2009-10 - Aditya Birla Nuvo, Ltd

SUBSIDIARY COMPANIES

CMYK 

ADITYA BIRLA NUVO LIMITED 

ANNUAL REPORT OF SUBSIDIARIES 2009-10 

ADITYA BIRLA FINANCIAL SERVICES 

Contents 

Birla Sun Life Insurance Company Ltd. ................................................. 1 

Aditya Birla Financial Services Pvt. Ltd.................................................. 175 

Aditya Birla Money Ltd......................................................................... 187 

Aditya Birla Commodities Broking Ltd. ................................................. 231 

Aditya Birla Capital Advisors Pvt. Ltd. ................................................... 253 

Aditya Birla Trustee Company Pvt. Ltd. ................................................. 264 

Aditya Birla Customer Services Pvt. Ltd. ............................................... 271 

Aditya Birla Financial Shared Services Ltd. ........................................... 276 

Birla Insurance Advisory and Broking Services Ltd. ............................... 287 

Aditya Birla Finance Ltd. ...................................................................... 298 

Aditya Birla Money Mart Ltd. ............................................................... 315 

Aditya Birla Money Insurance Advisory Services Ltd. ............................. 330 

ABNL Investment Ltd. .......................................................................... 341

CMYK 



BPO & IT SERVICES 

Contents 

Aditya Birla Minacs Worldwide Ltd. ...................................................... 353 

Transworks Inc. USA ............................................................................ 368 

Aditya Birla Minacs Philippines Inc, Philippines ..................................... 373 

AV Transworks Ltd., Canada ................................................................ 379 

Aditya Birla Minacs Worldwide Inc., Canada ........................................ 384 

The Minacs Group, USA ...................................................................... 394 

Minacs Worldwide S.A. de C.V., Mexico................................................ 397 

Minacs Ltd, UK .................................................................................... 399 

Minacs Worldwide GmbH, Germany .................................................... 401 

Minacs Kft., Hungary ........................................................................... 404 

Compass BPO Ltd. UK ......................................................................... 407 

Compass BPO Inc. USA ....................................................................... 414 

Compass Business Process Outsourcing Pvt. Ltd., India ........................ 416 

Compass BPO FZE, UAE ...................................................................... 422 

Aditya Birla Minacs IT Services Ltd. ...................................................... 428 

Aditya Birla Minacs Technologies Ltd. ................................................... 443

CMYK 



GARMENTS 

Contents 

Madura Garments Lifestyle Retail Company Ltd. .................................. 455 

Peter England Fashions and Retail Ltd. ................................................. 468 

Aditya Vikram Global Trading House Ltd. ............................................. 478

BIRLA SUN LIFE INSURANCE COMPANY LIMITED 

DIRECTORS’ REPORT 

Dear Shareholders, 

On behalf of the Directors, I present the tenth Annual Report, together with the Audited Statement 

of Accounts of Birla Sun Life Insurance Company Limited (“the Company/BSLI”) for the year 

ended 31 st March 2010. 

FINANCIAL PERFORMANCE 

The Company completed its 10 th year of successful operations this year. A decade after the private 

sector was allowed into the life insurance industry, the landscape has changed completely. 

In terms of total premium revenue, the Company achieved Rs. 55,057 Mn registering a growth of 

20% in FY10. 

(Rs. in Mn) 

Particulars Current Year Previous Year Inc (%) 

FY 2009-10 FY 2008-09 

Income 

Gross premium income 55,057 45,718 20% 

Reinsurance (net) (803) (552) 46% 

Total premium income (net) 54,254 45,166 20% 

Income from investments 

Policyholders 40,032 (6,707) -697% 

Shareholders 301 342 -12% 

Investment Income 40,333 (6,364) -734% 

Other Income 143 171 -16% 

Total Income 94,730 38,973 143% 

Less: 

Commission 5,162 4,818 7% 

Expenses (including depreciation) 13,276 12,498 6% 

Benefits paid (net) 11,388 6,464 76% 

Provisions for actuarial liability (net) 69,260 22,153 213% 

Provision for Taxation 0 61 -100% 

Loss for the Current Year (4,355) (7,021) -38% 

Add: Loss Brought Forward from Last Year (15,920) (8,899) 79% 

Total Loss as on date (20,275) (15,920) 27% 

Given the uncertain economic conditions at the start of the financial year and focus on profitable 

growth, the Company started FY10 with a thrust on driving higher productivity through existing 

capacities, growing alternate channels and maintaining its superiority on the products front by 

launching innovative products. The Insurance Regulatory and Development Authority (IRDA) 

guidelines on ‘Capping on charges’ necessitated redesigning and launching new ULIP products 

and that had some impact on sales in Q4. Given the strong performance in the first 9 months of the 

year the Company ended the year with a positive sales growth of new business at 2%. 

The Company took several steps to rationalize expenses across its operations to increase value to 

the customer without compromising on profit margins in the medium to long term. 

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The Company recorded good performance across the range of key financial parameters as detailed 

below: 

• The total premium at Rs. 55,057 Mn (including renewal premium of Rs. 25,456 Mn) grew by 

20% over the previous year. 

• Net Loss was Rs. 4,355 Mn, significantly lower than the previous year’s loss of Rs. 7,021 Mn. 

The reduction in losses is driven by profit from growing inforce business, declining expense 

ratios and changes in product structures to reduce new business strain. 

• Lower losses led to lower capital injection of Rs. 4,500 Mn in the year under review as compared 

to Rs. 7,250 Mn in the previous year. 

• The Company maintained excellence in investment performance for its policyholders. For all 

its unit linked funds, the Company delivered superior fund performance across the board, 

consistently beating benchmarks. 

BUSINESS REVIEW 

Industry Scenario 

The competitive landscape has changed substantially since liberalization of the Indian insurance 

industry in 2000-01. Currently, there are 22 private players in the life insurance sector. The entry of 

private players has led to a strong growth in distribution infrastructure as evident from an increase 

in the branch network from 2,199 branches in FY01 to 11,931 branches in FY10 and growth in the 

advisor base from 0.7 Mn in FY01 to 2.9 Mn in FY10. The private sector registered a new business 

growth of 13% in FY10 as per IRDA data. However, the year under review saw the share of the 

private sector decline from 48.4% in FY09 to 42.6% in FY10. Top 7 private players’ share of the total 

private players’ market share has remained constant at around 80% in the past 2 years. 

At the end of the year under review, your Company’s market share stood at 8.4% among private 

players and 3.6% for the total market. 

The Company continues to be optimistic on the future potential of the Life Insurance sector. It is 

essential to have a framework that promotes the growth of this sector given the importance it holds 

for the economic development of the country. As on December 2009, Investments in equities and 

fixed income securities was USD 90 Bn and USD 170 Bn respectively. 

Summary of Operations and Business 

• After recording strong growth of more than 50% CAGR in the first seven years since opening 

up, the life insurance sector has seen expected moderation of growth in the last two years with 

growth tapering to 5% p.a. Several factors are responsible for the change in the growth trajectory 

including uncertain economic environment, focus on growth through higher productivity and 

efficiency thus slowing down the creation of additional capacities, and conservation of capital. 

• New business annualized premium equivalent for the Company increased by 2% to Rs. 30,220 

Mn in FY10, in line with the private sector growth rate during the year. The Company registered 

strong growth in the retail segment by issuing more than 1 Mn policies (excluding obligatory 

rural policies) for the first time since it started operations. Our market share has grown from 

5.3% in FY07 to 8.4% in FY10. 

• The total premium income grew by 20% to Rs. 55,057 Mn, backed by a strong growth of 45% in 

renewal premiums over the previous year. 

• The Agency Channel continues to be the Company’s largest distribution channel accounting 

for 68% of the individual life business written in the year. The Agency channel has a network 

spread across 632 branches with 169,572 advisors as on March ‘10. The Channel added around 

50 rural kendras in 1 st half of FY10 to further strengthen its presence in rural areas. Also, 

initiatives undertaken to improve productivity across the sales force by way of segmentation 

and structured training yielded satisfactory results, though the full impact is expected in FY 

2010-11. 

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• Over the past few years, we have built a strong franchise in the Corporate Agent and Broker 

segment. The segment saw a 19% growth during the year under review and recorded new 

business sales of Rs. 4,173 Mn (previous year Rs. 3,505 Mn). 

• The year under review saw our Bancassurance channel deliver an APE of Rs. 3,858 Mn (previous 

year Rs. 5,219 Mn). Given the strength of our bancassurance partners, our innovative product 

offerings and the differentiated service model, we are confident that this channel will continue 

to deliver superior performance in the years ahead. 

• The current year saw Group business first year premium of Rs. 6,717 Mn (previous year Rs. 

3,409 Mn), registering an impressive YoY growth of 97%. The Company, on account of its 

established track record in this segment and superior investment performance, is one of the 

preferred product and service providers for various large, medium and small enterprises. 

• The Company continues to maintain an edge leadership in Product innovation. Some of the 

product innovations introduced by the Company during the year included Guaranteed Unitlinked 

products, Over–the-Counter products and Highest NAV plans. Due to recent regulation 

changes on the capping of unit-linked product charges, the Company revamped its product 

portfolio by building a competitive suite of products that will help increase customer value 

proposition while maintaining strong profitability. The Company sold a more profitable product 

mix in FY10 and reduced its exposure to shorter pay products. During the year, the Company 

launched 11 products, including 8 post the new IRDA regulations. Some of the new product 

suites launched include Saral Solutions, Dream Solutions & Titanium Plus. 

• The Company has been supporting social causes from the beginning of its operations. As in the 

previous years, the Company not only complied with both rural and social obligations as 

mandated by IRDA, but wrote 713,973 policies in the rural sector which was well-above the 

mandatory requirements as mandated by IRDA’s regulations on rural obligations. In addition 

to this the group insurance cover under social obligation was written for 253,759 lives against 

the mandatory requirement for 25,000 lives. The Company entered into strategic tie-ups with 

micro-finance institutions through which it was able to sell products like Bima Kavach and 

Bima Suraksha, which are primarily designed for the rural segment. The Company will 

continuously strive to launch specific products designed for the rural and semi-urban segment. 

• Investment performance across the range of fund offerings continued to be strong during the 

year. Assets under Management grew from Rs. 9,168 crores to Rs. 16,129 crores, an increase of 

76%. The Company continued to deliver superior investment performance to its policyholders 

with every fund beating the benchmark set. This ability to provide strong investment 

performance in both good and bad market conditions is a key strength for the Company. 

• We have focused on a conscious strategy of capital conservation and improving profitability. 

The endeavor to improve profitability and capital efficiency paid off well with lower capital 

requirements and Net Loss, both reducing by about 38% vis a vis the previous year. The year 

also saw an improvement in expense ratio i.e. from 27% in FY09 to 24% in FY10. This was made 

possible on the back of several initiatives implemented to optimize the cost structure. 

• Our investment in branding yielded good results with the brand recall score improving from 

84% to 93%. 

• The Company undertook several measures to further improve on all health metrics for the 

business. The management recognizes improving persistency and maintaining and growing a 

healthy inforce block of business as a key driver for profitability. Apart from stressing on needbased 

selling, the Company has increased its engagement with the customers, leveraging 

technology for efficient premium collections over the tenure of the policies sold by it. 

• The Company continues to leverage technology for achieving its business goals and creating a 

robust customer service platform for creating service differentiation in this market. The Company 

has taken several steps towards developing a customer centric culture and improving turnaround 

times by engaging exclusive call centers and empowering its service assurance cell for effective 

query and complaint management. 

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• The Company has been proactive in maintaining the culture of compliance in order to minimize 

the market conduct risks and to meet regulatory demands. The Company continues to comply 

with all existing and new regulations which came in during the year, the primary ones being 

the regulations on capping of charges and corporate governance. 

• The Company got its results, assumptions and methodology for preparing Embedded Value 

(EV) and VNB for FY09 peer reviewed by a international actuarial firm. It will continue to set 

standards going forward by improving the disclosure standards around reporting EV and 

VNB. 

OUTLOOK FOR THE INDUSTRY & COMPANY 

• In an uncertain and volatile economic environment, the last two years have been quite challenging 

for the industry in terms of new business growth. However, this has given an opportunity to 

existing players to review their operating models to drive higher efficiencies and focus on more 

balanced growth objectives. 

• The outlook for the Life Insurance industry though continues to be robust. The future growth 

will be driven by factors like long-term economic growth, high savings rate, regulatory reforms 

and rising awareness amongst the population about the need for insurance. While there can be 

some short term aberrations, long term growth remain attractive. 

• The Company will continue its journey of focusing on maximizing its inforce book through 

superior investment performance and customer service. To balance its portfolio the Company 

is in advanced stages of expanding its non ULIP portfolio in the next financial year. The 

Company has initiated several measures in the year under review to drive higher efficiencies in 

areas of operations, distribution and productivity and will continue on its path to achieve 

profitable growth. 

RESERVES 

Since the financial operations of the Company have resulted in a loss during the year owing to the 

continuous growth in new business and reasons stated above, the Company has not carried any 

amount to the reserves in the Balance Sheet. 

DIVIDEND 

In view of the loss incurred, the Directors are unable to recommend any dividend. 

CLAIMS 

In the insurance industry, ‘Claims’ is one of the most important yardsticks by which a company’s 

performance is measured. BSLI continues to build faith amongst the public and the insured 

population of being the preferred life Insurance provider and this reinforces its ‘Customer first’ 

approach. 

The objective of the Company in the critical area of claim processing is to carry out prompt and 

speedy settlement of claims, keeping the interest of both-policyholders and the Company in 

perspective, whilst also safeguarding the Company from potential losses by minimizing the risk of 

fraud associated with claims. The minimal litigations in claim related matters and the success ratio 

at various judicial forums, displays the sound decision making policy of the Company in settlement 

of claims. 

The Company’s claims outstanding ratio has been reducing year-on-year and has been one of the 

best in the industry [FY 03-04 - 3.14%, FY 04-05 - 2.52%, FY 05-06 - 1.72%, FY06 -07 - 0.41%, FY 07 

-08 - 0.32%, FY 08-09 – 0.00% (excluding admitted claims pending for disbursement for want of rightful 

nomination details)]. The Company has once again achieved the unique distinction of having 

claims outstanding ratio of 0.00% which means that 100% of claims raised during the year stood 

processed (excluding admitted claims pending for disbursement for want of rightful nomination details). In 

keeping with our customer first approach, we had delivered cheques to the claimants on the same 

day of the claim intimation after the horrific Pune terror attack in February 2010. 

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SHARE CAPITAL 

The Authorised Share Capital of the Company is Rs. 37,500 Mn. The Paid up Capital of the 

Company has increased from Rs. 18,795 Mn to Rs. 19,695 Mn during the year under review, as 

under: 

Sr. Date of Allotment No. of Equity Shares Amount 

No. Issued & Allotted (In Rs. Mn) 

1. June 29, 2009* 10,000,000 500 

2. August 31, 2009* 15,000,000 750 

3. September 30, 2009* 10,000,000 500 

4. November 30, 2009* 10,000,000 500 

5. December 29, 2009* 10,000,000 500 

6. January 27, 2010* 10,000,000 500 

7. February 26, 2010* 10,000,000 500 

8. March 29, 2010* 15,000,000 750 

* at premium 

Total 4500 

DIRECTORS 

The Board of Directors comprises of ten Directors including three Independent Directors. 

In accordance with the provisions of Section 255 and 256 of the Companies Act, 1956 Mr. Suresh N. 

Talwar, Mr. Gian P. Gupta and Mr. Bishwanath N. Puranmalka, Directors, retire by rotation at the 

ensuing Annual General Meeting (AGM) of the Company, and being eligible, offer themselves for 

re-appointment. 

The changes in the Directorships of the Company during the year under review are given as under: 

Name of the Directors 

Particulars 

Dr. Bharat K. Singh Ceased to be a Director of the Company w.e.f. May 11, 2009 

Dr. Rakesh Jain Appointed as an Additional Director w.e.f. November 10, 2009 

Ms. Tarjani Vakil Appointed as an Additional Director w.e.f. November 10, 2009 

Mr. Kumar Mangalam Birla Ceased to be the Chairman w.e.f. November 10, 2009 

Mr. Donald A. Stewart Appointed as the Chairman w.e.f. November 10, 2009 

Mr. Stephan Rajotte Ceased to be a Director of the Company w.e.f. January 23, 2010 

Mr. Dikran Ohannessian Appointed as an Additional Director w.e.f. January 23, 2010 

Mr. Ajay Srinivasan Re-appointed as Managing Director upto June 30, 2010 

Notices under Section 257 of the Companies Act, 1956, along with requisite deposits, have been 

received from a shareholder of the Company signifying his intention to propose Mr. Dikran 

Ohannessian, Dr. Rakesh Jain and Ms. Tarjani Vakil as candidates for the office of Directors of the 

Company at the ensuing AGM of the Company. 

The Company has received requisite disclosures and undertakings from all the Directors in 

compliance with the provisions of the Companies Act, 1956 and the Insurance Act, 1938. 

Detailed profile of the Directors seeking re-appointment/co-option at the ensuing AGM of the 

Company is given in Annexure 1 of the Corporate Governance Report which is an integral part of 

this Annual Report. 

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PARTICULAR OF EMPLOYEES 

In pursuance of the Company’s aspirations to maintain its position as the most preferred employer 

in the insurance industry, the Company continued to invest in creating a pool of talent for its 

growing business needs. The Company’s total workforce stood at 12,101 as at 31 st March 2010 

against 13,355 in the previous year. Several initiatives around Talent management, training and a 

long term-incentive plan for senior management were implemented. 

In accordance with the provisions of Section 217(2A) read with Companies (Particulars of Employees) 

Rules, 1975, as amended, the names and relevant particulars of employees are set out as an Annexure 

to the Directors’ Report. 

ACCOUNTS AND AUDIT 

Statutory Auditors 

As per the Circular no. 36/7/F&A/EMPL/74/July/05 dated 25 th July, 2005 of the Insurance 

Regulatory Development Authority, every insurance company is required to have two statutory 

auditors for a joint audit. 

The Joint Statutory Auditors M/s. Khimji Kunverji & Co. and M/s. Fraser & Ross, who were 

appointed at the last AGM, hold office upto the ensuing 10th AGM of the Company. The Board 

proposes to re-appoint M/s. Fraser & Ross as one of the Joint Statutory Auditor (being eligible for 

re-appointment) on recommendation of the Audit Committee of the Company. 

The Audit Committee of the Company at its meeting held on April 26, 2010 recommended the 

appointment of M/s. S. R. Batliboi & Associates as one of the Joint Statutory Auditor for the 

Financial Year 2010-11 in place of M/s. Khimji Kunverji & Co., who would cease to be the Joint 

Statutory Auditors of the Company, having completed their five year tenure, at the ensuing 10 th 

AGM of the Company. 

The Company has received certificates from the proposed auditors confirming their eligibility and 

willingness for their appointment/re-appointment pursuant to Section 224(1B) of the Companies 

Act, 1956 and as per the requirement stipulated by IRDA. The auditors have further certified that 

they have subjected themselves for the peer review process of the Institute of Chartered Accountants 

of India (ICAI) and they hold a valid certificate issued by the “Peer Review Board” of ICAI. 

Directors’ Responsibility Statement 

The Directors would like to assure the shareholders that the Financial Statements, for the year 

under review, conform in their entirety to the requirements of the Companies Act, 1956 and the 

regulations of IRDA. 

The Directors further confirm that: 

• the annual accounts have been prepared in accordance with applicable accounting standards 

and there have been no material departures from the same; 

• the Directors’ have selected accounting policies and applied them consistently and made 

judgments and estimates that are reasonable and prudent so as to give a true and fair view of 

the state of affairs of the Company, as at the end of the financial year March 31, 2010 and of the 

loss of the Company for the said period ending March 31, 2010; 

• they have taken proper and sufficient care for the maintenance of adequate accounting records 

in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the 

Company and for preventing and detecting fraud and other irregularities; and 

• they have prepared the accounts of the Company on a going concern basis, and other accounting 

policies are stated in the notes to the Accounts, which form an integral part of the annual 

accounts. 

• proper systems are in place to ensure compliance of all laws applicable to the Company. 

Internal Audit Framework 

The Company has in place a robust internal audit framework developed with a risk based audit 

approach and is commensurate with the nature of the business and the size of its operations. The 

internal audit plan covers process audits, as well as, transaction based audits at the head office and 

6


across various branches of the Company. The audits are carried out by independent firms of 

chartered accountants and also by the audit teams of the two promoters. The audit approach 

verifies compliance with the regulatory, operational and system related procedures and controls. 

Key audit observations and recommendations made by the internal auditors are reported to the 

Audit Committee of the Company and the implementation of these recommendations are actively 

monitored by the Internal Audit team and periodically reported to the Audit Committee. 

Risk Management Framework 

The Company has an Enterprise Risk Management (ERM) framework covering procedures to identify, 

assess and mitigate the key business risks. A detailed ERM report is annexed to and forms an 

integral part of this Annual Report. 

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE 

EARNINGS AND OUTGO 

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956 

read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, 

are given in the Annexure forming part of this Report. 

CORPORATE GOVERNANCE 

A detailed Corporate Governance Report is annexed to and forms an integral part of this Annual 

Report. 

CUSTOMER GRIEVANCE REDRESSAL 

It has been a constant endeavor of the Company to provide timely and qualitative resolution of all 

customer complaints in accordance with statutory/regulatory guidelines. Towards achieving this, 

there is in place a grievance redressal mechanism, which is reviewed and revised periodically to be 

in tandem with regulatory requirements. The grievances/complaints from clients as well as those 

received through the regulatory or governmental authority is resolved equitably and promptly by 

the Company. While most of the customer grievances are resolved by the respective functions, 

there are a few exceptional instances, which warrant steps that fall outside the purview of the laid 

down process. These exceptional cases are referred to an independent committee, namely 

Policyholders’ Protection Committee (PPC) (erstwhile Policyholders’ Grievance Redressal 

Committee), which is chaired by an independent Chairman Mr. N.N. Jambusaria (former Chairman 

of Life Insurance Corporation of India). More details on the composition, responsibilities and 

working of the PPC are given in a separate section of the Corporate Governance Report. 

AWARDS/ RECOGNITIONS 

As per the Claims statistics published in the IRDA Annual Report for 2008-09, it is noted that BSLI 

has the least (pending) outstanding Claims percentage amongst all its peers for both Individual 

and Group Claims. Also as per the said report BSLI has one of the best end-to-end settlement Turn 

Around Time (TAT’s) in both Individual and Group Claims category. 

The Company became the first insurance company to be awarded the British standard BS25999 

certification in area of BCP and disaster management. 

As a recognition for the highest standards of Financial Reporting the Company got the Silver 

Shield for Excellence in Financial Reporting in insurance category (for the financial year ended 

31st March, 2009) awarded by the ICAI. 

In addition to above recognitions, BSLI has also won the following awards: 

• ‘Wealth with Protection Solutions’ campaign of BSLI received several accolades by Pitch 

and Business Standard (which featured the campaign amongst top 5 TVC’s of the year); 

• Indian Digital Marketing Award in Silver category for best use of email marketing; 

• Srijon Sanman, an award to provide impetus in creation of outstanding works in Bengali 

language advertisements. 

LICENSE 

The IRDA has renewed the Certificate of Registration of the Company to sell life insurance products 

in India for the Financial Year 2010-11 vide its Certificate of Renewal of Registration dated 

March 10, 2010. The renewed registration is with effect from April 01, 2010 and is valid upto 

March 31, 2011. 

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OTHER STATUTORY INFORMATION 

Public Deposits 

During the financial year 2009-10, the Company has not accepted any deposits from the public. 

Statutory Disclosure of Particulars 

Particulars in the Companies (Disclosure of Particulars in the Annual Report of the Board of 

Directors) Rules, 1988, as applicable, are given in the Annexure forming part of this Report. 

Auditors’ Report 

The report of the Joint Statutory Auditors is attached to this Annual Report. All the notes to 

Schedules and Accounts are self-explanatory and do not call for any further comments. 

Management Report 

Pursuant to the provisions of Regulation 3 of the Insurance Regulatory and Development Authority 

(Preparation of Financial Statements and Auditors’ Report of Insurance Companies) Regulations, 

2000, the Management Report forms a part of this Annual Report. 

Appointed Actuary’s Certificate 

The certificate of the Appointed Actuary is attached to the Financial Statements. 

Certificate from Compliance Officer (under the IRDA Corporate Governance Guidelines) 

IRDA vide its circular no. IRDA/F&A/CIR/025/2009-10 dated August 05, 2009 notified “Guidelines 

on Corporate Governance for the Insurance Sector” (CG Guidelines) which is applicable to the 

Company with effect from April 01, 2010. Circular dated August 05, 2009 has been amended by 

IRDA vide its circular no. IRDA/F&I/CIR/F&A/014/01/2010 dated January 29, 2010. 

In compliance with said circulars, a Compliance Certificate issued by the Company Secretary, 

designated as the Compliance Officer under CG Guidelines, is attached to and forms part of the 

Corporate Governance Report. 

Solvency Margin 

The Directors are pleased to report that the assets of the Company are higher than the liabilities of 

the Company and the assets are more than sufficient to meet the minimum solvency margin level 

of 1.50 times, as specified in Section 64VA of the Insurance Act, 1938 read with the IRDA (Assets, 

Liabilities, and Solvency Margin of Insurers) Regulations, 2000. 

ACKNOWLEDGEMENTS 

The Board places on record its heartfelt appreciation to the dedicated efforts put in by the employees 

at all levels. The results of the year in a challenging environment are testimony to their hard work 

and commitment. 

The Board takes this opportunity to express sincere thanks to its valued customers for their continued 

patronage. 

The Board also acknowledges the contribution of its insurance advisors, banks, corporate brokers/ 

agents and intermediaries, training institutes, bankers and business and technology partners, the 

Registrars, National Securities Depository Limited /Central Depository Securities Limited, reinsurers, 

underwriters and other partners, who have always supported and helped the Company achieve its 

objectives. 

The Board would like to thank the Aditya Birla Group and Sun Life Financial Inc., for their 

constant support, guidance and co-operation. 

The Board would also like to express its gratitude for the valuable advice, guidance and support 

received from time to time from the Insurance Regulatory and Development Authority, the Reserve 

Bank of India, the Auditors and the other statutory authorities and look forward to their continued 

support in future. 

By order of the Board of Directors 

for Birla Sun Life Insurance Company Limited 

Donald A. Stewart 

Mumbai, April 26, 2010 

Chairman 

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ANNEXURE TO THE DIRECTORS’ REPORT 

Particulars pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) 

Rules, 1988, are furnished hereunder: 

A. CONSERVATION OF ENERGY : Not Applicable 

B. TECHNOLOGY ABOSORPTION, 

RESEARCH & DEVELOPMENT (R&D) 

1. Specific areas in which R & D is carried : Not Applicable 

out by the Company 

2. Benefits derived as a result of the above 

R & D : Not Applicable 

3. Future Plan of action : Not Applicable 

4. Expenditure on R & D 

a) Capital : Nil 

b) Recurring : Nil 

c) Total : Nil 

d) Total R &D expenditure as a 

percentage of total turnover : Nil 

Technology absorption, adaption 

and innovation 

1. Efforts, in brief, towards technology • Streamlining Automatic Underwriting to 

absorption, adaption and innovation improve straight-thru processing. 

• Leveraging technology – implementation of 

automated Process Management 

(Workflow). 

• Policy administration system used to 

provide and maintain policyholders’ details 

and handle routine customer related queries 

is connected to all branches. 

2. Benefits derived as a result of the above • Automatic Underwriting has reduced policy 

efforts (eg. Product improvement, cost issuance TAT. 

reduction, product development, • Delighting customers with enhanced 

import substitution, etc.) 

customer service through leveraging 

technology and better policy administration 

system. 

3. Particulars of imported technology in 

the last five years (reckoned from 

beginning of the financial year) 

a) Technology imported : Not Applicable 

b) Year of import : Not Applicable 

c) Has technology been fully absorbed : Not Applicable 

d) If not fully absorbed, areas where this 

has not taken place, reasons, therefor 

and future plans of action : Not Applicable 

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C. FOREIGN EXCHANGE EARNINGS AND 

OUTGO 

1. Earnings : As per the prevailing regulations, the 

Company is not permitted to do any 

business outside India and hence there is 

no foreign exchange inflow during the year, 

except in the form of share capital (including 

premium) of Rs. 117 Mn (previous year Rs. 

1,885 Mn). 

2. Outgo : The foreign exchange outgo, during the 

year, has been Rs. 322 Mn (previous year 

Rs. 59 Mn). 

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Philosophy of Corporate Governance 

CORPORATE GOVERNANCE REPORT 

Corporate Governance is an independent and professional approach of wealth creation where the 

rules of the game are simple (yet hard to follow) and transparent, wherein all the stakeholders’ 

(investors, customers, employees, vendors, government and society-at-large) have their own role to 

play and ripe benefit from mere adherence of Corporate Governance philosophy!! 

In the nut-shell, good corporate governance leads to a “Win-Win” situation for ALL… 

The philosophy and objective of Corporate Governance at Birla Sun Life Insurance Company 

Limited (BSLI) is “about working ethically and finding a balance between economic and social goals 

including the ability to function profitably while complying with the applicable laws, rules and regulations.” 

BSLI is committed to uphold the core values of transparency, integrity, honesty and accountability. 

This commitment lays the foundation for further development of superior governance practices, 

which are vital for growing a successful business, creating sustainable long term shareholder value 

and balancing it with the interests of other stakeholders in the Company. It is not a discipline 

necessarily imposed by a regulator rather a culture that guides the Board, the Management and 

employees to function towards the best interest of the various stakeholders. 

Structure: 

FY 2009-10 witnessed major changes on corporate governance front. Both Insurance Regulatory 

and Development Authority (IRDA) and Ministry of Corporate Affairs (MCA) introduced much 

needed corporate governance regulations and voluntary guidelines respectively. 

This Report is divided into three sections, as follows: 

A. Reporting under Clause 49 of the Listing Agreement; 

B. Reporting under IRDA Corporate Governance Guidelines (IRDA CG Guidelines); and 

C. Reporting under MCA Voluntary Guidelines on ‘Corporate Governance’ and ‘Corporate Social 

Responsibility’ (MCA Guidelines). 

SECTION A 

REPORTING UNDER CLAUSE 49 OF THE LISTING AGREEMENT 

BSLI is an unlisted company and hence the clause 49 of the listing agreement is not applicable. Yet 

BSLI, on a suo moto basis, has taken all necessary initiatives to comply with the provisions of the 

said clause to the maximum extent possible and endeavours, in true spirit, to go well beyond the 

mandatory provisions. 

I. BOARD OF DIRECTORS (“BOARD”) 

At BSLI, the Directors are elected by shareholders of the Company with a responsibility to set 

strategic objectives for the Management and to ensure that the long term interests of all stakeholders 

are served by adhering to and enforcing the principles of sound Corporate Governance. 

BSLI’s Board members have diverse areas of knowledge and expertise, which is necessary in 

providing an independent and objective view on business issues and assess them from the standpoint 

of the stakeholders of the Company. At BSLI, the Board is independent of the Management. 

I.A.Composition of the Board 

The Board comprised of ten Directors as on 31 st March, 2010, nine being Non-Executive Directors 

(of which three were Independent) and a Managing Director. 

The current Chairman of the Board, Mr. Donald A. Stewart, is a Non-Executive Director. 

11


The changes in the chairmanship/ directorship of the Company during the Financial Year (FY) 

2009-10 are given in Table 01: 

Name of the Directors 

Particulars 

Dr. Bharat K. Singh Ceased to be a Director of the Company w.e.f. May 11, 2009 

Dr. Rakesh Jain Appointed as an Additional Director w.e.f. November 10, 2009 

Ms. Tarjani Vakil Appointed as an Additional Director w.e.f. November 10, 2009 

Mr. Kumar Mangalam Birla Ceased to be the Chairman w.e.f. November 10, 2009 

Mr. Donald A. Stewart Appointed as the Chairman w.e.f. November 10, 2009 

Mr. Stephan Rajotte Ceased to be a Director of the Company w.e.f. January 23, 2010 

Mr. Dikran Ohannessian Appointed as an Additional Director w.e.f. January 23, 2010 

Mr. Ajay Srinivasan Re-appointed as Managing Director upto June 30, 2010 

Table 01 

I.B. Details of Directorships/Committee Membership 

The composition of our Board, their Directorships/Committee memberships and Chairmanships 

(excluding the Company) as on 31st March, 2010 is given in Table 02: 

Name of the Directors Designation No. of No. of 

Directorship(s) Committee Chairmanship 

in other Public Membership** in Committees** 

Companies* 

Mr. Donald A. Stewart Non-Executive 1 Nil Nil 

Director (Chairman) 

Mr. Kumar Mangalam Birla Non-executive Director 9 Nil Nil 

Mr. Ajay Srinivasan Managing Director 3 Nil Nil 

Mr. Bishwanath Non-executive Director 2 2 Nil 

N. Puranmalka 

Mr. Dikran Ohannessian Non-executive Director 1 Nil Nil 

Mr. Gian P. Gupta Non-Executive Director 10 4 3 

(Policyholders’ representative, 

Independent) 

Dr. Rakesh Jain Non-executive Director 5 1 Nil 

Mr. Suresh N. Talwar Non-Executive Director 13 6 2 

(Independent) 

Ms. Tarjani Vakil Non-Executive Director 6 2 4 

(Independent) 

Mr. Venkatesh S. Mysore Non-executive Director 2 Nil Nil 

Table 02 

* Excluding alternate directorships and directorships in foreign companies and companies under section 25 of the Companies Act, 

1956. 

** Only Audit Committee and Shareholders’ Grievance Committee of all public limited companies (whether listed or not) have been 

considered for the purpose of the Committee positions (membership and chairmanship), as per Clause 49 of listing agreement. 

I.C. Non-executive Directors’ Compensation and Disclosures 

As stated earlier, nine of our Directors are Non-Executive Directors. Of these, seven Directors are 

representatives of the two shareholders i.e. Aditya Birla Nuvo Limited (04) and Sun Life Financial 

(03) and the rest three are Independent. As decided by the Board, no remuneration of whatsoever 

nature is paid to these Non-Executive Directors, except for a sitting fee to the three Independent 

Directors, as detailed hereunder. 

12


The Company pays sitting fees of Rs. 20,000 to the Independent Directors for attending each Board 

Meeting and Board Committee meetings. 

The details of sitting fees paid to these Independent Directors during the FY 2009–10 are given in 

Table 03: 

(Amount in Rs.) 

Name of the Director 

Sitting Fees for the 

Board Meeting Audit Committee Finance Committee Share Allotment Risk Management 

Meeting Meeting Committee Meeting Committee Meeting 

Total 

Mr. Gian P. Gupta 80,000 1,00,000 20,000 60,000 60,000 3,20,000 

Mr. Suresh N. Talwar 40,000 NA NA 20,000 NA 60,000 

Ms. Tarjani Vakil 20,000 NA NA NA NA 20,000 

I.D. Board Meetings 

Agenda and Minutes 

Table 03 

The Company Secretary receives details on matters which require the approval of the Board/ 

Board Committees, from various departments of the Company well in advance, so that they can be 

included in the Board/ Board Committee agenda(s). All material information is incorporated, in 

detail, in the agenda papers for facilitating meaningful and focussed discussions at the meetings. 

In compliance with the statutory requirements, the following minimum information is supplied to 

the Board in the agenda of every quarterly Board Meeting: 

• Minutes of meetings of previous board and committee meetings; 

• Quarterly results of the Company; 

• Annual operating plans and quarterly variance analysis; 

• Presentation on the financial results which generally includes the financials for the quarter and 

its analysis, profitability drivers, investment performance, yearly plan vs actuals and an action 

taken report on the implementation of decisions taken in last Board meeting; 

• Compliance certificate by the functional heads; 

• Other statutory agenda; 

• The information on recruitment and remuneration of senior officers just below the board level, 

including appointment or removal of Chief Financial Officer and Company Secretary, if any; 

• Show cause, demand, prosecution notices and penalty notices which are materially important 

or involve possible public or product liability claims of substantial nature; 

• Any material default in financial obligations to and by the Company. 

Every agenda and minutes of the meeting are prepared in compliance with the non mandatory 

provisions of clause 49 and the applicable standards issued by the Institute of Company Secretaries 

of India (ICSI) and the Companies Act, 1956. The draft minutes of the proceedings of each previous 

Board / Board Committee meeting duly approved by the Chairman are circulated along with the 

agenda. The Board also takes note of minutes of Board Committee meetings, at every Board Meeting. 

Board Meetings and attendance of Directors 

As a good practice, a yearly meetings calendar is prepared and circulated to all the Directors in the 

month of November/December every year, relevant for the next calendar year, so that they can 

adequately plan their schedule. This ensures optimum presence of the Directors/Committee Members 

at each meeting. 

13


During FY 2009-10, four Board meetings were held as below: 

i) April 24, 2009 

ii) July 22, 2009 

iii) November 10, 2009 

iv) January 23, 2010 

During FY 2009- 10 the time gap between two successive board meetings did not exceed 4 months. 

The attendance of the Directors at the above Board meetings and at the last Annual General 

Meeting is given in Table 04: 

Name of the Directors No. of Board meetings Attendance in 

during the FY 2009-10 

the last AGM 

dated 

Held Attended 11th May 2009 

Mr. Donald A. Stewart 4 1 No 

Mr. Kumar Mangalam Birla 4 2 Yes 

Mr. Ajay Srinivasan 4 4 Yes 

Mr. Bishwanath N. Puranmalka 4 4 Yes 

Dr. Bharat K. Singh @ 1 0 No 

Mr. Dikran Ohannessian 1 1 N.A.# 

Mr. Gian P. Gupta 4 4 Yes 

Dr. Rakesh Jain 2 2 N.A.# 

Mr. Stephan Rajotte* 3 2 Yes 

Mr. Suresh N. Talwar 4 2 No 

Ms. Tarjani Vakil 2 2 N.A.# 

Mr. Venkatesh S. Mysore 4 4 Yes 

@ ceased to be director w.e.f. May 11, 2009 

* ceased to be director w.e.f. January 23, 2010 

# Appointed after the AGM 

Table 04 

I.E. Code of Conduct 

The Company has designed and implemented a Code of Conduct for all the employees of the 

Company. The senior management of the Company is also governed by this Code of Conduct. 

II. AUDIT COMMITTEE 

The provisions of Section 292A of the Companies Act, 1956, prescribes that every public company 

having paid-up capital of not less than Rs. five crores shall constitute a committee of the Board 

known as “Audit Committee”. The Company had constituted its Audit Committee on 31 st January, 

2001 with well defined objectives, roles and responsibilities. 

As per the documented charter, duly approved by the Board, the Audit Committee of the Company 

is primarily responsible to review the internal control systems and financial operating systems of 

the Company, ensure legislative and regulatory compliances, accounting policies and audit reports, 

and report to the Board on significant results of the foregoing activities. The Committee also serves 

the Board by providing qualitative inputs to financial statements and brings in a degree of financial 

expertise. The Audit Committee scrutinizes the quarterly / yearly unaudited / audited financial 

statements and satisfies itself with the accuracy and correctness of these statements. 

14


In addition, the Audit Committee also reviews the Management letters / letters of internal control 

weaknesses issued by the Statutory Auditors, the Internal Audit Reports relating to Internal control 

weaknesses and the appointment, removal and terms of remuneration of the Internal Auditors. 

II.A. COMPOSITION 

The composition of the Audit Committee as on 31 st March 2010 is given in Table 05: 

Name of the Committee Member Designation Status 

Mr. Gian P. Gupta Non-Executive & Independent Director Chairman 

Mr. Ajay Srinivasan Managing Director Member 

Mr. Bishwanath N. Puranmalka Non-Executive Director Member 

Mr. Dikran Ohannessian # Non-Executive Director Member 

Ms. Tarjani Vakil# Non-Executive & Independent Director Member 

Mr. Venkatesh S. Mysore Non-Executive Director Member 

# Appointed w.e.f. January 23, 2010 

Table 05 

The Company Secretary acts as the Secretary to the Committee. 

All members of the Audit Committee are financially literate and have the necessary accounting and 

related financial management expertise. 

The Chief Executive Officer/Managing Director, the Chief Financial Officer, the Appointed Actuary, 

the VP – Compliance, Risk Management & Internal Audit, the Statutory Auditors and the Internal 

Auditors attend each Audit Committee Meeting. The special auditors of both the promoters 

(viz. Aditya Birla Nuvo Limited & Sun Life Financial Inc.) of the Company also conduct certain 

process audits during the year and they are invited to present their report at the Audit Committee 

meeting of the Company. 

II.B. MEETINGS AND ATTENDANCE 

During FY 2009-10, the Audit Committee met five times viz., 

i) April 24, 2009; 

ii) July 21, 2009; 

iii) September 02, 2009; 

iv) October 21, 2009; and 

v) January 23, 2010. 

The attendance of the Audit Committee members at the Audit Committee meetings during FY 

2009-10 is given in Table 06: 

Name of the Committee Member 

No. of Audit Committee meetings 

during FY 2009-10 

Held 

Attended 

Mr. Gian P. Gupta 05 05 

Mr. Ajay Srinivasan 05 05 

Mr. Bishwanath N. Puranmalka 05 05 

Mr. Dikran Ohannessian** NA NA 

Mr. Stephan Rajotte* 04 03 

Ms. Tarjani Vakil** NA NA 

Mr. Venkatesh S. Mysore 05 05 

* Ceased to be Member w.e.f. January 23, 2010. 

** Appointed as Member w.e.f. January 23, 2010. 

Table 06 

15


III. OTHER COMMITTEES OF THE COMPANY 

For ensuring smooth business activities, the Company has constituted certain Board Committees 

with well defined charters. The prominent Board Committees, other than the Audit Committee, are 

as under: 

III.1. FINANCE COMMITTEE 

The Board has constituted a Finance Committee in compliance of the revised clause 41 of the 

Listing Agreement. As per the Listing Agreement such committee shall consist of not less than one 

third of the directors, which shall include atleast one Independent Director. 

As per the documented charter, duly approved by the Board, the Finance Committee is responsible 

for the following: 

a) To approve the following Audited and/or unaudited financial results of the Company. 

- Quarterly financial results; 

- Year to date financial results; 

b) To approve the Limited Review Report of the Auditors on the Quarterly and Year to Date 

Financial Results. 

c) Place the approved Financials and Limited Review Report before the Board. 

III.1.A. Composition 

The composition of Finance Committee as on 31 st March 2010 is given in Table 07: 




Mr. Gian P. Gupta Non-Executive & Independent Director Member 

Ms. Tarjani Vakil * Non-Executive & Independent Director Member 


Table 07 

*Appointed w.e.f. January 23, 2010 


III.1.B. Meetings and attendance 

During FY 2009-10, the Finance Committee met once on October 21, 2009 to consider, interalia, the 

un-audited financial results of the Company for the quarter and half year ended September 30, 

2009. 

The attendance of the Finance Committee members at the Finance Committee meeting during FY 

2009-10 is given in Table 08: 


No. of Finance Committee meetings 


Held 

Attended 




Mr. Stephan Rajotte* 01 01 

Ms. Tarjani Vakil** NA NA 

Mr. Venkatesh S. Mysore** NA NA 

*Ceased to be Member w.e.f. January 23, 2010. 

** Appointed as Member w.e.f. January 23, 2010. 

Table 08 

16


III.2. SHARE ALLOTMENT COMMITTEE 

To keep pace with the rapid growth of the Company and to smoothen and fasten the process of 

regular infusion of share capital, the Board of the Company, at its meeting held on 25 th April, 2005 

had constituted a committee called the Share Allotment Committee. The Share Allotment Committee 

has been delegated the authority to allot the shares and issue the share certificates. 

As per the documented charter, duly approved by the Board, the Share Allotment Committee is 

responsible, inter-alia, for the following: 

a) Offer unsubscribed portion of the capital to the other shareholders. 

b) Allot the shares to the shareholders of the Company. 

c) To authorise the issue of share certificates and shares in dematerialized form to the shareholders 

of the Company. 

d) To engage in other acts, deeds and things as may be necessary in connection therewith and 

incidental thereto as the Committee in its absolute discretion deem fit. 


The composition of Share Allotment Committee as on 31 st March 2010 is given in Table 09: 




Mr. Suresh N. Talwar Non-Executive & Independent Director Member 


Table 09 



During FY 2009-10, the Share Allotment Committee met three times viz: 

i) July 22, 2009; 

ii) October 21, 2009; and 

iii) January 23, 2010. 

The attendance of the Share Allotment Committee members at the Share Allotment Committee 

meetings during FY 2009-10 is given in Table 10: 


No. of Share allotment Committee meetings 


Held 

Attended 



Mr. Suresh N. Talwar 03 01 


Table 10 

III.3. RISK MANAGEMENT COMMITTEE 

In view of the growing scale of the Company and the regulations becoming more stringent, the 

Board of the Company, at its meeting held on May 24, 2008, constituted the Risk Management 

Committee (erstwhile Risk Review Committee) as a sub-committee of the Board, to oversee the risk 

management and compliance activities of the Company. 

The documented charter, duly approved by the Board, holds the Risk Management Committee 


17


a) Reviewing and assessing the integrity and adequacy of the risk management function; 

b) Overseeing the establishment and implementation of the risk management framework; 

c) Ensuring that major business risks are identified and managed appropriately; 

d) Reviewing and approving the annual Risk Management Plan; and 

e) Reviewing the operations of the risk management function and advising the risk management 

function in terms of critical projects to be undertaken. 


The composition of the Risk Management Committee as on 31 st March 2010 is given in Table 11: 





Table 11 



During FY 2009-10, the Risk Management Committee met three times viz: 

i) June 30, 2009; 

ii) November 12, 2009; and 

iii) March 11, 2010. 

The attendance of the Risk Management Committee members at the Risk Management Committee 

meetings during FY 2009-10 is given in Table 12: 


No. of Risk Management Committee meetings 


Held 

Attended 




Table 12 

III.4. INVESTMENT COMMITTEE 

Pursuant to Section 292 of the Companies Act 1956, the Board has the power to invest the funds of 

the Company and delegate the same to any Committee or to any officials of the Company on any 

such conditions as may be prescribed by the Board. The Company already had an Investment 

Committee with pre-defined objectives and a comprehensive charter. Further, as per IRDA CG 

Guidelines, dated 05 th August 2009, constitution of “Investment Committee” is mandatory for 

insurance companies. However, to bring parity with the provisions of the IRDA CG Guidelines, 

few changes were made in the said charter and approved by the Board at its meeting held on 

November 10, 2009. 

The role of Investment Committee is to set policy framework for Investment and ensuring to 

safeguard the interest of Shareholders and Policyholders Funds. Investment committee ensures 

that all investment activities are conducted as per the framework defined by IRDA and Board. 

18


The documented charter, duly approved by the Board, holds the Investment Committee responsible, 

inter-alia, for the following: 

a) Providing and reviewing the requisite policy and operating guidelines /framework for making 

investments; 

b) Ensuring requisite regulatory compliance and reporting system apart from Internal / Concurrent 

Audit mechanisms; 

c) Review portfolio performance and investment decisions with an objective to safeguard interest 

of the Policyholders and Shareholders Funds; 

d) Focus on prudential Asset Liability Management (ALM) supported by robust internal control 

systems; 

e) To be fully conversant with the various responsibilities cast on members of Investment committee 

by the IRDA (Investment) Regulations 2000 as amended from time to time as well as the 

guidelines issued on the system of risk management; and 

f) To report to the Board on the performance of Investments atleast on a quarterly basis and 

provide analysis of its Investment portfolio and on the future outlook to enable the Board to 

look at possible policy changes and strategies. 


