,96,900 options (3,99,900 options
under Plan A and 3,97,000 options under Plan B) to the eligible
employees of the Company as well as employees of its Subsidiary
Companies on the basis of their performance and other eligibility
criteria. ESOS Plans are administered through an ESOS Trust. The
vesting of the options is on the expiry of one year and so on from the
date of grant as per Plan under the respective ESOS(s). In respect of
Options granted, the accounting value of Options (based on market price
of the share on the date of the grant of the option) is accounted as
deferred employee compensation, which is amortised on a straight line
basis over the vesting period. Each Option entitles the holder thereof
to apply for and be allotted/ transferred one Equity Share of the
Company of Rs.10 each upon payment of the exercise price during the
exercise period. The Company has established a Trust for the
implementation and management of ESOS for the benefit of its present
and future employees. Advance of Rs.96.41 crore (Previous year Rs.Nil)
has been granted to the Trust. Rs.96.40 (Previous year Rs.Nil) has been
utilised by the Trust for purchasing 11,00,000 (Previous year Nil)
Equity Shares during the period upto March 31, 2010.
6 Micro, small and medium enterprises
During the current year, the management has carried out the process of
identification of enterprises, which have provided goods and services
to the Company and which qualify under the definition of medium and
small enterprises, as defined under Micro, Small and Medium Enterprises
Development Act, 2006. Based on the inputs received on above, there
have been no reporting cases of delays in payments to micro and small
enterprises or of interest payments due to delays in such payments.
7 The Company is a partner in the following firms i) Reliance Capital
Partners
a) The firm consists of following partners i) Reliance Capital Limited
ii) Reliance Land Pvt. Ltd. iii) Shri Surendra Pipara
b) Profit Sharing Ratio:
The profit is distributed between the partners on the basis of the
weighted average capital .
The Loss of Rs.1.04 crore is considered as Loss of the current
financial year (Previous Year Loss of Rs.4.40 crore).
ii) Reliance Capital Infrastructure Partners:
a) The firm consists of following partners: i) Reliance Capital Limited
ii) Reliance Infocomm Infrastructure Pvt. Ltd.
iii) Reliance Infraprojects Ltd.
b) Profit Sharing Ratio:
The profit is distributed between the partners on the basis of the
weighted average capital.
The firm has not commenced operations during the year ended March 31,
2010 and there has been no contribution of capital upto March 31, 2010.
8. Employee benefits
a) Defined Contribution Plan
Amount of Rs.4.22 crore (Previous Year : Rs.5.61 crore) is recognised
as expense and included in "Employee costs" referred to in Schedule L
in the Profit and Loss Account.
b) Defined Benefit Plan
The following tables summarise the components of the net employee
benefit expenses recognised in the Profit and Loss account, the fund
status and amount recognised in the balance sheet for the gratuity
benefit plan and leave encashment plan.
9. Segment reporting:
As per paragraph 4 of Accounting Standard (AS-17), on "Segment
Reporting" notified by the Companies (Accounting Standard) Rules 2006,
where a single financial report contains both consolidated financial
statements and the separate financial statements of the holding
company, segment reporting needs to be presented only on the basis of
consolidated financial statements. In view of this, segment information
has been presented at Note No.15 of Schedule O of the consolidated
financial statements.
10. Related party disclosures:
i) Holding Company
Reliance Innoventures Pvt. Ltd. (Holding Company w.e.f. June 26, 2009)
AAA Enterprises Pvt. Ltd. (Ceased to be Holding Company w.e.f. June 26,
2009)
ii) Individual Promoter
Shri Anil D. Ambani, the person having control during the year.
iii) Subsidiaries
Reliance Capital Asset Management Ltd.
Reliance Capital Trustee Company Ltd.
Reliance General Insurance Company Ltd.
Reliance Gilts Ltd.
Reliance Capital Research Pvt. Ltd.
Reliance Money Express Ltd.
Medybiz Pvt. Ltd.
Net Logistics Pvt. Ltd.
Reliance Venture Asset Management Pvt. Ltd. (formerly Reliance
Technology Ventures Pvt. Ltd.)