The composition of the Investment Committee as on 31 st March 2010 is given in Table 13: 



Mr. Bishwanath N. Puranmalka Non - Executive Director Member 

Mr. Fabien Jeudy Chief Actuarial Officer & Appointed Member 

Actuary 

Ms. Keerti Gupta Head - Investment Risk Management Member 

& Operations 

Mr. Mayank Bathwal Chief Financial Officer Member 

Mr. Venkatesh S. Mysore Non - Executive Director Member 

Mr. Vikram Kotak Chief Investment Officer Member 

Table 13 


During FY 2009-10, the Investment Committee met four times viz: 

i) June 03, 2009; 

ii) July 24, 2009; 

iii) November 04, 2009; and 

iv) February 23, 2010. 

19


The attendance of the Investment Committee members at the Investment Committee meetings 

during FY 2009-10 is given in Table 14: 


No. of Investment Committee meetings 


Held 

Attended 



Mr. Ernest Chiu* 03 02@ 

Mr. Eugene Lundrigan** 01 01 

Mr. Fabien Jeudy 04 03 

Ms. Keerti Gupta 04 04 

Mr. Mayank Bathwal 04 04 

Mr. Venkatesh S. Mysore# 01 01 

Mr. Vikram Kotak 04 04 

Table 14 

* Appointed as Member w.e.f. July 22, 2009. He ceased to be a member w.e.f. January 23, 2010 

** Ceased to be Member w.e.f. June 3, 2009 

@ inclusive of meeting attended via telephone conference 

# appointed as Member w.e.f. January 23, 2010 

III.5. ASSET LIABILITY MANAGEMENT COMMITTEE 

Pursuant to the nature of products sold by the Company it is crucial to have an Asset Liability 

Committee to manage the various risk and arising on account of product guarantees, interest rates 

movements, duration mismatches, cash flow mismatch, capital market, market liquidity etc. 

As per IRDA CG Guidelines constitution of “Asset Liability Management Committee” is mandatory 

for life insurance companies. In view of the foregoing provision, BSLI’s Board had constituted an 

“Asset Liability Management Committee” at its meeting held on November 10, 2009. 

Asset Liability Management Committee sets policy framework and operating guidelines for asset 

liability matching to safeguard the interest of Shareholders and Policyholders. This Committee 

insures that the assets are created in line with the liabilities. The Committee monitors, reviews & 

evaluates all possible variant that can have an impact on the ALM and insures requisites measures 

are placed to manage risk arising out of these variants. 

The documented charter, duly approved by the Board, holds the Investment Committee responsible, 

inter-alia, for the following: 

a) Setting the insurer’s risk/reward objectives and assess policyholder expectations; 

b) Quantifying the level of risk exposure and assessing the expected rewards and costs associated 

with the risk exposure; 

c) Formulating and implementing optimal ALM framework, policies, guidelines, strategies (both 

at product level and enterprise level) and meeting risk/reward objectives; 

d) Laying down the risk tolerance limits; 

e) Monitor, assess and simulate various scenario on interest rates, capital markets, Liquidity 

scenarios etc. that can have impact on capital requirements; 

f) Monitoring risk exposures at periodic intervals and revising ALM strategies where required; 

g) Placing the ALM information before the Board at periodic intervals; and 

h) Carrying out any other functions as is mentioned in the terms of reference of the Asset Liability 

Management Committee and as may be specified by the IRDA by way of notifications or 

necessary amendments in applicable statutes and/or guidelines, from time to time. 

20


III.5.A Composition 

The composition of the Asset Liability Management Committee as on 31 st March 2010 is given in 

Table 15: 



Mr. Bishwanath N. Puranmalka Non - Executive Director Member 

Mr. Fabien Jeudy Chief Actuarial Officer & Appointed Member 

Actuary 

Ms. Keerti Gupta Head - Investment Risk Management Member 

& Operations 


Mr. Venkatesh S. Mysore Non - Executive Director Member 

Mr. Vikram Kotak Chief Investment Officer Member 

Table 15 


During FY 2009-10, the Asset Liability Management Committee had one meeting on February 23, 

2010. 

The attendance of the Asset Liability Management Committee members at the Asset Liability 

Management Committee meetings during FY 2009-10 is given in Table 16: 


No. of Asset Liability Management Committee meetings 


Held 

Attended 



Mr. Fabien Jeudy 01 01 

Ms. Keerti Gupta 01 01 

Mr. Mayank Bathwal 01 01 


Mr. Vikram Kotak 01 01 

Table 16 

III.6. POLICYHOLDERS’ PROTECTION COMMITTEE 

IRDA places significant emphasis on the protection of policyholders’ interests and on the adoption 

of sound and healthy market conduct practices by insurers. IRDA regulations and guidelines are in 

place with respect to protection of policyholders’ interests, advertisement and disclosures, 

advertisement and promotion & publicity. 

As per IRDA CG Guidelines constitution of “Policyholders’ Protection Committee” is mandatory 

for life insurance companies. In view of the foregoing provision, BSLI’s Board had renamed its 

Policyholders’ Grievance Redressal Committee (PGRC) to “Policyholders’ Protection Committee” 

in consonance with IRDA approval to that effect, vide its letter dated February 15, 2010, and 

accordingly framed a comprehensive charter in line with IRDA CG Guidelines. 

21


Policyholders’ Protection Committee addresses the various compliance issues relating to protection 

of the interests of policyholders, as also relating to keeping the policyholders well informed of and 

educated about insurance products as well as complaint-handling procedures and shall directly 

report to the Board. 

The documented charter, duly approved by the Board, holds the Policyholders’ Protection Committee 


a) To address complaints and grievances of policyholders including misselling by intermediaries; 

b) Ensure compliance with the statutory requirements as laid down in the regulatory framework; 

c) Review of the mechanism at periodic intervals; 

d) Ensure adequacy of disclosure of “material information” to the policyholders; 

e) Review the status of complaints at periodic intervals to the policyholders; 

f) Provide the details of grievances at periodic intervals in such formats as may be prescribed by 

the IRDA; 

g) Provide details of insurance ombudsmen to the policyholders; 

h) Evaluate the merit of the investigated complaint cases that are presented at the meeting by any 

Function(s) of BSLI; 

i) Decide upon exceptional cases presented before the Policyholders’ Protection Committee from 

time-to-time which includes, but not limited to, the following viz. Misselling / Misrepresentation, 

Issues arising due to any deviations from BSLI processes, Out of Free Look & fraud cases etc.; 

and 

j) Carrying out any other functions as is mentioned in the terms of reference of the Policyholders’ 

Protection Committee and as may be specified by the IRDA by way of notifications or necessary 

amendments in applicable statutes and/or guidelines, from time to time. 


The composition of the Policyholders’ Protection Committee as on 31 st March 2010 is given in 

Table 17: 

Name of the Committee Members Designation Status 

Mr. N. N. Jambusaria Independent Chairman 


Mr. Amitabh Verma Chief Operational Officer Member 

Mr. Chander Chellani Chief Distribution Officer Member 

Mr. Fabien Jeudy Chief Actuarial Officer & Member 

Appointed Actuary 


Mr. Lalit Vermani VP – Compliance, Risk Management Member 

and Internal Audit 

Mr. Puneet M. Bansall Head – Legal & Company Secretary Member 

Ms. Yamini Kurup Head – Customer Services Member 

Table 17 


Since the Policyholders’ Protection Committee was constituted in March 2010, no meetings of this 

Committee took place during FY 2009-10. 

22


IV. SUBSIDIARY COMPANIES 

The Company does not have any subsidiary Company of its own. However, the Company is a 

material non listed Indian subsidiary company of Aditya Birla Nuvo Limited (ABNL), which is 

holding 74% of the Company’s share capital. Mr. Gian P. Gupta and Ms. Tarjani Vakil, both 

independent directors on the Board of ABNL, are also independent directors on the Board of the 

Company. The Company regularly reports the corporate governance requirements, as applicable to 

a material non listed Indian subsidiary company, to ABNL, including forwarding of minutes, 

financial statements, statement of significant transactions and arrangements entered into by the 

Company. 

V. DISCLOSURES 

V.A. Related Party Transactions 

The related party transactions of the Company are periodically placed and reviewed by the Audit 

Committee of the Company and necessary briefing is given to the Board as well. 

V.B. Risk Management System 

Besides a Board level Committee, the Company has constituted a management level Risk 

Management Committee with an objective to assist the management of the Company in fulfilling 

its corporate governance responsibilities of risk management systems and assessment of the 

effectiveness of such systems. 

Composition of this Committee is detailed above in this Corporate Governance Report. 

The compliance with the Risk Management polices of the Company are periodically reviewed by 

the Risk Review Committee of the Board. The minutes of the Board level Risk Review Committee 

meetings are also placed before the Board Meeting for its information. 

A detailed Risk Management Report has been included in this Annual Report, which forms part of 

this Annual Report. 

V.C. Remuneration of Directors 

The detailed note on the remuneration of Directors has already been incorporated in this Report 

earlier. Apart from the details mentioned therein, no other remuneration is paid to any of the 

Directors. 

Only one Director, Mr. Bishwanath N. Puranmalka, holds one equity share of Rs. 10/- jointly with 

ABNL in the share capital of the Company. None of the other Directors of the Company have any 

holding in the share capital of the Company. 

V.D. Whistle Blower Policy: 

The Company has a Whistle Blower Policy to escalate any issues on integrity / business issues / 

people issues and gender issues. BSLI Grievances and Disciplinary Committee members, constituted 

under the Whistle Blower Policy, conduct a proper and unbiased investigation and ascertain the 

correctness and trueness of the complaint and recommend necessary corrective measures, including 

punitive actions such as termination of employment / agency / contracts. Summary of cases as and 

when reported alongwith status is placed before the Audit Committee / Policyholders’ Protection 

Committee for their review and discussion. 

The Company ensures confidentiality and protection against victimization. No adverse action is 

taken against an employee or business associate in ‘knowing retaliation’ who makes any good-faith 

disclosure of suspect or wrongful conduct to the BSLI Grievances and Disciplinary Committee. 

V.E. Management Discussion & Analysis 

A detailed Management Discussion and Analysis Report has been included in this Annual Report. 

23


V.F. Shareholders & General information 

i) Brief profile of Directors to be re-appointed in the 10 th Annual General Meeting of the Company 

Details of Directors to be re-appointed are annexed to this Report. 

ii) 

Brief profile of Directors to be appointed in the 10 th Annual General Meeting of the Company 

Details of Directors to be appointed are annexed to this Report. 

iii) General Body Meetings 

The particulars of the last three Annual General Meetings (AGMs) of the Company are provided 

in Table 18: 

AGM Financial Year Date of the AGM Time Venue 

7 th 2006-2007 May 30, 2007 11.15 a.m. Vaman Centre, Makhwana Road, Near Marol Naka, 

off. Andheri Kurla Road, Andheri (E), Mumbai 

8 th 2007-2008 May 24, 2008 06.30 p.m. Aditya Birla Centre, Board Room, ‘B’ Wing, 5 th Floor, 

S. K. Ahire Marg, Worli, Mumbai – 400 030. 

9 th 2008-2009 May 11, 2009 10.00 a.m. Aditya Birla Centre, Board Room, ‘B’ Wing, 5 th Floor, 

S. K. Ahire Marg, Worli, Mumbai – 400 030. 

Table 18 

There were no Extraordinary General Meetings (EGMs) of the Company held during FY 2009-10. 

The special resolutions passed by the Company during the last three financial years are provided in 

Table 19: 

Meeting 

EGM held on 27 th November, 2006 

EGM held on 05 th November, 2007 

Details of the Special Resolution 

Alteration to the Articles of Association for increase in 

the Authorised Share Capital from Rs. 650 crores to 

Rs. 1,000 crores 

Alteration to the Articles of Association for increase in 

the Authorised Share Capital from Rs. 1,000 crores to 

Rs. 3,750 crores 

Table 19 

iv) 

General Shareholder Information 

Date, Time and Venue of the 10 th June 16, 2010 at 10.30 am at Board Room, 16 th Floor, One 

Annual General Meeting Indiabulls Centre, Tower 1, Jupiter Mill Compound, 841, 

S. B. Marg, Elphinstone Road, Mumbai – 400 013 

Financial Year 2009-2010 

Registrar and Transfer Agents 

MCS Limited 

Registration no. of the Company 11-128110 

as per Companies Act with the 

Registrar of Companies 

Registration no. of the Company 109 

as per Insurance Act with the 

Insurance Regulatory and 

Development Authority 

ISIN 

INE951F01015 

Corporate Identification Number (CIN) U99999MH2000PLC128110 

Permanent Account Number (PAN) 

Registered office* / 

address for correspondence 

AABCB4623J 

One Indiabulls Centre, Tower 1, 15 th & 16 th Floor, Jupiter 

Mill Compound, 841, S. B. Marg, Elphinstone Road, 

Mumbai – 400 013 

* changed w.e.f. September 01, 2009 

Table 20 

24


v) Distribution of Shareholding 

The Shareholding pattern of the Company as on 31 st March, 2010 is provided in Table 21: 

Sr. Name of the Shareholder No. of Equity Paid up Share Holding in equity 

No. Shares Held Capital (Rs.) share capital (%) 

1. Manoj Kedia jointly with Aditya Birla Nuvo Limited* 01 10 0.000000061 

2. Bishwanath N. Puranmalka# jointly with 01 10 0.000000061 

Aditya Birla Nuvo Limited 

3. Sushil Agarwal jointly with Aditya Birla Nuvo Limited 01 10 0.000000061 

4. Anil Rastogi jointly with Aditya Birla Nuvo Limited** 01 10 0.000000061 

5. Devendra Bhandari jointly with Aditya Birla Nuvo Limited 01 10 0.000000061 

6. Aditya Birla Nuvo Ltd 1,45,74,29,995 14,57,42,99,950 73.999999695 

7. Sun Life Financial (India) Insurance Investments Inc. 51,20,70,000 5,12,07,00,000 26 

Total 1,96,95,00,000 19,69,50,00,000 100 

Table 21 

* Transferred from Laxminarayan Investment Limited jointly with Aditya Birla Nuvo Ltd. 

** Transferred from Adesh Gupta jointly with Aditya Birla Nuvo Ltd. 

# Mr. Bishwanath N. Puranmalka is a non-executive director on the Board of the Company. 

vi) 

Dematerialisation of shares 

Particulars 

% of share capital 

CDSL 74% 

Physical 26% 

Total 100% 

Table 22 

vii) Share Capital History 

The history of infusion of capital of the Company since inception is given in Table 23: 

Financial No. of Equity Shares Allotted Amount (In Rupees) 

Year 

2000-2001 12,00,00,000 1,20,00,00,000 

2001-2002 Nil Nil 

2002-2003 6,00,00,000 60,00,00,000 

2003-2004 7,00,00,000 70,00,00,000 

2004-2005 10,00,00,000 100,00,00,000 

2005-2006 11,00,00,000 110,00,00,000 

2006-2007 21,15,00,000 211,50,00,000 

2007-2008 60,30,00,000 603,00,00,000 

2008-2009 60,50,00,000 605,00,00,000 

2009-2010 9,00,00,000 90,00,00,000 

Total 1,96,95,00,000 19,69,50,00,000* 

*excluding Share Premium 

Table 23 

25


viii) Means of Communication 

As per the IRDA guidelines on public disclosures, effective for the period ended 31 st March, 2010, 

insurance companies are required to disclose their financials (Balance Sheet, Profit & Loss Account, 

Revenue Account and Key Analytical Ratios) through new papers publication and host the same 

on their websites within stipulated timelines. 

Accordingly, the disclosures are hosted on BSLI’s website (www.birlasunlife.com) and adequate 

steps have been taken to ensure publication of requisite disclosure in new papers. 

SECTION B 

REPORTING UNDER IRDA CORPORATE GOVERNANCE GUIDELINES (IRDA CG 

GUIDELINES) 

IRDA, with an objective to have a better governance framework, issued “Guidelines on Corporate 

Governance for the Insurance Sector” (IRDA CG Guidelines) vide its circular no. IRDA/F&A/CIR/ 

025/2009-10 dated August 05, 2009 which is applicable to all the insurance companies including 

BSLI with effect from April 01, 2010. 

Circular dated August 05, 2009 was amended by IRDA vide its circular no. IRDA/F&I/CIR/F&A/ 

014/01/2010 dated January 29, 2010. 

A detailed para wise report on compliance of above guidelines is attached as Annexure 2 of this 


SECTION C 

REPORTING UNDER MCA VOLUNTARY GUIDELINES ON ‘CORPORATE GOVERNANCE’ 

AND ‘CORPORATE SOCIAL RESPONSIBILITY’ (MCA GUIDELINES) 

The Ministry of Corporate Affairs has issued a set of Voluntary Guidelines on ‘Corporate Governance’ 

and ‘Corporate Social Responsibility’ in December, 2009. These guidelines are expected to serve as 

a benchmark for the Corporate Sector and also help them in achieving the highest standard of 

corporate governance. 

Some of the provisions of these guidelines are already in place as reported elsewhere in this Report. 

The other provisions of these guidelines are being evaluated and the Company will strive to adopt 

the same in a phased manner. 

26


ANNEXURE 1 

Details of Directors Seeking Re-appointment / Appointment at the 10 th Annual General Meeting 

A. Directors seeking Re-appointment : 

Particulars 

Mr. Suresh N. Talwar Mr. Gian P. Gupta 

Mr. Bishwanath N. Puranmalka 

Date of Birth 

November 21, 1938 

January 11, 1941 


Date of First Appointment 



August 08, 2000 

Date of Last Appointment 

May 30, 2007 

May 24, 2008 

May 24, 2008 

Qualifications 

B.com, LLB (Bombay 

University) 

M.com (University of Delhi) 

B.com, LL.B., FCA and FCS 

Nature of expertise 

Professional specialization in 

corporate law, corporate tax, 

foreign exchange laws, 

Monopolies & Restrictive 

Trade Practices laws, & 

International issue of 

securities by Indian 

Companies. 

Wide and rich experience in 

Project Financing including 

Infrastructure projects, 

Capital Market, Financial 

Management and General 

Management. 

Rich experience in 

implementation and running 

of several manufacturing, 

training, service industry 

business and setting up 

Greenfield manufacturing 

operations. 

Directorship (excluding 

alternate directorship) held 

in other Public companies 

(excluding foreign and 

private companies) 

1. Biocon Limited 

2. Blue Star Ltd 

3. Blue Star Infotech Ltd 

4. Cadbury India Ltd 

5. ELANTAS Beck India 

Limited 

6. Esab India Ltd 

7. Greaves Cotton Ltd 

8. Merck Ltd 

9. Samson Maritime Ltd 

10. Shrenuj & Co Ltd 

11. Solvay Pharma India 

Limited 

12. Sonata Software Limited 

13. Larsen & Toubro Ltd 

1. Aditya Birla Nuvo 

Limited 

2. Idea Cellular Limited 

3. PTC India Limited 

4. Su-Raj Diamond & 

Jewellery Ltd. 

5. SIDBI Venture Capital 

Ltd 

6. Landmark Property 

Development Co. Ltd 

7. Baroda Pioneer Asset 

Mgmt Co. Ltd 

8. Swaraj Engines Limited 

9. Emkay Global Financial 

Services Ltd. 

10. Lodha Developers Ltd 

1. Aditya Birla Finance 

Limited 

2. Aditya Birla Money Mart 

Limited 

Membership/ 

Chairmanships of 

committees of other Public 

Companies (includes only 

Audit Committee and 

Shareholders’/Investors’ 

Grievance Committee) 

Member of Audit Committee 

in following companies: 

1. Biocon Limited 

2. Blue Star Infotech Ltd 

3. Cadbury India Ltd 

4. ELANTAS Beck India 

Limited 

5. Greaves Cotton Ltd 

6. Solvay Pharma India 

Limited 

Chairman of Audit 

Committee in following 

companies: 

Member of Audit 


companies: 


Limited 

2. PTC India Limited 

3. Landmark Property 

Development Co. Ltd 

4. Lodha Developers Ltd. 



companies: 



1. Aditya Birla Finance 

Limited 

2. Aditya Birla Money Mart 

Limited 

1. Blue Star Ltd 

2. Merck Ltd 


2. Swaraj Engines Limited 

3. Emkay Global Financial 

Services Ltd. 

Number of shares held in 

the Company 

Nil 

Nil 

1 equity share jointly with 


27


Details of Directors Seeking Reappointment / Appointment at the 10 th Annual General Meeting 

B. Directors seeking Appointment : 

Particulars 

Mr. Dikran Ohannessian 

Dr. Rakesh Jain 

Ms. Tarjani Vakil 

Date of Birth 

December 1, 1953 

January 19, 1961 

October 31, 1936 

Date of Appointment 

January 23, 2010 

November 10, 2009 

November 10, 2009 

Qualifications 

Degree in Science M.Tech (IIT, Kharagpur), 

(mathematics) (McGill Ph.D in Polymer Science & 

University), Harvard Engineering (Akron 

University Program for University (USA)) 

Management Development 

(Harvard University) 

M.A (University of Mumbai) 

Nature of expertise 

Well-versed with various 

facets of the life insurance 

business including 

individual, group benefits, 

financial planning and 

analysis, integration, 

corporate restructuring, 

shared services and joint 

ventures; as well as the asset 

management of company 

operations. 

Enriching experience across 

industries, associated with 

the Aditya Birla Group since 

2003. Spearheaded the 

digitization effort at Global 

GE Plastics in 2000 

Has over four decades of 

rich experience in 

development banking. 

Directorship held in other 

Public companies 

(excluding foreign 

companies and private 

companies) 

1. Birla Sun Life Asset 

Management Co. Ltd. 


Limited 

2. Aditya Birla Minacs 

Worldwide Limited 

3. Aditya Birla Minacs IT 

Services Limited 

4. Birla Technologies 

Limited 


1. Asian Paints Limited 

2. Mahindra Intertrade 

Limited 


Limited 

4. Oracle Financial Services 

Software Limited 

5. Alkyl Amines Chemical 

Limited 


M e m b e r s h i p / Nil 

Chairmanships of 

committees of other Public 

Companies (includes only 

Audit Committee and 

Shareholders’/Investors’ 

Grievance Committee) 



1. Birla Technologies 

Limited 








companies: 

1. Asian Paints Limited 

2. Mahindra Intertrade 

Limited 


Limited 

Chairman of Shareholders’ 

Grievance Committee in 

following companies: 



Number of shares held in 

the Company 

Nil 

Nil 

Nil 

28


ANNEXURE 2 

Compliance under IRDA Corporate Governance Guidelines 

Below table provide a short summary of contents / requirements of IRDA CG Guidelines and 

compliance status of the said guidelines at BSLI: 

Para Guidelines Compliance status 

3 Role of Board - Significant ownership, 

controlling shareholders and conflict of 

Interest 

3.1 Minimum lock-in period of 5 years from 

the date of certificate of business 

commencement forpromoters of an 

Insurance Company 

3.2 FDI capping at present @ 26% and in 

future, as notified by GOI 

Adhered 

Adhered 

3.3 Prior approval of IRDA for issuance 

exceeding 1% and transfer exceeding 5% No issuance or transfer exceeding prescribed 

of paid-up capital of the Company limits took place during the FY 2009-10 

Board shall ensure registration in 

accordance with Act and circular no. 022 

IRDA/F&A/Aug-05 dt. 25th Aug.,05 for 

(i) for issue of shares (other than equity) 

(ii) transfer of shares 

Adhered 

3.4 In case of any conflict of interest, Board No conflicting situation was reported. 

shall act in the interest of its Policyholders 

(including prospective ones) 

In addition, it is always ensured at BSLI 

that Policyholders’ interests are 

safeguarded and taken on priority. 

Adequate system, policies and procedures 

shall be in place to address conflict of 

interest and proper compliance of AS-18 Adequate systems are in place. 

3.5 Auditors, Actuaries, Directors and Senior 

Managers (Leadership team and those one 

level below them) shall not simultaneously 

hold 2 positions in the Company which 

could be conflicting in nature 

Adhered / Ensured 

3.6 Ongoing compliance of statutory 

compliance while consideration of capital 

augmentation Adhered / Ensured 

4 Governance Structure 

4.1 CG requirement of clause 49 of listing 

agreement of stock exchanges to be 

observed and gaps to be identified, which 

needs to be filled-in during transition from 

unlisted company to listed entity 

A detailed report in consonance with 

clause 49 of listing agreement forms part 

of the Corporate Governance Report of 

the Company (Section A). 

29



4.2 Irrespective of Board structure, good Good corporate governance practices are 

Corporate Governance practices to be always followed and forms part of Company’s 

followed 

key initiatives to keep improvising on 

corporate governance practices. 

4.3 Governance structure of the Company Company’s Governance structure is aligned 

can be aligned with that of the Group with that of its holding Company (ABNL) 

5 Board of Directors 

5.1 As per Insurance Act, the Company 

should be a ‘Public Limited Company’and 

Board should be properly constituted 

Competent and Qualified Directors 

should be placed on the Board 

Adhered 

Company’s Board comprises of qualified 

professional and with vast, varied & rich 

experience in managing and guiding 

Company’s affairs. 

Size of the Board should be as per legal Company has requisite number of Directors 

provisions and Board should dedicate as prescribed under Companies Act, 1956 

sufficient time with independence in their read with Articles of Association & 

governance 

Shareholders’ Agreement. 

Board members meet at regular intervals 

and ensure fair and independent approach 

while dealing with Company’s Affairs. 

Board and Senior Managers should be 

conversant with Company’s Organizational 

structure and its Line of Business & 

Products 

Board of large group, should have 

understanding of with material risk which 

could affect group entities 

For getting listed, Board should have 

Independent Directors, as mentioned in 

listing agreement and where, Chairman 

is non-executive 1/3rd of Board strength 

should be independent and otherwise 

(executive chairman) 50% of the Board 

shall comprise of Independent Directors 

As long as unlisted, 2 Independent 

Directors should be there on the Board 

of the Company 

Where Chairman is non-executive, CEO 

should be WTD 

Board and Senior Managers are well versed 

with Company’s organizational structure, 

its business model and products (both 

existing & future) 

Board is conversant with material risk 

which could impact the Company. 

To deal with risk related mattes 

Board has constituted Risk Management 

Committee which frames policies for risk 

mitigation and such matters are discussed 

at Board meetings at regular intervals. 

Since the Company is an unlisted entity this 

para is not applicable. 

However, existing Board composition 

consists of 3 Independent Directors having 

varied experience in finance, legal and 

business matters. 

As on March 31, 2010, there were 3 Independent 

Directors on Company’s Board. 

At present, consequent to approval from 

IRDA, Company is being managed by its 

Managing Director who takes care of 

day-to-day business affairs of the 

Company. 

30


Para 

Guidelines 

Not more than one member of family or 

close relative (as per section 6 of CA, 1956) 

or associate (partner, directors etc.) should 

be on Board of the Company as Independent 

Director 

5.2 Board should be responsible for activities 

as enlisted in Annexure 1 of IRDA CG 

Guidelines 

Policies and standards to be framed by the 

Board, which can be delegated to Board 

level committees 

Agenda Notes should be well-documented 

and proper system should be in place to 

monitor implementation process 

Board shall ensure avoidance of conflict in 

Interest; frame strategies which defines 

ethical individual and corporate behavior 

and these strategies should be adhered 

properly 

Compliance status 

Adhered 

Adhered 

Requisite policies and procedures are in 

place. 

To deal with certain matters of high 

importance, Board has constituted certain 

Committees, formulated charters and 

delegated requisite power to these 

Committees. 

Company has following Committees in 

place: 

a) Audit Committee; 

b) Finance Committee; 

c) Risk Management Committee; 

d) Asset Liability Management Committee; 

e) Investment Committee; 

f) Policyholders’ Protection Committee; and 

g) Share Allotment Committee. 

The Company Secretary receives details on 

matters which require the approval of the 

Board/ Board Committees, from various 

departments of the Company well in 

advance, so that they can be included in 

the Board/ Board Committee agenda(s). All 

material information is incorporated, in 

detail, in the agenda papers for facilitating 

meaningful and focused discussions at the 

meetings. 

An action taken report on the 

implementation of decisions taken in last 

Board / Committee meetings also forms part 

of Agenda. 

All Board members, senior management 

including other employees are governed by 

Code of Conduct which deals with ethical 

and corporate behaviour at organizational 

level. 

Moreover, several in-house, training 

sessions and lecturers were conducted 

during FY 2009-10 to nurture / cement our 

corporate values in new / existing 

employees of the Company. 

Our Values comprises of the following: 

• Integrity 

• Commitment 

• Passion 

• Seamlessness 

• Speed 

31



5.3 Directors of the Company shall not be 

convicted or be noticed adversely under any 

law involving moral turpitude or any 

professional body 

Due-diligence enquiry to be conducted at 

the time of appointment / re-appointment 

of a Director 

Declaration, in format of Annexure 2, to be 

obtained before appointment / re-appointment 

Annual Declaration from Directors to the 

effect that information provided at the time 

of appointment / re-appointment has not 

changed subsequently and changes, if any, 

are apprised to the Board 

Directors to enter into a Deed of Covenant 

(as per Annexure 3) which should be 

approved by the Board 

5.4 Company Secretary should be responsible 

for proper conduct of Board Meetings with 

adequate time to deliberate on pertinent 

matters, in detail 

Minutes to be recorded as soon as possible 

and be circulated 

New Directors should be apprised of 

Companies governance polices and duties 

and responsibilities of Directors 

Briefings on changes in financial sectors (in 

general) and Insurance sector (in particular) 

vide formal and informal programmers 

None of the Board members are convicted 

or noticed adversely under any law 

involving moral turpitude. 

Necessary due-diligence was conducted 

before appointment of Additional 

Director(s) viz., Dr. Rakesh Jain, 

Mr. Dikran Ohannessian & Ms. Tarjani 

Vakil during the FY 2009-10. 

Obtained at the time of appointment of 

aforesaid Additional Directors 

Annual Declaration to said effect obtained 

from all the directors along with other 

declarations under Companies Act, 1956 & 

IRDA regulations. 

Deed of Covenant was approved by the 

Board of Directors at their meeting & 

executed by all Directors. 

Company Secretary is responsible for 

convening and conducting Board & 

Committee Meetings. 

Adequate time is given for discussion of 

Agenda items and any item of special 

importance is discussed at length. In 

addition, a time-sheet is also circulated to 

all the Board members to ensure better time 

management and allocation of adequate 

time to all the agenda items. 

Company has pre-defined TATs for 

preparation, circulation and approval of 

minutes, post every Board & Committee 

Meetings. 

Minutes of previous meeting is signed and 

kept in safe custody as per the provisions 

of Companies Act, 1956 & applicable 

secretarial standards. 

Adhered 

Directors are in constant touch (vide person 

meetings, telephonic conversations, 

electronic mails, and other means of 

communication) with each other and senior 

management which allows them to keep 

abreast of recent update in Financial as well 

as Insurance sector. 

32



Annual Disclosure in Annual Report: 

• Number of meetings of board and 

committee meetings mandated under the 

CG Guidelines, in the financial year 

Meeting details are captured in Section A 

of this Corporate Governance Report. 

• Details of the Composition of the Board 

of Directors and Committees mandated, 

setting out name, qualification, field of 

specialization, status of directorship held. 

• Number of the meetings attended by the 

Directors and the members of the 

Committee 

• Detail of the remuneration paid, if any 

to the independent director. 

Composition details of Board and 

mandated Committees are captured in 

Section A of this Corporate Governance 

Report. 

Attendance details are captured in Section 

A of this Corporate Governance Report. 

Details of sitting fees paid to Independent 

Directors is captured in Section A of this 


6 Control Functions 

Board should lay down policy for: 

• Risk (identification, assessment, control, 

mitigation and monitoring) 

• Compliance with Company Polices, and 

applicable laws and regulations 

• Internal Control 

• Internal Audit 

• Independence of control functions, 

including risk management, and proper 

reporting arrangement 

6.1 Responsibility of control functions to be 

entrusted to Directors 

6.2 Risk control systems should be in place (at 

group and individual level) 

Board should lay down requisite policy for 

risk control 

7 Delegation of Functions 

Committee Charter should define its 

following role and functions: 

• Constitution 

• Objectives 

• Responsibilities 

• Frequency and quorum of meeting 

• Appointment and removal of members 

• Reporting to the Board 

Adhered 

Adhered 

Adhered 

Adhered 

Separate Committees, viz. Audit & Risk 

Management Committees, independently 

deals with internal control/ audit & risk 

management related matters. A detailed 

note on aforesaid Committees and their 

composition is captured in Section A of this 


Discussion and decision of all Committee 

meetings constituted by the Board are 

captured in the minutes of these Committees 

and placed before the Board for their perusal 

and future plan of action, if any. 

Adhered 

Adhered 

Adhered 

33



Role and responsibilities of the 

Committees: 

7.1 Audit Committee (Mandatory) 

Audit Committee should oversee financial 

statements, reporting on annual and 

quarterly basis and setting-up of process 

for checks and control mechanism 

Chairman should be an Independent 

Director 

Association of CEO should be limited to 

eliciting any specific information relating 

to audit findings 

Oversee functioning of internal audit 

department and review its reports 

Responsible for appointment, 

remuneration, performance and oversight 

of work of auditors (internal/statutory/ 

concurrent) 

Independence of Statutory Auditors should 

be ensured (though appointment and other 

activities is undertaken by shareholders at 

their general meetings) 

Oversight on process and procedures on 

issues relating to maintenance of books 

etc. 

Pre-audit discussion with statutory auditors 

over nature and scope of audit and postaudit 

discussion on areas of concern 

Additional work other than statutory / 

internal audit handled by the auditor or 

any of its associated person or companies 

shall be approved specifically by the Board 

with view of independence and integrity 

of audits. 

All additional audit works entrusted to the 

auditors or its associates or companies shall 

specifically disclosed in the Notes to 

Accounts, forming part company’s annual 

accounts 

Pursuant to provisions of Companies Act, 

1956, Company had constituted an Audit 

Committee and it is governed by a 

documented charter. 

To align with the IRDA CG Guidelines 

the existing charter has been altered and 

approved by the Board. 

Adhered 

Audit Committee is chaired by Mr. Gian 

P. Gupta, Non-executive & Independent 

Director 

Adhered 

Adhered 

Ensured 

Ensured 

Adhered 

Adhered 

Ensured 

Sufficient disclosures, if any, are made 

34



7.2 Investment Committee (IC) - Mandatory 

Composition: 2 Non-executive Directors, 

CEO, CFO, CIO, Appointed Actuary 

Investment Committee details are captured 

in Corporate Governance Report under 

clause 49 reporting 

Adhered. 

One meeting in a quarter to overview 

investment operations and proper 

monitoring of the same. 

Constitution of IC and any new 

appointment or removal to be approved by 

the Board and be communicated to IRDA 

with 30 days 

IC shall lay down investment policy and 

operational framework. Policy shall focus 

on ALM with robust internal control. 

Investment Policy shall encompass aspects 

such as liquidity, compliance with 

prudential norms, risk management / 

mitigation strategies, protection of 

policyholders’ 

Ensured 

IC shall be responsible for periodic review 

of Investment policy 

Members of IC shall be conversant with 

responsibilities cast by IRDA (Investment) 

Regulations 2000 along with guidelines on 

system of risk management 

All the Investment Committee members are 

conversant with their responsibilities. 

IC shall independently review its 

investment decisions with proper support 

of due diligence process undertaken by 

Investment team 

Effective reporting system should be in 

place to ensure compliance of its policies 

(in addition to internal/concurrent audit) 

Ensured 

IC to report to the Board on investment 

performance on a quarterly basis and 

provide analysis of its investment portfolio 

and future outlook so as to enable Board to 

foresee any policy change and its strategies 

7.3 Risk Management Committee (RMC) - 

Mandatory 

RM function should enable to monitor all 

risk across the various lines of business of 

the Company. 

Risk Management Committee details are 

captured in Section A of this Corporate 

Governance Report. 

Ensured 

35



RMC shall: 

• Assist Board in operating risk 

management system by specialized 

analyses and review 

• Report to Board on risk exposures and 

actions to manage such exposures 

Ensured 

• Advise Board on risk management 

decisions relating to strategies and 

operational matters (corporate strategy, 

mergers and acquisitions and related 

matters) 

7.4 Asset Liability Management Committee 

(ALMC) - Mandatory 

Asset Liability Management Committee 

details are captured in Section A of this 


ALMC lays down framework to ensure 

Company invest in a manner which enable 

it to meet cash flow needs and capital 

requirements, at a future date. 

Responsibilities of ALMC are: 

• Setting the insurer’s risk/reward 

objectives 

• Quantifying the level of risk exposure 

and assessing the expected rewards and 

cost 

• Formulating and implementing optimal 

ALM strategies (product and enterprise 

level) 

• Laying down the risk tolerance limits. 

• Monitoring risk exposures (at periodic 

intervals) and revising ALM strategies 

• Placement of ALM information before 

Board at regular intervals 

7.5 Policyholders’ Protection Committee (PPC) 

- Mandatory 

Ensured 

Ensured 

Policyholders’Protection Committee details 

are captured in Section A of this Corporate 


PPC shall report directly to the Board and 

shall ensure that Policyholders have access 

to redressal mechanisms and shall draft 

policies and procedure for dealing with 

customers and quick resolution of disputes 

Ensured 

Responsibilities of PPC are: 

• Formation of policies for addressing 

complaints and grievances of policyholders 

Ensured 

• Compliance of statutory requirements 

36



• Periodic review of mechanism 

• Adequate disclosure of “material 

information” to the policyholders. 

• Periodic review of status of complaints 

• Provide details of grievances at periodic 

intervals in such format as prescribed 

by IRDA 

Ensured 

• Provide details of insurance ombudsmen 

to the policyholders 

7.6 Other Committees 

7.6.1 Remuneration Committee (Nonmandatory) 

7.6.2 Nomination Committee (Non mandatory) 

7.6.3 Ethics Committee (Non mandatory) 

7.7 All mandatory committees should meet at 

least 4 times in a year and not more than 

four months shall elapse between two 

successive meetings. The quorum shall be 

either two members or one third of the 

members of the committee whichever is 

greater, but in case an independent director 

is mandated to be in the committee, he/ 

she should be necessary present to form 

quorum. 

The Board has resolved that constitution 

of Remuneration Committee was not 

required at present and it was suggested 

that the prescribed responsibilities of this 

committee could continue to be directly 

undertaken by the Board. 


of Nomination Committee was not required 

at present and it was suggested that the 

prescribed responsibilities of this 

committee could continue to be directly 

undertaken by the Board. 


of Ethics Committee was not required at 

present and the prescribed responsibilities 

be carried out by the Policyholders’ 

Grievance Redressal Committee (now 

renamed as Policyholders’ Protection 

Committee) of the Board. 

Ensured 

Necessary modifications were made in 

Charters of all mandatory Committees and 

were approved by the Board. 

8 Senior Management 

8.1 CEO & Other Senior Functionaries 

Prior approval of IRDA is required before 

appointment, re-appointment or 

termination of the CEO and WTD 

Board should take proactive steps to decide 

on the continuance of CEO before expiry 

of his tenure or to identify new incumbent 

Adhered 

Ensured 

37



Company should forward proposal (with 

Board approval) to IRDA, at least a month 

before the completion of the tenure of the 

incumbent. 

Board should have practices for 

succession planning for the key senior 

functionaries 

8.2 Role of Appointed Actuaries 

Board should ensure that requirements of 

IRDA (Appointed Actuary) Regulations, 

2000, are complied with 

Adhered 

Ensured 

Ensured 

Appointed Actuary shall provide 

professional advice or certification to the 

Board with respect to: 

• estimation of technical provisions in 

accordance with the valuation 

framework set up by the insurer 

• identification and estimation of material 

risks and appropriate management of the 

risks 

• financial condition testing 

• solvency margin requirements 

• appropriateness of premiums (and 

surrender value) 

• allocation of bonuses to with-profit 

insurance contracts 

Adhered for year and quarter ended 

31 st March, 2010 

Note: 

• management of participating funds 

(including analysis of material effects 

caused by strategies and policies) 

• product design, risk mitigation 

(including reinsurance) and other related 

risk management roles. 

Appointed Actuary in discharge of his 

responsibilities shall at all times be 

provided access to the information as 

required. 

Ensured 

8.3 External Audit - Appointment of Statutory 

Auditors 

8.3.1 Appointment 

Audit Committee are required to 

recommend Statutory Auditors who is 

appointed at general meeting of the 

shareholders 

Adhered 

38



8.3.2 Eligibility Conditions/Qualifications 

Joint audit of each insurance company to 

be conducted by two statutory Auditors. 

An audit firm to be eligible to be appointed 

as statutory auditors the following 

conditions must be complied with: 

Ensured 

• Continuous practice for a period of 

fifteen years 

• At least one partner/employee should 

have CISA/ISA or equivalent 

qualification 

• Joint auditors may have a term of 5 / 4 

years, in the first instance. Thereafter, the 

maximum duration is 5 years 

Ensured 

• 2 year cooling-off period should be 

adhered by the Company on completion 

of 4/5 year tenure, as the case may be 

• No Audit Firm shall carry out more than 

two statutory audits of Insurance 

Companies (Life /Non-Life Reinsurance). 

8.3.3 Access to Board and Audit Committee 

• AC should have discussions with the 

statutory auditors on internal control 

system, scope of audit (including 

observations) and review financial 

statements (quarterly/half yearly/ 

yearly) before submission before Board 

and ensure compliance of internal control 

systems 

Adhered 

Ensured 

Note: 

Statutory auditors should also have access 

to the Board of Directors through the Audit 

Committee. 

Ensured 

9 Disclosure Requirements 

Board shall ensure that the information on 

the following, including the basis, methods 

and assumptions on which the information 

is prepared and the impact of any changes 

therein are also disclosed in the annual 

accounts:- 

• Quantitative and qualitative information 

on the insurer’s financial and operating 

ratios, namely, incurred claim, 

commission and expenses ratios 

Adequate Disclosures are being made in 

the Annual Report 

• Actual solvency margin details vis-à-vis 

the required margin. 

39



• Life insurers shall disclose policy lapse 

ratio. 

• Financial performance including growth 

rate and current financial position of the 

insurer 

• A description of the risk management 

architecture 

• Details of number of claims intimated, 

disposed of and pending with details of 

duration 

• All pecuniary relationships or 

transactions of the Non-Executive 

Directors vis-à-vis the insurer shall be 

disclosed in the Annual Report. 

• Any other matters, which have material 

impact on the insurer’s financial position. 

10 Outsourcing 

10.1 The Company shall not outsource any of 

the company’s substantive functions other 

than those that have been explicitly 

permitted 

Each proposal to outsource any function of 

the insurer, as permitted by the IRDA, shall 

be reported to IRDA before entering into 

the arrangement. 

All outsourcing arrangements of the 

company shall have the approval of the 

Board. 

Every outsourcing contract shall contain 

explicit safeguards regarding : 

• confidentiality of data, 

• all outputs from the data, 

• continuing ownership of the data the 

Company and 

• orderly handing over of the data & all 

related software programmes on 

termination of the outsourcing 

arrangement. 

The arrangement shall not be for more than 

3 years and should have provision for 

premature cancellation without attracting 

penalties 

10.2 The Company shall monitor and review the 

performance of agencies to whom 

operations have been outsourced at least 

annually and report findings to the Board 

Adequate Disclosures are being made in 

the Annual Report 

Ensured 

Any arrangement to be carried with effect 

from April 01, 2010 will be reported to 

IRDA 

Any arrangement to be carried with effect 

from April 01, 2010 will be placed before 

the Board for their approval 

Will be ensured for all outsourcing 

contracts / arrangements effective from 

April 01, 2010 

Will be ensured for all outsourcing 

contracts / arrangements effective from 


40



10.3 IRDA reserves the right to access the 

operations of the outsourced entity to the 

extent of relevance with insurance company 

and for protection of policyholder. 

11 Relationship with Stakeholders 

11.1 A stakeholder is any person, group or 

organization that has a direct or indirect 

stake in an insurer. The key stakeholders 

can include shareholders, employees, 

policyholders and supervisors. Other 

stakeholders could include creditors, service 

providers, unions, rating agencies, equity 

analysts and the community at large. 

11.3 The company shall ensure complete 

transparency in operations and make 

periodic disclosures 

Disclosures shall touch the following : 

• accurate and fair financial statements; 

and 

• sound business fundamentals with long 

term viability 

12.4 Reporting to IRDA 

12.4.1 Full compliance with the guidelines from 

the financial year 2010-2011. 

N.A. 

— 

Ensured 

Ensured 

12.4.2. Each Company should designate a 

Compliance officer who will monitor 

continuing compliance with these CGG. 

12.4.3. Certification by Compliance Officer (in 

prescribed format) 

Company Secretary has been designated as 

the Compliance Officer under IRDA CG 

Guidelines. 

The certificate from the Compliance Officer 

is attached as Annexure 3 to this Corporate 


13 Whistle Blowing Policy 

13.1 Company shall have “whistle blowing” 

policy, where a mechanisms exists for 

employees to raise concerns internally about 

possible irregularities, governance 

weaknesses, financial reporting issues or 

other such matters 

Above reporting could include employee 

reporting in confidence directly to the 

Chairman of the Board or of a Committee 

of the Board or to the external auditor. 

A brief on Whistle Blower Policy details is 

captured in Section A of this Corporate 


Ensured 

Reporting under BSLI Whistle Blower 

Policy is made to BSLI Grievances and 

Disciplinary Committee or its members. 

41



Policy illustratively covers the following 

aspects: 

Employee awareness that such channels 

(whistle blowing) are available, how to use 

them and how their report will be handled 

Handling of the reports received 

confidentially, for independent assessment, 

investigation and where necessary for 

taking appropriate follow-up actions 

A robust anti-retaliation policy to protect 

employees who make reports in good faith 

13.2 The appointed actuary and the statutory/ 

internal auditors have the duty to ‘whistle 

blow’, i.e., to report in a timely manner to 

the IRDA if they are aware that the 

company has failed to take appropriate 

steps to rectify a matter which has a 

material adverse effect on its financial 

condition. 

Ensured 

Ensured 

Ensured 

Will be ensured as and when situation 

arises from April 01, 2010 onwards 

ANNEXURE 3 

Certification by Compliance Officer 

Certification for compliance of the Corporate Governance Guidelines 

I, Puneet M. Bansall, hereby certify that the Company has complied with the IRDA’s Corporate 

Governance Guidelines, dated August, 05, 2009, for Insurance Companies as amended from time to 

time and nothing has been concealed or suppressed. 

Puneet M. Bansall 

Head – Legal & Company Secretary 

Place: Mumbai 

Date: April 26, 2010 

42


A. Risk Management Framework: 

ENTERPRISE RISK MANAGEMENT (ERM) REPORT 

The Company has an Enterprise risk management framework covering procedures to identify, 

assess and mitigate the key business risks. Aligned with the business planning process, the 

Enterprise Risk Management framework covers all business risks including strategic risk, 

operational risks, investment risks, insurance risks and catastrophic risks. The Key business 

risks identified are approved by the Board Risk Management Committee of the Company and 

monitored by the Risk Management team thereafter. 

The Company also has in place an Operational risk management framework that supports 

excellence in business processes, system and facilitates matured business decisions to move to a 

proactive risk assessment and is in the process of implementing the key operational risk 

components. 

The Company’s investment team operates under the close supervision of the Investment 

Committee and the Asset Liability Management Committee appointed by the Board of Directors. 

Investments risks are managed through documented policies and reviewed by the Investment 

Committee and the Asset Liability Management Committee. The investments are made in line 

with the Investment and Asset liability management policy adopted by the Company. 

The Company through its risk management policies has set up systems to continuously monitor 

its experience with regard to other parameters that affect the value of benefits offered in the 

products. Such parameters include policy lapses, premium persistency, maintenance expenses 

and investment returns. 

Risk Management at Birla Sun Life Insurance is governed by Enterprise Risk Management 

framework which encompasses the following areas: 

Governed by Risk Policies and Operating Guidelines approved by 

Board Committee / Sub Committee of the Board 

Risk Indentification 

Risk Assessment 

Enterprise Risk Management 

Framework in BSLI 

Risk monitoring. 

Comunication and 

Reporting 

Risk Response and Risk 

Management strategy 

43


B. Risk Policies: 

The following risk policies govern and implement effective risk management practices: 

Product Design and Pricing Policy, Underwriting and liability management policy, Reinsurance 

ceded policy, Capital Management policy, Investment Policies, Valuation Policy, Information 

security policy, Business Continuity policy, Operational Risk Management Policy, Fraud 

Management policy, Asset Liability management policy etc. 

C. Risk Mitigation Strategies: 

The Company is exposed to several risks in the course of its business. The risks on the liabilities 

side may arise due to more than expected claims. On the assets side, the risks arise due to the 

possibility of fluctuations in their values. The Company is also subject to the expense risk, since 

until new business volumes grow significantly, the actual expenses of the Company will exceed 

the expenses loaded into the product pricing. The Company has implemented adequate 

safeguards to mitigate these risks. The overall business risks and mitigation strategies are 

bifurcated as are described below: 

Strategic Risk 

Investment 

Risk 

Operational 

Risk 

Risk to future earnings or capital from a failure to achieve our strategic 

or long term business plans, either through incorrect choices or improper 

implementation of those choices. 

Mitigation Strategy: Strategic risks are managed through risk 

identification and review process through the Enterprise Risk 

Management framework. Strategic risks and mitigating action plans 

are monitored through Risk Management Committee. 

Risk to investment performance due to movements in systemic & 

unsystemic factors like credit, market, interest, liquidity, global & other 

macro factors etc. This can impact both the guarantees given on the 

product or assumption made at the time of product development. The 

uncertainty surrounding the likelihood of defaults of counterparties to 

whom the Company has an exposure. 

Mitigation Strategy: The policies well defines governance structure for 

Investment, Robust Investment policies & processes insures that the 

risk is identified well and acceptable levels are defined and monitored 

regularly. the stringent investment norms, approval structure, insures 

a portfolio which is healthy & yet delivers the expected performance. 

The Company uses systems like MSCI barra to evaluate & monitor 

risks. A proper asset liability matching is done for traditional products 

offered by the Company. 

The uncertainty arising from larger than expected losses or damage to 

finances or reputation resulting from inadequate or failed internal 

processes, controls, people, systems or from external events. 

Mitigation Strategy: Operational risks are governed through Operational 

Risk Management policy. The Company has been maintaining and 

reporting an operational loss database to track and mitigate risks leading 

to financial losses. The Company has also initiated a Risk Control Self 

Assessment process to embed the control testing as a part of the day to 

day operations. To control operational risk, operating and reporting 

processes are reviewed and updated regularly. Ongoing training 

through internal and external programs is designed to prepare staff at 

all levels for meeting the demands of their positions. The Company has 

a Business Continuity Plan in place to manage any business interruption 

risk. The Company has become the first Indian Insurance company to 

be BS25999 (British Standard 25999) certified. Fraud management is 

handled through internal committee and governed by the Fraud 

Reporting and Investigation Policy. 

44


Insurance 

Risk 

The uncertainty of product performance due to differences between 

the actual experience and expected assumptions affecting amounts of 

claims, benefits payments, expenses etc. 

Mitigation Strategy: The Company through its risk management policies 

has set up systems to continuously monitor its experience with regard 

to other parameters that affect the value of benefits offered in the 

products. Such parameters include policy lapses, premium persistency, 

maintenance expenses and investment returns. 

A strong underwriting team is in place to review all proposals from 

clients, supported by comprehensive processes and procedures, and 

guided by international experts. The objective of the underwriting team 

is to minimize the risks of abnormal mortality and morbidity by 

acquiring adequate information, on which to determine, whether to 

accept individual lives, and if so, the extra premium, to compensate for 

any additional risk. 

The operating expenses are monitored very closely. Many products 

offered by the Company also have an investment guarantee. The 

Company has set aside additional reserves to cover this risk. Further, 

the possible financial effect of adverse mortality and morbidity 

experience has been reduced by entering into reinsurance agreements 

Further, the possible financial effect of adverse mortality and morbidity 

experience has beenreduced by entering into reinsurance agreements 

with RGA and Swiss Re (internationalreinsurers) for individual life 

business, RGA and Generali (international reinsurers) forgroup business 

and Swiss Re (international reinsurer) for Health business. All reinsurers 

arespecialist international reinsurance companies with excellent 

reputation and significant financial strength. The Company is entering 

into a separate agreement with RGA to cover the catastrophicrisks 

under group business. 

B. Risk Management Committee 

Governance structure: 

Board of Directors 

Risk Management Committee 

Risk Management Team 

Function Heads 

Composition, Meeting, attendance and other details of Risk Management Committee is detailed 

in Section A of Corporate Governance Report. 

The risk management structure comprises of the Risk Management Team and the Functional 

heads governed by Board level Risk Management Committee. Briefly the Roles and 

Responsibilities are summarised below: 

Scope & Term of Risk Management Committee 

Reference 

Risk Management - 

– Requires management to identify and review with the Committee 

the major areas of risk facing the business activities of the Company 

and strategies to manage those risks. 

– Reviews, at least annually, the adequacy of and compliance with the 

policies implemented for the management and control of risk, 

including investment policies, asset-liability risk management, 

operational risk, management of risk to reputation, management of 

outsourcing arrangements and approves changes to the foregoing as 

appropriate. 

45


Compliance 

– Reviews at least annually and approves changes to policies or 

programs that provide for the monitoring of compliance with legal 

and regulatory requirements including legislative compliance 

management systems. 

– Reviews the status of compliance and regulatory reviews and business 

practice reviews worldwide, including at least annually, compliance 

with codes of conduct of the Aditya Birla Group and Sun Life 

Financial. 

– Reviews market conduct practices. 

– Reviews procedures for dealing with customer complaints, and 

monitors and reviews the effectiveness of and compliance with those 

procedures. 

– Reviews procedures for complying with anti-money laundering and 

suppression of terrorism laws and regulations worldwide and 

monitors and reviews the effectiveness and compliance with those 

procedures. 

Other 

– Performs such other duties and exercises such other powers as may, 

from time to time, be assigned to or vested in the Committee by the 

Board. 

- In addition to above any such other duties and exercises as may be 

specified by IRDA by way of notifications or necessary amendments 

in applicable statutes and/or guidelines, from time to time. 

46


AUDITORS’ REPORT 

To the Members of BIRLA SUN LIFE INSURANCE COMPANY LIMITED 

1. We have audited the attached balance sheet of BIRLA SUN LIFE INSURANCE COMPANY LIMITED (‘the 

Company’) as at March 31, 2010 and also the revenue account, profit and loss account, and 

receipts and payments account for the year ended on that date annexed thereto. These financial 

statements are the responsibility of the Company’s management. Our responsibility is to express 

an opinion on these financial statements based on our audit. 

2. We conducted our audit in accordance with auditing standards generally accepted in India. 

Those standards require that we plan and perform the audit to obtain reasonable assurance as 

to whether the financial statements are free of material misstatement. An audit includes 

examining, on a test basis, evidence supporting the amounts and disclosures in the financial 

statements. An audit also includes assessing the accounting principles used and significant 

estimates made by management, as well as evaluating the overall financial statement 

presentation. We believe that our audit provides a reasonable basis for our opinion. 

3. In accordance with the provisions of Section 11 of the Insurance Act, 1938 (‘the Insurance Act’) 

read with the ‘Insurance Regulatory and Development Authority (Preparation of Financial 

Statements and Auditor’s Report of Insurance Companies) Regulations, 2002 (‘the IRDA Financial 

Statements Regulations’), and the provisions of sub-sections (1), (2) and (5) of Section 211 and 

sub-section (5) of Section 227 of the Companies Act, 1956 (‘the Companies Act’), the balance 

sheet, revenue account and profit and loss account are not required to be, and are not, drawn 

up in accordance with Schedule VI of the Companies Act. The balance sheet, revenue account 

and profit and loss account are drawn up in conformity with the IRDA Financial Statements 

Regulations. 

4. We report that: 

(a) We have obtained all the information and explanations which to the best of our knowledge 

and belief were necessary for the purposes of our audit and have found them to be 

satisfactory. 

(b) In our opinion and to the best of our information and according to the explanations given, 

proper books of account as required by law have been maintained by the Company so far 

as appears from our examination of those books. 

(c) The financial accounting systems of the Company are centralized and therefore accounting 

returns are not required to be submitted by branches and other offices. 

(d) The balance sheet, revenue account, profit and loss account and receipts and payments 

account referred to in this report are in agreement with the books of account. 

(e) The actuarial valuation of liabilities for policies in force is the responsibility of the Company’s 

appointed actuary (‘the appointed actuary’). The actuarial valuation of liabilities for policies 

in force has been duly certified by the appointed actuary. The appointed actuary has 

certified to the Company that the assumptions for such valuation are in accordance with 

the guidelines and norms issued by the Insurance Regulatory and Development Authority 

(‘IRDA’) and the Actuarial Society of India in concurrence with IRDA. We have relied on 

the appointed actuary’s certificate in this regard. 

(f) On the basis of the written representations received from the directors, and taken on record 

by the board of directors, none of the directors is disqualified as on March 31, 2010 from 

being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956. 

5. In our opinion and to the best of our knowledge and belief and according to the information 

and explanations given: 

(a) The accounting policies selected by the Company are appropriate and in compliance with 

the applicable accounting standards referred to in Section 211(3C) of the Companies Act 

and the accounting principles prescribed in the IRDA Financial Statements Regulations and 

47


orders or directions issued by IRDA in this behalf. The balance sheet, revenue account, 

profit and loss account and receipts and payments account referred to in this report are in 

compliance with the accounting standards referred to in Section 211(3C) of the Companies 

Act, 1956. 

(b) Investments of the Company have been valued in accordance with the provisions of the 

Insurance Act, 1938 and the regulations/ directions issued by IRDA in this behalf. 

(c) The said financial statements are prepared in accordance with the requirements of the 

Insurance Act, 1938, the Insurance Regulatory and Development Authority Act, 1999, the 

IRDA Financial Statements Regulations and the Companies Act, 1956, to the extent applicable 

and in the manner so required, and give a true and fair view in conformity with the 

accounting principles generally accepted in India, as applicable to insurance companies: 

i. in the case of the balance sheet, of the state of affairs as at March 31, 2010; 

ii. in the case of the revenue account, of the deficit (before contribution from the 

shareholders’ account) for the year ended March 31, 2010; 

iii. in the case of the profit and loss account, of the loss for the year ended March 31, 2010; 

and 

iv. in the case of the receipts and payments account, of the receipts and payments for the 

year ended March 31, 2010. 

6. Further, according to the information and explanations given and to the best of our knowledge 

and belief, we certify that: 

(a) We have reviewed the management report attached to the financial statements for the year 

ended March 31, 2010 and there is no apparent mistake or material inconsistency with the 

financial statements. 

(b) Based on the information and explanations received during the normal course of audit, 

management’s representations made to us and the compliance certificate submitted to the 

Board by the officers of the Company charged with compliance and the same being noted 

by the Board, nothing has come to our attention which causes us to believe that the Company 

has not complied with the terms and conditions of registration as per sub-section 4 of 

section 3 of the Insurance Act, 1938. 

(c) We have verified the cash balances, to the extent considered necessary and securities relating 

to Company’s loans and investments by actual inspection or on the basis of certificates/ 

confirmations received from the custodians and/ or Depository Participants appointed by 

the Company, as the case may be. At March 31, 2010, the Company had no reversions and 

life interests. 

(d) The Company is not a trustee of any trust. 

(e) No part of the assets of the policyholders’ funds has been directly or indirectly applied in 

contravention of the provisions of the Insurance Act, 1938 relating to the application and 

investments of the policyholders’ funds. 

For Khimji Kunverji & Co 

Chartered Accountants 

Registration No. 105146W 

For Fraser & Ross 


Registration No. 000829S 

Shivji K Vikamsey 

S. Ganesh 

Partner 

Partner 

Mumbai, April 26, 2010 Membership No. 2242 Membership No. 204108 

48


REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010 

Policyholders’ Account (Technical Account) 

(Amounts in thousands of Indian Rupees) 

Year ended Year ended 

Particulars 31st March 31st March 

Schedule 2010 2009 

Premiums earned - Net 

(a) Premium 1 55,056,579 45,718,041 

(b) Reinsurance ceded (802,949) (551,663) 

(c) Reinsurance accepted — — 

Sub - Total 54,253,630 45,166,378 


(a) Interest, Dividend & Rent - Gross 5,215,712 3,884,537 

(b) Profit on Sale / Redemption of Investments 24,129,090 3,279,011 

(c) (Loss) on Sale / Redemption of Investments (3,410,918) (11,161,291) 

(d) Transfer/Gain ( Loss) on revaluation / Change in Fair value 14,140,238 (2,708,296) 

(e) Gain / (Loss) on Amortisation (42,599) (607) 

Sub - Total 40,031,523 (6,706,646) 

Other Income 

(a) Contribution from the Shareholders’ Account 4,797,493 7,639,899 

(Refer Schedule 16 Note 24) 

(b) Others (Interest etc.) 143,486 170,850 

Sub - Total 4,940,979 7,810,749 

Total (A) 99,226,132 46,270,481 

Commission 2 5,161,974 4,817,880 

Operating Expenses related to Insurance Business 3 13,267,526 12,487,623 

Provision for doubtful debts — — 

Bad Debts written off — — 

Provision for Tax — 61,500 

Provision (other than taxation) 

(a) For diminution in value of investments (net) — — 

(b) Others — — 

Total (B) 18,429,500 17,367,003 

Benefits paid (Net) 4 11,387,815 6,464,413 

Interim Bonuses Paid — — 

Change in valuation of liability in respect of life policies 

(a) Gross 68,324,963 21,245,680 

(b) (Amount ceded in Re-insurance) (759,928) (123,547) 

(c) Amount accepted in Re-insurance — — 

Total (C) 78,952,850 27,586,546 

Surplus/ (Deficit) (D) = (A) - (B) - (C) 1,843,782 1,316,932 

Appropriations 

Transfer to Shareholders’ Account (Refer Schedule 16 Note 24) 149,123 286,159 

Transfer to Other Reserve — — 

Balance being Funds for Future Appropriation 1,694,659 1,030,773 

Total (D) 1,843,782 1,316,932 

The total surplus as mentioned below : 

(a) Interim Bonuses Paid — — 

(b) Allocation of Bonus to Policyholders — — 

(c) Surplus/(Deficit) shown in the Revenue Account 1,694,659 1,030,773 

Total Surplus [(a)+(b)+(c)] 1,694,659 1,030,773 

Significant Accounting Policies and Disclosures 16 

The schedules and accompanying notes are an integral part of this Revenue account 

As required by Section 40B(4) of the Insurance Act. 1938 we certify that all expenses of Management in respect of life 

insurance business transacted in India by the Company have been fully debited to the Policyholders’ Account. 

As per our report of even date attached 

For Khimji Kunverji & Co. For Fraser & Ross For and on behalf of the Board of Directors 

Chartered Accountants Chartered Accountants 

Shivji K Vikamsey S. Ganesh Donald A. Stewart Ajay Srinivasan Gian P. Gupta 

Partner Partner Chairman Managing Director Director 

Venkatesh S. Mysore Mayank Bathwal Fabien Jeudy 

Director Chief Financial Officer Appointed Actuary 

Mumbai, 26th April, 2010 


Company Secretary 

49


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010 

Shareholders’ Account (Non - Technical Account) 




Schedule 2010 2009 

Amounts transferred from Policyholders’ Account 

(Technical Account) 149,123 286,159 


Income from Investments 

(a) Interest, Dividend & Rent - Gross 303,934 301,761 

(b) Profit on Sale / Redemption of investments 17,717 24,327 

(c) (Loss) on sale / redemption of investments — (112) 

(d) Gain / (Loss) on Amortisation (20,262) 16,435 

Other Income — — 

Total (A) 450,512 628,570 

Expense other than those directly related to the 

insurance business 7,984 10,028 

Bad debts written off — — 


(a) For diminution in the value of investment (net) — — 

(b) Provision for doubtful debts — — 

(c) Others — — 

(d) Contribution to the Policyholders’ Account 4,797,493 7,639,899 


Total (B) 4,805,477 7,649,927 

Profit/(Loss) before tax (4,354,965) (7,021,357) 

Provision for taxation — — 

Profit/(Loss) after tax (4,354,965) (7,021,357) 


(a) Balance at the beginning of the year (15,920,075) (8,898,718) 

(b) Interim dividends paid during the year — — 

(c) Proposed final dividend — — 

(d) Dividend distribution tax — — 

(e) Transfer to reserves / other accounts — — 

Loss carried forward to Balance Sheet (20,275,040) (15,920,075) 

Earning Per Share (Basic and Diluted), Face Value of Rs. 10 (in Rs.) (2.28) (4.44) 


Significant Accounting Policies and Disclosures 

The schedules and accompanying notes are an integral part of this profit and loss account 











50


BALANCE SHEET AS AT 31ST MARCH 2010 


As at 

As at 

Particulars Schedule 31st March 2010 31st March 2009 

Sources of Funds 

Shareholders’ funds: 

Share Capital 5 19,695,000 18,795,000 

Reserves and Surplus 6 4,800,000 1,200,000 

Credit/(Debit) / Fair Value Change Account 305 204 

Sub - Total 24,495,305 19,995,204 

Borrowings 7 — — 

Policyholders’ Funds: 

Credit/(Debit) Fair Value Change Account 653 99 

Policy Liabilities 7,860,785 3,999,354 

Insurance Reserves — — 

Provision for Linked Liabilities 136,542,641 86,979,274 

Credit/(Debit) Fair Value Change Account (Linked) 9,130,333 (5,009,905) 

Total Linked Liabilities 145,672,974 81,969,369 

Sub - Total 153,534,412 85,968,822 

Funds for Future Appropriation 

- Linked Liabilities 2,984,243 1,289,584 

Total 181,013,960 107,253,610 

Application of Funds 

Investments 

Shareholders’ 8 5,043,972 4,670,115 

Policyholders’ 8A 10,581,669 5,044,186 

Assets Held to Cover Linked Liabilities 8B 145,672,974 81,969,369 

Loans 9 265,468 223,516 

Fixed Assets 10 698,167 844,269 

Current Assets 

Cash and Bank Balances 11 5,697,972 5,189,719 

Advances and Other Assets 12 1,215,350 1,044,299 

Sub - Total (A) 6,913,322 6,234,018 

Current Liabilities 13 8,113,511 7,399,580 

Provisions 14 323,141 252,358 

Sub - Total (B) 8,436,652 7,651,938 

Net Current Assets (C) = (A-B) (1,523,330) (1,417,920) 

Miscellaneous Expenditure 

(To the extent not written off or Adjusted ) 15 — — 

Debit Balance in Profit and Loss Account 

(Shareholders’ Account ) 20,275,040 15,920,075 

Total 181,013,960 107,253,610 

Significant Accounting Policies and Disclosures 16 

The schedules and accompanying notes are an integral part of this Balance Sheet 











51


Schedule 1 


Premium 



2010 2009 

1 First Year Premium 29,172,635 27,639,636 

2 Renewal Premium 25,456,469 17,509,535 

3 Single Premium 427,475 568,870 

Total Gross Premium 55,056,579 45,718,041 

Premium Income from Business written : 

In India 55,056,579 45,718,041 

Outside India — — 

Total Premium 55,056,579 45,718,041 

Note:Refer Schedule 16 Note 2 (b) 

Schedule 2 


Commission expenses 




Commision Paid 

Direct - First Year Premium 4,173,582 4,112,061 

Renewal Premium 981,747 696,814 

Single Premium 6,645 9,005 

Sub-total 5,161,974 4,817,880 

Add:Commission on Re-insurance Accepted — — 

Less:Commission on Re-insurance Ceded — — 

Net Commission 5,161,974 4,817,880 

Breakup of Commission 

Particulars 

Individual Agents 2,939,803 2,803,265 

Brokers 348,027 355,751 

Corporate Agents 1,838,800 1,542,738 

Referral 35,344 116,126 

Total 5,161,974 4,817,880 

Note: Refer Schedule 16 Note 2 (d) 

52


Schedule 3 


Operating Expenses Related to Insurance Business 




1 Employees’ remuneration, welfare benefits and 

other manpower costs 5,688,400 5,434,376 

2 Travel,conveyance and vehicle running expenses 166,969 165,736 

3 Training expenses 222,672 339,466 

4 Rents, rates and taxes 823,709 614,162 

5 Repairs & maintenance 246,268 147,479 

6 Printing and stationery 324,446 288,508 

7 Communication expenses 385,742 341,426 

8 Legal and professional charges 70,592 70,499 

9 Medical fees 109,889 107,890 

10 Auditor’s fees,expenses,etc. 

(a) i) as auditor 2,650 2,650 

ii) out of pocket expenses 205 204 

(b) as advisor or in any other capacity,in respect of 

i) Taxation services / matters — — 

ii) Management services 1,445 1,946 

11 Advertisement and publicity 1,463,915 1,531,199 

12 Interest and bank charges 108,882 94,290 

13 Others: 1) Distribution expenses 1,179,723 1,107,521 

2) Agents recruitment,seminar and other expenses 10,987 36,704 

3) Recruitment and seminar expenses 107,874 255,437 

4) IT expenses (including maintenance) 252,917 168,501 

5) Policy stamps 115,591 113,489 

6) (Profit)/Loss on sale of assets 5,884 (2,312) 

7) Service Tax expenditure including provision 

for unutilised credit* (338,852) 13,249 

8) Electricity expenses 185,513 142,881 

9) Miscellaneous expenses 12,338 18,123 

10) Outsourcing expenses 330,690 126,154 

14 Depreciation 462,271 342,692 

15 Service tax on premium 1,326,806 1,025,353 

Total 13,267,526 12,487,623 

* includes reversal of impairment relating to unutilised input credit of service tax for earlier years 

53


Schedule 4 


Benefits Paid (Net) 




1 Insurance Claims 

(a) Claims by Death 1,149,259 628,814 

(b) Claims by Maturity 127,302 135,118 

(c) Annuities / Pension payment 131 159 

(d) Other benefits (Surrender/ Withdrawals/ Health) 10,506,017 5,942,435 

— 

2 (Amount ceded in reinsurance): — 

(a) Claims by Death (391,647) (242,042) 

(b) Claims by Maturity — — 

(c) Annuities / Pension Payment — — 

(d) Other benefits (Health) (3,247) (71) 

— 

3 Amount accepted in reinsurance: — 

(a) Claims by Death — — 

(b) Claims by Maturity — — 

(c) Annuities / Pension Payment — — 

(d) Other benefits — — 

Total 11,387,815 6,464,413 

Benefits paid to Claimants 

1. In India 11,387,815 6,464,413 

2. Outside India — — 

Total 11,387,815 6,464,413 

Note: Refer Schedule 16 Note 2 (c) 

Schedule 5 


Share Capital 

As at 

As at 



1 Authorised Capital 

3,750,000,000 Equity Shares of Rs.10/- each 37,500,000 37,500,000 

2 Issued, Subscribed & Paid - up Capital 

1,969,500,000 Equity Shares (Previous Year : 19,695,000 18,795,000 

1,879,500,000 Equity Shares) of Rs. 10/- each fully paid up 

Less:Preliminary Expenses — — 

Total 19,695,000 18,795,000 

Note: Of the above,1,457,430,000 Equity Shares (Previous Year: 1,390,830,000 equity shares) of 

Rs. 10/- each are held by Aditya Birla Nuvo Limited, the holding Company. 

54


Schedule 5A 


Pattern of shareholding (As certified by the Management) 

Shareholder As at 31st March, 2010 As at 31st March, 2009 

Number of % of Number of % of 

Shares Holding Shares Holding 

Promoters: 

Indian 1,457,430,000 74% 1,390,830,000 74% 

Foreign 512,070,000 26% 488,670,000 26% 

Others - - - - 

Total 1,969,500,000 100% 1,879,500,000 100% 

Schedule 6 


Reserves and Surplus 

As at As at As at As at 

Particulars 31st March 31st March 31st March 31st March 

2010 2010 2009 2009 

1 Capital Reserve - - 

2 Capital Redemption Reserve - - 

3 Share Premium - 

Opening balance 1,200,000 - 

Add: Additions during the year 3,600,000 1,200,000 

Less: Utilised during the year - 4,800,000 - 1,200,000 

4 Revaluation Reserve - - 

5 General reserve - - 

6 Catastrophe Reserve - - 

7 Balance of profit in 

Profit and Loss Account - - 

Total 4,800,000 1,200,000 

Schedule 7 


Borrowings 

As at 

As at 



1 Debentures/Bonds - - 

2 Banks - - 

3 Financial Institutions - - 

4 Others - - 

Total - - 

55


Schedule 8 


Investments - Shareholders 

As at 

As at 



LONG TERM INVESTMENTS 

1 Government securities and Government 

guaranteed bonds including Treasury Bills 

(Refer Schedule 16, note 20) 1,921,826 1,328,362 

2 Other Approved Securities - - 

3 Other Investments 

(a) Shares - - 

(aa) Equity - - 

(bb) Preference - - 

(b) Mutual Funds - - 

(c) Derivative Instruments - - 

(d) Debentures / Bonds 283,056 302,692 

(e) Other Securities - - 

(f) Subsidiaries - - 

(g) Investment Properties-Real Estate - - 

4 

5 

Investments in Infrastructure and Social Sector 

Other than Approved Investments 

777,271 

25,000 

653,934 

25,000 

Total (A) 3,007,153 2,309,988 

SHORT TERM INVESTMENTS 


2 

- Fixed Deposits - - 

guaranteed bonds including Treasury Bills 

Other Approved Securities 

682,021 936,848 

3 

- Others 700,252 432,203 

Other Investments 




(b) Mutual Funds 408,502 397,217 






4 Investments in Infrastructure and Social Sector 89,171 256,991 

5 

6 

Outstanding trades 

Other than Approved Investments 

- 

87,500 

- 

135,000 

Total (B) 2,036,819 2,360,127 

TOTAL (A) + (B) 5,043,972 4,670,115 

Notes: 

1 Aggregate amount of company’s investments other than listed equity securities, mutual fund and 

derivative instruments and the market value thereof 

As at 

As at 



Aggregate amount of company’s investments other than 

listed equity securities, mutual fund and derivative instruments 4,635,470 4,272,898 

Market value of above Investments 4,654,015 4,314,823 

2 Investments in subsidiary/holding companies, joint ventures and associates at cost is Rs.Nil (Previous 

year Rs.Nil) 

3 Investments made out of Catastrophe reserve is Rs.Nil 

4 Debt Securities are held to maturity and reduction in market values represent market conditions and not 

a permanent dimunition in value of investments,if any. 

5 Historical cost of Mutual Fund included above is Rs. 408,197 (Previous Year: Rs 397,013) 

6 Refer Schedule 16 Note 2 (f) 

56


Schedule 8A 


Investments - Policyholders 

As at 

As at 





guaranteed bonds including Treasury Bills 4,196,006 1,576,382 

2 Other Approved Securities - - 







(d) Debentures / Bonds 1,544,040 704,733 




4 Investment in Infrastructure and Social Sector 1,581,307 703,709 

5 Other than Approved Investments - - 

Total (A) 7,321,353 2,984,824 



guaranteed bonds including Treasury Bills 1,263,716 1,147,882 

2 Other Approved Securities 

- Fixed Deposits - - 

- Others 762,786 649,619 


(a) Shares - 



(b) Mutual fund 196,047 42,812 






4 Investment in Infrastructure and Social Sector 860,976 169,153 

5 Other than Approved Investments - - 

Total (B) 3,260,316 2,059,362 

TOTAL (A) + (B) 10,581,669 5,044,186 

Notes: 

1 Aggregate amount of company’s investments other than listed equity securities, mutual fund and 

derivative instruments and the market value thereof 

As at 

As at 



Aggregate amount of company’s investments other than 

listed equity securities, mutual fund and derivative instruments 10,385,622 5,001,374 

Market value of above Investments 10,437,016 5,117,491 

2 Investments in subsidiary/holding companies, joint ventures 

and associates at cost is Rs.Nil (Previous year Rs.Nil) 

3 Investments made out of Catastrophe reserve is Rs.Nil 

4 Debt Securities are held to maturity and reduction in market values represent market conditions and 

not a permanent dimunition in value of investments,if any. 

5 Historical cost of Mutual Fund included above is Rs.195,394 (Previous Year: Rs 42,714) 

6 Refer Schedule 16 Note 2 (f) 

57


Schedule 8B 


Assets held to cover linked liabilities 

As at 

As at 




1 Government securities and Government guaranteed 

bonds including Treasury Bills 11,955,168 6,030,386 

2 Other Approved Securities 38,431 - 



(aa) Equity 50,423,430 26,498,370 




(d) Debentures / Bonds 17,588,365 13,299,383 




4 Investments in Infrastructure and Social Sector 25,640,549 11,781,052 

5 Other than Approved Investments 9,537,977 5,186,897 

Total (A) 115,183,920 62,796,088 


1 Government securities and Government guaranteed 

bonds including Treasury Bills 48,782 - 

2 Other Approved Securities 

- Fixed Deposits - 250,000 

- Others 6,962,637 5,943,887 





(b) Mutual Funds 6,427,245 3,831,430 


(d) Debentures / Bonds 3,831,141 2,204,210 


(d) Application Money - - 



4 Investments in Infrastructure and Social Sector 1,733,682 1,050,102 

5 Other than Approved Investments 4,618,147 1,096,435 

Total (B) 23,621,634 14,376,064 

OTHER ASSETS 

1 Bank Balances 3,763,074 4,072,166 

2 Interest Accrued on Investments 1,594,143 1,199,890 

3 Fund Charges - (65,855) 

4 Outstanding Contracts (Net) 1,510,203 (408,984) 

Total (C) 6,867,420 4,797,217 

TOTAL (A) + (B) + ( C) 145,672,974 81,969,369 

Refer Schedule 16 Note 2 (f) 

Notes: Investment in Aditya Birla Nuvo Limited, (Holding Company) included at cost is Rs.647,075 

(previous year, Rs.1,089,889) 

58


Schedule 9 


Loans 

As at 

As at 



1 Security-wise classification 

Secured 

(a) On mortgage of property 

(aa) In India - - 

(bb) Outside India - - 

(b) On Shares,Bonds,Govt. Securities,etc - - 

(c) Loans against Policies 265,468 223,516 

(d) Others - - 

Unsecured - - 

Total 265,468 223,516 

2 Borrower-wise classification 

(a) Central and State Governments - - 

(b) Banks and Financial Institutions - - 

(c) Subsidiaries - - 

(d) Companies - - 

(e) Loans against Policies 265,468 223,516 

(f) Others - - 

Total 265,468 223,516 

3 Performance-wise classification 

(a) Loans classified as standard: 

(aa) In India 265,468 223,516 


(b) Non-standard loans less provisions 

(aa) In India - - 


Total 265,468 223,516 

4 Maturity-wise classification 

(a) Short-Term - - 

(b) Long-Term 265,468 223,516 

Note: 

Total 265,468 223,516 

Refer Schedule 16 Note 2 (g) 

59


Schedule 10 


Fixed Assets 

Particulars Cost/Gross Block Depreciation Net Block 

As on Additions On Sales/ As on As on For the On Sales/ As on As on As on 

April 1, 2009 Adjust- March 31, April 1, year Adjust- March 31, March 31, March 31, 

ments 2010 2009 ments 2010 2010 2009 

Goodwill - - - - - - - - - - 

Intangibles (Software) 496,047 185,699 - 681,746 297,981 185,379 - 483,360 198,386 198,066 

Land-Freehold - - - - - - - - - - 

Leasehold property - - - - - - - - - - 

Buildings - - - - - - - - - - 

Furniture & Fittings 143,588 19,016 9,678 152,926 100,274 20,133 9,404 111,002 41,924 43,314 

Information Technology 

Equipment 610,735 42,301 1,136 651,900 399,265 130,206 651 528,820 123,080 211,469 

Vehicles 120,488 12,339 20,984 111,843 35,042 23,394 9,584 48,852 62,991 85,446 

Office Equipment 193,689 45,043 5,139 233,593 131,544 35,166 4,418 162,292 71,300 62,145 

Others (Leasehold 

Improvements) 409,177 113,976 59,616 463,537 286,082 67,992 51,214 302,860 160,677 123,096 

TOTAL 1,973,723 418,374 96,553 2,295,545 1,250,187 462,271 75,271 1,637,187 658,358 723,536 

Capital Work in Progress 

(Including Capital Advances) 39,809 120,733 

GRAND TOTAL 1,973,723 418,374 96,553 2,295,545 1,250,187 462,271 75,271 1,637,187 698,167 844,269 

Previous Year 1,661,541 374,904 62,722 1,973,723 957,260 342,692 49,765 1,250,187 844,269 

Note: Jointly held assets which form part of Sch 10 

Particulars Net Block 

As on As on 

March 31, March 31, 


Furniture & Fittings 1,335 1,249 

Information Technology Equipment 16,210 14,123 

Vehicles 49 398 

Office Equipment 10,363 2,230 

Others (Leasehold Improvements) 4,103 1,521 

TOTAL 32,060 19,521 

Capital Work in Progress(Including Capital Advances) - 806 

GRAND TOTAL 32,060 20,327 

Previous Year 20,327 

Note: Refer Schedule 16 Note 2 (k) 

60


Schedule 11 


Cash and Bank Balances 

As at 

As at 



1 Cash (including cheques on hand Rs 1,072,892, 

Previous year Rs.1,351,776) 1,361,050 1,633,354 

(Stamps on hand Rs 13,058, Previous year Rs 22,203) 

2 Bank Balances 

(a) Deposit Accounts 

(aa) Short - term (due within 12 months) 3,619,278 2,279,278 

(bb) Others - - 

(b) Current Accounts 717,644 1,277,087 

(c) Others - - 

3 Money at Call and Short Notice 

(a) With Banks - - 

(b) With other Institutions - - 

4 Others - - 

Total 5,697,972 5,189,719 

Balances with non-scheduled banks included in 2 above - - 

Cash and Bank Balances 

1. In India 5,697,972 5,189,719 

2. Outside India - - 

Total 5,697,972 5,189,719 

61


Schedule 12 


Advances and Other Assets 

As at 

As at 



ADVANCES 

1 Reserve deposits with ceding companies — — 

2 Application money for investments — — 

3 Prepayments 187,778 139,436 

4 Advances to Directors / Officers — — 

5 Advance tax paid and taxes deducted at source. 6,926 878 

6 Other advances — 

a) Advance to Suppliers/Contractors 84,233 42,534 

b) Others 39,170 27,860 

Total (A) 318,107 210,708 

OTHER ASSETS 

1 Income accrued on Investments 345,060 196,291 

2 Outstanding Premiums 23,982 10,643 

3 Agent’s Balances (gross) 56,487 39,283 

Less: Provision for doubtful debts (244) 56,243 (244) 39,039 

4 Foreign Agencies Balances — — 

5 Due from other Entities carrying on 

insurance business 6,344 4,003 

6 Due from holding company — — 

7 Deposit with Reserve Bank of India — — 

[pursuant to section 7 of Insurance Act,1938, 

refer schedule 16: Note 20] 

8 Service Tax unutilised credits 224,044 308,383 

Less: Provision for Service Tax unutilised credits (224,044) — (308,383) — 

9 Others- 

Deposits & Others 465,614 583,615 

Total (B) 897,243 833,591 

Total (A+B) 1,215,350 1,044,299 

62


Schedule 13 


Current Liabilities 

As at 

As at 



1 Agent’s Balance 556,773 646,837 

2 Balances due to other insurance companies 126,654 158,701 

3 Deposits held on re-insurance ceded — — 

4 Premiums received in advance 425,826 49,817 

5 Unallocated premiums 1,111 1 

6 Sundry Creditors* 3,442,403 2,818,804 

7 Due to holding company — — 

8 Claims outstanding 16,946 23,061 

9 Annuities Due — — 

10 Due to Officers/Directors — — 

11 Others - 

(a) Policy Application and other Deposits 558,471 625,997 

(b) Due to Policyholders 948,601 500,724 

(c) Taxes Payable 115,543 161,112 

(d) Temporary Overdraft (as per books only) 1,921,183 2,414,526 

Total 8,113,511 7,399,580 

* There are no Micro, Small and Medium Enterprises to whom the Company owes dues,which 

are outstanding for more than 45 days as at 31st March 2010.This information as required to be 

disclosed under the Micro, Small & Medium Enterprises Development Act ,2006 has been 

determined to the extent such parties have been identified on the basis of information available 

with the Company. 

63


Schedule 14 


Provisions 

As at 

As at 



1 For taxation 

a) Provision for wealth tax 857 965 

b) Provision for fringe benefit tax - 5,269 

2 For proposed dividends - - 

3 For dividend distribution tax - - 

4 Others - 

a) Provision for long term bonus 

[Refer Schedule 16, Note 16(a) & (b)] 52,270 - 

b) Provision for renewal bonus 

[Refer Schedule 16, Note 16(b)] 5,735 14,361 

c) Provision for retention bonus 

[Refer Schedule 16, Note 16(b)] - 27,614 

d) Provision for Gratuity 

[Refer Schedule 16, Note 17(a)(i)] 6,929 2,873 

e) Provision for leave encashment 

[Refer Schedule 16, Note 17(a)(ii)] 257,350 201,276 

Total 323,141 252,358 

Schedule 15 



(To the extent not written off or adjusted) 

As at 

As at 



1 Discount Allowed in issue of shares/debentures - - 

2 Others - - 

Total - - 

64


Schedule forming part of the Financial Statements for the year ended 31st March, 2010 

Schedule 16: Notes to the Financial Statements 

(Amounts in thousands of Indian Rupees unless otherwise stated) 

1. Background 

Birla Sun Life Insurance Company Limited (‘the Company’), headquartered at Mumbai, had 

commenced operations on 19 th March 2001, after receiving the license to transact life insurance 

business in India from the Insurance Regulatory and Development Authority (‘IRDA’) on 

31 st January 2001. The license has been renewed annually and is in force as at 31 st March 2010. 

The Company is a joint venture between Aditya Birla Nuvo Limited, a company of the Aditya 

Birla Group of India (74 percent) and Sun Life Financial (India) Insurance Investments Inc., 

subsidiary of Sun Life Assurance Company of Canada (26 percent). The Company offers non – 

participating linked and non-linked life insurance, health and pension products including riders 

for individual and group businesses. These products are distributed through individual agents, 

corporate agents, banks, brokers and other intermediaries across the country. 

2. Significant Accounting Policies 

a) Basis of preparation of financial statements 

The financial statements are prepared under the historical cost convention on the accrual 

basis of accounting in accordance with the accounting principles prescribed by the Insurance 

Regulatory and Development Authority (Preparation of Financial Statements and Auditor’s 

Report of Insurance Companies) Regulations, 2002 (‘the IRDA Financial Statements 

Regulations’), subsequent circulars, if any, provisions of the Insurance Regulatory and 

Development Authority Act, 1999, the Insurance Act, 1938 and the accounting standards 

notified under Companies (Accounting Standards) Rules, 2006, in terms of section 211(3C) 

of the Companies Act, 1956, to the extent applicable and in the manner so required. 

The preparation of the financial statements in conformity with generally accepted accounting 

principles (‘GAAP’) requires that the Company’s management make estimates and 

assumptions that affect the reported amounts of income and expenses for the year, reported 

balances of assets and liabilities and disclosures relating to contingent assets and liabilities 

as of the date of the financial statements. Examples of such estimates include valuation of 

policy liabilities, provision for linked liabilities, provision for doubtful debts, valuation of 

unlisted securities, if any, future obligations under employee retirement benefits plans and 

the useful lives of fixed assets, etc. Actual results could differ from these estimates. 

b) Revenue recognition 

Premium is recognised as income when due from policyholders. For unit linked business, 

premium income is recognised when the associated units are created. Premium on lapsed 

policies is recognised as income when such policies are reinstated. In case of Linked Business, 

top up premiums paid by policyholders are considered as single premium and are unitised 

as prescribed by the regulations. This premium is recognised when the associated units are 

created. 

Income from linked policies, which include asset management fees and other charges, if 

any, are recovered from the linked funds in accordance with the terms and conditions of 

the policies and recognised when due. 

Reinsurance premium ceded is accounted for at the time of recognition of the premium 

income in accordance with the terms and conditions of the relevant treaties with the 

reinsurers. Impact on account of subsequent revisions to or cancellations of premium are 

recognised in the year in which they occur. 

Income from Investments and Policy Loans are recognised on an accrual basis in the 

manner specified in clause (f) below. Dividend income is recognised, when the right to 

receive dividend is established. 

65


c) Benefits paid (including claims) 

Death and other claims are accounted for, when notified. Surrenders / Withdrawals under 

linked policies are accounted in the respective schemes when the associated units are cancelled. 

Maturity benefits are accounted for when due for payment. 

Claims payable include the direct costs of settlement. Reinsurance recoverable thereon, if 

any, is accounted for in the same period as the related claim. Repudiated claims disputed 

before judicial authorities are provided for based on management prudence considering 

the facts and evidences available in respect of such claims. 

d) Acquisition costs 

Acquisition costs mainly consists of commission to insurance intermediaries, medical costs, 

policy printing expenses, stamp duty and other related expenses to source and issue the 

policy. These costs are expensed in the year in which they are incurred. Clawback of the 

first year commission paid, if any, in future is accounted in the year in which it is recovered. 

e) Renewal bonus 

Renewal bonus is payable to the individual insurance agents and a segment of the sales 

force. This constitutes a part of the first year commission / incentives against receipt of the 

first year premium but due and payable at the end of the expiry of two years of the policy 

and is accrued for in the year of sale of the policy, subject to the intermediaries’ and 

policy’s continued persistency. 

f) Investments 

Investments are made in accordance with the Insurance Act, 1938, the Insurance Regulatory 

and Development Authority (Investment) Regulations, 2000, the Insurance Regulatory and 

Development Authority (Investment) (Amendment) Regulations, 2001 and various other 

circulars / notifications issued by the IRDA in this context from time to time. 

Investments are recorded on trade date at cost on the date of purchase, which includes 

brokerage and stamp duty, taxes, etc, if any, but excludes pre-acquisition interest i.e. (from 

the previous coupon date to the transaction settlement date), if any, on purchase. 

Debt securities 

i. Policyholders’ non-linked funds and shareholders’ investments: 

All debt securities, including government securities, held under policyholders’ nonlinked 

funds and shareholders’ investments are considered as ‘held to maturity’ and 

stated at amortised cost. 

The discount or premium which is the difference between the purchase price and the 

redemption amount of fixed income securities is amortised and recognised in the revenue 

account or the profit and loss account, as the case may be, on a straight line basis over 

the remaining period to maturity of these securities. 

ii. Policyholders’ linked funds: 

All debt securities, including government securities, under policyholders’ linked funds 

are valued using CRISIL Bond Valuer/ CRISIL Gilt Prices, as applicable. 

The discount or premium on money market instruments (except treasury bills) which is 

the difference between the purchase price and the redemption amount is amortised 

and recognised in the revenue account on a straight line basis over the remaining 

period to maturity of these securities. 

iii. Realised gain / loss 

The realised gain or loss on debt securities for other than linked business is the difference 

between the net sale consideration and the amortised cost in the books of the Company. 

The realised gain or loss on debt securities held for linked business is the difference 

between the net sale consideration and weighted average cost. 

66


Equity shares 

Listed equity shares are valued and stated at fair value, using the last quoted closing prices 

on the National Stock Exchange (NSE), at the balance sheet date. If the equity shares are not 

traded on the NSE, then closing prices of the Bombay Stock Exchange (BSE) is considered. 

Equity shares acquired through primary markets and awaiting listing are valued at their 

issue price. 

Unlisted equity shares are valued as per the valuation policy of the company duly approved 

by Investment Committee. 

A provision is made for diminution, if any, in the value of these shares to the extent that 

such diminution is other than temporary. 

Mutual Funds 

Mutual fund units are valued at previous day’s Net Asset Value. 

Gain / loss on equity and mutual funds 

The realised gain / loss are the difference between the net sale consideration and weighted 

average cost. 

Unrealised gains / losses are recognised in the respective fund’s revenue account as fair 

value change in case of linked funds. 

Unrealised gain / loss due to changes in fair value of listed equity shares and mutual funds 

are taken to the Fair Value Change account for other than linked business and are carried 

to the Balance Sheet. 

Diminution in the value of investments as at the balance sheet date, other than temporary, 

is recognised as an expense in the Revenue / Profit & Loss account. 

Long term and short term investments 

All investments maturing within twelve months of the balance sheet date are classified as 

short-term investments. All other investments are classified as long-term investments. 

Investment transfer 

Transfers of Investments from Shareholders’ funds to the Policyholders’ funds are affected 

at the lower of amortised cost or market value in respect of all debt securities including 

money market instruments and at the market value in case of other securities. 

Inter-fund transfer of debt securities relating to Policyholders’ Funds is effected at market 

value as of the previous day closing. Inter fund transfer of equity are done during market 

hours at the prevailing market price. 

Impairment on Investment 

The carrying amounts of investments are reviewed at each balance sheet date, if there is 

any indicator of impairment based on internal / external factors. An impairment loss is 

recognised as an expense in Revenue/ Profit or Loss account, to the extent of difference 

between the re-measured fair value and the acquisition cost as reduced by any previous 

impairment loss recognised as expense in Revenue/ Profit and Loss Account. Any reversal 

of impairment loss, earlier recognised in profit and loss account shall be recognised in 

Revenue/ Profit and Loss account. 

g) Loans 

Loans are valued at the aggregate of book values (net of repayments) plus capitalised 

interest and are subject to impairment, if any. 

67


h) Assets acquired under finance leases 

Assets acquired under finance leases are capitalised at the fair value of the leased asset at 

the inception of the lease and are depreciated on a straight-line basis over the useful life in 

accordance with the Company’s depreciation policy. 

i) Operating leases 

The Company classifies leases, where the lessor effectively retains substantially all the risks 

and benefits of ownership over the lease term, as Operating Leases. Operating lease rentals 

are recognised as an expense over the lease period. 

j) Taxation 

Direct Taxes 

The Income-tax Act, 1961 prescribes that profits and gains of life insurance companies will 

be the surplus or deficit disclosed by the actuarial valuation made in accordance with the 

Insurance Act, 1938. 

Deferred income tax is recognised for future tax consequences attributable to timing 

differences between income as determined by the financial statements (prepared as per 

IRDA regulations) and the recognition for income tax purposes. The effect on deferred tax 

assets and liabilities of a change in tax rates is recognised using the tax rates and tax laws 

that have been enacted or substantively enacted by the balance sheet date. 

Deferred tax assets are recognised only to the extent there is reasonable certainty that the 

assets can be realised in future. However, where there is unabsorbed depreciation or 

carried forward loss under taxation law, deferred tax assets are recognised only if there is 

virtual certainty backed by convincing evidence that such deferred assets can be realised. 