Reliance Capital Markets Pvt. Ltd.
Reliance Asset Management (Mauritius) Ltd.
Reliance Asset Management (Malaysia) SDN BHD w.e.f. April 19, 2009.
Reliance Asset Management (Singapore) Pte. Ltd.
Reliance Capital Asset Management (UK) Plc.
Reliance Equity Advisors (India) Ltd.
Reliance Consultants (Mauritius) Ltd.
Reliance Equities International Pvt. Ltd.
Reliance Home Finance Pvt. Ltd.
Reliance Capital Services Pvt. Ltd.
Reliance Capital (Singapore) Pte. Ltd.
Reliance Consumer Finance Pvt. Ltd.
Reliance Securities Ltd.
Reliance Commodities Ltd.
Reliance Financial Ltd.
Reliance Alternative Investments Services Pvt. Ltd.
Reliance Prime International Ltd.
Reliance Capital Pension Fund Ltd.
iv) Partnership firm
Reliance Capital Partners
Reliance Capital Infrastructure Partners
v) Associates
Reliance Land Pvt. Ltd.
Reliance Share & Stock Brokers Pvt. Ltd.
Ammolite Holdings Ltd.
Reliance Asset Reconstruction Co. Ltd.
vi) Fellow subsidiaries
Reliance Communications Ltd.
Reliance Communications Infrastructure Ltd.
Reliance Telecom Ltd.
Matrix Innovations Ltd.
Reliance Natural Resources Ltd.
Reliance WiMax Ltd.
Reliance Webstore Ltd.
Reliance Infocomm Infrastructure Pvt. Ltd.
vii) Key management personnel
Shri V. R. Mohan - Company Secretary & Manager
11 a) Accrued Premium / Interest on Investments includes Rs.24.95 crore
due from Associates (Previous Year Rs.2.90 crore) b) Accrued Premium /
Interest on Investments amounting to Rs.45.31 crore are due within 1
Year. (Previous Year Rs.Nil)
12 In the financial year 2008-09, the Company has entered into a joint
venture with KGS Developers Ltd in respect of certain real estate
project devlopment, The Company has invested Rs.85 crore and is
entitled to share the Profit / Loss equally. The joint venture has not
commenced operations during the year ended March 31, 2010.
13. Contingent Liabilities and Commitments (As Certified by the
Management)
(Rs. in crore)
As at As at
March 31, 2010 March 31, 2009
Contingent Liabilities
i) Guarantees to Banks and Financial
Institutions 235.00 366.43
on behalf of Subsidiaries and Associates.
ii) Claims against the Company not
acknowledged as debt 11.95 0.09
Commitments
iii) Estimated amount of contracts
remaining to be executed on capital
account (net of advances) 27.11 23.09
iv) Uncalled amount on Investment 371.66 265.17
Mar 31, 2000
No Informations available.
Mar 31, 2000
No Informations available.
Mar 31, 1999
No Information Available.
Mar 31, 1999
No Information Available.
Mar 31, 1996
1. a. Payment to Auditors Rs.
As Auditors 35,000
Tax Audit fees 10,000
Certification Fees 10,000
2. Expenditure in Foreign currency
Travel: Rs. 1,33,025
3. Balance Sheet Abstract and Company's General Business
Profile
1. Registration Details
Registration No. 24780 State Code 04
Balance Sheet date 31 03 96
Date Month Year
ii. Capital raised during the year (Amount in Rs. Thousands)
Private Placement (Promoter's Contribution) 60007
Mar 31, 1996
1. a. Payment to Auditors Rs.
As Auditors 35,000
Tax Audit fees 10,000
Certification Fees 10,000
2. Expenditure in Foreign currency
Travel: Rs. 1,33,025
3. Balance Sheet Abstract and Company's General Business
Profile
1. Registration Details
Registration No. 24780 State Code 04
Balance Sheet date 31 03 96
Date Month Year
ii. Capital raised during the year (Amount in Rs. Thousands)
Private Placement (Promoter's Contribution) 60007