Deferred tax assets are reviewed as at each balance sheet date and written down or 

written up to reflect the amount that is reasonably or virtually certain, as the case may be, 

to be realised. 

Provision for wealth tax is made at the appropriate rates, as per the applicable provisions 

of Wealth Tax Act, 1957. 

Indirect Taxes 

The Company claims credit of service tax for input services, which is set off against tax on 

output services. As a matter of prudence, unutilised credits are deferred for recognition 

until such time that there is reasonable certainty of utilisation. A provision is created 

against unutilised credit based on estimated realisation of such unutilised credit. 

k) Fixed assets and depreciation 

Fixed assets are stated at cost less accumulated depreciation. Cost includes the purchase 

price and any cost directly attributable to bringing the asset to its working condition for its 

intended use. Subsequent expenditure incurred on fixed assets is expensed out in the year 

of expense except where such expenditure increases the future economic benefits from the 

existing assets. 

Software expenses exceeding Rs 1,000 incurred on customisation of software (other than 

for maintenance of existing software) are capitalised. Expenditure on development of website 

is written off in the year in which it is incurred. Fixed assets individually costing less than 

Rs 5 are fully depreciated in the year of purchase. 

Depreciation on fixed assets is provided using the straight-line method based on the 

economic useful life of assets as estimated by the management, which are not greater than 

the period underlying computed with reference to the rates prescribed in Schedule XIV to 

the Companies Act, 1956. Depreciation is charged for the complete month, if acquired in 

68


the first half of the month. Management’s estimates of the economic useful life of the 

various fixed assets are as follows: 

Asset Type 

Management’s estimate 

of useful life (In years) 

i) Intangible Assets (Softwares) 3 

ii) Leasehold Improvements and Furniture 5 years or the maximum 

and fittings at leased premises renewable period of the respective 

leases, whichever is lower 

iii) Furniture & fittings (other than (ii) above) 5 

iv) Information Technology Equipment 3 

v) Vehicles 5 

vi) Office Equipment 5 

vii) Mobile Phones (included in office 

equipment under schedule 10) 2 

Any additions to the original fixed assets are depreciated over the remaining useful life 

of the original asset. 

l) Impairment of Assets 

At each balance sheet date Management assesses whether there is any indication, based on 

internal / external factors, that an asset may be impaired. If any such indication exists, 

management estimates the recoverable amount of the asset and an impairment loss is 

recognised, wherever the carrying amount of an asset exceeds its recoverable amount. 

m) Employee benefits 

The Company has established defined contribution schemes for provident fund and 

superannuation to provide retirement benefits to its employees. Contributions to the 

provident fund and the superannuation schemes are made on a monthly basis and are 

charged to revenue account when due. 

Gratuity liability is defined benefit obligation and is funded. The Company accounts for 

liability for future gratuity benefits based on independent actuarial valuation under revised 

Accounting Standard 15. 

Compensated absences are entitled to be carried forward for future encashment or availment, 

at the option of the employee during the tenure of the employment, subject to the rules 

framed by the company in this regard. Accumulated compensated absences entitlements 

outstanding at the close of the year are accounted on the basis of an independent actuarial 

valuation. Accumulated entitlements at the time of separation are entitled to be encashed. 

n) Foreign Currency Transactions 

Transactions in foreign currency are recorded at the rate of exchange prevailing at the date 

of the transaction. Monetary assets and liabilities in foreign currency are translated at the 

rates existing as at the balance sheet date. The resulting exchange gain or loss for revenue 

transactions is reflected, in the revenue account or the profit and loss account, as the case 

may be. 

o) Earnings Per Share 

Basic earning per share is calculated by dividing the net profit or loss for the year attributable 

to equity shareholders by the weighted average number of equity shares outstanding during 

the year. 

69


For the purpose of calculating diluted earning per share, the net profit or loss for the year 

attributable to equity shareholders and the weighted average number of shares outstanding 

during the year are adjusted for the effects of all dilutive potential equity shares. 

p) Provisions and Contingencies 

A provision is recognised when the Company has a present legal obligation as a result of 

past event and it is probable that an outflow of resources will be required to settle the 

obligation, in respect of which reliable estimate can be made. Provisions (excluding employee 

benefits) are not discounted to its present value and are determined based on best estimate 

required to settle the obligation at the balance sheet date. These are reviewed at each 

balance sheet date and adjusted to reflect current best estimates. Contingent liabilities are 

not recognised but disclosed by way of notes. A Contingent asset is neither recognised nor 

disclosed. 

q) Funds for Future Appropriation 

Amounts estimated by the Appointed Actuary as Funds for Future Appropriation (FFA) in 

respect of lapsed Unit Linked Policies are set-aside in the balance sheet and are not available 

for distribution to shareholders until expiry of the revival period. 

r) Segment reporting 

As per Accounting Standard 17 on ‘Segment Reporting’ read with the IRDA Financial 

Statements Regulations, the Company is required to report segment results separately for 

linked, non-linked, health and pension businesses. The business is broadly classified as 

Unit Linked and Non Linked businesses, which are further segmented into Individual Life, 

Group, Pension Individual and Health Individual businesses. Accordingly, the Company 

has prepared the revenue account and balance sheet for these primary business segments 

separately. Since the business operation of the Company is in India only, the same is 

considered as one geographical segment. 

The following basis have been used for allocation of revenues, expenses, assets and liabilities 

to the business segments: 

• Revenues, expenses, assets and liabilities directly attributable and identifiable to business 

segments, are allocated on actual basis; and 

• Other expenses, assets and liabilities which are not directly identifiable though 

attributable to a business segment and other indirect expenses, are allocated on one of 

the following bases, as considered appropriate by the management: 

➘ 

➘ 

➘ 

➘ 

➘ 

Annualised premium income; 

Sum assured; 

Average Policy liability; 

Number of employees; and 

Number of policies 

The accounting policies, used in segment reporting, are the same as those used in the 

preparation of the financial statements. 

70


3. Contingent liabilities 

Particulars As at 31st As at 31st 

March, 2010 March, 2009 

(Rs.) 

(Rs.) 

1. Partly paid-up investments Nil Nil 

2. Claims, other than against policies, not 

acknowledged as debts by the Company 4,150 100 

3. Underwriting commitments outstanding Nil Nil 

4. Guarantees given by or on behalf of the Company Nil Nil 

5. Statutory demands / liabilities in dispute, 

not provided for Refer Note Refer Note 

Below 

Below 

6. Reinsurance obligations to the extent not Nil Nil 

provided for in the accounts. 

7. Others * 70,107 39,136 

* Represents potential liability to the Company (net of reinsurance) in respect of cases filed against the 

Company’s decision of repudiation of death claims and customer complaints. 

Note: 

The Company has received several Show Cause-Cum-Demand notices relating to Service Tax 

demands related to excess utilization of CENVAT credit against liability on risk premium, 

applicability on fund management charges, payment of reimbursements to agents and foreign 

payments aggregating to Rs.443,025 (previous year Rs. 384,340) plus applicable interest and 

penalty, which is contested. 

4. Actuarial assumptions 

The actuarial liabilities are calculated in accordance with accepted actuarial practice, requirements 

of Insurance Act, 1938, Regulations notified by Insurance Regulatory and Development Authority 

and Guidance Notes prescribed by the Institute of Actuaries of India. 

Unit Reserves 

Unit reserves are computed by multiplying the number of units with the unit price. 

Non Unit Reserves 

Prospective gross premium cash flow method is used to compute the non unit liabilities in 

respect of the policies in force as at March 31, 2010. 

The cash flows are projected based on assumptions that reflect the expected future experience 

and have an appropriate allowance for margins for adverse deviations. The major assumptions 

relate to mortality, interest, expenses, policy persistency and premium persistency. 

Mortality rates are derived based on the Indian Assured Lives Mortality (1994-1996) table after 

making suitable adjustments depending on the type of the product. Interest rates used to 

discount the future cash flows vary from 4.70% to 5.48%. A prudent assumption is made for 

investment growth on the unit funds. An appropriate allowance is made for future policy 

maintenance expenses and investment expenses. Policy persistency rates are derived based on 

expected future policyholder behavior. For unit linked business, the discontinuance of premiums 

by the policyholders while keeping the benefits in force is allowed for by appropriate premium 

persistency assumptions varying by product. 

71


Additional provisions are made towards: 

I. Investment guarantees for unit linked business 

II. Substandard lives 

III. Unearned premium (in accordance with IRDA Circular 50/IRDA/ACTL/CIR/GEN /050/ 

03/2010) 

IV. Reserves for free look option given to the policyholders 

V. Lapse policies eligible for revivals (in accordance with IRDA Circular 41/IRDA/ACTL/ 

Mar-2006). 

For group yearly renewable term business, unearned premium method is used to compute the 

reserves. In addition to the unearned premium method, provision is also made for incurred but 

not reported claims. 

5. Encumbrances 

As on 31 st March 2010, there were no encumbrances (Previous year: Rs. Nil) on the assets of the 

Company. 

6. Commitments made and outstanding on Loans, Investments and Fixed Assets 

The commitments made and outstanding for fixed assets by the Company as at 31 st March 2010 

are Rs. 24,494 (Previous Year: Rs. 167,050), net of advances. 

7. Operating lease commitments 

In accordance with Accounting Standard 19 on Leases, the details of leasing arrangements 

entered into by the Company are as under: 

The Company has entered into agreements in the nature of cancellable and non-cancellable 

lease / leave and license agreements with different lessors / licensors for the purpose of 

establishment of office premises, leasehold improvements, furniture and fixtures, information 

technology and office equipments. These are generally in the nature of operating leases/ leave 

and licenses. 

The operating lease rentals charged during the year and maximum obligations on operating 

lease payable at the balance sheet date, as per the rentals stated in the agreements are as 

follows: 

Particulars Current Year Previous Year 

(Rs.) 

(Rs.) 

Total lease rentals charged to Revenue Account 720,543 496,601 

Lease obligations for non – cancellable leases 

— Within one year of the balance sheet date 341,857 79,201 

— Due in a period between one year and five years 283,101 89,658 

— Due after five years NIL NIL 

8. Claims 

The Company does not have any claims, settled and unpaid, which are outstanding for more 

than six months as at the balance sheet date Rs. Nil (Previous Year Rs. Nil). Reinsurance 

recoverable is netted off against claim expenses incurred. 

9. Value of contracts outstanding 

Value of contracts in relation to investments where purchases have been made and deliveries 

are pending is Rs. 618,098 (Previous year: Rs. 1,268,075) as at the balance sheet date. There are 

no investment contracts where sales have been made and payments are overdue as at the 

balance sheet date. 

72


10. Historical cost of investments 

As at 31 st March 2010, the aggregate historical cost and market value of Linked investments, 

which are valued at fair value, is Rs. 129,567,314 and Rs. 138,805,554 respectively (Previous 

Year: Rs. 82,007,144 and Rs. 77,172,152 respectively). 

11. Foreign exchange gain / (loss) 

The Company has recorded foreign exchange gain of Rs. 460 in the Revenue Account and the 

same is included under “Interest and Bank Charges” in Schedule 3 (Previous Year gain: Rs. 597). 

12. Foreign currency exposure 

The year end foreign currency exposures that have not been hedged by a derivative instrument 

or otherwise are given below:- 

— Amount payable in foreign currency in respect of import of services Rs 1,654 (US$ 37 

thousands) and previous year Rs. 3,032 (US$ 59 thousands). 

13. Managerial remuneration 

The appointment of managerial personnel is in accordance with the requirements of Section 

34A of the Insurance Act, 1938 and is as approved by the IRDA. 

(i) Mr. Ajay Srinivasan has been appointed as Managing Director since 2 nd December 2008, 

with Rs Nil remuneration paid during the current year. 

(ii) Sitting Fees paid to independent directors in the current year is Rs.400 (Previous Year: 

Rs. 560). 

(iii) Mr. Vikram J Mehmi had been the President and Chief Executive Officer of the Company 

till 31 st December 2008. His remuneration for Previous Year was as follows: 


(Rs.) 

(Rs.) 

Salary — 4,971 

Other Allowances — 14,799 

Contribution to: 

— Provident Fund — 597 

— Superannuation Fund — 746 

Perquisites — 1,775 

Total* NIL 22,888 

* Of the above, amount aggregating to Rs. Nil (Previous Year Rs.1,708) arising on the final 

settlement is borne from the shareholders fund as per the approval received from IRDA. The 

remuneration stated above excludes gratuity and leave encashment which was accrued based 

on actuarial valuation for the Company’s overall liability. 

14. Assets restructured during the year 


(Rs.) 

(Rs.) 

Total amount of loan assets subject to restructuring Nil Nil 

Total amount of standard assets subject to 

restructuring Nil Nil 

Total amount of sub-standard assets subject to 


Total amount of doubtful assets subject to 


73


15. Earnings per Share 


(Rs.) 

(Rs.) 

Profit / (loss) as per profit and loss account (4,354,965) (7,021,357) 

Weighted average number of share 1,909,527,397 1,579,787,671 

Earnings per share (Basic and Diluted) (2.28) (4.44) 

Face Value per share- Rs 10 10 

16. Provisions 

a) Employee Long term Bonus Plan (‘the Plan’)* 

The Company has estimated and recognised a liability of Rs. 52,270 (Previous Year Nil) in 

respect of employee benefits arising out of the “Employee Phantom Unit Plan” (the “Bonus 

Plan”) announced by it. The cost estimate is determined after factoring in assumptions in 

respect of criteria identified in the Bonus Plan which include the following: 

a. Units granted to employees under different options under the plan; 

b. Maximum payout over vesting period per unit; 

c. Employee attrition rate; and 

d. Performance condition. 

b) Additional information in respect of provision shown as “Provision for retention bonus” 

and “Provision for Renewal Bonus” in Schedule 14: 

Particulars Long Term Bonus Plan Retention Bonus Renewal Bonus 

Current Previous Current Previous Current Previous 

Year Year Year Year Year Year 

(Rs) (Rs) (Rs) (Rs) (Rs) (Rs) 

Opening balance Nil Nil 27,614 48,535 14,361 54,391 

Additional provision made 52,270 Nil Nil 6,692 5,445 12,604 

Incurred and charged Nil Nil 25,404 27,613 14,071 52,634 

Unused amounts reversed Nil Nil 2,210 Nil Nil Nil 

Closing balance 52,270 Nil Nil 27,614 5,735 14,361 

Nature of obligation Long Term NA Retention Retention Renewal Renewal 

Bonus Bonus Bonus Bonus Bonus 

Expected timing 4 years NA NA 1 year 2 years 2 years 

Assumptions *Refer note NA NA 100% 100% 100% 

above retention 

17. Employee benefits 

(a) Defined benefit plans 

i) Gratuity 

The Company provides for gratuity, a defined benefit retirement plan covering all employees 

as at balance sheet date using projected unit credit method. The plan provides a lump sum 

payment to vested employees at retirement or termination of employment based on the 

respective employee’s salary and the years of employment with the Company. The gratuity 

74


benefit payable is greater of the provisions of the Payment of Gratuity Act, 1972 and the 

Company’s Gratuity Scheme as mentioned below: 

Change in Defined benefit obligations 2009-10 2008-09 2007-08 2006-07 

(Rs) (Rs) (Rs) (Rs) 

Present value of Defined benefit obligations 

as at beginning of the year 87,582 35,173 21,370 19,559 

Service cost 34,338 15,271 8,183 4,782 

Interest cost 7,652 3,570 1,591 1,528 

Benefits paid (2,342) (4,828) (3,441) (1,454) 

Past service cost — 20,292 — — 

Actuarial (gain) / loss on obligations (17,204) 18,104 7,470 (3,046) 

Present value of Defined benefit obligations 

as at end of the year 110,026 87,582 35,173 21,370 

Opening Fair Value of Plan assets 84,709 35,859 29,741 15,099 

Contributions by the employer for the year — 53,420 5,500 15,045 

Benefits paid (2,342) (4,828) (3,442) (1,454) 

Expected Return on Plan Assets 6,055 2,453 2,075 1,669 

Actuarial Gain / (Loss) 14,675 (2,195) 1,985 (618) 

Closing Fair Value of Plan assets 103,097 84,709 35,859 29,741 

Net asset/ (liability) as at end of the year (6,929) (2,873) 686 8,371 

Cost recognised for the year 

Current service cost 34,338 15,271 8,183 4,782 

Interest cost 7,652 3,570 1,592 1,528 

Expected return on plan assets (6,055) (2,453) (2,075) (1,669) 

Past service cost — 20,292 — — 

Actuarial (gain) / loss (31,879) 20,299 5,485 (2,428) 

Net gratuity cost 4,056 56,979 13,185 2,213 

Transitional Liability expended in Revenue Account Nil Nil Nil 4,460 

Experience Adjustments 

Defined Benefit Obligation 110,026 87,581 35,173 21,370 

Plan Assets 103,097 84,708 35,859 29,741 

Surplus / (Deficit) (6,929) (2,873) 686 8,371 

Experience adjustment on Plan Liabilities (12,707) 12,288 6,186 (2,807) 

Experience adjustment on Plan Assets 14,675 (2,195) 1,985 (618) 

Investment in Category of Assets 

(% Allocation) 

Insurer Managed Funds* 100% 100% 100% 100% 

Group Stable Fund 100% 38% 100% 100% 

Group Short Term Debt Fund 0% 62% 0% 0% 

Actuarial assumptions used 

Discount rate (p.a.) 7.15% 6.60% 7.55% 8.25% 

Rate of return on plan (p.a.) 7.50% 7.50% 7.50% 7.50% 

8.00% 8.00% 8.00% 

(1st Yr) (1st Yr) (1st Yr) 

Salary escalation rate (p.a.) 6.00% 6.00% 6.00% 6.00% 

(thereafter) (thereafter) (thereafter) 

*The amount is invested in Stable fund and Short term debt fund of Birla Sun Life Insurance 

Limited, Gratuity and Group Unit Linked Product (GULP) scheme. 

75


(i) Gratuity (Continued) 

The contributions expected to be paid to the plan during the annual period beginning after 

the balance sheet date is Rs 20,000 (Previous Year: Rs. 4,000). 

As this is the fourth year in which revised Accounting Standard 15 has been applied, the 

amounts of present value of obligations, fair value of plan assets, surplus or deficit in the 

plan and experience adjustments arising on planned liabilities and planned assets for 

immediate three previous years have been disclosed. 

(ii) Accumulated Compensated Absences 

The Company provides for accumulated compensated absences as at balance sheet date 

using projected unit credit method. This method takes into account the pattern of availment 

of leave while in service and qualifying salary on date of availment of leave. 

Present value of obligation for accumulated compensated absences as determined by the 

Actuary is given below: 


(Rs.) 

(Rs.) 

Present value of obligations as at end of the year 257,350 201,276 

Fair value of plan assets — — 

Actuarial assumptions used 

Discount rate (p.a.) 7.15% 6.60% 

Salary escalation rate (p.a.) 6.00% 8.00% (first yr) 

6.00% (thereafter) 

Cost recognised during the year 130,192 112,240 

(b) Defined contribution plans 

The Company has recognised the following amounts as an expense in the Revenue account 

as below 


(Rs.) 

(Rs.) 

Contribution to Employees Provident Fund 168,273 171,394 

Contribution to Superannuation Fund 13,598 13,443 

18. Statutory investments 

All the investments made during the year have been made in accordance with the Insurance 

Act, 1938 and the Insurance Regulatory Development Authority (Investment) Regulations, 2000, 

the Insurance Regulatory and Development Authority (Investment) (Amendment) Regulations, 

2001 and various other circulars / notifications issued by the IRDA from time to time. 

19. Non-performing investments 

As at 31st March 2010 all the investments of the Company are performing investments in 

accordance with the income recognition norms issued by IRDA. 

20. Statutory deposits 

As on 31 st March 2010, the Company has securities with face value of Rs. 87,400 (Previous Year: 

Rs. 87,400) in CSGL Account with Deutsche Bank, as required under Section 7 of the Insurance 

Act, 1938. The market value of these securities as at 31 st March 2010 was Rs. 99,383 

(Previous Year: Rs. 104,221). 

76


Other collateral deposits 

As on 31 st March 2010, the Company also has collateral deposit of Government Security 

Rs. 260,000 (Previous Year Rs. 20,000) and cash Rs. 25,200 (Previous Year Rs. 100) with Clearing 

Corporation of India Limited. 

21. Allocation of investments and income 

The funds of the shareholders and the policyholders are kept separate and records are maintained 

accordingly. Investments made out of the shareholders’ and policyholders’ funds are tracked 

from their inception and the income thereon is also tracked separately. Since the actual funds, 

investments and income thereon are tracked and reported separately, the allocation of 

investments and income is not required. 

22. Policyholders’ Investments 

Policy liabilities of Rs. 7,860,785 (Previous Year: Rs. 3,999,354) and funds for future appropriation 

of Rs. 2,984,243 (Previous year: Rs. 1,289,584) are backed by corresponding assets of Rs. 10,890,650 

(Previous Year: Rs. 5,388,646), comprising policyholders’ investments of Rs. 10,581,669 (Previous 

Year: Rs. 5,044,186), policy loans of Rs. 265,468 (Previous Year: Rs. 223,516), bank balances of 

Rs. 2,267 (Previous Year: Rs. 12,795) and other receivables of Rs. 41,246 (Previous Year: 

Rs. 108,149). 

23. Assets in the Internal Funds 

The Company has presented the financial statements of each internal fund to which the 

policyholders can link their policy in Annexure 3. Also additional disclosures as required by 

the Circular dated 20th February 2007 issued by IRDA are given in Annexure 3A. 

24. Transfer to Revenue Account (Policyholders’ Account) 

The net deficit of Rs 4,648,370 ( Previous year : Rs 7,353,740) based on the actuarial valuation 

made in accordance with the Insurance Act, 1938 is being made good by transfer from 

shareholders’ account to the policyholders’ account. The details are tabulated below: 

(Surplus) / Deficit of Non Par Business Segments Current Year Previous Year 

(Rs.) 

(Rs.) 

Linked Individual 4,459,682 6,189,622 

Linked Group 49,336 28,955 

Linked Individual Pensions 260,214 1,416,268 

Linked Health 26,842 — 

Non Linked Individual (37,084) (286,159) 

Non Linked Group (97,928) — 

Non Linked Individual Pensions 1,419 5,054 

Non Linked Health (14,111) — 

Net Deficit for Non Par Policyholders’ 4,648,370 7,353,740 

25. Segment reporting 

As per Accounting Standard 17 on ‘Segment Reporting’ read with the IRDA Financial Statements 

Regulations, the Company is required to report segment results separately for linked, nonlinked, 

health and pension businesses. The same is disclosed at Annexure 1. 

77


26. Percentage of Business Sector-wise 


Number of Number of First year Number of Number of First year 

Individual Group lives and single Individual Group lives and single 

life policies covered premium life policies covered premium 

(Rs.) 

(Rs.) 

Total Business 1,770,721 584,519 29,584,478 1,383,469 303,090 28,239,090 

Rural Sector 704,456 — 40,629 428,795 — 28,881 

As a % of 

Total Business 39.78% — 0.14% 30.99% — 0.10% 

Social Sector 253,759 8,971 — 90,517 2,651 

As a % of 

Total Business 43.41% 0.03% — 29.86% 0.01% 

27. Percentage of risk-retained and risk-reinsured 


Sum Assured (Rs.) Percentage Sum Assured (Rs.) Percentage 

Individual Business 

Risk-retained 538,041,295 48.85% 414,741,986 51.24% 

Risk-reinsured 563,445,288 51.15% 394,592,844 48.76% 

Total Individual Risk 1,101,486,583 100.00% 809,334,830 100.00% 

Group Business 

Risk-retained 50,625,443 29.33% 41,143,526 33.86% 

Risk-reinsured 121,968,929 70.67% 80,362,464 66.14% 

Total Group Risk 172,594,372 100.00% 121,505,990 100.00% 

28. Related Party Disclosure 

During the year ended 31 st March 2010, the Company has had transactions with related parties 

as defined in Accounting Standard 18 on “Related Party Disclosures”. Related Parties have 

been identified by the management on the basis of the information available with the Company. 

Details of these parties with whom the Company has had transactions, nature of the relationship, 

transactions with them and balances at year-end, are detailed in Annexure 2. 

29. Summary of financial statements 

A summary of the financial statements as per the formats prescribed by the IRDA in its circular 

dated 29 th April 2003 is provided in Annexure 4. 

30. Accounting Ratios 

Accounting ratios prescribed by the IRDA in its circular dated 29 th April 2003 are provided in 

Annexure 5. 

31. Statement containing names, descriptions, occupations of and directorships held by the 

persons in charge of management of the business under section 11 (2) of Insurance Act, 1938: 

Name : Mr. Ajay Srinivasan 

Designation : Managing Director 

Occupation : Service (From 2 nd December 2008) 

78


Directorships Held during the year / as on 31st March, 2010 

Birla Sun Life Insurance Company Limited. (With effect from 1 st August 2007) 

Birla Sun Life Asset Management Company Limited (With effect from 2 nd August 2007) 

Aditya Birla Management Corporation Private Limited (with effect from 30 th August 2007) 

Aditya Birla Capital Advisors Private Limited (With effect from 21 st November 2008) 

Aditya Birla Finance Limited (with effect from 31 st July 2007) 

Aditya Birla Money Mart Limited (formally Birla Sun Life Distribution Limited) (With effect 

from 31 st July 2007) 

Financial Planning Standards Board India (Section 25 Company) (Chairman with effect from 

11 th September 2009) 

32. Outsourcing, Business Development and Marketing support costs 

As required by IRDA circular no.067/IRDA/F&A/CIR/Mar-08 dated 28 th March 2008, the 

amounts paid (net of service tax) towards Outsourcing, Business Development and 

Marketing Support shown under operating expenses in schedule 3 “Operating expenses 

relating to insurance business” are mentioned below: 

Particulars Business Marketing Outsourcing 

Development support 

(Rs.) (Rs.) (Rs.) 

Agents recruitment,seminar and other expenses 10,987 

(36,704) 

Communication expenses / Accounts — 

(17,732) 

Distribution Expenses 1,179,723 

(1,107,521) 

Electricity Expenses — 

(2,823) 

Employees’ remuneration & welfare benefits — 

(44,698) 

Hire Charges and Insurance expenses — 

(26) 

IT Expenses (incl. maintenance) — 

(109) 

Legal & professional charges — 

(4,862) 

Miscellaneous Expenses 4,999 

(11,180) 

Printing and Stationary — 

(1,158) 

Recruitment and seminar Expenses 29,147 — 

(65,261) (1,373) 

Outsourcing expenses 330,690 

(97,997) 

Rents,rates & taxes — 

(14,154) 

Repairs & Maintenance — — 

(5,044) (3,844) 

Training, Seminar & conference — 

(9) 

Travel,conveyance and vehicle running expenses — 

(3,306) 

Total 1,224,856 — 330,690 

(1,220,666) (95,294) (101,841) 

Figures in brackets () refer to the previous year. 

79


33. Penalty 

As required by circular no.005/IRDA/F&A/CIR/MAY-09 dated 7 th May 2009, the details of 

various penal actions taken by various Government Authorities for the financial year 2009-2010 

are mentioned below:- 

Sr. Authority Non- Amount in Rs. 

No. Compliance / Penalty Penalty Penalty 

Violation Awarded Paid Waived 

Reduced 

1 Insurance Regulatory and 

Development Authority Nil Nil Nil Nil 

2 Service Tax Authorities Nil Nil Nil Nil 

3 Income Tax Authorities Nil Nil Nil Nil 

4 Any other Tax Authorities Nil Nil Nil Nil 

5 Enforcement Directorate/ 

Adjudicating Authority/ Tribunal 

or any Authority under FEMA Nil Nil Nil Nil 

6 Registrar of Companies/ NCLT/ 

CLB / Department of Corporate 

Affairs or any Authority under 

Companies Act, 1956 Nil Nil Nil Nil 

7 Penalty awarded by any Court/ 

tribunal for any matter including 

claim settlement but excluding 

compensation Nil Nil Nil Nil 

8 Securities and Exchange Board of India Nil Nil Nil Nil 

9 Competition Commission of India Nil Nil Nil Nil 

10 Any other Central/ State/ Local 

Government/ Statutory Authority Nil Nil Nil Nil 

80


34. Disclosures relating to controlled Fund 

As required by circular no. IRDA/F&I/CIR/F&A/045/03/2010 dated 17 th March 2010, the 

details of controlled fund for the financial year 2009-10 and 2008-09 are mentioned below:- 

a) Statement Showing Controlled Fund 

Particulars 2009-10 2008-09 

Rs. 

Rs. 

Computation of Controlled fund as per the 

Balance Sheet 

Policyholders’ Fund (Life Fund) 

Participating 

Individual Assurance — — 

Individual Pension — — 

Any other (Pl. Specify) — — 

Non-participating 

Individual Assurance 5,968,791 2,553,109 

Group Assurance 1,410,015 1,412,420 

Individual Annuity 471,428 33,629 

Health 10,551 196 

Others — — 

Linked 

Individual Assurance 122,453,868 68,490,561 

Group Assurance 15,732,910 9,061,888 

Individual Pension 7,438,682 4,416,920 

Group Superannuation — — 

Group Gratuity — — 

Any other (Health) 47,514 — 

Funds for Future Appropriations 2,984,243 1,289,584 

Shareholders’ Fund 

Total (A) 156,518,002 87,258,307 

Paid up Capital 19,695,000 18,795,000 

Reserves & Surpluses 4,800,000 1,200,000 

Fair Value Change 305 204 

Total (B) 24,495,305 19,995,204 

Misc. expenses not written off 

Credit / (Debit) from P&L A/c. (20,275,040) (15,920,075) 

Total (C ) (20,275,040) (15,920,075) 

Total shareholders’ funds (B+C) 4,220,265 4,075,129 

Controlled Fund (Total (A+B-C)) 160,738,267 91,333,436 

81


b) Reconciliation of the Controlled Fund from Revenue and Profit & Loss Account 


Rs. 

Rs. 

Opening Balance of Controlled Fund 91,333,436 68,951,785 

Add: Inflow 

Income 

Premium Income 55,056,579 45,718,041 

Less: Reinsurance ceded (802,949) (551,663) 

Net Premium 54,253,630 45,166,378 

Investment Income 40,031,523 (6,706,646) 

Other Income 143,486 170,850 

Funds transferred from Shareholders’ Accounts 4,797,493 7,639,899 

Total Income 99,226,132 46,270,481 

Less: Outgo 

(i) Benefits paid (Net) 11,387,815 6,464,413 

(ii) Interim Bonus Paid — — 

(iii) Change in Valuation of Liability 67,565,036 21,122,132 

(iv) Commission 5,161,974 4,817,880 

(v) Operating Expenses 13,267,526 12,487,623 

(vi) Provision for Taxation — 61,500 

(a) FBT — — 

(b) I.T. — — 

Total Outgo 97,382,351 44,953,548 

Surplus of the Policyholders’ Fund 1,843,781 1,316,933 

Less: transferred to Shareholders’ Account 149,123 286,159 

Net Flow in Policyholders’ account 1,694,659 1,030,773 

Add: Net income in Shareholders’ Fund (4,354,964) (7,021,357) 

Net In Flow / Outflow (2,660,305) (5,990,584) 

Add: change in valuation Liabilities 67,565,036 21,122,132 

Add: Increase in Paid up Capital 4,500,100 7,250,103 

Closing Balance of Controlled Fund 160,738,267 91,333,436 

As Per Balance Sheet 160,738,267 91,333,436 

Difference, if any 

82


c) Reconciliation with Shareholders’ and Policyholders’ Fund 


Rs. 

Rs. 

Policyholders’ Funds 

Policyholders’ Funds - Traditional- 

PAR and NON-PAR 

Opening Balance of the Policyholders’ Fund 3,999,354 1,888,360 

Add: Surplus of the Revenue Account — — 

Add: change in valuation Liabilities 3,861,985 2,110,944 

Total 7,861,339 3,999,304 

As per Balance Sheet 7,860,785 3,999,354 


Policyholders’ Funds - Linked 

Opening Balance of the Policyholders’ Fund 83,258,953 63,217,042 

Add: Surplus of the Revenue Account 1,694,659 1,030,773 

Add: change in valuation Liabilities 63,703,605 19,011,138 

Total 148,657,217 83,258,953 



Shareholders’ Funds 

Opening Balance of Shareholders’ Fund 4,075,129 3,846,383 

Add: net income of Shareholders’ account (P&L) (4,354,964) (7,021,357) 

Add: Infusion of Capital 4,500,100 7,250,103 

Closing Balance of the Shareholders’’ fund 4,220,265 4,075,129 



83


35. Previous year comparatives 

Previous year amounts have been reclassified, wherever necessary and to the extent possible, 

to confirm to current year’s classification. The details are as follows: 

Sr. Regrouped from Regrouped to Amount Reason 

No. 

(Rs.) 

1 Wealth Tax Rates & Taxes 684 Represents Wealth tax shown 

(Revenue a/c) (Sch 3) under Revenue a/c regrouped to 

Rent Rates & Taxes in Schedule 3 

2 Service Tax on Service tax on 1,081,509 Represents Service tax in 

Risk Premium, mortality premium (Sch 3) Schedule 1 under Premium 

& ULIP charges (Sch 1) 

regrouped to Schedule 3 i.e., 

Operating expenses 

3 Service Tax on - First year Service tax on 12,075 Represents Service tax included 

Premium (Schedule 1) premium (Sch 3) in First year premium regrouped to 

Schedule 3 i.e., Operating expenses 

- Renewal Premium 

(Schedule 1) 

27,267 

- Single Premium 18,509 

(Schedule 1) 

4 Bonus Commission (Sch 2) First Year 

Commission (Sch 2) 

9,636 Represents Bonus Commission 

shown seperately regrouped 

with First Year Commission in 

Schedule 2. 

5 Repairs & Maintenance Outsourcing 4,314 Represents expenses relating to 

(Sch 3) expenses (Sch 3) outsourcing grouped with 

Outsourcing expenses. 

Fund and asset 15,082 Represents NAV Calculation 

management charges 

charges shown in Fund and asset 

(Sch 3) 

management charges grouped 

with Outsourcing expenses. 

Policy processing 106,758 Represents Policy processing 

expenses (Sch 3) 

expenses shown seperateley 

grouped with Outsourcing 

expenses. 

6 Advances to Directors & 

Officers (Sch 12) 

Advances - Others 

(Sch 12) 

18,756 Represents Advances to employees 

grouped with Advances - Others. 

7 Advances - Others Others Assets - 65,855 Represents Fund Management 

(Sch 12) Depostis (Sch 12) fees shown under Others in 

Advances grouped with Other 

Assets - Deposits 

8 Sundry Creditors 

(Sch 13) 

Due to Policyholders 

(Sch 13) 

494,385 Represents payments due to 

policyholders like refunds, 

surrenders, maturity grouped 

with Due to Policyholders 

9 Claims Outstanding Due to Policyholders 6,339 Represents Rural Maturity 

(Sch 13) (Sch 13) Claims shown under Claims 

Outstanding now grouped with 

Due to Policyholders. 










84

85 

Form A - RA ANNEXURE 1 

REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010 

(Amount in thousands of Rupees) 

Linked Business 

Non Linked Business 

PARTICULARS SCH Individual Pension Health Individual Pension Health 

Life Group Individual Individual Life Group Individual Individual Total 

Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended 

31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 

2010 2010 2010 2010 2010 2010 2010 2010 2010 

(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) 


(a) Premium 1 44,659,136 7,025,211 2,685,066 62,427 357,846 206,948 2,781 57,164 55,056,579 

(b) Reinsurance ceded (612,307) - (297) - (59,573) (121,783) - (8,989) (802,949) 

(c) Reinsurance accepted - - - - - - - - - 

SUB-TOTAL 44,046,829 7,025,211 2,684,769 62,427 298,273 85,165 2,781 48,175 54,253,630 

Income from Investment 

(a) Interest, Dividend & Rent - Gross 4,066,212 695,279 292,493 275 39,742 121,343 100 268 5,215,712 

(b) Profit on Sale / Redemption of Investments 21,684,190 1,243,657 1,184,992 690 3,830 11,695 10 26 24,129,090 

(c) (Loss) on Sale / Redemption of Investments (3,105,943) (156,661) (146,603) (198) (372) (1,137) (1) (3) (3,410,918) 

(d) Transfer /Gain (Loss) on revaluation / change in Fair value 13,151,666 357,725 629,789 1,058 - - - - 14,140,238 

(e) Gain / (Loss) on Amortisation (27,363) (229) (1,806) (17) (3,245) (9,909) (8) (22) (42,599) 

SUB-TOTAL 35,768,762 2,139,771 1,958,865 1,808 39,955 121,992 101 269 40,031,523 

Other Income 

(a) Contribution from the Shareholders’ Account 4,459,682 49,336 260,214 26,842 - - 1,419 - 4,797,493 

(b) Others (Interest etc) 9,429 7,077 48,928 50 77,854 95 4 49 143,486 

TOTAL (A) 84,284,702 9,221,395 4,952,776 91,127 416,082 207,252 4,305 48,493 99,226,132 

Commission 2 4,950,290 209 142,262 13,360 44,565 801 200 10,287 5,161,974 

Operating Expenses related to Insurance Business 3 12,041,371 154,678 882,485 25,582 130,750 15,016 1,693 15,951 13,267,526 

Provisions for doubtful debts - - - - - - - - - 

Bad debts written off - - - - - - - - - 

Provision for Tax - - - - - - - - - 


(a) For diminution in the value of investment (net) - - - - - - - - - 

(b) Others ( to be specified ) - - - - - - - - - 

TOTAL (B) 16,991,661 154,887 1,024,747 38,942 175,315 15,817 1,893 26,238 18,429,500 

Benefit Paid (Net) 4 8,527,476 2,396,601 327,417 - 38,957 94,798 131 2,435 11,387,815 

Interim Bonuses Paid - - - - - - - - - 

Change in valuation of liability against life policies in force 

(a) Gross 57,983,350 6,669,981 3,457,309 50,731 189,285 (34,773) 2,281 6,799 68,324,963 

(b) (Amount ceded in Re-insurance) (769,087) (74) (28) 1,428 (24,559) 33,482 - (1,090) (759,928) 

(c) Amount accepted in Re-insurance - - - - - - - - - 

TOTAL (C) 65,741,739 9,066,508 3,784,698 52,159 203,683 93,507 2,412 8,144 78,952,850 

SURPLUS/ (DEFICIT ) (D) = (A) - (B) - ( C ) 1,551,302 - 143,331 26 37,084 97,928 - 14,111 1,843,782 

APPROPRIATIONS 

Transfer to Shareholders Account - - - - 37,084 97,928 - 14,111 149,123 

Transfer to Other Reserves - - - - 

Transfer to Funds for future Appropriations 1,551,302 - 143,331 26 - - - - 1,694,659 

TOTAL 1,551,302 - 143,331 26 37,084 97,928 - 14,111 1,843,782 

BIRLA SUN LIFE INSURANCE COMPANY LIMITED

86 

Form A - RA ANNEXURE 1 

REVENUE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2009 




PARTICULARS SCH Individual Pension Health Individual Pension Health 




2009 2009 2009 2009 2009 2009 2009 2009 2009 



(a) Premium 1 38,064,355 2,698,566 3,465,930 - 242,391 1,206,825 - 39,974 45,718,041 

(b) Reinsurance ceded (385,772) - 2,250 - (61,871) (100,607) - (5,663) (551,663) 

(c) Reinsurance accepted - - - - - - - - - 

SUB-TOTAL 37,678,583 2,698,566 3,468,180 - 180,520 1,106,218 - 34,311 45,166,378 

Income from Investment 

(a) Interest, Dividend & Rent - Gross 3,048,575 561,654 141,146 - 38,506 94,645 - 11 3,884,537 

(b) Profit on Sale / Redemption of Investments 2,562,755 524,102 167,803 - 7,041 17,308 - 2 3,279,011 

(c) (Loss) on Sale / Redemption of Investments (10,032,924) (761,356) (360,538) - (1,871) (4,601) - (1) (11,161,291) 

(d) Transfer /Gain (Loss) on revaluation / change in Fair value (2,936,727) 126,118 102,313 - - - - - (2,708,296) 

(e) Gain / (Loss) on Amortisation (348) (6) (5) - (72) (176) - - (607) 

SUB-TOTAL (7,358,669) 450,512 50,719 - 43,604 107,176 - 12 (6,706,646) 

Other Income 

(a) Contribution from the Shareholders’ Account 6,189,622 28,955 1,416,268 - - - - 5,054 7,639,899 

(b) Others (Interest etc) 48,110 2,325 (3,545) - 122,830 1,069 - 61 170,850 

TOTAL (A) 36,557,646 3,180,358 4,931,622 - 346,954 1,214,463 - 39,438 46,270,481 

Commission 2 4,563,837 3,170 216,186 - 23,443 1,607 - 9,637 4,817,880 

Operating Expenses related to Insurance Business 3 10,544,495 75,298 1,727,277 - 65,778 45,349 - 29,426 12,487,623 

Provisions for doubtful debts - - - - - - - - - 

Bad debts written off - - - - - - - - - 

Provision for Tax 51,431 364 8,951 - 353 243 - 158 61,500 


(a) For diminution in the value of investment (net) - - - - - - - - - 

(b) Others ( to be specified ) - - - - - - - - - 

TOTAL (B) 15,159,763 78,832 1,952,414 - 89,574 47,199 - 39,221 17,367,003 

Benefit Paid (Net) 4 4,271,240 1,980,771 165,910 - (41,126) 87,597 - 21 6,464,413 

Interim Bonuses Paid - - - - - - - - - 

Change in valuation of liability against life policies in force 

(a) Gross 16,232,730 1,121,084 2,783,935 - 35,688 1,072,027 - 216 21,245,680 

(b) (Amount ceded in Re-insurance) (107,480) (329) (17) - 7,086 (22,787) - (20) (123,547) 

(c) Amount accepted in Re-insurance - - - - - - - - - 

TOTAL (C) 20,396,490 3,101,526 2,949,828 - 1,648 1,136,837 - 217 27,586,546 

SURPLUS/ (DEFICIT ) (D) = (A) - (B) - ( C ) 1,001,393 - 29,380 - 255,732 30,427 - - 1,316,932 


Transfer to Shareholders Account - - - - 255,732 30,427 - - 286,159 

Transfer to Other Reserves - - - - - - - - - 

Transfer to Funds for future Appropriations 1,001,393 - 29,380 - - - - - 1,030,773 

TOTAL 1,001,393 - 29,380 - 255,732 30,427 - - 1,316,932 


87 

Form A-BS ANNEXURE 1 

BALANCE SHEET FOR SEGMENTS AS AT 31ST MARCH 2010 


Particulars Linked Business Non Linked Business 

Individual Pension Health Individual Pension Health Share-Holders 

Life Group Individual Individual Life Group Individual Individual Fund Total 

As at As at As at As at As at As at As at As at As at As at 

31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 

(Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) 

Sources of Fund 


Share Capital - - - - - - - - 19,695,000 19,695,000 

Reserves and Surplus - - - - - - - - 4,800,000 4,800,000 

Credit/(Debit)/ Fair Value Change Account - - - - - - - - 305 305 

Sub-Total - - - - - - - - 24,495,305 24,495,305 

Borrowings - - - - - - - - - - 


Credit/(Debit)/ fair value change account - - - - 183 470 - - - 653 

Policy Liabilities 5,434,652 31,264 469,147 4,646 534,139 1,378,751 2,281 5,905 - 7,860,785 

Insurance Reserves - - - - - - - - - - 

Provision For Linked Liabilities 114,380,317 15,310,856 6,805,012 46,456 - - - - - 136,542,641 

Credit/(Debit)/ Fair Value Change Account (Linked) 8,073,550 422,054 633,671 1,058 - - - - - 9,130,333 

Total Linked Liabilites 122,453,867 15,732,910 7,438,683 47,514 - - - - - 145,672,974 

Sub-Total 127,888,519 15,764,174 7,907,830 52,160 534,322 1,379,221 2,281 5,905 - 153,534,412 

Funds for Future Appropriation 2,806,516 - 177,701 26 - - - - - 2,984,243 

- Linked Liabilities 

Total 130,695,035 15,764,174 8,085,531 52,186 534,322 1,379,221 2,281 5,905 24,495,305 181,013,960 


Investments 

Shareholders’ - - - - - - - - 5,043,972 5,043,972 

Policyholders’ 7,975,700 31,264 646,848 4,672 534,139 1,380,860 2,281 5,905 - 10,581,669 

Asset held to Cover Linked Liabilites 122,453,868 15,732,910 7,438,682 47,514 - - - - - 145,672,974 

Loans 265,468 - - - - - - - - 265,468 

Fixed Assets 504,428 142,310 41,105 1,922 5,386 1,943 81 992 - 698,167 


Cash and Bank Balances 4,116,506 1,161,352 335,443 15,687 43,952 15,858 659 8,096 419 5,697,972 

Advances and other Assets 812,206 213,926 63,339 3,035 32,564 9,273 124 1,603 79,280 1,215,350 

Sub-Total (A) 4,928,712 1,375,278 398,782 18,722 76,516 25,131 783 9,699 79,699 6,913,322 

Current Liabilities 5,634,275 1,425,651 576,875 20,697 313,545 125,726 831 15,911 - 8,113,511 

Provisions 234,828 64,698 18,845 889 2,498 884 37 462 - 323,141 

Sub-Total (B) 5,869,103 1,490,349 595,720 21,586 316,043 126,610 868 16,373 - 8,436,652 

Net Current Asset (C) = (A-B) (940,391) (115,071) (196,938) (2,864) (239,527) (101,479) (85) (6,674) 79,699 (1,523,330) 


(To the extent not written off or Adjusted ) - - - - - - - - - - 


(Shareholders’ Account ) - - - - - - - - 20,275,040 20,275,040 

Total 130,259,073 15,791,413 7,929,697 51,244 299,998 1,281,324 2,277 223 25,398,711 181,013,960 


88 

Form A-BS ANNEXURE 1 

BALANCE SHEET FOR SEGMENTS AS AT 31ST MARCH 2009 


Particulars Linked Business Non Linked Business 

Individual Pension Health Individual Pension Health Share-Holders 

Life Group Individual Individual Life Group Individual Individual Fund Total 

As at As at As at As at As at As at As at As at As at As at 

31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 31st Mar 

2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 

(Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) (Rs) 

Sources of Fund 


Share Capital - - - - - - - - 18,795,000 18,795,000 

Reserves and Surplus - - - - - - - - 1,200,000 1,200,000 

Credit/(Debit)/ Fair Value Change Account - - - - - - - - 204 204 

Sub-Total - - - - - - - - 19,995,204 19,995,204 

Borrowings - - - - - - - - - - 


Credit/(Debit)/ fair value change account - - - - 21 78 - - - 99 

Policy Liabilities 2,183,696 32,379 33,629 - 369,413 1,380,041 - 196 - 3,999,354 

Insurance Reserves - - - - - - - - - - 

Provision For Linked Liabilities 73,641,859 8,997,559 4,339,856 - - - - - - 86,979,274 

Credit/(Debit)/ Fair Value Change Account (Linked) (5,151,298) 64,329 77,064 - - - - - - (5,009,905) 

Total Linked Liabilites 68,490,561 9,061,888 4,416,920 - - - - - - 81,969,369 

Sub-Total 70,674,257 9,094,267 4,450,549 - 369,434 1,380,119 - 196 - 85,968,822 

Funds for Future Appropriation 1,255,214 - 34,370 - - - - - - 1,289,584 

- Linked Liabilities 

Total 71,929,471 9,094,267 4,484,919 - 369,434 1,380,119 - 196 19,995,204 107,253,610 


Investments 

Shareholders’ - - - - - - - - 4,670,115 4,670,115 

Policyholders’ 3,215,393 32,379 67,999 - 348,178 1,380,041 - 196 - 5,044,186 

Asset held to Cover Linked Liabilites 68,490,561 9,061,888 4,416,920 - - - - - - 81,969,369 

Loans 223,516 - - - - - - - - 223,516 

Fixed Assets 631,585 63,508 112,674 - 3,603 31,134 - 1,765 - 844,269 


Cash and Bank Balances 3,882,232 390,372 692,585 - 22,143 191,377 - 10,852 158 5,189,719 

Advances and other Assets 767,961 68,617 121,895 - 16,728 (11,661) - 1,985 78,774 1,044,299 

Sub-Total (A) 4,650,193 458,989 814,480 - 38,871 179,716 - 12,837 78,932 6,234,018 

Current Liabilities 5,566,106 492,699 971,316 - 105,694 243,195 - 20,570 - 7,399,580 

Provisions 191,646 17,912 31,837 - 1,619 8,818 - 526 - 252,358 

Sub-Total (B) 5,757,752 510,611 1,003,153 - 107,313 252,013 - 21,096 - 7,651,938 

Net Current Asset (C) = (A-B) (1,107,559) (51,622) (188,673) - (68,442) (72,297) - (8,259) 78,932 (1,417,920) 


(To the extent not written off or Adjusted ) - - - - - - - - - - 


(Shareholders’ Account ) - - - - - - - - 15,920,075 15,920,075 

Total 71,453,496 9,106,153 4,408,920 - 283,339 1,338,878 - (6,298) 20,669,122 107,253,610 


89 

SCHEDULE 1 ANNEXURE 1 


PREMIUM 



PARTICULARS Individual Pension Health Individual Pension Health 






First Year Premium 20,288,761 6,626,844 1,896,118 62,427 160,398 87,066 2,781 48,240 29,172,635 

Renewal Premium 23,985,289 398,367 764,792 - 182,639 116,458 - 8,924 25,456,469 

Single Premium 385,086 - 24,156 - 14,809 3,424 - - 427,475 

Total Gross Premium 44,659,136 7,025,211 2,685,066 62,427 357,846 206,948 2,781 57,164 55,056,579 









First Year Premium 21,142,079 2,302,676 3,144,177 - 49,772 960,958 - 39,974 27,639,636 

Renewal Premium 16,537,767 395,890 299,562 - 175,847 100,469 - - 17,509,535 

Single Premium 384,509 - 22,191 - 16,772 145,398 - - 568,870 

Total Gross Premium 38,064,355 2,698,566 3,465,930 - 242,391 1,206,825 - 39,974 45,718,041 


90 



COMMISSION EXPENSES 









Commission Paid 

Direct - First Year Premiums 3,985,641 — 128,130 13,360 35,512 648 200 10,091 4,173,582 

Renewal Premiums 958,399 209 13,738 — 9,053 152 — 196 981,747 

Single Premiums 6,250 — 394 — — 1 — — 6,645 

Sub-total 4,950,290 209 142,262 13,360 44,565 801 200 10,287 5,161,974 

Add: Commission on Re-insurance Accepted — — — — — — — — — 

Less: Commission on Re-insurance Ceded — — — — — — — — — 

Net Commission 4,950,290 209 142,262 13,360 44,565 801 200 10,287 5,161,974 









Commission Paid 

Direct - First Year Premiums 3,874,134 3,073 210,274 — 14,120 823 — 9,637 4,112,061 

Renewal Premiums 681,928 97 5,354 — 9,323 112 — — 696,814 

Single Premiums 7,775 — 558 — — 672 — — 9,005 

Sub-total 4,563,837 3,170 216,186 — 23,443 1,607 — 9,637 4,817,880 

Add: Commission on Re-insurance Accepted — — — — — — — — — 

Less: Commission on Re-insurance Ceded — — — — — — — — — 


Net Commission 4,563,837 3,170 216,186 — 23,443 1,607 — 9,637 4,817,880

91 



OPERATING EXPENSES RELATED TO INSURANCE BUSINESS 



SR PARTICULARS Individual Pension Health Individual Pension Health Total 

No. Life Group Individual Individual Life Group Individual Individual 





1 Employees’ remuneration, welfare 

benefits and other manpower costs 5,096,527 86,020 415,302 22,520 54,416 1,175 817 11,623 5,688,400 

2 Travel,conveyance and vehicle 

running expenses 147,557 5,536 12,024 117 1,575 76 24 60 166,969 

3 Training expenses 202,478 1,282 16,499 133 2,162 18 32 68 222,672 

4 Rents, rates and taxes 752,334 1,715 61,306 117 8,033 23 121 60 823,709 

5 Repairs & maintenance 224,429 896 18,288 139 2,396 12 36 72 246,268 

6 Printing and stationery 293,211 4,038 23,893 47 3,131 55 47 24 324,446 

7 Communication expenses 358,549 (5,937) 29,217 72 3,828 (81) 57 37 385,742 

8 Legal & professional charges 63,079 1,649 5,140 11 674 23 10 6 70,592 

9 Medical fees 103,304 3 388 46 4,290 27 — 1,831 109,889 

10 Auditor’s fees, expenses, etc. 

(a) (i) as auditor 2,410 17 196 1 26 — — — 2,650 

(ii) out of pocket expenses 187 1 15 — 2 — — — 205 

(b) as adviser or in any other capacity, 

in respect of 

(i) Taxation services / matters — — — — — — — — — 

(ii) Insurance Matters — — — — — — — — — 

(iii) Management Services; and 1,315 9 107 — 14 — — — 1,445 

(c) in any other capacity — — — — — — — — — 

11 Advertisement and publicity 1,335,538 4,720 108,829 191 14,260 64 214 99 1,463,915 

12 Interest & Bank charges 98,729 980 8,045 30 1,054 13 16 15 108,882 

13 Others 

1) Distribution expenses 1,081,081 (1,048) 88,094 (70) 11,543 (14) 173 (36) 1,179,723 

2) Agents recruitment, seminar 

and other expenses 10,060 (2) 820 — 107 — 2 — 10,987 

3) Recruitment and seminar expenses 92,876 6,154 7,568 122 992 84 15 63 107,874 

4) IT expenses (incl. maintenance) 229,997 1,562 18,742 67 2,456 21 37 35 252,917 

5) Policy stamps 97,609 1,169 366 — 4,053 12,394 — — 115,591 

6) (Profit)/Loss on sale of assets 5,544 (74) 452 (64) 59 (1) 1 (33) 5,884 

7) Service Tax expenditure including 

provision for unutilised credit (308,920) (1,259) (25,173) (90) (3,298) (17) (49) (46) (338,852) 

8) Electricity expenses 168,968 697 13,769 157 1,804 10 27 81 185,513 

9) Miscellaneous expenses 10,950 320 892 35 117 4 2 18 12,338 

10) Outsourcing expense 299,885 5,849 12,215 1,803 8,226 731 48 1,933 330,690 

14 Depreciation 396,000 29,191 32,269 80 4,228 399 63 41 462,271 

15 Service tax on premium 1,277,674 11,190 33,222 118 4,602 — — — 1,326,806 


Total 12,041,371 154,678 882,485 25,582 130,750 15,016 1,693 15,951 13,267,526

92 



OPERATING EXPENSES RELATED TO INSURANCE BUSINESS 









1 Employees’ remuneration, welfare 

benefits and other manpower costs 4,525,712 42,156 807,377 - 25,813 20,667 - 12,651 5,434,376 

2 Travel,conveyance and vehicle 

running expenses 135,290 3,463 24,135 - 772 1,698 - 378 165,736 

3 Training expenses 284,990 813 50,842 - 1,625 399 - 797 339,466 

4 Rents, rates and taxes 516,895 444 92,211 - 2,949 218 - 1,445 614,162 

5 Repairs & maintenance 123,794 367 22,086 - 705 181 - 346 147,479 

6 Printing and stationery 242,065 806 43,184 - 1,381 395 - 677 288,508 

7 Communication expenses 286,110 1,236 51,042 - 1,632 606 - 800 341,426 

8 Legal & professional charges 57,494 1,516 10,257 - 327 744 - 161 70,499 

9 Medical fees 103,452 - 1,161 - 1,633 502 - 1,142 107,890 

10 Auditor’s fees, expenses, etc. 

(a) (i) as auditor 2,224 7 397 - 13 3 - 6 2,650 

(ii) out of pocket expenses 171 1 31 - 1 - - - 204 

(b) as adviser or in any other capacity, 

in respect of 

(i) Taxation services / matters - - - - - - - - - 

(ii) Insurance Matters 

(iii) Management Services; and 1,633 5 291 - 10 2 - 5 1,946 

(c) in any other capacity 

11 Advertisement and publicity 1,279,175 8,690 228,202 - 7,296 4,260 - 3,576 1,531,199 

12 Interest & Bank charges 79,040 321 14,100 - 450 158 - 221 94,290 

13 Others 

1) Distribution expenses 933,316 (153) 166,501 - 5,323 (75) - 2,609 1,107,521 

2) Agents recruitment, seminar 

and other expenses 30,961 (29) 5,523 - 176 (14) - 87 36,704 

3) Recruitment and seminar expenses 213,722 1,188 38,128 - 1,219 583 - 597 255,437 

4) IT expenses (incl. maintenance) 141,580 308 25,258 - 808 151 - 396 168,501 

5) Policy stamps 98,157 - 1,101 - 1,549 11,598 - 1,084 113,489 

6) (Profit)/Loss on sale of assets (1,943) (4) (347) - (11) (2) - (5) (2,312) 

7) Service Tax expenditure including 

provision for unutilised credit 10,890 217 1,943 - 63 106 - 30 13,249 

8) Electricity expenses 119,679 560 21,350 - 683 274 - 335 142,881 

9) Miscellaneous expenses 14,977 233 2,672 - 85 114 - 42 18,123 

10) Outsourcing expense 99,936 4,874 9,814 - 7,938 2,350 - 1,242 126,154 

14 Depreciation 287,625 879 51,312 - 1,641 431 - 804 342,692 

15 Service tax on premium 957,550 7,400 58,706 - 1,697 - - - 1,025,353 


Total 10,544,495 75,298 1,727,277 - 65,778 45,349 - 29,426 12,487,623

93 



BENEFITS PAID (NET) 










(a) Claims by Death 971,229 1,877 24,053 — 41,253 110,847 — — 1,149,259 

(b) Claims by Maturity 119,819 — 875 — 6,608 — — — 127,302 

(c) Annuties / Pension Payment — — — — — — 131 — 131 

(d) Other Benefits 

(Surrender/Withdrawals/Health) 7,745,878 2,394,724 302,514 — 1,840 55,379 — 5,682 10,506,017 

2 (Amount ceded in reinsurance): 

(a) Claims by Death (309,450) — (25) — (10,744) (71,428) — — (391,647) 

(b) Claims by Maturity — — — — — — — — — 

(c) Annuties / Pension Payment — — — — — — — — — 

(d) Other Benefits (Health) — — — — — — — (3,247) (3,247) 

3 (Amount accepted in reinsurance): 

(a) Claims by Death — — — — — — — — — 



(d) Other Benefits — — — — — — — — — 

TOTAL 8,527,476 2,396,601 327,417 — 38,957 94,798 131 2,435 11,387,815 


94 



BENEFITS PAID (NET) 










(a) Claims by Death 518,749 21,113 9,983 — 15,193 63,776 — — 628,814 

(b) Claims by Maturity 128,582 — 1,041 — 5,495 — — — 135,118 

(c) Annuties / Pension Payment — — — — 159 — — — 159 

(d) Other Benefits 

(Surrender/Withdrawals/Health) 3,803,898 1,959,658 154,966 — — 23,821 — 92 5,942,435 

2 (Amount ceded in reinsurance): 

(a) Claims by Death (179,989) — (80) — (61,973) — — — (242,042) 



(d) Other Benefits (Health) — — — — — — — (71) (71) 

3 (Amount accepted in reinsurance): 

(a) Claims by Death — — — — — — — — — 



(d) Other Benefits — — — — — — — — — 

TOTAL 4,271,240 1,980,771 165,910 — (41,126) 87,597 — 21 6,464,413 


95 

Disclosures in terms of Accounting Standard 18 on Related Party Disclosure for the year ended 31st March, 2010 ANNEXURE 2 


(A) Enterprises where control exists 

Holding company 1 Aditya Birla Nuvo Limited 

Foreign Promoter 2 Sun Life Financial (India) Insurance Investments Inc. 

(B) Key Management Personnel 1 Ajay Srinivasan (from 2nd December, 2008) 

(C) Disclosures of transaction between the Company and related parties and outstanding balances as at the year end : 

Sr. Name of the related Description of Nature of Transaction For the year For the year Amount Outstanding Amount Outstanding 

No. Party with whom the Relationship with ended on ended on as recoverable/(payable) as recoverable/(payable) 

transaction has been made the party 31/03/2010 31/03/2009 31/03/2010 31/03/2009 

1 2 3 4 5 6 7 8 

1 Aditya Birla Nuvo Limited Holding Company a) Share Capital 666,000 4,477,000 (1,638) Nil 

b) Share Premium 2,664,000 888,000 

c) Reimbursement of other expenses 2,661 822 

d) Recovery Nil Nil 

2 Aditya Birla Finance Limited Fellow Subsidiary a) Reimbursement of other expenses Nil 3 Nil Nil 

(Formerly known as Birla Global Finance 

Company Limited) 

3 Sun Life Financial (India) Insurance Foreign Promoter a) Share Capital 234,000 1,573,000 Nil Nil 

Investment Inc. b) Share Premium 936,000 312,000 

4 Aditya Birla Minacs Worldwide Ltd Fellow Subsidiary a) Reimbursement of expenses for outsource 64,555 39,163 (22,832) (1,210) 

(Formerly known as Tran works 

and other activities 

Information Services Ltd) 

5 Aditya Birla Minacs IT Services Limited Fellow Subsidiary a) Reimbursement of expenses for 51,139 1,683 (4,624) (191) 

(Formerly known as PSI Data Systems 

IT and other services 

Limited) 

6 Aditya Birla Money Mart Limited Fellow Subsidiary a) Reimbursement of expenses 3,007 Nil (427) Nil 

(Formerly known as Birla Sun Life b) Recovery of expenses 76 Nil 

Distribution Company Ltd.) 

(w.e.f. March 31, 2009) 

7 Aditya Birla Money Insurance Advisory Fellow Subsidiary a) Payment of Commission 76,045 3,696 (22,694) (8,091) 

Services Ltd. (Formerly known as BSDL b) Reimbursement of co-branding expenses 27,041 Nil 

Insurance Advisory Services Ltd. 

Limited (w.e.f. March 31, 2009) 

8 Aditya Birla Money Limited Fellow Subsidiary a) Reimbursement of expenses 1,452 883 (1,182) (883) 

(Formerly known as Apollo Sindhoori b) Brokerage for purchase / sales of securities 14,402 946 

Capital Investments Limited) 


9 Aditya Birla Financial Services Pvt Ltd Fellow Subsidiary a) Advance given for India Bull Properties 81,971 17,800 (141) 12,062 

(w.e.f. November 4, 2008) b) Recovery of advance 99,912 

c) Reimbursement of expenses 61 

10 Aditya Birla Financial Shared Services Fellow Subsidiary a) Advance for given for expenses 87,955 Nil 1,614 Nil 

Limited b) Advance for Security deposit 915 

c) Reimbursement of expenses (accrued) 88,402 Nil 

d) Recovery of expenses 1,146 Nil 

11 Birla Insurance Advisory & Fellow Subsidiary a) Recovery of expenses 76 Nil Nil Nil 

Broking Services Ltd 

12 Mr. Ajay Srinivasan Key Management a) Managerial Remuneration Nil NIL Nil Nil 

Managing Director (w.e.f December 2, 2008) Personnel 

13 Mr. Vikram Mehmi Key Management a) Managerial Remuneration Nil 22,888 Nil 997 

Chief Executive Officer 

Personnel 

(Till December 31, 2008) 

Note 1: Premium received from the related parties against life insurance products sold at market rates for the year ended March’10 is Rs.10,783 thousands and for year ended March’09 is Rs. 9,961 thousands 

Note 2: There are no provisions for doubtful debts, amounts written off or amounts written back pertaining to the above transactions 

Note 3: Related party relationship have been identified by the management and relied upon by the auditors. 

Note 4: Related party transactions disclosed above denote the transactions entered during the existence of related party relationship. 

Note 5: In Aditya Birla Money Insurance Advisory Services Limited, transaction includes an amount of Rs. 2,525 thousands towards service tax. 


96 

Form A-RA(UL) ANNEXURE 3 


Fund Revenue Account for the period ended 31st March 2010 

Particulars Sch Ind. Assure Ind. Income Advantage Ind. Protector Ind. Builder Ind. Balancer 

Current Previous Current Previous Current Previous Current Previous Current Previous 

Year Year Year Year Year Year Year Year Year Year 


Interest income 81,394 48,379 106,528 22,427 262,115 226,615 156,001 138,724 16,044 12,695 

Dividend income - - - - 4,493 3,394 5,507 4,892 788 552 

Profit / Loss on sale of investment 16,962 5,356 36,551 16,518 193,538 (12,698) 261,418 (60,931) 35,910 (3,270) 

Profit / Loss on inter fund transfer/ sale of investment 48,529 24,654 29,067 9,741 (295) (2,764) 11,105 (4,073) 1,527 1,108 

Miscellaneous Income / (Expenses) (26) 19 (5) 7 13 (85) (9) 12 (4) 4 

Unrealised Gain/loss** (25,198) 20,771 (20,312) 21,352 77,015 65,941 84,646 32,328 11,246 5,680 

Total (A) 121,659 99,179 151,830 70,045 536,879 280,403 518,667 110,952 65,512 16,769 

Fund management expenses 12,916 6,511 15,883 2,882 41,685 31,988 27,144 21,595 3,843 2,180 

Fund administration expenses 

Other charges: F-5 77,018 55,539 150,098 40,909 211,237 135,233 86,433 77,255 25,624 25,634 

Total (B) 89,934 62,050 165,981 43,791 252,922 167,221 113,577 98,850 29,467 27,814 

Net Income for the year (A-B) 31,725 37,129 (14,152) 26,255 283,957 113,182 405,090 12,102 36,045 (11,045) 

Add: Fund revenue account at the beginning of the year 45,057 7,928 26,255 - 504,765 391,583 364,872 352,771 (44,984) (33,939) 

Fund revenue account at the end of the year 76,782 45,057 12,103 26,255 788,722 504,765 769,962 364,872 (8,939) (44,984) 

Particulars Sch Ind. Enhancer Ind. Creator Ind. Magnifier Ind. Maximiser Ind. Multiplier 




Interest income 2,337,615 1,762,311 98,854 94,509 47,311 90,056 20,211 54,804 6,585 6,104 

Dividend income 164,213 120,808 14,078 12,356 127,579 100,446 244,872 103,859 35,512 13,765 

Profit / Loss on sale of investment 4,647,907 (1,016,729) 773,306 (211,101) 3,129,571 (2,632,061) 5,360,533 (2,062,615) 1,560,632 (239,357) 

Profit / Loss on inter fund transfer/ sale of investment 184,457 (187,564) 21,565 (58,845) 22,341 (308,990) 127,301 (140,392) 77,259 (84,946) 

Miscellaneous Income / (Expenses) (151) (243) (7) 63 (230) (23) (194) 117 (33) (23) 

Unrealised Gain/loss** 3,616,921 (1,061,800) 175,260 77,455 2,820,788 (486,499) 5,456,299 (1,398,481) 321,434 (73,851) 

Total (A) 10,950,962 (383,216) 1,083,056 (85,563) 6,147,360 (3,237,071) 11,209,022 (3,442,708) 2,001,389 (378,308) 

Fund management expenses 601,725 320,624 37,510 27,684 184,573 114,670 317,861 127,357 49,003 14,168 

Fund administration expenses - - - - 

Other charges: F-5 5,477,704 3,404,097 75,581 59,440 491,994 414,909 2,116,592 1,554,108 739,625 615,696 

Total (B) 6,079,429 3,724,721 113,091 87,124 676,567 529,579 2,434,453 1,681,465 788,628 629,864 

Net Income for the year (A-B) 4,871,533 (4,107,938) 969,965 (172,688) 5,470,793 (3,766,650) 8,774,569 (5,124,173) 1,212,761 (1,008,172) 

Add: Fund revenue account at the beginning of the year (2,269,749) 1,838,189 522,100 694,788 (2,347,003) 1,419,647 (6,324,141) (1,199,968) (1,177,326) (169,153) 

Fund revenue account at the end of the year 2,601,784 (2,269,749) 1,492,065 522,100 3,123,790 (2,347,003) 2,450,428 (6,324,141) 35,435 (1,177,326) 

** Net change in mark to market value of invesmtents 


97 




Particulars Sch Ind. Platinum Plus 1 Ind. Platinum Plus 2 Ind. Platinum Plus 3 Ind. Platinum Plus 4 Titanium Plus 1 




Interest income 29,389 51,298 13,191 4,650 3,566 — 485 — 770 — 

Dividend income 32,405 18,648 51,560 3,129 14,471 — 3,264 — — — 

Profit / Loss on sale of investment 719,090 (500,561) 1,533,494 24,035 199,521 — 19,734 — 441 — 

Profit / Loss on inter fund transfer/ sale of investment 99,580 (147,451) 71,557 1,504 2,632 — 987 — (1) — 

Miscellaneous Income / (Expenses) 2 179 2 (1) 2 — 2 — (0) — 

Unrealised Gain/loss** 434,355 (150,790) 549,986 84,351 131,237 — 39,615 — 3,618 — 

Total (A) 1,314,821 (728,677) 2,219,789 117,667 351,429 — 64,087 — 4,827 — 

Fund management expenses 57,386 29,912 80,354 6,829 30,318 — 11,204 — 473 — 

Fund administration expenses — — — — — — — — — — 

Other charges: F-5 155,551 142,891 183,442 28,780 151,954 — 69,669 — 4,917 — 

Total (B) 212,937 172,803 263,796 35,609 182,272 — 80,873 — 5,390 — 

Net Income for the year (A-B) 1,101,883 (901,480) 1,955,993 82,059 169,157 — (16,786) — (562) — 

Add: Fund revenue account at the beginning of the year (900,117) 1,363 82,059 — — — — — — — 

Fund revenue account at the end of the year 201,767 (900,117) 2,038,052 82,059 169,157 — (16,786) — (562) — 

Particulars Sch Titanium Plus 2 Super 20 Platinum Premier 1 IPP - Enrich IPP - Nourish 




Interest income 16 — 113 — 228 — 83,756 73,887 9,510 8,545 

Dividend income — — 420 — 111 — 6,561 5,473 152 126 

Profit / Loss on sale of investment — — 5,573 — — — 325,398 (83,773) 6,514 997 

Profit / Loss on inter fund transfer/ sale of investment — — (1,211) — — — 23,335 (23,705) 901 969 

Miscellaneous Income / (Expenses) 2 — 10 — 77 — (4) 20 (1) (1) 

Unrealised Gain/loss** 0 — 7,098 — 7,767 — 76,755 21,652 1,710 3,112 

Total (A) 19 — 12,004 — 8,183 — 515,801 (6,446) 18,787 13,748 


Fund management expenses 7 — 1,134 — 405 — 21,948 13,909 1,483 1,225 


Other charges: F-5 725 — 10,557 — 14,483 — 33,733 25,515 3,753 2,706 

Total (B) 732 — 11,691 — 14,888 — 55,681 39,424 5,236 3,931 

Net Income for the year (A-B) (713) — 313 — (6,705) — 460,120 (45,870) 13,551 9,817 

Add: Fund revenue account at the beginning of the year — — — — — — 238,692 284,562 27,114 17,297 

Fund revenue account at the end of the year (713) — 313 — (6,705) — 698,812 238,692 40,665 27,114 

** Net change in mark to market value of invesmtents

98 




Particulars Sch IPP - Growth Gr. Fixed Interest Gr. Gilt Gr. Bond Gr. Money Market 




Interest income 21,145 17,518 25,415 28,468 1,536 107 201,915 120,012 25,613 8,180 

Dividend income 763 600 — — — — — — — — 

Profit / Loss on sale of investment 37,200 (1,286) 5,597 8,224 1,640 163 30,804 19,736 6,641 4,924 

Profit / Loss on inter fund transfer/ sale of investment 2,100 9,930 11,913 4,079 312 42 52,299 50,845 96 (0) 

Miscellaneous Income / (Expenses) (2) 2 24 3 — 0 3 (1) 2 (1) 

Unrealised Gain/loss** 12,271 4,367 1,328 8,871 46 (44) (12,020) 46,573 (3) 1 

Total (A) 73,477 31,132 44,277 49,646 3,534 269 273,000 237,164 32,349 13,105 

Fund management expenses 3,841 2,870 3,586 2,788 283 12 24,664 11,385 4,811 752 


Other charges: F-5 6,233 5,003 62 511 — 5 3,069 2,250 3,508 180 

Total (B) 10,074 7,873 3,648 3,299 283 17 27,733 13,635 8,319 932 

Net Income for the year (A-B) 63,402 23,258 40,628 46,347 3,251 252 245,267 223,529 24,030 12,172 

Add: Fund revenue account at the beginning of the year 69,097 45,838 128,610 82,263 374 122 260,302 36,773 14,960 2,787 

Fund revenue account at the end of the year 132,499 69,097 169,238 128,610 3,625 374 505,568 260,302 38,989 14,960 

Particulars Sch Gr. Short Term Debt Gr. Capital Protection Gr. Floating Rate* Gr. Secure Gr. Stable 




Interest income 48,134 7,650 — 6,888 921 3,006 166,816 132,458 158,173 192,720 

Dividend income — — — — — — 6,169 4,688 13,195 12,452 

Profit / Loss on sale of investment 8,996 1,201 — 183 58 281 233,232 (54,532) 477,653 (153,824) 

Profit / Loss on inter fund transfer/ sale of investment 19,422 — — (689) 79 (4) 4,764 8,312 23,457 (28,206) 

Miscellaneous Income / (Expenses) (2) 2 — (2) (1) (1) 50 50 14 32 

Unrealised Gain/loss** (3,847) 1,711 — (587) (71) 51 88,708 48,076 205,548 (13,825) 

Total (A) 72,703 10,564 — 5,792 987 3,333 499,740 139,052 878,040 9,350 


Fund management expenses 4,849 948 — — 32 142 26,072 14,823 27,704 21,119 


Other charges: F-5 1,913 158 — 1,541 139 200 1,756 4,695 7,915 10,089 

Total (B) 6,762 1,106 — 1,541 171 342 27,828 19,518 35,619 31,208 

Net Income for the year (A-B) 65,941 9,458 — 4,251 817 2,991 471,912 119,534 842,422 (21,858) 

Add: Fund revenue account at the beginning of the year 9,458 — — 33,355 12,555 9,564 465,696 346,161 952,320 974,178 

Fund revenue account at the end of the year 75,399 9,458 — 37,607 13,371 12,555 937,608 465,696 1,794,741 952,320 

* This Fund became dormant during during the year on account of no units. 

** Net change in mark to market value of invesmtents

99 




Particulars Sch Gr. Growth Gr. Growth Advantage Gr. Income Advantage Total 

Current Previous Current Previous Current Previous Current Previous 

Year Year Year Year Year Year Year Year 


Interest income 38,576 36,252 1,406 196 — — 3,963,333 3,148,460 

Dividend income 4,352 5,157 259 21 — — 730,722 410,366 

Profit / Loss on sale of investment 194,540 (84,581) 10,942 1 — — 19,833,395 (7,035,702) 

Profit / Loss on inter fund transfer/ sale of investment 2,283 (13,834) 2,026 (28) — — 839,388 (890,308) 

Miscellaneous Income / (Expenses) 3 61 7 0 — — (457) 191 

Unrealised Gain/loss** 75,302 34,879 2,733 411 — — 14,140,238 (2,708,296) 

Total (A) 315,056 (22,066) 17,372 600 — — 39,506,617 (7,075,288) 

Fund management expenses 7,683 4,324 569 57 — — 1,600,950 780,753 

Fund administration expenses — — — — — — — — 

Other charges: F-5 2,608 3,097 — — — — 10,107,893 6,610,441 

Total (B) 10,291 7,421 569 57 — — 11,708,843 7,391,194 

Net Income for the year (A-B) 304,765 (29,487) 16,803 543 — — 27,797,774 (14,466,482) 

Add: Fund revenue account at the beginning of the year 134,715 164,203 543 — — — (9,203,777) 5,300,312 

Fund revenue account at the end of the year 439,480 134,715 17,346 543 — — 18,593,997 (9,166,170) 

** Net change in mark to market value of invesmtents 


100 

Form A-BS(UL) ANNEXURE 3 


Fund Balance Sheet as at 31st March 2010 

Particulars Sch Ind. Assure Ind. Income Advantage Ind. Protector Ind. Builder Ind. Balancer 





Policyholder contribution F-1 1,629,626 2,097,901 1,831,998 1,210,331 3,184,553 2,910,084 1,858,785 1,719,469 278,550 286,852 

Revenue Account 76,782 45,057 12,103 26,255 788,722 504,765 769,962 364,872 (8,939) (44,984) 

Total 1,706,408 2,142,958 1,844,101 1,236,586 3,973,275 3,414,849 2,628,747 2,084,341 269,611 241,868 


Investments F-2 1,514,559 1,067,779 1,728,754 963,132 3,817,895 3,255,783 2,553,801 2,034,151 263,130 235,899 

Current Assets F-3 191,849 1,075,959 115,347 274,188 155,380 163,711 75,025 56,851 7,176 8,777 

Less: Current Liabilities and Provisions F-4 — 780 — 735 — 4,645 80 6,661 694 2,809 

Net current assets 191,849 1,075,179 115,347 273,454 155,380 159,066 74,946 50,190 6,482 5,968 

(a) Total 1,706,408 2,142,958 1,844,101 1,236,586 3,973,275 3,414,849 2,628,747 2,084,341 269,611 241,868 

(b) Number of Units outstanding 110,350,354 152,236,362 141,642,102 104,542,769 185,135,449 182,058,567 99,201,930 96,987,358 15,891,371 17,882,751 

NAV per Unit (a)/(b) (Rs) Plan I 15.46 14.08 13.02 11.83 21.46 18.76 26.50 21.49 16.97 13.53 

Plan II — — — — — — — — — 

Particulars Sch Ind. Enhancer Ind. Creator Ind. Magnifier Ind. Maximiser Ind. Multiplier 





Policyholder contribution F-1 50,919,210 37,079,537 1,487,132 1,520,445 10,384,680 10,323,853 23,696,983 18,014,043 3,900,039 2,488,154 

Revenue Account 2,601,784 (2,269,749) 1,492,065 522,100 3,123,790 (2,347,003) 2,450,428 (6,324,141) 35,435 (1,177,326) 

Total 53,520,994 34,809,788 2,979,197 2,042,545 13,508,470 7,976,850 26,147,412 11,689,902 3,935,475 1,310,829 


Investments F-2 51,462,608 33,353,607 2,897,160 2,006,613 13,398,818 8,230,230 25,291,352 11,260,096 3,683,930 1,226,608 

Current Assets F-3 2,101,382 1,653,418 82,037 86,443 157,387 195,731 1,126,717 768,268 293,357 163,743 

Less: Current Liabilities and Provisions F-4 42,996 197,237 — 50,511 47,735 449,112 270,656 338,462 41,813 79,522 

Net current assets 2,058,386 1,456,181 82,037 35,932 109,652 (253,380) 856,061 429,806 251,545 84,221 


(a) Total 53,520,994 34,809,788 2,979,197 2,042,545 13,508,470 7,976,850 26,147,412 11,689,902 3,935,475 1,310,829 

(b) Number of Units outstanding 1,671,988,765 1,397,259,736 118,699,398 123,539,518 510,901,006 527,527,167 1,852,922,175 1,583,379,259 339,877,653 271,006,145 

NAV per Unit (a)/(b) (Rs) Plan I 32.01 24.91 25.10 16.53 26.44 15.12 14.11 7.38 11.58 4.84 

Plan II — — — — — — — — — —





Particulars Sch Ind. Platinum Plus 1 Ind. Platinum Plus 2 Ind. Platinum Plus 3 Ind. Platinum Plus 4 Titanium Plus 1 





Policyholder contribution F-1 3,989,012 2,848,872 3,849,516 2,154,272 2,893,611 — 2,041,941 — 216,328 — 

Revenue Account 201,767 (900,117) 2,038,052 82,059 169,157 — (16,786) — (562) — 

Total 4,190,779 1,948,755 5,887,568 2,236,330 3,062,768 — 2,025,155 — 215,766 — 


Investments F-2 4,183,067 1,930,306 5,788,128 2,253,555 3,008,645 — 2,007,644 — 204,858 — 

Current Assets F-3 23,185 84,139 132,023 35,016 70,370 — 28,729 — 10,908 — 

Less: Current Liabilities and Provisions F-4 15,473 65,690 32,582 52,240 16,247 — 11,218 — — — 

Net current assets 7,712 18,449 99,440 (17,225) 54,123 — 17,511 — 10,908 — 

(a) Total 4,190,779 1,948,756 5,887,568 2,236,330 3,062,768 — 2,025,155 — 215,766 — 

(b) Number of Units outstanding 383,194,678 277,904,465 383,414,692 248,323,528 259,607,132 — 194,625,245 — 21,065,355 — 

NAV per Unit (a)/(b) (Rs) Plan I 10.94 7.01 15.36 9.01 11.80 — 10.41 — 10.24 — 

Plan II — — — — — — — — — — 

Particulars Sch Titanium Plus 2 Super 20 Platinum Premier 1 IPP - Enrich IPP - Nourish 





Policyholder contribution F-1 86,552 — 339,782 — 1,350,767 — 1,079,026 1,101,710 94,039 98,544 

Revenue Account (713) — 313 — (6,705) — 698,812 238,692 40,665 27,114 

Total 85,838 — 340,094 — 1,344,063 — 1,777,838 1,340,402 134,704 125,658 


Investments F-2 23,736 — 264,510 — 745,558 — 1,752,969 1,295,085 130,762 121,368 

Current Assets F-3 62,102 — 75,585 — 710,634 — 25,506 80,043 3,942 4,630 

Less: Current Liabilities and Provisions F-4 — — — — 112,129 — 637 34,726 — 341 

Net current assets 62,102 — 75,585 — 598,505 — 24,869 45,317 3,942 4,289 


(a) Total 85,838 — 340,094 — 1,344,063 — 1,777,838 1,340,402 134,704 125,657 

(b) Number of Units outstanding 8,559,051 — 27,619,148 — 129,265,098 — 68,771,628 71,155,371 7,477,220 7,952,699 

NAV per Unit (a)/(b) (Rs) Plan I 10.03 — 12.31 — 10.40 — 25.85 18.84 18.02 15.80 

Plan II — — — — — — — — — —





Particulars Sch IPP - Growth Gr. Fixed Interest Gr. Gilt Gr. Bond Gr. Money Market 





Policyholder contribution F-1 229,301 236,729 1,073,763 115,733 (3,215) 66,061 1,980,265 866,908 128,899 141,183 

Revenue Account 132,499 69,097 169,238 128,610 3,625 374 505,568 260,302 38,989 14,960 

Total 361,800 305,826 1,243,001 244,343 410 66,436 2,485,833 1,127,210 167,889 156,142 


Investments F-2 353,871 292,396 1,159,831 231,386 397 5,354 2,390,196 1,046,877 164,175 203,405 

Current Assets F-3 9,415 16,692 83,171 13,136 13 61,085 95,637 80,847 3,715 (47,097) 

Less: Current Liabilities and Provisions F-4 1,486 3,262 — 179 — 4 — 514 — 166 

Net current assets 7,929 13,429 83,171 12,957 13 61,081 95,637 80,333 3,715 (47,263) 

(a) Total 361,800 305,826 1,243,001 244,343 410 66,435 2,485,833 1,127,210 167,889 156,142 

(b) Number of Units outstanding 16,483,869 17,140,327 69,075,081 15,334,459 27,861 4,800,537 157,210,503 79,256,244 10,379,843 10,659,446 

NAV per Unit (a)/(b) (Rs) Plan I 21.95 17.84 17.99 15.87 14.72 13.84 15.70 14.02 16.14 14.63 

Plan II — — 19.29 16.77 14.72 13.84 16.47 14.55 16.87 15.12 

Particulars Sch Gr. Short Term Debt Gr. Capital Protection Gr. Floating Rate* Gr. Secure Gr. Stable 





Policyholder contribution F-1 835,587 2,130,504 — (37,607) (13,371) 20,398 3,298,485 1,581,220 1,882,895 1,718,379 

Revenue Account 75,399 9,458 — 37,607 13,371 12,555 937,608 465,696 1,794,741 952,320 

Total 910,986 2,139,961 — — — 32,953 4,236,093 2,046,916 3,677,636 2,670,699 


Investments F-2 535,446 1,003,124 — — — 37,115 4,135,603 1,775,868 3,611,799 2,772,365 

Current Assets F-3 375,540 1,137,576 — — — (4,153) 121,964 283,425 66,872 (75,148) 

Less: Current Liabilities and Provisions F-4 — 738 — — — 9 21,474 12,377 1,035 26,518 

Net current assets 375,540 1,136,838 — — — (4,162) 100,490 271,048 65,837 (101,665) 


(a) Total 910,986 2,139,962 — — — 32,953 4,236,093 2,046,917 3,677,636 2,670,699 

(b) Number of Units outstanding 81,037,820 207,162,244 — — — 2,446,989 151,209,875 87,533,335 97,930,657 92,155,248 

NAV per Unit (a)/(b) (Rs) Plan I 11.19 10.33 10.00 10.00 10.00 13.13 27.85 23.10 37.38 28.55 

Plan II 11.39 10.35 10.00 10.00 10.00 13.54 29.65 24.32 39.44 29.79 

* This Fund became dormant during during the year on account of no units.





Particulars Sch Gr. Growth Gr. Growth Advantage Gr. Income Advantage Total 





Policyholder contribution F-1 1,478,834 418,817 75,401 23,148 1,000,000 — 127,078,977 91,135,541 

Revenue Account 439,480 134,715 17,346 543 — — 18,593,997 (9,166,170) 

Total 1,918,314 553,533 92,747 23,691 1,000,000 — 145,672,974 81,969,371 


Investments F-2 1,642,270 548,439 90,084 21,611 — — 138,805,554 77,172,152 

Current Assets F-3 277,785 11,291 2,768 2,591 1,000,000 — 7,485,518 6,131,161 

Less: Current Liabilities and Provisions F-4 1,741 6,197 104 510 — — 618,098 1,333,942 

Net current assets 276,044 5,094 2,663 2,080 1,000,000 — 6,867,420 4,797,219 

(a) Total 1,918,314 553,533 92,747 23,692 1,000,000 — 145,672,974 81,969,371 

(b) Number of Units outstanding 42,920,330 17,731,450 6,089,890 2,393,459 100,000,000 — 7,262,575,179 5,598,369,434 

NAV per Unit (a)/(b) (Rs) Plan I 44.25 30.55 15.23 9.90 10.00 — 

Plan II 47.15 32.20 — — — — 



Schedules to Fund Balance Sheet ANNEXURE 3 

Schedule: F-1 


POLICYHOLDERS’ CONTRIBUTION 

Particulars Ind. Assure Ind. Income Advantage Ind. Protector Ind. Builder Ind. Balancer 



Opening balance 2,097,901 789,818 1,210,331 — 2,910,084 2,336,824 1,719,469 1,587,533 286,852 204,577 

Add: Additions during the year* ** 5,201,037 6,666,360 1,410,896 1,226,000 2,272,697 1,619,534 702,624 484,705 92,486 100,826 

Less: Deductions during the year* ** 5,669,312 5,358,277 789,229 15,669 1,998,228 1,046,274 563,308 352,769 100,788 18,551 

Closing balance 1,629,626 2,097,901 1,831,998 1,210,331 3,184,553 2,910,084 1,858,785 1,719,469 278,550 286,852 

Particulars Ind. Enhancer Ind. Creator Ind. Magnifier Ind. Maximiser Ind. Multiplier 



Opening balance 37,079,537 25,061,617 1,520,445 1,386,617 10,323,853 8,117,196 18,014,043 9,658,120 2,488,154 884,533 

Add: Additions during the year* ** 24,305,718 16,579,027 895,225 544,501 4,197,895 4,010,223 15,651,847 11,248,624 2,916,018 1,778,693 

Less: Deductions during the year* ** 10,466,045 4,561,107 928,537 410,674 4,137,068 1,803,566 9,968,907 2,892,701 1,504,133 175,072 

Closing balance 50,919,210 37,079,537 1,487,132 1,520,445 10,384,680 10,323,853 23,696,983 18,014,043 3,900,039 2,488,154 

Particulars Ind. Platinum Plus 1 Ind. Platinum Plus 2 Ind. Platinum Plus 3 Ind. Platinum Plus 4 Titanium Plus 1 



Opening balance 2,848,872 36,330 2,154,272 — — — — — — — 

Add: Additions during the year* ** 1,824,961 2,813,939 2,542,985 2,154,099 3,101,128 — 2,054,013 — 217,002 — 

Less: Deductions during the year* ** 684,821 1,397 847,742 (173) 207,517 — 12,072 — 673 — 

Closing balance 3,989,012 2,848,872 3,849,516 2,154,272 2,893,611 — 2,041,941 — 216,328 — 

Particulars Titanium Plus 2 Super 20 Platinum Premier 1 IPP - Enrich IPP - Nourish 



Opening balance — — — — — — 1,101,710 1,006,621 98,544 91,129 

Add: Additions during the year* ** 86,060 — 397,240 — 1,343,863 — 274,146 260,822 29,086 28,312 

Less: Deductions during the year* ** (492) — 57,458 — (6,904) — 296,829 165,733 33,590 20,897 


Closing balance 86,552 — 339,782 — 1,350,767 — 1,079,026 1,101,710 94,039 98,544 

* Additions represents units creation & deductions represent unit cancellations 

** Includes Last Day Collections



Schedule: F-1 


POLICYHOLDERS’ CONTRIBUTION 

Particulars IPP - Growth Gr. Fixed Interest Gr. Gilt Gr. Bond Gr. Money Market 



Opening balance 236,729 201,968 115,733 347,412 66,061 471 866,908 1,345,816 141,183 10,632 

Add: Additions during the year* ** 52,012 68,812 1,066,700 77,224 54,380 67,827 3,577,979 1,313,165 1,897,435 208,180 

Less: Deductions during the year* ** 59,441 34,051 108,670 308,903 123,656 2,237 2,464,623 1,792,073 1,909,719 77,629 

Closing balance 229,301 236,729 1,073,763 115,733 (3,215) 66,061 1,980,265 866,908 128,899 141,183 

Particulars Gr. Short Term Debt Gr. Capital Protection Gr. Floating Rate Gr. Secure Gr. Stable 



Opening balance 2,130,504 — — 183,066 20,398 29,269 1,581,220 1,548,855 1,718,379 2,081,172 

Add: Additions during the year* ** 1,814,719 2,142,471 — — 4,751 (475) 2,367,402 632,684 2,150,891 1,145,999 

Less: Deductions during the year* ** 3,109,635 11,967 — 220,673 38,520 8,396 650,137 600,318 1,986,375 1,508,792 

Closing balance 835,587 2,130,504 — (37,607) (13,371) 20,398 3,298,485 1,581,220 1,882,895 1,718,379 

Particulars Gr. Growth Gr. Growth Advantage Gr. Income Advantage Total 



Opening balance 418,817 747,277 23,148 1,067 — — 91,173,149 57,657,919 

Add: Additions during the year* ** 1,400,004 188,742 90,619 22,344 1,000,000 — 84,993,822 55,382,639 

Less: Deductions during the year* ** 339,988 517,202 38,366 262 — — 49,087,995 21,905,015 

Closing balance 1,478,834 418,817 75,401 23,148 1,000,000 — 127,078,977 91,135,543 

* Additions represents units creation & deductions represent unit cancellations 

** Includes Last Day Collections 




Schedule: F-2 


INVESTMENTS 




Approved Investments 

Government Bonds — — 316,699 196,374 851,120 688,833 457,100 382,743 45,274 44,569 

Corporate Bonds 565,363 555,197 529,919 361,288 1,204,880 1,127,659 669,257 721,531 66,240 45,638 

Infrastructure Bonds 479,196 169,791 437,693 246,986 934,334 846,688 586,922 438,733 85,579 55,189 

Equity — — — — 292,115 225,535 425,241 288,472 56,104 42,751 

Money Market 252,443 319,025 287,126 55,296 131,948 166,950 34,321 52,900 200 15,926 

Mutual Funds 123,728 11,215 61,707 103,188 204,785 138,418 159,565 92,600 408 23,898 

Total 1,420,730 1,055,227 1,633,145 963,132 3,619,182 3,194,084 2,332,406 1,976,979 253,805 227,971 


Corporate Bonds — 10,367 — — — — 21,140 — — — 

Infrastructure Bonds — — — — — — — — — — 

Equity — — — — 59,446 42,363 60,757 55,023 9,167 7,929 

Money Market — — — — — — — — — — 

Mutual Funds 93,829 2,184 95,609 — 139,267 19,336 139,499 2,149 158 — 

Total 93,829 12,552 95,609 — 198,713 61,699 221,396 57,172 9,325 7,929 

GRAND TOTAL 1,514,559 1,067,779 1,728,754 963,132 3,817,895 3,255,783 2,553,801 2,034,151 263,130 235,899 

% of Approved Investments to Total 94% 99% 94% 100% 95% 98% 91% 97% 96% 97% 

% of Other Investments to Total 6% 1% 6% 0% 5% 2% 9% 3% 4% 3% 





Government Bonds 8,402,951 3,087,604 272,149 232,147 — — — — — — 

Corporate Bonds 13,850,464 9,023,177 318,278 387,527 179,184 296,781 — — — — 

Infrastructure Bonds 7,416,649 7,466,116 570,475 289,932 20,335 — — — — — 

Equity 11,757,606 7,272,724 1,128,675 738,698 10,496,277 5,045,837 20,203,632 8,174,880 2,338,546 738,138 

Money Market 2,969,853 3,034,107 40,778 56,442 941,660 807,611 457,058 517,805 331,892 200,137 

Mutual Funds 3,128,120 1,335,563 202,748 140,277 231,678 1,032,986 747,038 815,979 100,871 1,392 

Total 47,525,643 31,219,293 2,533,102 1,845,023 11,869,134 7,183,215 21,407,728 9,508,664 2,771,309 939,666 


Other Investments — — — — 

Corporate Bonds 239,504 391,687 20,079 — — — — — — — 


Equity 2,042,514 1,513,533 166,053 145,460 1,385,645 799,692 3,230,838 1,587,128 871,709 286,942 

Money Market — — — — — — — — — — 

Mutual Funds 1,654,947 229,094 177,926 16,130 144,039 247,324 652,786 164,305 40,911 — 

Total 3,936,965 2,134,315 364,058 161,589 1,529,684 1,047,016 3,883,624 1,751,433 912,621 286,942 

GRAND TOTAL 51,462,608 33,353,607 2,897,160 2,006,613 13,398,818 8,230,230 25,291,352 11,260,096 3,683,930 1,226,608 

% of Approved Investments to Total 92% 94% 87% 92% 89% 87% 85% 84% 75% 77% 

% of Other Investments to Total 8% 6% 13% 8% 11% 13% 15% 16% 25% 23%



Schedule: F-2 






Government Bonds — 98,842 — — — — — — 4,880 — 

Corporate Bonds 47,521 77,856 — — 69,637 — 46,425 — — — 

Infrastructure Bonds 107,427 795,516 47,409 37,353 47,409 — — — 27,421 — 

Equity 3,449,808 781,707 4,842,475 1,656,807 2,503,242 — 1,708,293 — 157,053 — 

Money Market 106,617 2,400 216,424 279,384 54,848 — 100,294 — — — 

Mutual Funds 160,130 645 149,858 12 123,322 — 1,328 — 452 — 

Total 3,871,503 1,756,966 5,256,166 1,973,556 2,798,459 — 1,856,340 — 189,805 — 

Other Investments — — — — — — — — — — 

Corporate Bonds — — — — — — — — — — 


Equity 195,922 173,340 367,250 279,999 136,962 — 87,093 — 15,022 — 

Money Market — — — — — — — — — — 

Mutual Funds 115,643 — 164,711 — 73,223 — 64,211 — 31 — 

Total 311,564 173,340 531,962 279,999 210,186 — 151,304 — 15,053 — 

GRAND TOTAL 4,183,067 1,930,306 5,788,128 2,253,555 3,008,645 — 2,007,644 — 204,858 — 

% of Approved Investments to Total 93% 91% 91% 88% 93% — 92% — 93% — 

% of Other Investments to Total 7% 9% 9% 12% 7% — 8% — 7% — 





Government Bonds — — — — — — 220,010 219,412 23,673 26,833 

Corporate Bonds — — — — — — 205,232 371,673 40,615 47,860 

Infrastructure Bonds — — — — — — 492,851 279,801 41,366 27,857 

Equity — — 220,441 — 489,670 — 512,888 331,831 10,344 9,214 

Money Market 23,736 — 26,325 — 179,204 — — 18,580 300 4,163 

Mutual Funds — — 4,191 — — — 96,726 10,105 12,295 4,387 

Total 23,736 — 250,957 — 668,874 — 1,527,707 1,231,402 128,591 120,314 

Other Investments — — — — — — 



Equity — — 10,314 — 76,684 — 77,106 63,681 2,169 1,055 

Money Market — — — — — — — — — — 

Mutual Funds — — 3,238 — — — 148,156 2 1 — 

Total — — 13,552 — 76,684 — 225,262 63,683 2,171 1,055 

GRAND TOTAL 23,736 — 264,510 — 745,558 — 1,752,969 1,295,085 130,762 121,368 

% of Approved Investments to Total 100% — 95% — 90% — 87% 95% 98% 99% 

% of Other Investments to Total 0% — 5% — 10% — 13% 5% 2% 1% 




Schedule: F-2 






Government Bonds 59,211 56,658 115,829 41,405 377 3,607 — — — — 

Corporate Bonds 81,266 109,712 492,953 108,546 — — 1,136,663 552,677 — — 

Infrastructure Bonds 103,817 32,164 264,538 55,011 — — 634,708 471,638 — — 

Equity 55,713 42,564 — — — — — — — — 

Money Market 1,999 30,137 131,071 23,630 20 1,700 276,123 1,935 163,192 201,137 

Mutual Funds 23,289 13,453 80,625 2,794 — 47 187,797 13,055 980 2,268 

Total 325,295 284,689 1,085,015 231,386 397 5,354 2,235,290 1,039,305 164,172 203,405 


Corporate Bonds — — 30,119 — — — 45,178 — — — 


Equity 10,246 7,708 — — — — — — — — 

Money Market — — — — — — — — — — 

Mutual Funds 18,330 — 44,696 0 — 0 109,728 7,571 2 — 

Total 28,576 7,708 74,815 0 — 0 154,906 7,571 2 — 

GRAND TOTAL 353,871 292,396 1,159,831 231,386 397 5,354 2,390,196 1,046,877 164,175 203,405 

% of Approved Investments to Total 92% 97% 94% 100% 100% 100% 94% 99% 100% 100% 

% of Other Investments to Total 8% 3% 6% 0% 0% 0% 6% 1% 0% 0% 





Government Bonds — — — — — — 589,502 373,404 476,635 495,155 

Corporate Bonds 190,329 478,591 — — — 30,336 964,506 538,498 555,166 605,803 

Infrastructure Bonds 267,293 235,646 — — — 2,592 839,682 499,814 748,147 771,220 

Equity — — — — — — 718,932 250,968 1,116,012 695,401 

Money Market 39,776 287,860 — — — — 326,449 7,899 68,068 51,172 

Mutual Funds 38,046 1,027 — — — 4,187 243,400 33,240 166,190 46,528 

Total 535,444 1,003,124 — — — 37,115 3,682,471 1,703,824 3,130,216 2,665,280 

Other Investments — — — — 

Corporate Bonds — — — — — — 61,298 — 42,325 — 


Equity — — — — — — 80,670 34,518 133,490 106,474 

Money Market — — — — — — — — — — 

Mutual Funds 2 — — — — — 311,164 37,526 305,767 611 

Total 2 — — — — — 453,132 72,045 481,582 107,085 

GRAND TOTAL 535,446 1,003,124 — — — 37,115 4,135,603 1,775,868 3,611,799 2,772,365 

% of Approved Investments to Total 100% 100% — — — 100% 89% 96% 87% 96% 

% of Other Investments to Total 0% 0% — — — 0% 11% 4% 13% 4% 




Schedule: F-2 






Government Bonds 152,084 81,258 6,105 1,541 - - 11,993,600 6,030,386 

Corporate Bonds 197,789 60,563 7,818 2,679 - - 21,419,506 15,503,593 

Infrastructure Bonds 151,768 106,356 6,638 2,750 - - 14,311,658 12,831,154 

Equity 670,376 193,954 39,874 8,890 - - 63,193,315 26,498,370 

Money Market 127,377 53,460 15,004 4,235 - - 7,304,107 6,193,887 

Mutual Funds 170,050 4,034 7,921 130 - - 6,427,245 3,831,430 

Total 1,469,445 499,624 83,361 20,225 - - 124,649,431 70,888,820 

Other Investments - - 0 0 

Corporate Bonds - - - - - - 459,644 402,054 

Infrastructure Bonds - - - - - - - - 

Equity 103,953 28,831 5,427 1,387 - - 9,128,436 5,135,060 

Money Market - - - - - - - - 

Mutual Funds 68,872 19,985 1,296 - - - 4,568,043 746,217 

Total 172,825 48,815 6,723 1,387 - - 14,156,124 6,283,332 

GRAND TOTAL 1,642,270 548,439 90,084 21,611 - - 138,805,554 77,172,152 

% of Approved Investments to Total 89% 91% 93% 94% - - 90% 92% 

% of Other Investments to Total 11% 9% 7% 6% - - 10% 8% 


110 


Schedule: F - 3 


CURRENT ASSETS 




Accrued Interest 33,309 30,828 42,752 23,508 101,236 89,989 57,472 52,253 6,512 4,056 

Cash &Bank Balance 158,528 1,045,093 72,593 250,673 47,600 66,313 3,399 (6,381) (908) 1,763 

Dividend Receivable — — — — — 19 — 24 — 4 

Receivable for Sale of Investments — — — — 6,533 7,391 14,156 10,947 1,575 2,953 

Unit Collection A/c# — — — — — — — — — — 

Other Current Assets (for Investments) 12 38 2 7 12 (1) (1) 8 (3) 1 

Total 191,849 1,075,959 115,347 274,188 155,380 163,711 75,025 56,851 7,176 8,777 




Accrued Interest 1,029,014 729,153 40,522 29,494 3,823 10,313 — — — — 

Cash &Bank Balance 587,519 713,980 (747) 5,916 (27,872) 119,928 332,588 529,604 69,522 71,466 

Dividend Receivable 275 3,348 150 49 — 65 — 506 (0) 605 

Receivable for Sale of Investments 484,383 206,596 42,111 50,976 181,503 65,262 794,025 237,859 223,818 91,622 


Other Current Assets (for Investments) 190 342 1 8 (67) 163 104 298 18 50 

Total 2,101,382 1,653,418 82,037 86,443 157,387 195,731 1,126,717 768,268 293,357 163,743 




Accrued Interest — 24,727 — 975 — — — — 1,857 — 

Cash &Bank Balance (6,407) (274) (847) 4,578 17,149 — 6,282 — (1,100) — 

Dividend Receivable 450 — 686 324 313 — 172 — — — 

Receivable for Sale of Investments 29,140 59,686 132,184 29,140 52,906 — 22,274 — 10,151 — 


Other Current Assets (for Investments) 2 0 (1) (1) 2 — 2 — — — 

Total 23,185 84,139 132,023 35,016 70,370 — 28,729 — 10,908 — 




Accrued Interest — — — — — — 25,346 24,238 3,587 3,357 

Cash &Bank Balance 62,100 — 67,914 — 679,434 — (15,940) 4,317 169 454 

Dividend Receivable — — 66 — — — — 25 — — 

Receivable for Sale of Investments — — 7,594 — 31,122 — 16,090 51,449 179 811 


Other Current Assets (for Investments) 2 — 10 — 77 — 10 13 7 8 

Total 62,102 — 75,585 — 710,634 — 25,506 80,043 3,942 4,630 


# represents interfund receivables or payables

111 








Accrued Interest 7,553 4,594 23,923 6,369 8 44 67,692 37,221 — — 

Cash &Bank Balance 696 8,339 59,224 6,767 5 61,041 27,942 23,835 3,713 (47,097) 

Dividend Receivable — 4 — — — — — — — — 

Receivable for Sale of Investments 1,166 3,754 — — — — — 19,791 — — 


Other Current Assets (for Investments) — 1 24 (0) (0) — 3 0 2 0 

Total 9,415 16,692 83,171 13,136 13 61,085 95,637 80,847 3,715 (47,097) 




Accrued Interest 14,839 23,659 — — — 588 62,953 36,941 51,502 53,451 

Cash &Bank Balance 360,702 1,113,915 — — — (4,741) 48,256 242,586 (2,557) (141,432) 

Dividend Receivable — — — — — — — 6 — 17 

Receivable for Sale of Investments — — — — — — 10,606 3,794 17,913 12,816 


Other Current Assets (for Investments) (1) 2 — — — — 148 98 14 0 

Total 375,540 1,137,576 — — — (4,153) 121,964 283,425 66,872 (75,148) 




Accrued Interest 17,504 8,684 415 330 — — 1,591,819 1,194,771 

Cash &Bank Balance 214,414 (682) (298) 2,206 1,000,000 — 3,763,074 4,072,167 

Dividend Receivable 84 5 8 — — — 2,205 5,000 

Receivable for Sale of Investments 45,780 3,284 2,634 55 — — 2,127,843 858,186 

Unit Collection A/c# — — — — — — — — 

Other Current Assets (for Investments) 3 (0) 7 — — — 578 1,037 


Total 277,785 11,291 2,768 2,591 1,000,000 — 7,485,518 6,131,161 

# represents interfund receivables or payables

112 




CURRENT LIABILITIES 




Payable for Purchase of Investments - - - - - 1,883 80 4,933 694 2,614 

Other Current Liabilities - 780 - 735 - 2,762 - 1,728 - 195 

Unit Payable a/c# - - - - - - - - - - 

Total - 780 - 735 - 4,645 80 6,661 694 2,809 




Payable for Purchase of Investments 42,996 169,694 - 48,448 47,735 441,599 270,656 327,894 41,813 78,195 

Other Current Liabilities - 27,543 - 2,063 - 7,513 - 10,568 - 1,327 


Total 42,996 197,237 - 50,511 47,735 449,112 270,656 338,462 41,813 79,522 




Payable for Purchase of Investments 15,473 63,296 32,582 49,840 16,247 - 11,218 - - - 

Other Current Liabilities - 2,394 - 2,400 - - - - - - 


Total 15,473 65,690 32,582 52,240 16,247 - 11,218 - - - 




Payable for Purchase of Investments - - - - 112,129 - 637 33,649 - 238 

Other Current Liabilities - - - - - - - 1,077 - 103 


Total - - - - 112,129 - 637 34,726 - 341 


# Represents inter fund receivables or payables, if any

113 








Payable for Purchase of Investments 1,486 3,020 - - - - - 2 - - 

Other Current Liabilities - 242 - 179 - 4 - 512 - 166 


Total 1,486 3,262 - 179 - 4 - 514 - 166 




Payable for Purchase of Investments - - - - - - 21,474 11,191 1,035 25,140 

Other Current Liabilities - 738 - - - 9 - 1,186 - 1,378 


Total - 738 - - - 9 21,474 12,377 1,035 26,518 




Payable for Purchase of Investments 1,741 5,959 104 493 - - 618,098 1,268,087 

Other Current Liabilities - 238 - 17 - - - 65,855 

Unit Payable a/c# - - - - - - - - 

Total 1,741 6,197 104 510 - - 618,098 1,333,942 

# Represents inter fund receivables or payables, if any 


114 

Schedules to Fund Revenue Account ANNEXURE 3 

Schedule: F- 5 


OTHER EXPENSES* 




Policy Administration charge 57,200 39,651 140,338 40,014 125,053 87,309 55,425 51,249 18,317 21,800 

Surrender charge 1,868 140 289 1 4,841 802 1,888 908 4,263 385 

Switching charge 547 179 58 2 559 159 100 30 9 19 

Mortality charge 17,403 15,569 9,413 892 80,784 46,963 29,020 25,068 3,035 3,430 

Rider Premium charge - - - - - - - - - - 

Partial withdrawal charge - - - - - - - - - - 

Miscellaneous charge - - - - - - - - - - 

Total 77,018 55,539 150,098 40,909 211,237 135,233 86,433 77,255 25,624 25,634 




Policy Administration charge 3,563,877 2,418,888 40,912 30,778 265,327 264,672 1,690,661 1,234,378 649,490 549,228 

Surrender charge 212,170 21,049 7,206 2,674 91,754 7,035 51,127 237 3,213 - 

Switching charge 1,479 1,085 113 23 553 189 1,461 385 101 11 

Mortality charge 1,700,178 963,075 27,350 25,965 134,360 143,013 373,343 319,108 86,821 66,457 




Total 5,477,704 3,404,097 75,581 59,440 491,994 414,909 2,116,592 1,554,108 739,625 615,696 

*Any expense which is 1% of the total expenses incurred should be disclosed as a separate line item. 




Policy Administration charge 106,247 96,102 131,558 19,839 109,697 - 49,670 - 4,041 - 

Surrender charge - - - - 177 - 59 - - - 

Switching charge - - - - - - - - - - 

Mortality charge 49,304 46,789 51,884 8,941 42,080 - 19,940 - 876 - 




Total 155,551 142,891 183,442 28,780 151,954 - 69,669 - 4,917 - 




Policy Administration charge 570 - 7,442 - 11,833 - 25,468 22,697 2,360 2,225 

Surrender charge - - - - - - 6,190 375 1,195 250 

Switching charge - - 48 - - - 4 4 2 1 

Mortality charge 155 - 3,067 - 2,650 - 2,071 2,439 196 230 




Total 725 - 10,557 - 14,483 - 33,733 25,515 3,753 2,706 


*Any expense which is 1% of the total expenses incurred should be disclosed as a separate line item.

115 

Schedules to Fund Revenue Account ANNEXURE 3 

Schedule: F- 5 


OTHER EXPENSES* 

Particulars IPP - Growth Gr. Fixed Interest Gr-Gilt Gr. Bond Gr. Money Market 



Policy Administration charge 5,070 4,583 62 511 - 5 3,069 2,250 3,508 180 

Surrender charge 847 46 - - - - - - - - 

Switching charge 1 1 - - - - - - - - 

Mortality charge 315 373 - - - - - - - - 




Total 6,233 5,003 62 511 - 5 3,069 2,250 3,508 180 




Policy Administration charge 1,913 158 - 1,541 139 200 1,756 4,695 7,915 10,089 

Surrender charge - - - - - - - - - - 

Switching charge - - - - - - - - - - 

Mortality charge - - - - - - - - - - 




Total 1,913 158 - 1,541 139 200 1,756 4,695 7,915 10,089 





Policy Administration charge 2,608 3,097 - - - - 7,081,526 4,906,139 

Surrender charge - - - - - - 387,087 33,902 

Switching charge - - - - - - 5,035 2,088 

Mortality charge - - - - - - 2,634,245 1,668,312 

Rider Premium charge - - - - - - - - 

Partial withdrawal charge - - - - - - - - 

Miscellaneous charge - - - - - - - - 

Total 2,608 3,097 - - - - 10,107,893 6,610,441 



116 

ANNEXURE TO REVENUE ACCOUNT-Break up of Unit Linked Business (UL) ANNEXURE 3 

REVENUE ACCOUNT FOR FINANCIAL YEAR ENDED 31st March 2010 

(Amount in thousands of Indian Rupees) 


Particulars Linked Life Linked Pension Linked Group Linked Health Total Unit 

Linked 

Non-Unit Unit Total Non-Unit Unit Total Non-Unit Unit Total Non-Unit Unit Total (13)=(3)+ 

(1) (2) (3)=(1) + (2) (4) (5) (6)=(4) + (5) (7) (8) (9)= (7) + (8) (10) (11) (12)= (10) + (11) (6)+(9)+(12) 

Premiums earned – net 

(a) Premium 2,636,427 42,022,709 44,659,136 191,483 2,493,583 2,685,066 - 7,025,211 7,025,211 13,135 49,292 62,427 54,431,840 

(b) Reinsurance ceded (612,307) - (612,307) (297) - (297) - - - - - - (612,604) 


(a) Interest, Dividend & Rent - Gross 335,087 3,731,125 4,066,212 22,114 270,379 292,493 2,799 692,480 695,279 204 71 275 5,054,259 

(b) Profit on sale/redemption of investments 32,296 21,651,894 21,684,190 2,131 1,182,861 1,184,992 269 1,243,388 1,243,657 20 670 690 24,113,529 

(c) Loss on sale/redemption of investments (3,137) (3,102,806) (3,105,943) (208) (146,395) (146,603) (27) (156,634) (156,661) (2) (196) (198) (3,409,405) 

(d) Unrealised gain/(loss) - 13,151,666 13,151,666 - 629,789 629,789 - 357,725 357,725 - 1,058 1,058 14,140,238 

(e) Gain Loss on Amortisation (27,363) - (27,363) (1,806) - (1,806) (229) - (229) (17) - (17) (29,415) 

Other income: - - - - - - - - 

(a) Linked Income - Charges 11,081,820 (11,081,820) - 502,419 (502,419) - 121,223 (121,223) - 3,381 (3,381) - - 

(b) Linked Income - Others 9,429 - 9,429 48,928 - 48,928 7,077 - 7,077 50 - 50 65,484 

(c) Contribution from the Shareholders’ a/c 4,459,682 - 4,459,682 260,214 - 260,214 24,537 24,799 49,336 26,842 - 26,842 4,796,074 

TOTAL (A) 17,911,934 66,372,768 84,284,702 1,024,978 3,927,798 4,952,776 155,649 9,065,746 9,221,395 43,613 47,514 91,127 98,550,000 

Commission 4,950,290 - 4,950,290 142,262 142,262 209 209 13,360 13,360 5,106,121 

Operating Expenses related to Insurance Business 12,041,371 - 12,041,371 882,485 882,485 154,678 154,678 25,582 25,582 13,104,116 

Provision for Taxation - - - - - 

TOTAL (B) 16,991,661 - 16,991,661 1,024,747 - 1,024,747 154,887 - 154,887 38,942 - 38,942 18,210,237 

Benefits Paid (Net) 569,431 7,958,045 8,527,476 1,156 326,261 327,417 1,877 2,394,724 2,396,601 - - 11,251,494 

Interim Bonus Paid - - - - - - - - - - - 

Change in valuation of liability in respect 

of life policies - - - - - - - - - - - 

Transfer to Non - Linked Reserves (4,451,417) 4,451,417 - (579,774) 579,774 - - - - - - 

Change in Valuation Liability 3,250,957 53,963,306 57,214,263 435,518 3,021,763 3,457,281 (1,115) 6,671,022 6,669,907 4,645 47,514 52,159 67,393,610 

TOTAL (C) (631,029) 66,372,768 65,741,739 (143,100) 3,927,798 3,784,698 762 9,065,746 9,066,508 4,645 47,514 52,159 78,645,104 

SURPLUS/ (DEFICIT) (D) =(A)-(B)-(C) 1,551,302 - 1,551,302 143,331 - 143,331 - - - 26 - 26 1,694,659 


Insurance reserve at the beginning of the year - - - - - - - - - - - - - 

Transfer to Shareholders’ a/c - - - - - - - - - - - - - 

Funds available for future appropriations 1,551,302 - 1,551,302 143,331 - 143,331 - - - 26 0 26 1,694,659 

Total (D) 1,551,302 - 1,551,302 143,331 - 143,331 - - - 26 0 26 1,694,659 


117 

Schedules to Annexure to Revenue Account (UL) forming part of Financial Statements ANNEXURE 3 

Schedule-UL1 


Linked Income (Recovered from linked funds)* for the Year ended 31st March 2010 

Particulars Life Linked Unit Linked Pension Linked Group Unit Linked Health Total 

Fund Administration charges NA NA NA NA NA 

Fund Management charge 1,405,715 94,933 100,254 48 1,600,950 

Policy Administration charge 6,670,421 387,744 20,969 2,392 7,081,526 

Surrender charge 378,123 8,964 NA NA 387,087 

Switching charge 5,029 6 NA NA 5,035 

Mortality charge /Rider Premium Charge 2,622,532 10,772 NA 941 2,634,245 

Partial withdrawal charge NA NA NA NA NA 

Miscellaneous charge NA NA NA NA NA 

TOTAL (UL-1) 11,081,820 502,419 121,223 3,381 11,708,843 

Schedule–UL2 


BENEFITS PAID [NET] for the financial year ended 31st March 2010 

Sr Particulars Linked Life Linked Pension Linked Group Linked Health Total Unit 

No. 

Non Unit Unit Linked Life Non-Unit Unit Linked Non-Unit Unit Linked Linked 

Pension Group Non-Unit Unit Group 

(1) (2) (3)=(1)+(2) (4) (5) (6)=(4)+(5) (7) (8) (9)=(7)+(8) (10) (11) (12)=(10) (13)=(3)+(6) 

+(11) +(9)+(12) 


(a) Claims by Death 867,220 104,009 971,229 1,131 22,922 24,053 1,877 - 1,877 - - - 997,159 

(b) Claims by Maturity - 76,652 76,652 - 875 875 - - - - - 77,527 

(c) Annuities / Pension payment - - - - - - - - - - - - - 

(d) Other benefits - - - - - - - - - - - - - 

- Surrender 11,661 7,734,217 7,745,878 50 302,464 302,514 - 2,394,724 2,394,724 - - - 10,443,116 

- Survival - 43,167 43,167 - - - - - - - - - 43,167 

Sub Total (A) 878,881 7,958,045 8,836,926 1,181 326,261 327,442 1,877 2,394,724 2,396,601 - - - 11,560,969 

2 Amount Ceded in reinsurance 

(a) Claims by Death 309,450 - 309,450 25 - 25 - - - - - - 309,475 

(b) Claims by Maturity - - - - - - - - - - - - - 

(c) Annuities / Pension payment - - - - - - - - - - - - - 

(d) Other benefits - - - - - - - - - - - - - 

- Surrender - - - - - - - - - - - - - 

- Survival - - - - - - - - - - - - - 

Sub Total (B) 309,450 - 309,450 25 - 25 - - - - - - 309,475 

TOTAL (A) - (B) 569,431 7,958,045 8,527,476 1,156 326,261 327,417 1,877 2,394,724 2,396,601 - - - 11,251,494 

Benefits paid to claimants: 

In India 569,431 7,958,045 8,527,476 1,156 326,261 327,417 1,877 2,394,724 2,396,601 - - - 11,251,494 

Outside India 

TOTAL (UL2) 569,431 7,958,045 8,527,476 1,156 326,261 327,417 1,877 2,394,724 2,396,601 - - - 11,251,494 


118 

ANNEXURE TO REVENUE ACCOUNT-Break up of Unit Linked Business (UL) ANNEXURE 3 

REVENUE ACCOUNT FOR FINANCIAL YEAR ENDED 31st March 2009 



Particulars Linked Life Linked Pension Linked Group Total Unit 

Linked 

Non-Unit Unit Total Non-Unit Unit Total Non-Unit Unit Total Health (10)=(3)+ 

(1) (2) (3)=(1) + (2) (4) (5) (6)=(4) + (5) (7) (8) (9)= (7) + (8) (6)+(9) 

Premiums earned – net 

(a) Premium 2,010,149 36,054,206 38,064,355 362,973 3,102,957 3,465,930 - 2,698,566 2,698,566 44,228,851 

(b) Reinsurance ceded (385,772) - (385,772) 2,250 - 2,250 - - - (383,522) 


(a) Interest, Dividend & Rent - Gross 186,226 2,862,349 3,048,575 2,923 138,223 141,146 3,400 558,254 561,654 3,751,375 

(b) Profit on sale/redemption of 

investments 34,055 2,528,700 2,562,755 535 167,268 167,803 622 523,480 524,102 3,254,660 

(c) Loss on sale/redemption of 

investments (9,051) (10,023,873) (10,032,924) (144) (360,394) (360,538) (165) (761,191) (761,356) (11,154,818) 

(d) Unrealised gain/(loss) - (2,936,727) (2,936,727) - 102,313 102,313 - 126,118 126,118 (2,708,296) 

(e) Gain Loss on Amortisation - (348) (348) - (5) (5) - (6) (6) (359) 

Other income: 

(a) Linked Income - Charges 7,140,019 (7,140,019) - 172,101 (172,101) - 79,075 (79,075) - - 

(b) Linked Income - Others 48,110 - 48,110 (3,545) - (3,545) 2,325 - 2,325 46,890 

(c) Contribution from the 

Shareholders’ a/c 6,189,622 - 6,189,622 1,416,268 - 1,416,268 17,999 10,956 28,955 7,634,845 

TOTAL (A) 15,213,358 21,344,288 36,557,646 1,953,361 2,978,261 4,931,622 103,256 3,077,102 3,180,358 - 44,669,626 

Commission 4,563,837 4,563,837 216,186 216,186 3,170 3,170 4,783,193 

Operating Expenses related to 

Insurance Business 10,544,495 10,544,495 1,727,277 1,727,277 75,298 75,298 12,347,070 

Provision for Taxation 51,431 51,431 8,951 8,951 364 364 60,746 

TOTAL (B) 15,159,763 - 15,159,763 1,952,414 - 1,952,414 78,832 - 78,832 - 17,191,009 

Benefits Paid (Net) 286,137 3,985,103 4,271,240 3,321 162,589 165,910 21,113 1,959,658 1,980,771 6,417,921 

Interim Bonus Paid - - - - - - - - - - - 

Change in valuation of liability 

in respect of life policies 

Transfer to Non - Linked Reserves (2,234,994) 2,234,994 - (46,168) 46,168 - - - 

Change in Valuation Liability 1,001,059 15,124,191 16,125,250 14,414 2,769,504 2,783,918 3,311 1,117,444 1,120,755 20,029,923 

TOTAL (C) (947,798) 21,344,288 20,396,490 (28,433) 2,978,261 2,949,828 24,424 3,077,102 3,101,526 - 26,447,844 

SURPLUS/ (DEFICIT) (D) =(A)-(B)-(C) 1,001,393 - 1,001,393 29,380 - 29,380 - - - - 1,030,773 

APPROPRIATIONS - - - - 

Insurance reserve at the beginning of the year - - - - 

Transfer to Shareholders’ a/c - - - - 

Funds available for future appropriations 1,001,393 - 1,001,393 29,380 - 29,380 - - - 1,030,773 

Total (D) 1,001,393 - 1,001,393 29,380 - 29,380 - - - - 1,030,773 


119 

Schedules to Annexure to Revenue Account (UL) forming part of Financial Statements ANNEXURE 3 

Schedule-UL1 


Linked Income (Recovered from linked funds)* for the financial year ended 31st March 2009 

Particulars Life Linked Unit Pension Linked Unit Linked Group Unit Total 

Fund Administration charges NA NA NA NA 

Fund Management charge 704,192 20,212 56,349 780,753 

Policy Administration charge 4,737,469 145,944 22,726 4,906,139 

Surrender charge 33,230 671 0 33,901 

Switching charge 2,083 7 0 2,090 

Mortality charge /Rider Premium Charge 1,663,045 5,267 0 1,668,312 

Partial withdrawal charge NA NA NA NA 

Miscellaneous charge NA NA NA NA 

TOTAL (UL-1) 7,140,019 172,101 79,075 7,391,195 

Schedule–UL2 


BENEFITS PAID [NET] for the financial year ended 31st March 2009 

Sr. Particulars Linked Life Linked Pension Linked Group Total Unit Linked 

No. 

Non-Unit Unit Linked Life Non-Unit Unit Linked Pension Non-Unit Unit Linked Group 

(1) (2) (3)=(1)+(2) (4) (5) (6)=(4)+(5) (7) (8) (9)=(7)+(8) (10)=(3)+(6)+(9) 


(a) Claims by Death 458,357 60,392 518,749 3,401 6,582 9,983 21,113 — 21,113 549,845 

(b) Claims by Maturity — 51,148 51,148 — 1,041 1,041 — — — 52,189 

(c) Annuities / Pension payment — — — — — — — — — — 

(d) Other benefits 

- Surrender 7,769 3,796,128 3,803,897 — 154,966 154,966 — 1,959,658 1,959,658 5,918,521 

- Survival — 77,435 77,435 — — — — — — 77,435 

Sub Total (A) 466,126 3,985,103 4,451,229 3,401 162,589 165,990 21,113 1,959,658 1,980,771 6,597,990 

2 Amount Ceded in reinsurance 

(a) Claims by Death 179,989 — 179,989 80 — 80 — — — 180,069 

(b) Claims by Maturity — — — — — — — — — — 

(c) Annuities / Pension payment — — — — — — — — — — 

(d) Other benefits 

- Surrender — — — — — — — — — — 

- Survival — — — — — — — — — — 

Sub Total (B) 179,989 — 179,989 80 — 80 — — — 180,069 

TOTAL (A) - (B) 286,137 3,985,103 4,271,240 3,321 162,589 165,910 21,113 1,959,658 1,980,771 6,417,921 

Benefits paid to claimants: 

In India 286,137 3,985,103 4,271,240 3,321 162,589 165,910 21,113 1,959,658 1,980,771 6,417,921 

Outside India — — — — — — — — — — 

TOTAL (UL2) 286,137 3,985,103 4,271,240 3,321 162,589 165,910 21,113 1,959,658 1,980,771 6,417,921 



ANNEXURE 3A 

Disclosure for ULIP Business 

1. Performance of the Fund (Absolute Growth %) (Appendix 1) 

2. Investment Management 

• Activities Outsourced: Nil 

• Fees Paid for various activities charged to Policyholders account for the Period ended 31 st March 

2010: Nil (Previous Year Nil) 

3. Related Party Transactions (Appendix 1A) 

4. Company wise details of Investments held in Promoters Group along with its Percentage to funds under 

management. This information is to be given fund wise and total fund under ULIP. (Appendix 2) 

5. Industry wise disclosures of Investments (amount in thousands) (Appendix 3) 

6. Unclaimed redemption of units: NIL 

7. NAV: Highest, Lowest & Closing at the end of the Year (Appendix 4) 

8. Expenses charged to Fund (%) (Appendix 5) 

9. Ratio of Gross Income (including unrealized gains) to Average Daily Net Assets (Appendix 6) 

10. As at 31 st March 2010, there are no doubtful debts on assets of the respective funds. 

11. Fund Wise disclosure of appreciation and/or depreciation in value of Investments (Appendix 7) 

120


Appendix 1 to Annexure 3A 

Performance of ULIP funds (Absolute Growth - %) 

Returns as on 31st March 2010 

INDIVIDUAL LIFE 

FUND NAME Year Of Inception FY 2009-10 FY 2008-09 FY 2007-08 Since Inception 

Ind. Assure 12-Sep-05 9.85% 16.17% 13.08% 54.64% 

Ind. Income Advantage 22-Aug-08 10.07% 18.29% NA 30.19% 

Ind. Protector 22-Mar-01 14.42% 8.39% 11.05% 114.61% 

Ind. Builder 22-Mar-01 23.30% 4.46% 12.52% 164.99% 

Ind. Balancer 18-Jul-05 25.44% 6.89% 13.50% 69.66% 

Ind. Enhancer 22-Mar-01 28.49% -3.07% 12.72% 220.10% 

Ind. Creator 23-Feb-04 51.80% -5.25% 19.85% 150.99% 

Ind. Magnifier 12-Aug-04 74.86% -32.67% 21.34% 164.41% 

Ind. Maximiser 12-Jun-07 91.14% -32.24% 8.96% 41.11% 

Ind. Multiplier 30-Oct-07 139.39% -38.78% -20.99% 15.79% 

Ind. Platinum Plus 1 17-Mar-08 55.96% -29.88% 4.27% 9.36% 

Ind. Platinum Plus 2 8-Sep-08 70.51% -9.94% NA 53.56% 

Ind. Platinum Plus 3 15-May-09 17.98% NA NA 17.98% 

Ind. Platinum Plus 4 15-Sep-09 4.05% NA NA 4.05% 

Titanium Plus 1 16-Dec-09 2.43% NA NA 2.43% 

Titanium Plus 2 16-Mar-10 0.29% NA NA 0.29% 

Super 20 6-Jul-09 23.14% NA NA 23.14% 

Platinum Premier 1 15-Feb-10 3.98% NA NA 3.98% 

IPP - Enrich 12-Mar-03 37.23% -1.60% 15.01% 158.51% 

IPP - Nourish 12-Mar-03 14.02% 11.67% 10.73% 80.15% 

IPP - Growth 18-Mar-03 23.01% 11.05% 13.20% 119.49% 

GROUP LIFE 

FUND NAME Year Of Inception FY 2009-10 FY 2008-09 FY 2007-08 Since Inception 

Gr. Fixed Interest Plan I 18-Nov-02 13.35% 20.93% 10.06% 79.92% 

Gr. Fixed Interest Pan II 26-Dec-03 15.02% 21.95% 11.14% 67.58% 

Gr. Gilt Plan I 28-Apr-04 6.38% 22.90% 6.27% 47.22% 

Gr. Gilt Plan II 7-Nov-07 6.38% 22.53% 1.79% 32.68% 

Gr. Bond Plan I 28-Apr-04 11.99% 17.47% 14.07% 49.74% 

Gr. Bond Plan II 16-Oct-06 13.22% 18.63% 15.20% 57.16% 

Gr. Money Market Plan I 31-Mar-05 10.36% 15.06% 12.38% 61.40% 

Gr. Money Market Plan II 31-Mar-05 11.57% 16.40% 13.03% 64.92% 

Gr. Short Term Debt Plan I 10-Dec-08 8.31% 3.30% NA 11.88% 

Gr. Short Term Debt Plan II 10-Dec-08 10.07% 3.49% NA 13.91% 

Gr. Capital Protection Plan I** 31-Mar-06 NA 2.68% 12.42% NA 

Gr. Capital Protection Plan II** 31-Mar-06 NA 2.68% 12.42% NA 

Gr. Floating Rate Plan I*** 28-Apr-04 2.46% 7.81% 7.46% NA 

Gr. Floating Rate Plan II*** 31-Mar-06 3.04% 9.00% 8.54% NA 

Gr. Secure Plan I 19-Jun-01 20.58% 7.42% 14.27% 178.53% 

Gr. Secure Plan II 19-Jun-01 21.92% 8.60% 15.38% 91.22% 

Gr. Stable Plan I 31-Aug-01 30.91% -0.17% 13.56% 273.78% 

Gr. Stable Plan II 31-Aug-01 32.40% 0.98% 14.74% 117.33% 

Gr. Growth Plan I 31-Aug-01 44.83% -1.94% 22.63% 342.45% 

Gr. Growth Plan II 31-Aug-01 46.42% -0.83% 23.87% 188.72% 

Gr. Growth Advantage 18-Feb-08 53.86% -1.01% NA 52.30% 

Gr. Income Advantage 23-Mar-10 NA NA NA NA 

Gr. Growth Index Plus**** 18-Feb-08 NA NA NA NA 

Gr. Growth Multiplier**** 18-Feb-08 NA NA NA NA 

Gr. Growth Maximsier**** 23-Mar-10 NA NA NA NA 

** The Group Capital Protection Fund became a dormant fund on 12th August 2008 on account of no units. Returns for FY 08-09 are as on 11th August 2008. 

*** The Group Floating Fund became a dormant fund on 12th October 2009 on account of no units. 

**** These funds do not have any units since their inception. 

121


Appendix 1A to Annexure 3A 


Related Party Transactions 

Related Party : Aditya Birla Money Limited 

Service : Brokerage for purchase / sale of securities 

Basis of Payment : As per agreed % of trade value 

Fund Name Current Previous 

Year 

Year 

Ind. Protector 190 10 

Ind. Builder 184 12 

Ind. Balancer 34 4 

Ind. Enhancer 2,239 209 

Ind. Creator 385 52 

Ind. Magnifier 2,627 228 

Ind. Maximiser 3,883 244 

Ind. Multiplier 832 25 

Ind. Platinum Plus 1 1,065 38 

Ind. Platinum Plus 2 1,297 21 

Ind. Platinum Plus 3 430 - 

Ind. Platinum Plus 4 198 - 

Titanium Plus 1 11 - 

Super 20 29 - 

Platinum Premier 1 73 - 

IPP - Enrich 201 19 

IPP - Growth 10 1 

IPP - Nourish 35 4 

Gr. Growth Advantage 14 1 

Gr. Growth 158 17 

Gr. Secure 160 17 

Gr. Stable 346 46 

Total 14,402 946 

122




Investment in promoter group companies 

As on 31st March 2010 

Ind. Assure 

Ind. Assure 

Name of the Company Current Year Previous Year 

Debt & % to the Debt & % to the 

MF Equity Fund MF Equity Fund 

Aditya Birla Nuvo Limited 52,584 4.29 

Birla Global Finance Limited 

Birla Mutual Fund 78,460 5.07 7,738 0.63 

Grasim Industries Limited 

Hindalco Industries Limited 

Idea Cellular Limited 

Ultratech Cement Company Limited 49,700 4.06 

Total Investment in 

Promoter Group Companies 78,460 5.07 110,023 8.98 

Asset held 1,546,871 1,225,608 

Ind. Protector 










Idea Cellular Limited 5,135 0.15 

Ultratech Cement Company Limited 


Promoter Group Companies 153,233 3.91 52,494 5,135 1.72 

Asset held 3,923,643 3,349,191 

123






Ind. Income Advantage 

Ind. Income Advantage 







Grasim Industries Limited 12,411 0.70 12,316 1.22 





Promoter Group Companies 41,912 2.37 104,363 10.33 

Asset held 1,769,922 1,010,358 

Ind. Builder 

Ind. Builder 




Aditya Birla Nuvo Limited 16,255 0.62 16,593 0.79 









Asset held 2,622,998 2,096,559 

124






Ind. Balancer 

Ind. Balancer 






Birla Mutual Fund 98 0.04 3,238 1.34 



Idea Cellular Limited 882 0.37 



Promoter Group Companies 98 0.04 3,238 882 1.71 

Asset held 270,308 240,823 

Ind. Creator 

Ind. Creator 




Aditya Birla Nuvo Limited 10,755 0.53 

Birla Global Finance Limited 4,624 0.23 








Asset held 2,976,669 2,040,350 

125






Ind. Enhancer 

Ind. Enhancer 




Aditya Birla Nuvo Limited 629,002 1.19 570,806 1.66 

Birla Global Finance Limited 101,003 0.29 

Birla Mutual Fund 1,881,254 3.56 662,955 1.93 


Hindalco Industries Limited 49,302 0.14 




Promoter Group Companies 2,556,122 4.83 1,426,904 116,425 4.50 

Asset held 52,878,593 34,289,416 

Ind. Magnifier 








Grasim Industries Limited 145,911 1.08 



Ultratech Cement Company Limited 149,108 1.89 


Promoter Group Companies 115,832 145,911 1.94 873,600 48,384 11.66 

Asset held 13,519,589 7,906,432 

126






Ind. Maximiser 





Aditya Birla Nuvo Limited 107,445 0.95 








Promoter Group Companies 409,567 232,000 2.49 426,699 131,402 4.96 

Asset held 25,783,415 11,251,161 

Ind. Platinum Plus 1 Ind. Platinum Plus 1 






Birla Mutual Fund 92,346 2.20 453 0.02 






Promoter Group Companies 92,346 51,332 3.43 453 50,075 2.59 

Asset held 4,191,411 1,948,864 

127






Ind. Multiplier 













Promoter Group Companies 54,432 1.41 561 24,319 1.98 

Asset held 3,861,257 1,254,912 













Promoter Group Companies 34,733 0.59 9 45,854 2.06 

Asset held 5,880,439 2,231,241 

128










Birla Mutual Fund 95,387 3.14 






Promoter Group Companies 95,387 36,793 4.35 

Asset held 3,041,495 



Super 20 Super 20 










Promoter Group Companies 2,429 0.89 

Asset held 271,890 



129










Birla Mutual Fund 291 0.01 

Grasim Industries Limited 24,810 1.23 





Promoter Group Companies 291 24,810 1.24 

Asset held 2,016,151 



Titanium Plus 1 Titanium Plus 1 




Birla Mutual Fund 16 0.01 






Promoter Group Companies 16 3,941 1.83 




130






Platinum Premier I 

Platinum Premier I 




Birla Mutual Fund 










IPP - Growth 

IPP - Growth 












Promoter Group Companies 27,671 7.67 30,312 904 10.47 

Asset held 360,803 298,202 

131






IPP - Nourish 

IPP - Nourish 












Promoter Group Companies 6,904 5.13 9,043 398 7.51 

Asset held 134,525 125,641 

IPP - Enrich 

IPP - Enrich 







Grasim Industries Limited 10,792 0.60 10,709 0.80 






Asset held 1,791,756 1,337,254 

132






Gr. Gilt 

Gr. Gilt 






Birla Mutual Fund - 11 0.20 






Promoter Group Companies 11 0.20 

Asset held 410 5,496 

Gr. Money Market 







Birla Mutual Fund 3 0.00 2,268 1.12 






Promoter Group Companies 3 0.00 53,188 26.17 

Asset held 164,048 203,263 

133






Gr. Bond 

Gr. Bond 












Promoter Group Companies 89,979 3.66 67,805 6.14 

Asset held 2,456,023 1,103,436 

Gr. Floating Rate 














Asset held 0 37,703 

134






Gr. Secure 

Gr. Secure 







Grasim Industries Limited 10,792 9,244 0.48 10,709 0.59 





Promoter Group Companies 127,410 9,244 3.27 51,621 4,218 3.09 

Asset held 4,184,619 1,805,681 

Gr. Growth 

Gr. Growth 







Grasim Industries Limited 10,792 0.63 10,709 1.93 






Asset held 1,702,743 554,116 

135






Gr. Stable 

Gr. Stable 







Grasim Industries Limited 32,377 15,228 1.29 32,128 1.14 





Promoter Group Companies 98,280 15,228 3.09 88,310 7,535 3.41 

Asset held 3,677,179 2,812,326 

Gr. Growth Advantage 





Aditya Birla Nuvo Limited 213 0.23 215 1.00 








Promoter Group Companies 4,886 5.25 1,340 184 7.07 

Asset held 92,982 21,552 

136






Gr. Short Term Debt 







Birla Mutual Fund 22,528 4.10 502 0.05 




Ultratech Cement Company Limited 99,406 9.66 


Promoter Group Companies 22,528 4.10 106,826 10.38 

Asset held 550,116 1,029,194 

Gr. Fixed Interest 













Promoter Group Companies 126,790 10.71 13,475 5.67 

Asset held 1,183,774 237,602 

137






BSLI ULIP level BSLI ULIP level 


Debt & MF Total Equity Grand Total ULIPs Debt & MF Total Equity Grand Total ULIPs 

Aditya Birla Nuvo Limited 645,470 — 645,470 0.46 1,122,345 — 1,122,345 1.43 

Birla Global Finance Limited — — — 0.00 143,926 — 143,926 0.18 

Birla Mutual Fund 3,609,850 — 3,609,850 2.55 1,773,602 — 1,773,602 2.26 

Grasim Industries Limited 215,845 525,803 741,647 0.52 214,184 — 214,184 0.27 

Hindalco Industries Limited — — — 0.00 49,302 — 49,302 0.06 

Idea Cellular Limited — — — 0.00 — 469,572 469,572 0.60 

Ultratech Cement Company Limited — — — 0.00 298,214 — 298,214 0.38 

Total Investment in Promoter Group Companies 4,471,165 525,803 4,996,968 3.52 3,601,574 469,572 4,071,146 5.19 

Asset held 141,758,439 — 78,416,381 

Note: The Asset held figures do not include last day collection. 

138




Disclosure of Investment - Industrywise 

Ind.Assure 


Industry Security Nature of Current Year Previous Year 

security Market value % Market % 

holding value holding 

INFRASTRUCTURE 

FINANCE SERVICES 252,256 16.31 107,671 8.79 

11.45% RECL Ltd NCD (MD 26/05/2010) DEBT 50,450 3.26 

11.50% RECL Ltd NCD (MD 26/11/2013) DEBT 27,941 1.81 


7% POWER FINANCE (MD 24/12/2011) 

(P/C 24/12/2009) DEBT 19,965 1.29 

7.30% RECL 30-06-2011 DEBT 30,072 1.94 

8.49% Power Finance Corp 09/10/2011 DEBT 20,380 1.32 

8.60% Power Finance Corporation Ltd 

NCD (MD 07/08/2014) DEBT 3,804 0.25 


NCD (MD 09/07/2010) DEBT 83,635 5.41 

FINANCIAL 

INSTITUTIONS 241,034 15.58 36,713 3.00 

6.40% National Housing Bank Ltd. 

(MD 27/01/2013)-P/C 28/03/2011 DEBT 59,957 3.88 

6.55% National Housing Bank 

NCD (MD 20/11/2012) P/C 21/11/11 DEBT 39,661 2.56 


NCD (MD 11/01/2013) P/C 11/01/12 DEBT 19,892 1.29 

8.20% IRFC NCD (MD 27/04/2011) DEBT 10,167 0.66 

8.69% IRFC NCD (MD 07/01/2011) DEBT 30,058 1.94 

9.45% NABARD NCD 

(MD 22/04/2011) P/C 22/04/2010 DEBT 10,019 0.65 

9.50% NABARD NPS Bonds Sr IX I 

(MD 15/10/2012) DEBT 20,805 1.34 

9.68% IRFC NCD (MD 03/07/2010) DEBT 50,475 3.26 

HOUSING 

FINANCE SERVICES 226,205 14.62 174,364 14.23 

11.65% HDFC Ltd NCD (MD 09/09/2010) DEBT 49,985 3.23 

7.99% LIC Housing Finance Ltd 

NCD (MD 12/03/2013) DEBT 50,414 3.26 

9.15% LIC Housing Finance 

(MD 22/10/2010) DEBT 57,986 3.75 

9.90% HDFC Ltd NCD (MD 17/12/2011) DEBT 41,736 2.70 

HDFC Ltd. ZCB (MD 24/08/2011) DEBT 26,083 1.69 

Others 

(Other than G-Sec) 707,712 45.75 478,662 39.06 

139





Ind.Income Advantage 





BANKING SERVICES 396,054 22.38 80,081 7.93 

9.05% SBI Perpetual NCD 

(Call- 27/01/2020) Step Up Rate 9.55% DEBT 30,410 1.72 

9.10% State Bank of Mysore Perpetual 

NCD Call/Step-Up 25/11/2019 DEBT 50,841 2.87 

9.15% State Bank of Patiala PERP 

NCD Call 18/01/2020 StepUp 9.65 DEBT 30,575 1.73 

State Bank of Bikaner & Jaipur CD 

(MD 05/05/10) DEBT 49,744 2.81 

State Bank of Hyderabad CD 

(MD 13/01/2011) DEBT 47,804 2.70 

State Bank of Mysore CD 

(MD 04/05/2010) DEBT 49,751 2.81 



State Bank Of Patiala CD (MD 10/12/2010) DEBT 48,137 2.72 

Syndicate Bank CD (MD 22/06/2010) DEBT 39,515 2.23 


FINANCE SERVICES 201,903 11.41 105,635 10.46 


NCD (MD 28/11/2013) DEBT 55,736 3.15 



7.75% RECL NCD (MD 17/11/2012) DEBT 20,028 1.13 



NCD (MD 07/08/2014) DEBT 40,038 2.26 

Others 


140












10.75% RECL Ltd NCD (MD 24/07/2013) DEBT 32,601 0.83 



10.90% Power Finance Corporation Ltd 

NCD (MD 11/08/2013) DEBT 21,841 0.56 

10.90% RECL Ltd NCD (MD 14/08/2013) DEBT 10,923 0.28 


NCD (MD 28/11/2013) DEBT 66,884 1.70 





NCD (MD 07/08/2014) DEBT 30,028 0.77 



NCD (MD 28/12/2012) DEBT 57,019 1.45 

9.35% IDFC Ltd NCD (MD 09/05/2010) DEBT 25,083 0.64 



NCD Sr XXXVIII (MD 20/09/2012) DEBT 23,601 0.60 

RURAL ELECTRIFICATION 

CORPORATION LIMITED EQUITY SHARES 9,409 0.24 

Others 

(Other than G-Sec) 2,345,285 59.77 2,070,967 61.83 

Ind. Builder 





Others (Other than G-Sec) 2,082,309 79.39 1,648,508 78.63 

The following Sectors were having exposure of more than 10% during previous year but less than 10% during the current year: 

Sector Market Value % holding 

REFINERY 231,348 11.03 

141





Ind. Balancer 









11% IDFC Ltd NCD (MD 21/07/2010) DEBT 7,598 2.81 

11% Power Finance Corpoartion Ltd 

NCD (MD 15/09/2018) DEBT 4,511 1.67 


NCD (MD 28/11/2013) DEBT 5,574 2.06 




NCD (MD 07/08/2014) DEBT 5,005 1.85 


NCD Sr XXXVIII (MD 20/09/2012) DEBT 5,245 1.94 


CORPORATION LIMITED EQUITY SHARES 747 0.28 

FINANCIAL 

INSTITUTIONS 35,597 13.17 1,948 0.81 

10.05% NABARD (MD 11/06/2014) DEBT 10,505 3.89 


NCD (MD 11/01/2013) P/C 11/01/12 DEBT 19,892 7.36 

9.50% NABARD NPS Bonds Sr IX I 

(MD 15/10/2012) DEBT 5,201 1.92 

Others 




BANKING SERVICES 26,552 11.03 

142





Ind. Enhancer 





BANKING SERVICES 6,514,757 12.32 4,017,059 11.72 

10.1% ICICI Bank (Call 09/08/16) 

MD - Perpetual DEBT 53,931 0.10 

10.40% Punjab Nat Bank 

(Maturity-Perpetual) (Call 20/07/2017) DEBT 54,523 0.10 

10.70% HDFC Bank Ltd 

NCD (MD 26/12/2018) DEBT 109,681 0.21 

10.85% Punjab National Bank 

(MD 29/09/2023) Call 29/09/2018 

st-up 11.35% DEBT 246,249 0.47 

5.40% ASIAN DEVELOP BANK 

(27/02/14) DEBT 94,024 0.18 

5.75% ICICI RIB 15122010 AAA DEBT 3,482 0.01 

5.90% Allalahabad Bank Ltd 

NCD (MD 30/06/2012). DEBT 48,170 0.09 

5.90% HDFC Bank Ltd 

NCD (MD 04/05/2014) DEBT 36,464 0.07 

6.50% UTI BANK (MD 15/10/2013) DEBT 74,967 0.14 

6.90% UN BK OF INDIA 07042010 DEBT 9,001 0.02 

7.35% IDBI (28/11/2010) DEBT 100,426 0.19 

7.45% STATE BK OF INDIA 050515 AAA DEBT 956 0.00 

8.25% HDFC Bank Ltd 

NCD (MD 24/10/2015) DEBT 49,124 0.09 

8.47% IDBI Bank NCD 

(MD 05/04/2013) PUT 05/04/2011 DEBT 30,535 0.06 

8.8% ST BK INDIA(050621) 

RSET050616 (Call 06/06/2016) DEBT 1,007 0.00 

8.8% State Bank of Hyderabad 

NCD (MD 29/04/2016) DEBT 52,341 0.10 

9% Canara Bank 

NCD (MD 09/01/2018) DEBT 36,410 0.07 

9.00% Punjab National Bank 

NCD (Perpetual) Call/Step-Up 27/11/2019 DEBT 100,926 0.19 


(Call- 27/01/2020) Step Up Rate 9.55% DEBT 354,786 0.67 

9.1% Axis Bank NCD (MD 28/06/2016) DEBT 40,794 0.08 


(Call- 14/08/2019) Step Up Rate 9.6% DEBT 101,972 0.19 



BANKING SERVICES 

9.15% Bank of Baroda Perpetual 

NCD Step up 9.65% Reset 23/11/19 DEBT 50,935 0.10 


NCD Call 18/01/2020 StepUp 9.65 DEBT 101,917 0.19 

9.25% IDBI Omni Bonds 

NCD (MD 26/03/2014) DEBT 213,124 0.40 

9.30% State Bank of Patiala 

NCD(MD 20/12/2022) 

Call fr 20/12/2017 Int 9.80 DEBT 46,239 0.09 

9.35 Punjab National Bank 

(MD 05/03/2023) Call 05/03/2018 

St-up 9.85 DEBT 41,254 0.08 

9.35% State Bank of Hyderabad NCD 

(MD 19/03/2023) call 19/03/18 

Stepup 9.85 DEBT 72,224 0.14 

9.75% Punjab Nati Bank 

(Maturity-Perpetual) 

(Call 11/12/2017) Step up 10.25 DEBT 105,182 0.20 

143





Ind. Enhancer 





9.78% State Bank of Bik & Jai 

NCD (MD15/10/2022)(Call-15/10/17 

stepup -10.28 DEBT 82,738 0.16 

9.8% State Bank of Mysore Perpetual 

(30/11/2017)Call 301117 Stepup 10.30% DEBT 106,143 0.20 

9.80% ICICI Bank Ltd 

NCD (MD 10/02/2013) DEBT 79,507 0.15 

9.80% State Bank of Saurashtra Ltd 

NCD (MD 30/06/2016) DEBT 31,612 0.06 

9.85% State Bank of Bik & Jai 

NCD(MD Perpetual) call 20/03/18 

stepup 10.35 DEBT 79,558 0.15 

9.85% State Bank of India (28/06/2016) DEBT 52,801 0.10 


(MD Perpetual) call 28/03/2018 

Stepup 10.45 DEBT 50,122 0.09 

9.95% State Bank of Travancore 

NCD(MD Perpetual) Call 31/03/18 

stepup 10.45 DEBT 41,546 0.08 

9.98% ICICI Bank Ltd 

(Maturity-Perpetual)(Call and 

Steup up 13/09/16)10.98% DEBT 214,721 0.41 

Axis Bank CD (MD 29/12/2010) DEBT 95,777 0.18 

AXIS BANK LIMITED EQUITY SHARES 1 0.00 

Canara Bank CD (MD 10/05/2010) DEBT 79,509 0.15 

BANKING SERVICES FEDRAL BANK LTD EQUITY SHARES 157,442 0.30 

HDFC BANK EQUITY SHARES 388,711 0.74 

ICICI Bank INBMK+60bps 


ICICI BANK LTD EQUITY SHARES 783,803 1.48 

IDBI Bank Ltd CD (MD 14/05/2010) DEBT 100,432 0.19 

IDBI Bank Ltd CD (MD 21/01/2011) DEBT 85,728 0.16 

KOTAK MAHINDRA BANK LIMITED EQUITY SHARES 122,085 0.23 

Kotak Mahindra Bank Ltd CD 


SOUTH INDIAN BANK LTD. EQUITY SHARES 152,925 0.29 




(MD 13/01/2011) DEBT 64,201 0.12 

STATE BANK OF INDIA EQUITY SHARES 514,660 0.97 

United Bank Of India EQUITY SHARES 161,680 0.31 

Yes Bank Ltd CD (MD 28/07/2010) DEBT 245,389 0.46 

Others 




INFRASTRUCTURE FINANCE SERVICES 3,649,661 10.64 

144





Ind. Creator 





Others 




REFINERY 227,495 11.15 

BANKING SERVICES 214,275 10.50 







AXIS BANK LIMITED EQUITY SHARES 89,613 0.66 

Development Credit bank Limited EQUITY SHARES 45,139 0.33 



IDBI BANK LTD EQUITY SHARES 113,197 0.84 

IDBI Bank Ltd CD (MD 14/05/2010) DEBT 144,113 1.07 



Kotak Mahindra Bank Ltd CD 








State Bank Of Patiala CD 

(MD 10/12/2010) DEBT 48,137 0.36 


Others 

(Other than G-Sec) 10,730,763 79.37 6,850,813 86.65 

145












Central Bank of India CD 


FEDRAL BANK LTD EQUITY SHARES 255,437 0.99 


ICICI BANK LTD EQUITY SHARES 1,302,234 5.05 





Others 








BANK OF INDIA EQUITY SHARES 45,934 1.19 







IDBI BANK LTD EQUITY SHARES 39,103 1.01 

IDBI Bank Ltd CD (MD 14/05/2010) DEBT 2,932 0.08 

ING VYSYA BANK LIMITED EQUITY SHARES 49,734 1.29 


ORIENTAL BANK OF COMMERCE EQUITY SHARES 62,939 1.63 





UNION BANK OF INDIA LTD. EQUITY SHARES 66,014 1.71 

United Bank Of India EQUITY SHARES 34,019.26 0.88 

YES BANK LIMITED EQUITY SHARES 52,264.80 1.35 

Others (Other than G-Sec) 2,955,241 76.54 852,089 67.90 

146





Ind. Platinum Plus 1 















YES BANK LIMITED EQUITY SHARES 63,243 1.51 




FINANCIAL INSTITUTIONS 516,000 26.48 

INFRASTRUCTURE FINANCE SERVICES 311,984 16.01 






BANKING SERVICES 1,116,578 18.99 404,802 18.14 
















BANKING SERVICES 561,593 18.46 NA NA 





STATE BANK OF INDIA EQUITY SHARES 105,597 3.47 




Others (Other than G-Sec) 2,441,954 80.29 NA NA 

147





Ind.Platinum Plus 4 







HDFC BANK EQUITY SHARES 62,431 3.10 

ICICI BANK LTD EQUITY SHARES 103,871 5.15 









Others (Other than G-Sec) 1,559,356 77.34 NA NA 

Platinum Premier 1 





BANKING SERVICES 101,491 15.28 NA NA 







Others (Other than G-Sec) 464,863 69.97 NA NA 

Super 20 







ICICI BANK LTD EQUITY SHARES 16,594 6.10 







148





Titanium Plus 1 







HDFC BANK EQUITY SHARES 10,847 5.01 





Titanium Plus 2 






IDBI Bank Ltd CD (MD 14/05/2010) DEBT 994 4.17 




(MD 08/04/2010) DEBT 999 4.20 



Others (Other than G-Sec) 0 - NA NA 

IPP-Nourish 







10.85% RECL Ltd NCD 

(MD 14/08/2018) DEBT 2,236 1.66 

11.50% RECL Ltd NCD 

(MD 26/11/2013) DEBT 8,382 6.23 


(MD 03/11/2011) DEBT 5,336 3.97 


NCD (MD 07/08/2014) DEBT 2,502 1.86 


(MD 15/01/2019) DEBT 1,982 1.47 

9.35% IDFC Ltd NCD 



NCD (MD 25/03/2013) DEBT 7,836 5.83 


CORPORATION LIMITED EQUITY SHARES 279 0.21 

Others (Other than G-Sec) 75,727 56.29 71,476 56.89 




149





IPP-Growth 








(MD 26/11/2013) DEBT 16,765 4.65 

7.75% RECL NCD 

(MD 17/11/2012) DEBT 20,028 5.55 


NCD (MD 07/08/2014) DEBT 7,507 2.08 


(MD 15/01/2019) DEBT 2,477 0.69 


NCD Sr XXXVIII (MD 20/09/2012) DEBT 10,489 2.91 






BANKING SERVICES 44,358 14.88 

REFINERY 42,509 14.26 

IPP-Enrich 








(MD 26/11/2013) DEBT 44,706 2.50 


NCD (MD 07/08/2014) DEBT 32,531 1.82 


NCD (MD 28/12/2012) DEBT 30,065 1.68 

9.35% IDFC Ltd NCD 

(MD 09/05/2010) DEBT 10,033 0.56 


(MD 04/04/2013) DEBT 104,642 5.84 






HOUSING FINANCE SERVICES 175,095 13.09 

REFINERY 133,812 10.01 

150










FINANCIAL 

INSTITUTIONS 262,318 22.16 5,277 2.22 

7.63% IRFC (MD 29/10/2013) DEBT 49,733 4.20 

8.50% EXIM BANK MD 26-09-2011 DEBT 71,310 6.02 

9.50% Export Import Bank NCD 

(MD 12/12/2013) DEBT 31,370 2.65 


9.80% NABARD NCD (MD 10/09/2012) DEBT 26,252 2.22 

NABARD ZCB (MD 01/01/2019) DEBT 41,386 3.50 

BANKING SERVICES 126,625 10.70 49,876 20.99 

7.05% Canara Bank NCD 

(MD 18/05/2014) DEBT 21,842 1.85 


(MD 29/04/2016) DEBT 10,066 0.85 




(MD 05/05/10) DEBT 24,872 2.10 


(MD 04/05/2010) DEBT 24,876 2.10 


HOUSING FINANCE 

SERVICES 121,312 10.25 2,933 1.23 

7.64% LIC Housing Finance NCD 

(MD 26/02/2012) DEBT 50,474 4.26 



HDFC Ltd ZCB (MD 09/03/2012) DEBT 50,564 4.27 




REFINERY 28,332 11.92 

Gr. Gilt 





Others (Other than G-Sec) - - 47 0.86 

151





Gr. Bond 






5.90% HDFC Bank Ltd NCD 

(MD 04/05/2014) DEBT 31,906 1.30 




(Call- 14/08/2019) Step Up Rate 9.6% DEBT 10,197 0.42 




NCD Call 18/01/2020 StepUp 9.65 DEBT 30,575 1.24 


Perpetual (MD 24/02/2020) DEBT 40,931 1.67 

9.80% State Bank of Saurashtra Ltd 

NCD (MD 30/06/2016) DEBT 21,075 0.86 

9.85% State Bank of India (28/06/2016) DEBT 9,504 0.39 




(MD 13/01/2011) DEBT 47,804 1.95 

State Bank of Mysore CD (MD 04/05/2010) DEBT 99,502 4.05 

FINANCIAL 

INSTITUTIONS 356,547 14.52 180,403 16.35 

5.55% Export & Import Bank Ltd 

NCD (MD 27/11/2012) DEBT 99,314 4.04 




(MD 18/12/2013) DEBT 25,870 1.05 


(MD 12/12/2013) DEBT 83,653 3.41 

9.80% NABARD NCD (MD 10/09/2012) DEBT 105,010 4.28 

NABARD ZCB (MD 01/08/2017) DEBT 2,686 0.11 




ELECTRICITY DISTRIBUTION 113,679 10.30 










(MD 13/01/2011) DEBT 31,407 19.15 









DIVERSIFIED 50,920 25.05 

MINERALS 35,685 17.56 

AUTO FINANCE SERVICES 31,057 15.28 

152
















(MD 26/11/2013) DEBT 13,971 2.54 

7% POWER FINANCE 

(MD 24/12/2011) (P/C 24/12/2009) DEBT 9,983 1.81 

7.30% RECL 30-06-2011 DEBT 20,048 3.64 


ELECTRICITY 

DISTRIBUTION 96,022 17.45 70,084 6.81 

12.25% Power Grid Corporation Ltd 

NCD (MD 22/08/2010) DEBT 20,422 3.71 

12.25% Power Grid Corporation Ltd 

NCD (MD 22/08/2011) DEBT 19,534 3.55 

6.10% Power Grid Corporation Ltd 

NCD (MD 17/07/2011) DEBT 7,125 1.30 

7.10% POWER GRID MD(18.02.2012) DEBT 35,854 6.52 

9.47% Power Grid Corporation NCD 

(MD 31/03/2013) DEBT 13,087 2.38 

FINANCIAL 

INSTITUTIONS 89,994 16.36 47,740 4.64 

6.40% National Housing Bank Ltd. 

(MD 27/01/2013)-P/C 28/03/2011 DEBT 39,972 7.27 

6.77% National Housing Bank NCD 

(MD 11/01/2013) P/C 11/01/12 DEBT 9,946 1.81 

9.45% NABARD NCD 

(MD 22/04/2011) P/C 22/04/2010 DEBT 40,077 7.29 


SERVICES 87,695 15.94 116,084 11.28 

11.65% HDFC Ltd NCD 


7.64% LIC Housing Finance NCD 

(MD 26/02/2012) DEBT 17,666 3.21 



HDFC FLOATER BOND 

(MD 23/06/2011) DEBT 11,200 2.04 

BANKING SERVICES 69,376 12.61 103,956 10.10 


ICICI Bank INBMK+60bps 









AUTO FINANCE SERVICES 105,206 10.22 

153











SERVICES - 0.00 14,989 39.75 

BANKING SERVICES - 0.00 13,946 36.99 

Others (Other than G-Sec) - 0.00 8,180 21.69 

Gr. Secure 






10.85% Punjab National Bank 

(MD 29/09/2023) Call 29/09/2018 

st-up 11.35% DEBT 11,193 0.27 

5.90% HDFC Bank Ltd NCD 

(MD 04/05/2014) DEBT 22,790 0.54 




9.15% State Bank of Patiala PERP NCD 

Call 18/01/2020 StepUp 9.65 DEBT 30,575 0.73 


NCD Perpetual (MD 24/02/2020) DEBT 10,233 0.24 

9.25% IDBI Omni Bonds NCD 

(MD 26/03/2014) DEBT 20,298 0.49 

9.30% State Bank of Patiala 

NCD (MD 20/12/2022) 

Call fr 20/12/2017 Int 9.80 DEBT 10,275 0.25 










(MD 13/01/2011) DEBT 47,804 1.14 










154





Gr. Stable 








(MD 24/07/2013) DEBT 10,867 0.30 


(MD 14/08/2018) DEBT 27,954 0.76 



NCD (MD 28/11/2013) DEBT 61,310 1.67 


(MD 26/11/2013) DEBT 5,588 0.15 

7.75% RECL NCD (MD 17/11/2012) DEBT 30,042 0.82 


NCD (MD 07/08/2014) DEBT 40,038 1.09 


(MD 15/01/2019) DEBT 43,397 1.18 

8.90% Power Finance Ltd NCD 

(MD 16/02/2014) DEBT 40,432 1.10 


NCD (MD 25/03/2013) DEBT 43,799 1.19 







FINANCIAL INSTITUTIONS 292,236 10.39 

Gr. Growth 







(Call- 27/01/2020) Step Up Rate 9.55% DEBT 30,410 1.79 











United Bank Of India EQUITY SHARES 10,750 0.63 

YES BANK LIMITED EQUITY SHARES 10,760 0.63 




REFINERY 72,953 13.17 

155











BANK OF INDIA EQUITY SHARES 619 0.67 

Development Credit bank Limited EQUITY SHARES 453 0.49 



IDBI BANK LTD EQUITY SHARES 604 0.65 

KOTAK MAHINDRA BANK LIMITED EQUITY SHARES 554 0.60 

ORIENTAL BANK OF COMMERCE EQUITY SHARES 600 0.65 






United Bank Of India EQUITY SHARES 546 0.59 

YES BANK LIMITED EQUITY SHARES 525 0.56 





156



NAV Highest, Lowest and Closing 


INDIVIDUAL LIFE 

FUND NAME HIGHEST LOWEST CLOSING 



Ind. Assure 15.4635 14.0765 14.1045 12.1208 15.4635 14.0765 

Ind. Income Advantage 13.0194 11.8774 11.8690 10.0000 13.0194 11.8285 

Ind. Protector 21.4614 18.8910 18.8387 16.8752 21.4614 18.7569 

Ind. Builder 26.4990 21.7158 21.6101 19.1357 26.4990 21.4909 

Ind. Balancer 16.9659 13.6348 13.6038 11.8040 16.9659 13.5252 

Ind. Enhancer 32.0224 26.7620 25.0886 22.2784 32.0104 24.9129 

Ind. Creator 25.1982 18.5634 16.7024 14.0002 25.0987 16.5335 

Ind. Magnifier 26.6386 24.6947 15.2552 12.8886 26.4405 15.1212 

Ind. Maximiser 14.3078 12.0924 7.5029 6.2249 14.1114 7.3829 

Ind. Multiplier 12.1147 8.9293 4.9265 4.0085 11.5791 4.8369 

Ind. Platinum Plus 1 11.1530 11.3452 7.0845 6.1916 10.9364 7.0123 

Ind. Platinum Plus 2 15.6442 10.3462 9.0905 7.7498 15.3556 9.0057 

Ind. Platinum Plus 3 12.0586 NA 9.4918 NA 11.7977 NA 

Ind. Platinum Plus 4 10.6052 NA 9.3369 NA 10.4054 NA 

Titanium Plus 1 10.2804 NA 10.0000 NA 10.2427 NA 

Titanium Plus 2 10.0321 NA 10.0000 NA 10.0290 NA 

Super 20 12.4938 NA 9.9991 NA 12.3137 NA 

Platinum Premier 1 10.4476 NA 10.0000 NA 10.3977 NA 

IPP - Nourish 18.0153 15.8955 15.8735 13.8835 18.0153 15.8006 

IPP - Growth 21.9487 17.8661 17.9446 15.1609 21.9487 17.8425 

IPP - Enrich 25.8513 19.9896 19.0056 16.4500 25.8513 18.8377 

GROUP LIFE 

FUND NAME HIGHEST LOWEST CLOSING 



Gr. Fixed Interest Plan I 17.9915 15.9441 15.9338 13.0225 17.9915 15.8728 

Gr. Fixed Interest Pan II 19.2897 16.8306 16.8356 13.6814 19.2897 16.7706 

Gr. Gilt Plan I 14.7728 14.2249 13.8427 11.1273 14.7215 13.8391 

Gr. Gilt Plan II 14.7728 14.3887 13.8427 11.1739 14.7215 13.8391 

Gr. Bond Plan I 15.6959 14.0157 14.0805 11.8869 15.6959 14.0157 

Gr. Bond Plan II 16.4732 14.5503 14.6180 12.2526 16.4732 14.5503 

Gr. Money Market Plan I 16.1396 14.6250 14.6284 12.4816 16.1396 14.6250 

Gr. Money Market Plan II 16.8696 15.1207 15.1247 12.9933 16.8696 15.1207 

Gr. Short Term Debt Plan I 11.1875 10.3295 10.3369 10.0000 11.1875 10.3295 

Gr. Short Term Debt Plan II 11.3907 10.3489 10.3566 10.0000 11.3907 10.3489 

Gr. Capital Protection Plan I** 10.0000 12.1134 10.0000 10.0000 10.0000 10.0000 

Gr. Capital Protection Plan II** 10.0000 12.1134 10.0000 10.0000 10.0000 10.0000 

Gr. Floating Rate Plan I*** 13.4610 13.1299 10.0000 12.1808 10.0000 13.1299 

Gr. Floating Rate Plan II*** 13.9552 13.5438 10.0000 12.4276 10.0000 13.5438 

Gr. Secure Plan I 27.8526 23.2985 23.2044 20.0162 27.8526 23.0989 

Gr. Secure Plan II 29.6498 24.4658 24.4307 20.9753 29.6498 24.3188 

Gr. Stable Plan I 37.3777 29.7831 28.7105 24.9600 37.3777 28.5519 

Gr. Stable Plan II 39.4424 30.7527 29.9576 25.9099 39.4424 29.7911 

Gr. Growth Plan I 44.2686 33.1494 30.7341 25.3759 44.2452 30.5496 

Gr. Growth Plan II 47.1749 34.5885 32.3995 26.6177 47.1529 32.2041 

Gr. Growth Advantage 15.2471 10.7146 9.9590 7.9565 15.2296 9.8986 

Gr. Income Advantage 10.0000 NA 10.0000 NA 10.0000 NA 

Gr. Growth Index Plus**** 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 

Gr. Growth Multiplier**** 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 

Gr. Growth Maximsier**** 10.0000 NA 10.0000 NA 10.0000 NA 

** The Group Capital Protection Fund became a dormant fund on 12th August 2008 on account of no units. 

*** The Group Floating Fund became a dormant fund on 12th October 2009 on account of no units. 

**** These funds do not have any units since their inception. 

157




Annualised Expense Ratio to Average Daily Assets of the Fund 



Management Fees for the Period (inclusive of service tax) 1,600,950 780,753 

Average Daily AUM of the ULIP funds 117,659,698 66,596,333 

Annualised Expense Ratio to Average daily AUM (%) 1.36% 1.17% 



Statement showing Ratio of Gross Income (Including Unrealized Gain/Loss) to Average Daily Net Assets 


A Income from Investment ULIP Assets Current Year Previous Year 

1 Interest, Dividend & Rent - Gross 4,316,131 3,024,055 

2 Profit on Sale/ Redemption of Investments 24,078,813 3,219,449 

3 (Loss on Sale/ Redemption of Investments) (3,406,031) (11,145,460) 

4 Gain / (Loss) on Amortization 377,923 534,771 

5 Other Income / (Expense) (458) 193 

Sub Total 25,366,378 (4,366,992) 

B Unrealized Gain / (Loss) 14,140,238 (2,708,297) 

C Total (A+B) 39,506,616 (7,075,289) 

D Average Daily AUM of the ULIP Funds 117,659,698 66,596,333 

E Ratio of Gross Income to Average Daily Net Assets (%) 34 (11) 

158




Fund Wise Disclosure of Appreciation and/or (Depreciation) in value of Investment segregated Class Wise 






Government Bonds — — (7,954) (5,722) (32,163) (15,161) (12,943) (8,923) (1,974) (1,347) 

Corporate Bonds (687) 16,467 9,910 15,657 42,179 42,435 27,299 25,997 1,677 1,668 

Infrastructure Bonds (4,339) 3,620 (1,138) 11,188 33,801 33,663 10,497 16,680 2,386 2,891 

Equity — — — — 70,710 (17,085) 58,012 (24,304) 10,920 46 

Money Market — — — — — — — — — — 

Mutual Funds 214 15 64 230 500 94 328 44 1 1 

Total (4,813) 20,102 882 21,352 115,027 43,947 83,194 9,493 13,009 3,259 


Corporate Bonds — 367 — — — — 1,140 — — — 


Equity — — — — 3,721 (2,096) 5,957 (3,619) 1,396 (100) 

Money Market — — — — — — — — — — 

Mutual Funds 87 3 158 — 127 9 231 1 0 — 

Total 87 370 158 — 3,848 (2,087) 7,328 (3,618) 1,396 (100) 

GRAND TOTAL (4,726) 20,473 1,040 21,352 118,874 41,859 90,522 5,875 14,405 3,159 

159










Government Bonds (365,670) (64,909) (12,483) (8,015) — — — — — — 

Corporate Bonds 251,868 221,241 10,092 15,746 (28) 353 — — — — 

Infrastructure Bonds 128,335 234,845 6,090 10,326 (162) — — — — — 

Equity 1,990,485 (1,221,467) 146,765 (32,537) 1,517,562 (808,859) 2,839,815 (2,010,973) 126,635 (135,484) 

Money Market — — — — — — — — — — 

Mutual Funds 1,059 451 329 24 219 614 627 671 215 3 

Total 2,006,078 (829,839) 150,794 (14,456) 1,517,591 (807,893) 2,840,442 (2,010,302) 126,851 (135,481) 


Corporate Bonds (657) 4,304 79 — — — — — — — 


Equity 306,153 (479,378) 527 (9,022) 113,449 (381,832) 189,282 (415,919) 32,604 (26,409) 

Money Market — — — — — — — — — — 

Mutual Funds 524 90 402 20 127 104 473 119 89 — 

Total 306,021 (474,984) 1,008 (9,002) 113,575 (381,729) 189,755 (415,800) 32,693 (26,409) 

GRAND TOTAL 2,312,098 (1,304,822) 151,802 (23,459) 1,631,167 (1,189,621) 3,030,197 (2,426,102) 159,543 (161,890) 

160










Government Bonds — (6,822) — — — — — — — — 

Corporate Bonds (2,330) 1,350 — — (4,740) — (3,159) — — — 

Infrastructure Bonds (5,531) 46,689 (3,142) (130) (3,142) — — — 64 — 

Equity 295,600 (161,510) 621,076 73,586 140,918 — 40,729 — 2,548 — 

Money Market — — — — — — — — — — 

Mutual Funds 356 2 80 — 377 — 3 — 3 — 

Total 288,095 (120,291) 618,014 73,456 133,413 — 37,573 — 2,615 — 




Equity (3,259) (28,998) 16,246 10,894 (2,289) — 1,930 — 1,003 — 

Money Market — — — — — — — — — — 

Mutual Funds 230 — 77 — 114 — 112 — — — 

Total (3,029) (28,998) 16,323 10,894 (2,175) — 2,042 — 1,003 — 

GRAND TOTAL 285,066 (149,289) 634,337 84,351 131,237 — 39,615 — 3,617 — 

161










Government Bonds — — — — — — (8,869) (9,871) (1,411) (1,182) 

Corporate Bonds — — — — — — 5,666 12,919 1,569 1,555 

Infrastructure Bonds — — — — — — 9,032 9,655 1,447 1,511 

Equity — — 6,801 — 6,275 — 63,820 (11,788) 2,124 162 

Money Market — — — — — — — — — — 

Mutual Funds — — 13 — — — 145 1 4 4 

Total — — 6,814 — 6,275 — 69,795 915 3,733 2,050 




Equity — — 275 — 1,493 — 5,857 (1,821) 62 35 

Money Market — — — — — — — — — — 

Mutual Funds — — 10 — — — 197 — — — 

Total — — 284 — 1,493 — 6,054 (1,821) 62 35 

GRAND TOTAL — — 7,098 — 7,767 — 75,849 (906) 3,795 2,085 

162










Government Bonds (2,026) (1,618) (746) (1,911) (6) (52) — — — — 

Corporate Bonds 3,135 3,114 5,709 5,756 — — 23,858 29,807 — — 

Infrastructure Bonds 1,028 1,079 1,646 1,902 — — 10,425 17,131 — — 

Equity 11,396 222 — — — — — — — — 

Money Market — — — — — — — — — — 

Mutual Funds 54 1 218 0 — 0 205 2 — 3 

Total 13,586 2,798 6,826 5,748 (6) (52) 34,488 46,941 — 3 


Corporate Bonds — — 119 — — — 178 — — — 


Equity 1,327 (95) — — — — — — — — 

Money Market — — — — — — — — — — 

Mutual Funds 60 — 131 — — — 255 1 — — 

Total 1,388 (95) 250 — — — 434 1 — — 

GRAND TOTAL 14,974 2,703 7,076 5,748 (6) (52) 34,922 46,943 — 3 

163










Government Bonds — — — — — — (24,801) (6,267) (11,351) (5,059) 

Corporate Bonds (41) 483 — — — 45 27,429 26,632 21,382 29,584 

Infrastructure Bonds (2,109) 1,225 — — — 22 18,070 19,703 18,653 27,421 

Equity — — — — — — 88,452 (9,437) 153,812 (43,855) 

Money Market — — — — — — — — — — 

Mutual Funds 14 3 — — — 4 403 8 464 9 

Total (2,136) 1,711 — — — 71 109,553 30,639 182,960 8,100 


Corporate Bonds — — — — — — 1,298 — 188 — 


Equity — — — — — — 6,378 (1,579) 11,020 (18,955) 

Money Market — — — — — — — — — — 

Mutual Funds — — — — — — 565 27 525 — 

Total — — — — — — 8,241 (1,552) 11,734 (18,955) 

GRAND TOTAL (2,136) 1,711 — — — 71 117,795 29,087 194,694 (10,855) 

164










Government Bonds (5,213) (2,964) (127) (13) — — (487,735) (139,836) 

Corporate Bonds 3,974 2,469 217 127 — — 424,976 453,405 

Infrastructure Bonds 3,833 4,342 22 24 — — 225,764 443,788 

Equity 61,644 (10,788) 2,948 237 — — 8,259,050 (4,413,836) 

Money Market — — — — — — — — 

Mutual Funds 395 2 5 — — — 6,296 2,186 

Total 64,633 (6,939) 3,064 374 — — 8,428,350 (3,654,293) 

Other Investments — — 

Corporate Bonds — — — — — — 2,346 4,672 

Infrastructure Bonds — — — — — — — — 

Equity 1,830 (1,809) 76 37 — — 695,035 (1,360,668) 

Money Market — — — — — — — — 

Mutual Funds 103 10 3 — — — 4,601 384 

Total 1,933 (1,798) 79 37 — — 701,982 (1,355,613) 

GRAND TOTAL 66,565 (8,737) 3,144 411 — — 9,130,332 (5,009,905) 

165


SUMMARY OF FINANCIAL STATEMENTS ANNEXURE - 4 


Sr. Particulars 2009-10 2008-09 2007-08 2006-07 2005-06 

No. 

POLICYHOLDERS’ A/C 

1 Gross Premium Income 55,056,579 45,718,039 32,571,331 17,661,695 12,556,593 

2 Net Premium Income # 54,253,630 45,166,377 32,230,713 17,351,608 12,338,228 

3 Income from investments(Net) @ 40,031,523 (6,706,646) 4,872,915 1,949,411 3,254,571 

4 Other Income 143,486 170,850 100,150 31,751 15,802 

5 Total Income 94,428,639 38,630,582 37,203,778 19,332,771 15,608,601 

6 Commissions 4,813,947 4,462,129 3,178,308 1,996,712 1,590,132 

7 Brokerage 348,027 355,751 177,230 17,067 6,296 

8 Operating Expenses related to insurance Business 13,267,526 12,487,624 6,707,323 3,758,767 2,294,143 

9 Total Expenses 18,429,500 17,305,503 10,062,861 5,772,546 3,890,570 

10 Payment to Policy holders 11,387,815 6,464,413 4,296,800 1,248,351 737,878 

11 Increase in Actuarial Liability 69,259,695 22,152,906 27,486,205 13,835,478 11,660,679 

12 Provision for Tax 

(Fringe Benefit Tax and Wealth Tax) - 61,500 38,281 23,650 21,410 

13 Surplus/(Deficit) from operations (4,648,370) (7,353,741) (4,680,369) (1,547,255) (701,937) 

SHAREHOLDERS’ A/C 

14 Total Income under Shareholders’ Account 293,404 332,383 227,614 149,876 90,672 

15 Profit / (loss) Before Tax (4,354,966) (7,021,358) (4,452,755) (1,397,379) (611,265) 

16 Profit / (loss) After Tax (4,354,966) (7,021,358) (4,452,755) (1,397,379) (611,265) 

17 Profit / (loss) carried to Balance Sheet (20,275,040) (15,920,075) (8,898,719) (4,445,964) (3,048,585) 

MISCELLANEOUS 

18 (A) Policyholders’ account: 

Total funds (incl Funds for Future Appropriation) 156,518,655 87,258,406 65,105,551 37,619,808 23,784,010 

Total Investments (including policy loans) 156,520,111 87,237,071 64,854,552 37,537,759 23,751,577 

Yield on investments 

- Linked Fund(%) $ 44.77% -9.82% 10.65% 14.29% 21.94% 

- Non-Linked Fund(%) 6.95% 11.49% 8.75% 6.84% 6.13% 

(B) Shareholders’ account: 

Total funds (including unrealised gain) 4,220,265 4,075,129 3,846,383 2,269,360 1,551,534 

Total investments 5,043,972 4,670,115 4,222,791 2,744,348 1,816,994 

Yield on investments (%) 6.41% 8.01% 6.83% 7.32% 6.33% 

19 Yield on total investments 40.14% -8.00% 10.34% 13.56% 20.12% 

20 Paid up equity capital 19,695,000 18,795,000 12,745,000 6,715,000 4,600,000 

21 Net worth 4,220,265 4,075,129 3,846,383 2,269,360 1,551,534 

22 Total Assets 160,738,920 91,333,534 68,951,934 39,889,168 25,335,544 

23 Earnings per share (share of FV of Rs.10 each) Rs (2.28) (4.44) (5.11) (2.58) (1.57) 

24 Book value per share (share of FV of Rs.10 each) Rs 2.14 2.17 3.02 3.38 3.37 

# Net of Reinsurance 

@ Net of Losses 

$ Yield on Linked policyholders investments includes unrealised gains on investments. 

166


Financial Year : 2009-10 ANNEXURE 5 

Sr. Ratios for Life Insurers 31st March 31st March 

No. 2010 2009 

1 New business premium income growth (segment-wise) 

(New business premium for Current Year divided by new business 

premium income for Previous Year) 

a) Linked Business 115% 123% 

b) Non-Linked Business 23% 672% 

c) Pension Business 61% 3300% 

d) Health Business 277% NA 

e) Total Business 105% 144% 

2 Net Retention Ratio 99% 99% 

(Net premium divided by gross premium) 

3 Ratios of Expenses of Management 33% 38% 

(Expenses of management divided by the total gross direct premium) 

Note: Expenses of Management = Operating Expenses related to 

Insurance Business + Commission Expenses 

4 Commission Ratio 9% 11% 

(Gross Commission paid to Gross Premium) 

5 Ratio of Policyholders’ Liabilities to Shareholders’ Funds 3709% 2141% 

Note: a) Policyholders’ Liabilities = Policy Liabilities + Funds for 

Future Appropriations + Provision for Linked Liabilities + 

Credit/(Debit) fair value change account (Linked & Non Linked) 

b) Shareholders’ Funds = Share Capital + Reserves & Surplus + 

Credit / (Debit) fair value Current Year account + Credit / 

(Debit) balance in Profit &Loss A/C 

6 Growth Rate of Shareholders’ Funds 4% 6% 

7 Ratio of Surplus to Policyholders Liabilities Nil Nil 

8 Change in Net Worth (Rs.in ‘000) 145,136 228,745 

9 Profit after Tax / Total Income -5% -18% 

Note: 1) Total Income = Total Income under Policyholders’ Account 

(Excluding Contributions from Shareholders’ Account) + 

Total Income under Shareholders’ Account) 

10 (Total Real Estate + Loans) / Cash & Invested Assets 0.16% 0.24% 

11 Total Investments / (Capital + Surplus) 3822% 2250% 

Note: Total Investments = Shareholders’ Investments + 

Policyholders’ Investments + Assets held to cover Linked Liabilities 

12 Total Affiliated Investments / (Capital + Surplus)* 86.15% 47.52% 

* Ratio calculated above is without considering policyholders’ funds amounting to Rs.149,387 (Previous Year: 82,860). 

The ratio after considering the policyholders’ funds is 2.37% (Previous Year: 2.23%) 

167


MANAGEMENT REPORT 

For the year ended 31st March 2010 

(Currency: In thousands of Indian Rupees unless otherwise stated) 

In accordance with the Insurance Regulatory and Development Authority (Preparation of Financial 

Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, the following 

Management Report is submitted by the Board of Directors : 

1. Certificate of Registration 

The Certificate of Registration granted by the Insurance Regulatory and Development Authority 

(IRDA) to enable the Company to transact life insurance business was valid as on 31 st March, 

2010 and is in force as on the date of this Report. IRDA has renewed the Company’s Certificate 

of Registration to sell life insurance products in India for the year 2009-10 vide its Certificate of 

Renewal of Registration dated 10 th March 2010. 

2. Statutory Dues 

We hereby certify that all the material dues payable, other than those which are being contested 

with the statutory authorities, have been duly paid. 

3. Shareholding Pattern 

The Company confirms that the shareholding pattern and any transfer of shares during the 

year are in accordance with the statutory and / or regulatory requirements. 

4. Investment of Funds 

The Company has not, directly or indirectly, invested outside India, the funds of the holders of 

the policies issued in India. 

5. Solvency Margin 

The Company has maintained adequate assets to cover both its liabilities and the minimum 

solvency margin, as stipulated in Section 64 VA of the Insurance Act, 1938. 

6. Valuation of Assets 

We hereby certify that all assets of the Company have been reviewed on the date of the Balance 

Sheet and to the best of our knowledge and belief the assets set forth in the Balance Sheet are 

shown in the aggregate at amounts not exceeding their realizable or market value under the 

several headings – “Loans”, “Investments” (other than as mentioned hereunder), “Agents 

balances”, “Outstanding Premiums”, “Interest, Dividends and Rents outstanding”, “Interest, 

Dividends and Rents accruing but not due”, “Amounts due from other persons or Bodies 

carrying on insurance business”, “Sundry Debtors”, “Bills Receivable”, “Cash” and the several 

items specified under “Other Accounts”. 

Market values of fixed income investments made in shareholders’ funds and policyholders 

non-linked funds which are valued at amortised cost as per IRDA regulations, is higher than 

their carrying amounts by Rs.69,939 (previous year Rs.158,042), in aggregate as at 31 st March, 


7. Investment Pattern 

We hereby certify that the Life Insurance funds have been invested in line with the provisions 

of the Insurance Act, 1938 and various other circulars / notifications issued by the IRDA in this 

context from time to time. 

8. Risk Minimization Strategies 

The company is exposed to several risks in the course of its business. The risks on the liabilities 

side may arise due to more than expected claims. On the assets side, the risks arise due to the 

possibility of fluctuations in their values. The Company is also subject to the expense risk, since 

168


until new business volumes grow significantly, the actual expenses of the company will exceed 

the expenses loaded into the product pricing. The Company has implemented adequate 

safeguards to mitigate these risks, as are described below. 

A strong underwriting team is in place to review all proposals from clients, supported by 

comprehensive processes and procedures. The objective of the underwriting team is to minimise 

the risks of abnormal mortality and morbidity by acquiring adequate information, on which to 

determine, whether to accept individual lives, and if so, the extra premium, to compensate for 

any additional risk. 

Further, the possible financial effect of adverse mortality and morbidity experience has been 

reduced by entering into reinsurance agreements with RGA and Swiss Re for individual life 

business and RGA and Generali for group business and Swiss Re for Health business. All 

reinsurers are specialist international reinsurance companies with excellent reputation and 

significant financial strength. The Company also has a separate agreement with RGA to cover 

the catastrophic risks under group business. 

The Company has also set up systems to continuously monitor its experience in regard to other 

parameters that affect the value of benefits offered in the products. Such parameters include 

policy lapses, premium persistency, maintenance expenses and investment returns. The operating 

expenses are monitored very closely. Many products offered by the company also have an 

investment guarantee. The Company has set aside additional reserves to cover this risk. 

The Company’s investment team operates under the close supervision of the Investment 

Committee appointed by the Board of Directors. The investments are made in line with the 

investment policy adopted by the Company. 

The Company has a Business Continuity Plan in place to manage any business interruption 

risk. The Company got British standard BS25999 certification during the current year for BCP 

and Disaster management, making it the first Life insurance company to get such certification. 

To control operational risk operating and reporting processes are reviewed and updated 

regularly. Ongoing training through internal and external programs is designed to prepare 

staff at all levels for meeting the demands of their positions. 

9. Country Risk 

The Company is operating in India only and hence has no exposure to any other country risk. 

10. Ageing of Claims 

The average claims settlement time to date has been 3 days from the day all necessary documents 

are submitted to the Company. There are no claims, settled and unpaid, which are outstanding 

for more than six months as at the Balance Sheet date (previous year Rs. Nil). The ageing of 

outstanding claims as on 31 st March 2010 is given below: 

Current Year (Rs. ’000) 

Period Unit Linked Non Linked and Term 

No. of Amount No. of Amount 

claims Involved claims Involved 

30 days* 5 2,512 0 0 

30 days to 6 months* 5 1,494 193 3,359 

6 months to 1 year* 4 2,485 0 0 

1 year to 5 years* 18 3,745 5 3,350 

5 years and above 0 0 0 0 

Total 32 10,237 198 6,709 

169


Previous Year (Rs. ’000) 

Period Unit Linked Non Linked and Term 

No. of Amount No. of Amount 

claims Involved claims Involved 

30 days 2 651 5 10 

30 days to 6 months* 3 1,060 11 582 

6 months to 1 year* 7 6,553 2 700 

1 year to 5 years* 13 10,580 3 2,825 

5 years and above 1 100 

Total 26 18,944 21 4,117 

* The above includes provision made (net of reinsurance) for 23 cases (previous year 33 cases) 

amounting to Rs. 6,139, (previous year Rs. 14,543) during the year where the Company has 

lost in the first forum of litigation and has appealed against the same. 

11. Valuation of Investments 

We hereby certify that the fixed income investments made in the controlled fund (shareholders 

funds and policyholders non linked funds) have been valued on the basis of the amortised 

value of these assets and mutual fund investments have been valued at the previous business 

day’s net asset value of the respective mutual funds. 

The investments of linked funds of policyholders are valued as under: 

• Fixed Income Securities: These are valued on the basis of the CRISIL bond valuer/ CRISIL 

gilt prices. Debt securities with a residual maturity of less than or equal to 182 days is 

amortized over the remaining days to maturity through CRISIL Bond Valuer. 

• Equity: These will be valued on the last quoted closing price of the security on the National 

Stock Exchange of India Limited. In case the share is not listed on NSE, valuation is done 

on closing price at BSE. 

• Money Market Instruments: Money market instruments are valued on amortized value. In 

case of T-bill if the traded price is available the same is considered for valuation. 

• Mutual Funds: The previous day’s net asset value published by the respective mutual 

funds. 

12. Review of Asset Quality 

Shareholders’ Fund 

The Company has invested approximately 52% of the Shareholders’ funds in Government 

securities, Treasury Bills and Collateralized Borrowing and lending obligation (CBLO), which 

have a sovereign rating. Around 39% of the funds have been invested in AAA/P1+ and AA+ 

rated securities (which includes Infrastructure and Housing bonds). Approximately 8% of the 

funds is invested in liquid and short-term schemes of leading mutual funds to meet short-term 

cash flow requirements. 

Policyholders’ Fund 

The policyholders’ funds are invested as per the regulatory norms and the commitments made 

to the policyholders. In fixed income segment, majority ofthe investment is made in government 

securities having sovereign rating & debt paper of reputed corporate having rating AAA/P1+. 

The equity selection is made after appropriate research and analysis of the investee company as 

well as the industry to which it belongs. To meet the liquidity requirement a part is invested 

170


into liquid and short-term schemes of leading mutual funds and other money market instruments 

of high credit rating. The investments are also made keeping in mind the asset-liability 

requirement of the respective funds. 

13. Directors Responsibility Statement 

The Board of Directors of the Company also state that: 

• The financial statements have been prepared in accordance with applicable accounting 

standards, the regulations stipulated by the IRDA and the provisions of the Insurance Act, 

1938 and the Companies Act, 1956 and disclosures have been made, wherever the same is 

required. There is no material departure from the said standards, principles and policies; 

• The Company has adopted accounting polices and applied them consistently and has made 

judgments and estimates that are reasonable and prudent, so as to give a true and fair view 

of the state of affairs of the Company as at 31 st March, 2010, and, of the operating loss of the 

Company for the year ended on 31 st March, 2010; 

• Proper and sufficient care has been taken to maintain adequate accounting records in 

accordance with the applicable provisions of the Insurance Act, 1938, Companies Act, 1956, 

for safeguarding the assets of the Company and for preventing and detecting fraud and 

other irregularities; 

The financial statements of the Company are prepared on a going concern basis; and 

• The Company has appointed some audit firms to conduct the internal audit of the Company. 

The scope of work of the audit firms’ is commensurate with the size and nature of the 

Company’s business. The management certifies that adequate internal control systems and 

procedures were in existence for this financial year. 

14. Schedule of payments made to individuals, firms, companies and organization in which 

Directors of the Company are interested: 

The Company has not made any payments during the year to individuals, firms, companies 

and organization in which Directors of the Company are interested. 

For and on behalf of the Board of Directors 

Donald A. Stewart Ajay Srinivasan Gian P. Gupta 

Chairman Managing Director Director 

Venkatesh S. Mysore Fabien Jeudy Mayank Bathwal 

Director Appointed Actuary Chief Financial Officer 




171


RECEIPTS AND PAYMENTS ACCOUNT - CASH FLOW STATEMENT 


For the period ended 31st March 2010 

Particulars Audited Audited 


31st March 2010 31st March 2009 

Cash flow from operating activities (A) 

Premium received 55,419,250 44,744,544 

Reinsurance premium ceded (727,200) (549,041) 

Application money deposit & due to Policy holders 381,461 (166,281) 

Commission paid (5,633,718) (5,126,124) 

Deposits taken from/(refunded to) agents (4,482) (674) 

Payments made to employees and for expenses (11,627,588) (9,646,265) 

Claims paid (11,504,071) (6,436,028) 

Deposits & others 118,001 (183,638) 

Deposits with Reserve Bank of India - - 

Other income (158,165) 151,875 

Loan against Policies (9,821) (54,612) 

Cash inflow / (outflow) from operating activities 26,253,667 22,733,758 

Taxes Paid (Fringe Benefit Tax & Wealth Tax) (5,377) (60,638) 

Net cash flow from operating activities (A) 26,248,290 22,673,121 

Cash flow from investing activities (B) 

Purchase of fixed assets (331,946) (489,525) 

Sale of fixed assets 15,398 15,269 

Decrease /(Increase) in investments (34,190,403) (31,678,300) 

Cash held to cover linked liabilities 309,093 (1,330,225) 

Interest received (net of tax deducted at source) 3,717,645 3,410,727 

Dividend received 733,518 408,887 

Net cash used in investing activities (B) (29,746,695) (29,663,168) 

Cash flow from financing activities (C) 

Share capital issued 900,000 6,050,000 

Share premium 3,600,000 1,200,000 

Net cash inflow from financing activities (C ) 4,500,000 7,250,000 

Net increase / (decrease) in cash and 

cash equivalents (D=A+B+C) 1,001,595 259,953 

Cash and cash equivalents at beginning of the year 2,775,194 2,515,241 

Cash and cash equivalents at end of the period 3,776,789 2,775,194 

Notes: 

1. Cash and cash equivalents at end of the period includes: 

Cash and Bank Balances 5,697,972 5,189,719 

Temporary Overdraft (as per books only) (1,921,183) (2,414,525) 

Cash and cash equivalents 3,776,789 2,775,194 

2. Due to large volume of investments transactions, cash flow is reported on net basis in accordance 

with Accounting Standard 3 issued by the Institute of Chartered Accountants of India. 

For Khimji Kunverji & Co. 


For Fraser & Ross 



Shivji K Vikamsey 

Partner 

S. Ganesh 

Partner 


Chairman 

Ajay Srinivasan 

Managing Director 

Gian P. Gupta 

Director 

Venkatesh S. Mysore 

Director 

Mayank Bathwal 

Chief Financial Officer 

Fabien Jeudy 





172



BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE 

I Registration Details State Code 2 2 

Registration No. 

Balance Sheet Date 

1 2 8 1 1 0 

3 1 0 3 2 0 1 0 

Date Month Year 

II Capital Raised during the Year (Amount in Rs. thousands) 

Public Issue 

Right Issue 

N I L 

N I L 

Bonus Issue 

Private Placement 

N I L 4 5 0 0 0 0 0 

III Position of Mobilisation and Development of Fund (Amount in Rs. Thousands) 

Total Liabilities 

Total Assets 

1 8 9 4 5 0 6 1 2 

1 8 9 4 5 0 6 1 2 

Source of Funds 

Paid-Up-Capital 

Reserve & Surplus* 

1 9 6 9 5 0 0 0 1 6 1 3 1 8 9 5 9 

Secured Loans 

Unsecured Loans 

N I L 

N I L 

* Reserves & Surplus includes Policy Liabilities,Linked Liabilities & Fair Value Change Account. 


Net Fixed Assets 

Investments* 

6 9 8 1 6 7 1 6 1 5 6 4 0 8 3 

Net Current Assets 

Misc. Expenditure 

(–) 1 5 2 3 3 3 0 N I L 

Accumulated losses 

2 0 2 7 5 0 4 0 

* Includes Loans 

IV Performance of Company (Amount in Rs. Thousands) 

Turnover 

Total Expenditure 

9 4 7 3 0 0 2 8 9 9 0 8 4 9 9 3 

Profit Before Tax 

Profit After Tax 

(–) 4 3 5 4 9 6 5 

(–) 4 3 5 4 9 6 5 

Earning per share Dividend rate % 

– 2 . 2 8 – – 

V Generic Names of Three Principal products / Services of Company (as per monetary terms) 

Item Code No.(ITC Code) 

Product Description 

N I L 

L I F E I N S U R A N C E 



Chairman 



Gian P. Gupta 

Director 

Venkatesh S. Mysore 

Director 

Mayank Bathwal 


Fabien Jeudy 





173


APPOINTED ACTUARY’S CERTIFICATE 

I have valued the policy liabilities of Birla Sun Life Insurance Company Limited at 31 st March 2010, 

in accordance with accepted actuarial practice and in line with relevant professional guidance 

issued by the Institute of Actuaries of India, including that covering the selection of appropriate 

assumptions. 

In my opinion, the amount of policy liabilities (Rs. 153,533,759,288 - net of reinsurance) makes 

appropriate provision for all policyholders’ obligations, and the financial statements fairly present 

the result of the valuation. 

Fabien Jeudy 

Fellow of the Institute of Actuaries of India 

Fellow of the Society of Actuaries 

Fellow of the Canadian Institute of Actuaries 

20 th April, 2010 

174

C M Y K 

ADITYA BIRLA FINANCIAL SERVICES PRIVATE LIMITED 

AUDITORS' REPORT 

To, 

The Members of Aditya Birla Financial Services Private Limited 

1. We have audited the attached Balance Sheet of Aditya Birla Financial 

Services Private Limited (the 'Company') as at March 31, 2010 and 

also the Profit and Loss Account, and the Cash Flow Statement for the 

year ended on that date annexed thereto. These financial statements 

are the responsibility of the Company's management. Our responsibility 

is to express an opinion on these financial statements based on our 

audit. 

2. We conducted our audit in accordance with auditing standards generally 

accepted in India. Those Standards require that we plan and perform 

the audit to obtain reasonable assurance about whether the financial 

statements are free of material misstatement. An audit includes 

examining, on a test basis, evidence supporting the amounts and 

disclosures in the financial statements. An audit also includes assessing 

the accounting principles used and significant estimates made by 

management, as well as evaluating the overall financial statement 

presentation. We believe that our audit provides a reasonable basis 

for our opinion. 

3. As required by the Companies (Auditor's Report) Order, 2003 (as 

amended) issued by the Central Government of India in terms of subsection 

(4A) of Section 227 of the Companies Act, 1956, we enclose 

in the Annexure a statement on the matters specified in paragraphs 4 

and 5 of the said Order. 

4. Further to our comments in the Annexure referred to above, we report 

that: 

i. We have obtained all the information and explanations, which to 

the best of our knowledge and belief were necessary for the 

purposes of our audit; 

ii. In our opinion, proper books of account as required by law have 

been kept by the Company so far as appears from our examination 

of those books; 

iii. The balance sheet, profit and loss account, and cash flow statement 

dealt with by this report are in agreement with the books of account; 

iv. In our opinion, the balance sheet, profit and loss account, and 

cash flow statement dealt with by this report comply with the 

accounting standards referred to in sub-section (3C) of section 

211 of the Companies Act, 1956; 

v. On the basis of the written representations received from the 

directors, as on March 31, 2010, and taken on record by the 

Board of Directors, we report that none of the directors is 

disqualified as on March 31, 2010 from being appointed as a 

director in terms of clause (g) of sub-section (1) of section 274 of 

the Companies Act, 1956; 

vi. In our opinion and to the best of our information and according 

to the explanations given to us, the said accounts give the 

information required by the Companies Act, 1956, in the manner 

so required and give a true and fair view in conformity with the 

accounting principles generally accepted in India: 

a) in the case of the balance sheet, of the state of affairs of the 

Company as at March 31, 2010; 

b) in the case of the profit and loss account, of the loss for the 

year ended on that date; and 

c) in the case of cash flow statement, of the cash flows for the 

year ended on that date. 

For S.R. Batliboi & Co., 

Firm registration number: 301003E 


Per Shrawan Jalan 

Partner 

Membership No.: 102102 

Mumbai, 

(175)

C M Y K 




We are pleased to present the 3rd Annual Report, together with the Audited 

Accounts of your Company for the year ended 31st March, 2010. 


The summarized standalone results of your Company are given in the table 

below :- 

Particulars For the year For the year 

ended March ended March 

31, 2010 31, 2009 

Rs. 

Rs. 

Income 1,09,04,660 7,79,230 

Expenditure 7,55,76,641 1,50,147 

Profit / (loss) before tax (6,46,71,981) 6,29,083 

Less : Provision for tax 

- Current tax — 1,95,000 

- Deferred tax — — 

- Fringe benefit tax — — 

Net Profit / (loss) after tax (6,46,71,981) 4,34,083 

Add : Balance brought forward 

from previous period 1,53,513 (2,80,570) 

Surplus / (Deficit ) carried to 

Balance sheet (6,45,18,468) 1,53,513 

DIVIDEND 

In view of losses made your Directors do not recommend any dividend for 

the year under review. 

SUBSIDIARY COMPANIES 

During the year, following companies became subsidiaries of your Company. 

1) Aditya Birla Capital Advisors Pvt. Ltd. 

2) Aditya Birla Financial Shared Services Ltd. 

3) Aditya Birla Customer Services Pvt. Ltd. 

4) Aditya Birla Trustee Company Pvt. Ltd. 

5) Aditya Birla Money Insurance Advisory Services Ltd. 

6) Aditya Birla Money Limited. 

As per Section 212 of the Companies Act, 1956, Subsidiary Companies 

Directors' Report, Auditors' Report, Balance Sheet, and Profit and Loss Account, 

are required to be attached to the Balance Sheet of the Company. Accordingly 

the said documents are attached as annexure to this report. 

COMPULSORILY CONVERTIBLE PREFERENCE SHARES: (CCPS) 

During the year under review, your Company issued 40 crores Compulsorily 

Convertible Preference Shares with a Face Value of Rs.10/- each to Aditya 

Birla Nuvo Limited, the Holding Company, aggregating to Rs. 400 crores 

with the approval of the shareholders in the Extraordinary General Meeting 

held on 17th February, 2010. 

SHIFTING OF REGISTERED OFFICE 

With effect from October 28, 2009 your Company has shifted its registered 

office from the State of Maharashtra to the State of Gujarat after obtaining 

all statutory approvals in this regard. The registered office of the Company 

is now situated at Indian Rayon Compound, Junagadh District, 

Veraval - 362 266. 

DIRECTORS' RESPONSIBILITY STATEMENT 

Your Company is committed to maintaining the highest standards of 

Corporate Governance. 

As required under Section 217(2AA) of the Companies Act, 1956, your 

Directors confirm that: 

i) In the preparation of the annual accounts, the applicable accounting 

standards have been followed along with proper explanation relating 

to material departures. 

ii) The Directors have selected such accounting policies and applied them 

consistently and made judgments and estimates that are reasonable 

and prudent so as to give a true and fair view of the state of affairs of 

the company at the end of the financial year and of the loss of the 

company for that period. 

iii) The Directors have taken proper and sufficient care for the maintenance 

of adequate accounting records in accordance with the provisions of 

this Act for safeguarding the assets of the Company and for preventing 

and detecting fraud and other irregularities. 

iv) The Directors have prepared the annual accounts on a going concern 

basis. 

PARTICULARS OF EMPLOYEES 

There are no employees of the Company drawing more than Rupees Twenty 

Four Lakh per annum or Rupees Two Lakh per month as the case may be. As 

such no particulars are required to be given under the Companies (Particulars 

of Employees) Rules, 1975. 

PUBLIC DEPOSITS 

Your Company has not accepted any fixed deposits during the financial 

year 2009-10. There was no unclaimed deposit and interest accrued as on 

March 31, 2010. 

AUDITORS 

The report of the Statutory Auditors is attached to this report. All the notes to 

Schedules and Accounts are self-explanatory and do not call for any further 

comments. 

Your Directors request you to appoint Auditors for the current year as set out 

in the accompanying notice of the Annual General Meeting. 

ACKNOWLEDGEMENT 

Your Directors place on record their appreciation for employees at all levels, 

who have contributed to the growth and performance of your Company. 

Your Directors also thank the clients, vendors, bankers, shareholders and 

advisers of the Company for their continued support. 

Your Directors also thank the Central and State Governments, and other 

statutory authorities for their continued support. 

For and on behalf of the Board 

Aditya Birla Financial Services Private Limited 

Shriram Jagetiya Anil Chirania 

Date : May 05, 2010 Director Director 

Place: Mumbai 

(176)

C M Y K 


Balance Sheet as at March 31, 2010 

SOURCES OF FUNDS 


(Amount in Rupees) 

As at 

As at 

Schedules March 31, March 31, 


Share Capital 1 5,100,000,000 20,600,000 

Reserves and Surplus 2 — 153,513 

Deferred Tax (net) [Refer 

note C8 of Schedule 10] — — 

Total 5,100,000,000 20,753,513 

APPLICATION OF FUNDS 

Fixed Assets 3 

Gross Block 22,465,089 — 

Less: Accumulated Depreciation 2,464,998 — 

Net Block 20,000,091 — 

Investments 4 3,531,217,035 460,650 

Current Assets, Loans and Advances 

Cash and Bank balances 5 1,311,826 42,513,533 

Loans and Advances 6 1,507,619,607 1,843,833 

Less: Current Liabilities 

and Provisions 

(A) 1,508,931,433 44,357,366 

Current liabilities 7 24,667,028 24,064,503 

(B) 24,667,028 24,064,503 

Net Current Assets (A-B) 1,484,264,405 20,292,863 

Debit balance in Profit 

and Loss Account 64,518,468 — 


Notes to Accounts 10 

Profit and Loss Account for the year ended March 31, 2010 

INCOME 



Schedules March 31, March 31, 


Income from Operations 8 10,900,184 779,230 

Other Income 4,476 — 

Total 10,904,660 779,230 

EXPENDITURE 

Administration and Other Expenses 9 73,096,688 113,900 

Interest and Finance Expenses 14,955 36,247 

Depreciation 2,464,998 — 

Total 75,576,641 150,147 

Profit/(Loss) before tax (64,671,981) 629,083 

Less: Provision for tax 

– Current tax — 195,000 

– Deferred tax — — 

Net Profit/(loss) after tax (64,671,981) 434,083 

Add: Balance brought forward 

from previous period 153,513 (280,570) 

Balance carried to Balance Sheet (64,518,468) 153,513 

Basic Earnings Per Share (0.90) 0.52 

Diluted Earnings Per Share (0.90) 0.52 

[Nominal value per share Rs. 10] 

(Refer Note No C7 of schedule 10) 


The schedules referred to above and notes to accounts form an integral part of the 

Balance Sheet. 

As per our report of even date For and on behalf of the Board of Directors of 


For S.R. Batliboi & Co. 

Firm registration no.: 301003E Shriram Jagetiya Anil Chirania 

Chartered Accountants Director Director 


Profit and Loss Account 






per Shrawan Jalan 

Partner 

Membership No. 102102 

Geetika Anand 

Manager and Company Secretary 


Partner 


Geetika Anand 


Place : Mumbai 


Date : May 05, 2010 Date : May 05, 2010 




(177)

C M Y K 


Cash Flow Statement for the year ended 31st March, 2010 

(In Rupees) 

PARTICULARS 2009-10 2008-09 

A 

B 

CASH FLOW FROM OPERATING ACTIVITIES 

Profit/ (Loss) before tax (64,671,981) 629,083 

Adjustments for : 

Depreciation 2,464,998 0 

(Profit) / Loss on sale of Equity Shares — 250 

Interest Expenses — 2,464,998 36,247 36,497 

OPERATING PROFIT / (LOSS) 

BEFORE WORKING CAPITAL CHANGES (62,206,983) 665,580 

Changes in working capital: 

(Increase) / Decrease in trade and other Receivables (1,504,924,788) (1,827,260) 

Increase / (Decrease) in trade and other payables 602,525 (1,504,322,263) 23,834,649 22,007,389 

CASH GENERATED FROM OPERATIONS (1,566,529,246) 22,672,969 

Taxes paid (850,987) (211,573) 

(850,987) (211,573) 

NET CASH FROM OPERATING ACTIVITIES (1,567,380,233) 22,461,396 

CASH FLOW FROM INVESTING ACTIVITIES 

Sale / Redemption of investments 3,183,917,370 300,000 

Purchase of fixed aseets (22,465,089) — 

Investment in Equity Shares of Subsidiary (2,762,421,315) (760,900) 

Sale of Equity Shares of Subsidiary 240,753,095 — 

Purchase of investments (4,193,005,535) — 

NET CASH (DECREASE)/INCREASE FROM INVESTING ACTIVITIES (3,553,221,474) (460,900) 

C 

CASH FLOW FROM FINANCING ACTIVITIES 

Proceeds from issue of equity shares 1,079,400,000 20,500,000 

Proceeds from issue of preference shares 4,000,000,000 — 

Proceeds from Borrowings — 750,000 

Repayment of Borrowings — (750,000) 

Interest on Loan — (36,247) 

NET CASH (DECREASE)/INCREASE 

FROM FINANCING ACTIVITIES 5,079,400,000 20,463,753 

Net increase/ (decrease) in cash and cash equivalents (A+B+C ) (41,201,707) 42,464,249 

CASH AND CASH EQUIVALENTS (OPENING BALANCE) 42,513,533 49,284 

CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 

1,311,826 42,513,533 

Note: 

1 Cash and cash equivalents include cheques in hand and remittance in transit 

Cash in hand 85 356 

Cash at bank 1,311,741 42,513,177 

1,311,826 42,513,533 

2 Previous year’s figures have been regrouped / rearranged to confirm to the current year’s presentation, wherever necessary. 

As per our report of even date 

For and on behalf of the Board of Directors of 






Partner 


Geetika Anand 





(178)

C M Y K 


Schedules annexed to and forming part of Balance Sheet as at March 31, 2010 


As at 

As at 

SCHEDULE 1 - SHARE CAPITAL March 31, 2010 March 31, 2009 

Authorised 

1,500,00000 (Previous year: 21,00,000) 

Equity Shares of Rs. 10/- each 1,500,000,000 21,000,000 

5,000,00000 (Previous year: NIL) 

Preference Shares of Rs. 10/- each 5,000,000,000 — 

Total 6,500,000,000 21,000,000 

Issued, Subscribed and Paid-up 

110,000,000 (Previous year - 2,060,000) equity 

shares of Rs.10/- each fully paid up 1,100,000,000 20,600,000 

(Entire share capital is held by the Holding Company 

viz. Aditya Birla Nuvo Limited and its nominees (Previous 

Year 2,000,000)) 


As at 

As at 

March 31, 2010 March 31, 2009 

4,000,000,000 (Previous year - NIL) 

0.01% Compulsorily Convertible Preference Shares of 

Rs.10/- each fully paid up [Refer note 10 of Schedule 10] 4,000,000,000 — 

(Entire Compulsorily Convertible Preference Share capital is 

held by the Holding Company viz. Aditya Birla Nuvo Limited) 


SCHEDULE 2 - RESERVES AND SURPLUS 

Profit & Loss Account Balance — 153,513 

Total — 153,513 

SCHEDULE 3 - FIXED ASSETS 


GROSS BLOCK DEPRECIATION NET BLOCK 

As at Additions Deductions/ As at As at For the Deductions As at As at As at 

Particulars April 1, During the Adjustments March 31, April 1, Year Adjustments March 31, March 31, March 31, 

2009 Year 2010 2009 2010 2010 2009 

Office Electronic Equipments * — 6,024,069 — 6,024,069 — 746,380 — 746,380 5,277,689 — 

Computers ** — 508,212 — 508,212 — 66,718 — 66,718 441,494 — 

Furniture and Fixtures *** — 1,364,758 — 1,364,758 — 101,193 — 101,193 1,263,565 — 

Leasehold Improvements **** — 14,568,050 — 14,568,050 — 1,550,707 — 1,550,707 13,017,343 — 

Total — 22,465,089 — 22,465,089 — 2,464,998 — 2,464,998 20,000,091 — 

Previous Year — — — — — — — — — — 

Note 

* Includes assets amounting to Rs.5,393,080/- (previous year: Rs. NIL) held joinlty with the Subsidiary / fellow subsidiary / joint venture Company. 

** Includes assets amounting to Rs.496,212/- (previous year: Rs. NIL) held joinlty with the Subsidiary / fellow subsidiary / joint venture Company. 

*** Includes assets amounting to Rs.36,764/- (previous year: Rs. NIL) held joinlty with the Subsidiary / fellow subsidiary / joint venture Company. 

**** Includes assets amounting to Rs.13,645,386/- (previous year: Rs. NIL) held joinlty with the Subsidiary / fellow subsidiary / joint venture Company. 

As at 

As at 

SCHEDULE 4 - INVESTMENTS Face March 31, March 31, 

Value Number* 2010 Number 2009 


(Refer note C11 to Schedule 10) 

(At Cost, Non Trade) 

Investments in Subsidiary Companies: 

QUOTED 

Equity Shares fully paid up 

Aditya Birla Money Limited 1 41,550,000 2,483,028,000 — — 

UNQUOTED 


Aditya Birla Capital Advisors 

Private Limited 10 3,500,000 35,000,250 30,000 300,250 

Aditya Birla Shared Services 

Private Limited 10 50,000 500,000 — — 

Aditya Birla Customer Services 

Private Limited 10 10,000 100,250 6,000 60,150 

Aditya Birla Trustee Company 

Private Limited 10 50,000 500,250 10,000 100,250 

Birla Insurance Advisory & 

Broking Services Limited 10 1,350,054 3,000,120 — — 

Investments in Joint Venture 

Companies: (Refer note C9 

to Schedule 10) 

UNQUOTED 


Birla Sun Life Asset Management 

Company Limited 10 8,999,980 143,099,052 — — 

Birla Sun Life Trustee Company 

Private Limited 10 9,950 99,700 — — 

Other Investments : 

UNQUOTED 


Aditya Birla Finance Limited 10 30,964,841 276,222,550 — — 

Investment in Aditya Birla 

Private Equity - Fund I (Refer note 

C1 to Schedule 10) 10 352,252,500 — — 

Investment in Mutual fund 

Birla Sun Life Savings Fund Instl. 

As at 

As at 

Face March 31, March 31, 

Value Number* 2010 Number 2009 

Premium - Growth 10 120,884,770 — 

[7,107,646 (Previous Year Nil) 

Units of 10/- each, fully paid up] 

Birla Sun Life Cash Plus- Instl. 

Prem.- Growth 10 419 — 

[17 (Previous Year Nil) Units of 

10/- each, fully paid up] 

Birla Sun Life Cash Plus 10 116,529,174 

[7,915,686 (Previous Year Nil) 

Units of 10/- each, fully paid up] 

Total 3,531,217,035 460,650 

Aggregate amount of quoted investments 2,483,028,000 — 

Aggregate amount of unquoted investments 1,048,189,035 460,650 

Total 3,531,217,035 460,650 

Market value of quoted investments 2,098,275,000 — 

Net asset value of units in mutual funds 240,829,277 — 


As at 

As at 


SCHEDULE 5 - CASH AND BANK BALANCES 

Cash on hand 85 356 

Balance with scheduled bank: 

– on current account 1,311,741 22,713,177 

– on fixed deposit account — 19,800,000 

Total 1,311,826 42,513,533 

SCHEDULE 6 - LOANS AND ADVANCES 

(Refer Note C2 of Schedule 10) 

(Unsecured, considered good except otherwise stated) 

Inter Corporate Loan to Body Corporates 1,500,000,000 — 

Advance income tax (net of provision for tax) 867,560 16,573 

Advance recoverable from subsidiary companies 2,701,013 — 

Advances recoverable in cash or kind received 3,393,500 1,768,398 

Accrued Interest 657,534 58,862 

Total 1,507,619,607 1,843,833 

(179)

C M Y K 




As at 

As at 

SCHEDULE 7 - CURRENT LIABILITIES 

Sundry creditors (Refer Note C3 of Schedule 10) 


(a) total outstanding dues of micro enterprises 

and small enterprises — — 

(b) total outstanding dues of creditors other than 

micro enterprises and small enterprises 7,996,620 23,858,463 

Other liabilities 16,670,408 206,040 

Total 24,667,028 24,064,503 

SCHEDULE 8 - INCOME FROM OPERATIONS 

Interest on Fixed deposit with Banks 225,015 779,230 

{Tax Dedcuted at Source of Rs. Nil 

(Previous year- Rs. 1,59,327/-)} 

Interest Received on Loan 657,534 — 

{Tax Dedcuted at Source of Rs. Nil 

(Previous year- Rs. Nil)} 

Profit on sale of Mutual Fund 10,017,635 — 

Total 10,900,184 779,230 

SCHEDULE - 9 - ADMINISTRATION AND OTHER EXPENSES 

Rent and Maintenance Cost 40,905,040 — 

Rates and taxes 27,830,400 22,520 

Electricity Charges 2,253,321 — 

General Expenses 1,851,056 604 

Legal and Professional fees 122,988 1,000 

Loss on sale of shares — 250 

Auditors remuneration – Audit fees 110,304 55,150 

– Certification fees 23,514 34,376 

– Out of Pocket Expenses 65 — 

Total 73,096,688 113,900 

SCHEDULE - 10 - NOTES TO ACCOUNTS 

A. NATURE OF OPERATIONS 

Aditya Birla Financial Services Private Limited (the ‘Company’) is a Non Banking Financial 

Company. The Company was incorporated on October 15, 2007 and has received a 

Certificate of Registration from the Reserve Bank of India (‘RBI’) on May 19, 2009 to 

commence / carry on the business of Non-Banking Financial Institution without accepting 

public deposits. The Company is engaged in investments and financial activities. 

B. SIGNIFICANT ACCOUNTING POLICIES 

1. Basis of preparation 

The financial statements have been prepared to comply in all material respects with 

the Notified Accounting Standard by Companies Accounting Standards Rules, 2006 

and the relevant provisions of the Companies Act, 1956 (‘the Act’). The financial 

statements have been prepared under the historical cost convention on an accrual 

basis, except for dividend from mutual fund units, which is in accordance with the 

Non-Banking Financial Companies Prudential Norms, 1998 (‘NBFC Regulation’). 

The accounting policies have been consistently applied by the Company and are 

consistent with those used in the previous year. 

2. Use of estimates 

The preparation of financial statements in conformity with generally accepted 

accounting principles requires management to make estimates and assumptions that 

affect the reported amounts of assets and liabilities and disclosure of contingent 

liabilities at the date of the financial statements and the results of operations during 

the reporting period end. Although these estimates are based upon management’s 

best knowledge of current events and actions, actual results could differ from these 

estimates. 

3. Fixed assets and depreciation 

Tangible Assets 

Fixed assets are stated at cost less accumulated depreciation and impairment losses, 

if any. Cost comprises the purchase price and any other directly attributable costs of 

bringing the asset to its working condition for its intended use. 

Leasehold improvements are depreciated on straight line basis over 5 years. 

Depreciation 

Depreciation is provided using Straight Line Method as per the useful lives of the 

assets estimated by the management or at the rates prescribed under Schedule XIV of 

the Companies Act, 1956, whichever is higher, except in the case of the following 

where depreciation is equally charged over the estimated useful lives. 

Estimated useful life 

Office Computers 

- 4 years 

Furniture, Fixtures and Electric Fittings 

- 7 years 

Office Electronic Equipments 

- 4 years 

Depreciation on the Fixed Assets added/disposed off/discarded during the year is 

provided on pro-rata basis with reference to the month of addition/disposal/discarding. 

Tangible assets and intangible assets costing Rs 5,000 or less individually are fully 

depreciated / amortized in the year of purchase. 

Impairment 

The carrying amounts of assets are reviewed at each balance sheet date if there is 

any indication of impairment based on internal/external factors. An impairment loss 

is recognized wherever the carrying amount of an asset exceeds its recoverable amount. 

The recoverable amount is the greater of the assets net selling price and value in use. 

In assessing value in use, the estimated future cash flows are discounted to their 

present value at the weighted average cost of capital. 

After impairment, depreciation is provided on the revised carrying amount of the 

asset over its remaining useful life. 

A previously recognised impairment loss is increased or reversed depending on 

changes in circumstances. However, the carrying value after reversal is not increased 

beyond the carrying value that would have prevailed by charging usual depreciation 

if there was no impairment. 

4. Foreign currency transactions 

(i) Initial Recognition 

Foreign currency transactions are recorded in the reporting currency, by applying 

to the foreign currency amount the exchange rate between the reporting currency 

and the foreign currency at the date of the transaction. 

(ii) Conversion 

Foreign currency monetary items are reported using the closing rate. Nonmonetary 

items which are carried in terms of historical cost denominated in a 

foreign currency are reported using the exchange rate at the date of the 

transaction. 

(iii) Exchange Differences 

Exchange differences arising on the settlement of monetary items or on reporting 

Company’s monetary items at rates different from those at which they were 

initially recorded during the year, or reported in previous financial statements, 

are recognised as income or as expenses in the year in which they arise. 

(180)

C M Y K 


SCHEDULE - 10 - NOTES TO ACCOUNTS (CONTD...) 

5. Provisions 

A provision is recognized when the enterprise has a present obligation as a result of 


obligation, in respect of which a reliable estimate can be made. Provisions are not 

discounted to their present value and are determined based on management estimate 

required to settle the obligation at the balance sheet date. These are reviewed at 

each balance sheet date and adjusted to reflect the current management estimates. 

6. Leases 

Leases where the lessor effectively retains substantially all the risks and benefits of 

ownership of the leased asset are classified as operating leases. Operating lease 

payments are recognized as an expense in the profit and loss account on a straight 

line basis over the lease period. 

7. Investments 

Investments that are readily realisable and intended to be held for not more than a 

year are classified as current investments. All other investments are classified as longterm 

investments. Current investments are carried at lower of cost and fair value 

determined on an individual investment basis. Long-term investments are carried at 

cost. However, provision for diminution in value is made to recognise a decline other 

than temporary in the value of the investments. 

8. Revenue recognition 

Revenue is recognized to the extent that it is probable that the economic benefits will 

flow to the Company and the revenue can be reliably measured. 

Interest income 

Interest on income is recognised on a time proportion accrual basis, except in the 

case of non–performing assets, which are recognised on realisation. 

Dividend income 

Dividend income is recognised when the shareholders’ right to receive payment is 

established by the balance sheet date. Dividend from the units of mutual funds is 

recognized in accordance with the NBFC Regulation. 

Profit/ Loss on sale of investments 

Profit or loss on sale of investments is determined on the basis of the weighted average 

cost method. 

9. Taxation 

Income tax comprises of current and deferred tax. Current income tax is measured at 

the amount expected to be paid to the tax authorities in accordance with the Income 

Tax Act, 1961. Deferred income taxes reflects the impact of current year timing 

differences between taxable income and accounting income for the year and reversal 

of timing differences of earlier years. 

Deferred tax is measured based on the tax rates and the tax laws enacted or 

substantively enacted at the balance sheet date. The effect on deferred tax assets 

and liabilities of a change in tax rates is recognized in the income statement in the 

period of enactment of the change. Deferred tax assets are recognised only to the 

extent that there is reasonable certainty that sufficient future taxable income will be 

available against which such deferred tax assets can be realised. In situation where 

the Company has unabsorbed depreciation and carry forward tax losses, deferred 

tax assets are recognised only if there is virtual certainty supported by convincing 

evidence that such deferred tax assets can be realised against future taxable profits. 

At each balance sheet date, the Company re-assesses unrecognised deferred tax 

assets. It recognises unrecognised deferred tax assets to the extent that it has become 

reasonably certain or virtually certain, as the case may be, that sufficient future taxable 

income will be available against which such deferred tax assets can be realised. 

The carrying amount of deferred tax assets are reviewed at each balance sheet date. 

The Company writes-down the carrying amount of a deferred tax asset to the extent 

that it is no longer reasonably certain or virtually certain, as the case may be, that 

sufficient future taxable income will be available against which deferred tax asset can 

be realised. Any such write-down is reversed to the extent that it becomes reasonably 

certain or virtually certain, as the case may be, that sufficient future taxable income 

will be available. 

10. Earnings per share 

Basic earnings per share are calculated by dividing the net profit for the period 

attributable to equity shareholders by the weighted average number of equity shares 

outstanding during the period. 

For the purpose of calculating diluted earnings per share, the net profit for the period 

attributable to equity shareholders and the weighted average number of shares 

outstanding during the period are adjusted for the effects of all dilutive potential 

equity shares. 

C 

NOTES ON ACCOUNTS 

1. Contingent liabilities and commitments 

a. Contingent Liabilities not provided for in respect of: 


Particulars As at As at 


Uncalled commitment in respect of 

investments in units of Aditya Birla 

Private Equity Fund I 1,409,010,000 Nil 

b. Capital commitments: 




Estimated amount of contracts remaining 

to be executed on capital account and 

not provided for Nil Nil 

2. Loans and Advances includes 

Amount Receivable from Balance Balance Maximum Maximum 

as on as on amount due amount due 

March 31, March 31, at any time at any time 

2009 2010 during the during the 

year ended year ended 



(I) Subsidiaries 

Aditya Birla Capital 

Advisors Private Limited NIL 9,015 187,117 NIL 

Birla Insurance Advisory and 

Broking Services Limited NIL 101,998 101,998 NIL 

(II) Fellow Subsidiaries 

Aditya Birla Money Mart 

Limited NIL 478,443 478,443 NIL 

Birla Sun Life Insurance 

Company Limited NIL 140,754 140,754 NIL 

(III) Joint Venture 

Birla Sun Life Asset 

Management Company NIL 763,149 763,149 NIL 

Limited 

3. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 

2006 

The Company did not have any transactions with Small, Micro and Medium Enterprises 

as defined under “Micro, Small and Medium Enterprises Development Act, 2006” 

and hence there are no amounts due to such undertakings. The identification of units 

is based on the management’s knowledge of their status. 


Particulars For the year ended For the year ended 


The principal amount and the interest due 

thereon remaining unpaid to any supplier 

as at the end of each accounting year; Nil Nil 

The amount of interest paid in terms of 

section 16, of the Micro, Small and Medium 

Enterprise Development Act, 2006 along 

with the amounts of the payment made to 

the supplier beyond the appointed day 

during each accounting year; Nil Nil 

Amount of interest due and payable 

for the period of delay in making 

payment but without adding the interest 

specified under Micro, Small and Medium 

Enterprise Development Act, 2006; Nil Nil 

The amount of interest accrued and 

remaining unpaid at the end of each 

accounting year; and Nil Nil 

The amount of further interest remaining 

due and payable even in the succeeding 

years, until such date when the interest 

dues as above are actually paid to the 

small enterprise for the purpose of 

disallowance as a deductible expenditure 

under section 23 of the Micro, Small and 

Medium Enterprise Development Act, 2006. Nil Nil 

(181)

C M Y K 


SCHEDULE - 10 - NOTES TO ACCOUNTS (CONTD...) 

4. Segmental Reporting 

The Company has single reportable segment, viz., investment and financial activity 

for the purpose of Accounting Standard (AS)–17 on ‘Segment Reporting’. The 

Company does not have any reportable geographical segment. 

5. Related Party Disclosure: 

Names of related parties where control exists irrespective of whether transactions 

have occurred or not: 

Relationship 

Name of the Party 

Holding Company 


Subsidiaries 

Aditya Birla Capital Advisors Pvt. Limited 

Aditya Birla Customer Services Private Limited 

Aditya Birla Financial Shared Services Limited 

Aditya Birla Trustee Company Private Limited 

Aditya Birla Money Limited (formerly known as Apollo 

Sindhoori Capital Investment Limited 

Birla Insurance Advisory & Broking Services Limited 

Aditya Birla Securities Private Limited (ceased to be 

subsidiary w.e.f. March 13, 2009) 

Joint Ventures 

Birla Sun Life Asset Management Company Limited 

Birla Sun Life Trustee Company Private Limited 

Names of other related parties with whom transactions have taken place during the 

year: 

Relationship 

Name of the Party 

Fellow Subsidiaries 

Aditya Birla Finance Limited (formerly known as Birla 

Global Finance Limited) 

Aditya Birla Money Mart Limited (formerly known as 

Birla Sun Life Distribution Company Limited) 

Birla Sun Life Insurance Company Limited 

Aditya Birla Capital Limited (formerly known as 

Laxminarayan Investment Limited) 

Key Management Personnel Geetika Anand, Manager (in terms of Sec. 269 of 

the Companies Act, 1956) 

Shriram Jagetiya, Director 

Anil Chirania, Director 

Refer Annexure 1 for the transactions with related parties. 

6. Operating Leases 

The Company’s significant leasing arrangements are in respect of operating leases 

are for office premises, The lease term is for 3 years and renewable for further two 

terms of 3 years at the option of the Company. There is an escalation clause in the 

lease arrangement at the end of every 3 years. There are no restrictions imposed by 

lease arrangements. There are no subleases. The aggregate lease rentals payable 

are charged to the profit and loss account. 




Lease payments recognised in the profit 

and loss account 35,102,708 Nil 

Details of non-cancellable leases are as follows: 




Minimum Lease Payments: 

Not later than one year 29,179,308 Nil 

Later than one year but not later 

than five years 29,179,308 Nil 

Later than five years — Nil 

7. Earnings Per Share (‘EPS’) 

Basic and diluted EPS has been computed by dividing the net profit after tax for the 

year attributable to equity shareholders by weighted average number of equity shares 

outstanding during the year. 




Net Profit / (loss) considered for basic 

EPS calculation (64,671,981) 434,083 

Weighted average number of equity 

shares for calculating basic EPS 72,111,562 835,616 

Nominal value per share 10 10 

Basic and Diluted * EPS (0.90) 0.52 

* As the conversion of preference shares results into reduction of loss per share, the same 

has been considered to be anti-dilutive and, hence, the same has not been considered for 

diluted earnings per share calculations. 

8. Deferred Tax Liabilities/ Assets 




Deferred Tax Liability 

On depreciation 347,400 — 

Sub-Total 347,400 — 

Deferred Tax Asset 

On unabsorbed losses 21,674,742 — 

Sub-Total 21,674,742 — 

Deferred tax assets to the extent of liability 347,400 — 

Deferred tax (assets)/ liabilities (net) Nil Nil 

9. Joint Venture Disclosures: 

i) Jointly Controlled Entity by the Company: 

Name of the Entity 

Country of 

incorporation 

% Holding 



Company Limited India 49.99% Not applicable 

Birla Sun Life Trustee Company 

Private Limited India 49.99% Not applicable 

ii) Company’s share of in the Assets, Liabilities, Income and Expenses with respect 

to jointly controlled entities are as follows: 




Assets 583,442,779 Not applicable 

Liabilities 175,000,000 Not applicable 

Revenue 505,298,402 Not applicable 

Other expenses (inclusive Depreciation 

and Taxation) 262,896,000 Not applicable 

Profit/ (Loss) after tax 242,402,402 Not applicable 

Capital Commitments 16,180,945 Not applicable 

Contingent Liabilities 23,018,221 Not applicable 

10. Issued, Subscribed and Paid up capital includes 400,000,000 (previous year: Nil) 

0% Compulsory Convertible Preference Share (CCPS) of Rs.10 each, fully paid up, 

which are compulsorily convertible into equity shares of Rs. 10 each, fully paid up at 

a premium of Rs. 90 per share on expiry of five years from the date of allotment. 

11. Investments include certain investments as detailed below which are in the process of 

being registered in the name of the Company: 




Birla Sun Life Trustee Company Limited 9,950 NIL 


Company Limited 70 NIL 

Birla Insurance Advisory and Broking 

Services Limited 225 NIL 

12. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of 

part II of the Schedule VI to the Companies Act, 1956 have been given to the extent 

applicable and necessary. 

13. The figures for the previous year have been re-grouped/re-arranged wherever 

necessary. 







Geetika Anand 

Partner 

Manager and Company Sectetary 





(182)

C M Y K 


Transaction with related parties during the year ended March 31, 2010 

Annexure - I 

During the year following transactions were carried out with the related parties in the ordinary course of business:- 


Transaction/Nature of Relationship Holding Company Subsidiary Joint Ventures of Fellow Other Entities Grand Total 

Companies Holding Company Subsidiaries over which 

the Company 

having control 

Issue of Equity Shares:- 

Aditya Birla Nuvo Limited 1,079,400,000 1,079,400,000 

(20,000,000) — — — — (20,000,000) 

ABNL Investment Limited (Formerly A B Captial Limited) — — — — — — 

— — — (500,000) — (500,000) 

Issue of Preference Shares:- — — — — — — 

Aditya Birla Nuvo Limited 4,000,000,000 — — — — 4,000,000,000 

— — — — — — 

1,079,400,000 — — — — 1,079,400,000 

(20,000,000) — — (500,000) — (20,500,000) 

Purchase of Equity Shares of 

Aditya Birla Money Mart Limited (Formerly Birla Sun Life Distribution 

Company Limited) 240,753,095 — — — — 240,753,095 

— — — — — — 

Aditya Birla Money Limited 2,483,028,000 — 2,483,028,000 

— — — — — — 

Birla Insurance Advisory & Broking Services Limited (Purchase from 

Aditya Birla Finance Limited) — 3,000,120 — — — 3,000,120 

— — — — — — 

Birla Sun Life Asset Management Company Limited 143,099,052 — — — — 143,099,052 

— — — — — — 

Birla Sun Life Trustee Company Private Limited 99,700 — 99,700 

— — — — — — 

Aditya Birla Customer Services Private Limited 40,000 — 40,000 

— — — — — — 

Aditya Birla Shared Services Private Limited (Purchased from ABNL 

Investment Limited) — — — 500,000 — 500,000 

— — — — — — 

Aditya Birla Finance Limited (Formerly Birla Global Finance Limited) 276,222,550 — — — — 276,222,550 

— — — — — — 

2,867,019,847 3,000,120 — — — 2,870,019,967 

— — — — — — 

Subscription to Equity Shares of 

Aditya Birla Capital Advisors Private Limited — 34,700,000 — — — 34,700,000 

— (200,000) — — — (200,000) 

Aditya Birla Securities Private Limited — — — — — — 

— (200,000) — — — (200,000) 

Aditya Birla Money Mart Limited (Formerly Birla Sun Life Distribution 

Company Limited) — 128,250,550 — — — 128,250,550 

— — — — — — 

Aditya Birla Trustee Company Private Limited — 400,000 — — — 400,000 

— — — — — — 

162,950,550 162,950,550 

— (400,000) — — — (400,000) 

Sale of Equity Shares of 

Aditya Birla Money Mart Limited (Formerly Birla Sun Life Distribution 240,753,095 — — — — 240,753,095 

Company Limited) — — — — — — 

240,753,095 — — — — 240,753,095 

— — — — — — 

Advance given to 

Aditya Birla Customer Services Private Limited — 2,590,000 — — — 2,590,000 

— — — — — — 

— 2,590,000 — — — 2,590,000 

— — — — — — 

TDS paid on belhaf of the Company by 

Aditya Birla Finance Limited (Formerly Birle Global Finance Limited) — 555,120 — — — 555,120 

— — — — — — 

— 555,120 — — — 555,120 

— — — — — — 

Expenses paid on behalf of 


— — — — — — 

Aditya Birla Finance Limited (Formerly Birla Global Finance Limited) — — — 26,331 — 26,331 

— — — — — — 

Birla Insurance Advisory & Broking Services Limited — — 11,645 — 11,645 

— — — — — — 

Birla Sun Life Asset Management Company Limited 53,769 53,769 

— — — — — 

Aditya Birla Money Mart Limited (Formerly Birla Sun Life Distribution Company Limited) 21,192 

— — — — — 

Birla Sun Life Insurance Company Limited 140,754 

— — — — — 

— 3,540,750 53,769 199,922 — 3,632,495 

— — — — — — 

(183)

C M Y K 



Transaction/Nature of Relationship Holding Company Subsidiary Joint Ventures of Fellow Other Entities Grand Total 

Companies Holding Company Subsidiaries over which 

the Company 

having control 

Contribution against expenses to be incurred towards joint development 

of office premises 

Aditya Birla Finance Limited (Formerly Birla Global Finance Limited) — — — 32,441,000 — 32,441,000 

— — — (4,008,000) — (4,008,000) 

Birla Insurance Advisory & Broking Services Limited — — — 9,989,383 — 9,989,383 

— — — (1,772,000) — (1,772,000) 

Birla Sun Life Assest Management Company Limited — — 49,535,387 — — 49,535,387 

— — (8,876,000) — — (8,876,000) 

Birla Sun Life Distribution Company Limited — — — 14,850,395 — 14,850,395 

— — — (2,680,000) — (2,680,000) 

Birla Sun Life Insurance Company Limited — — — 99,892,683 — 99,892,683 

— — — (17,800,000) — (17,800,000) 


— — — — — — 

— 19,626,176 49,535,387 157,173,461 — 226,335,024 

— — (8,876,000) (26,260,000) — (35,136,000) 

Allocation of payment made to vendors towards joint development 

of office premises:- 

Aditya Birla Finance Limited (Formerly Birla Global Finance Limited) — — — 30,459,769 30,459,769 

— — — (1,292,084) — (1,292,084) 

Birla Insurance Advisory & Broking Services Limited 10,102,936 10,102,936 

— — — (571,250) — (571,250) 

Birla Sun Life Assest Management Company Limited 50,244,767 

— — (2,861,410) — — (2,861,410) 

Aditya Birla Money Mart Limited (Formerly Birla Sun Life Distribution Company Limited) 15,307,646 

— — — (863,968) — (863,968) 

Birla Sun Life Insurance Company Limited 99,892,683 

— — — (5,738,295) — (5,738,295) 


— — — — — — 

— 19,626,176 50,244,767 155,763,034 — 60,188,881 

— — (2,861,410) (8,465,597) — (11,327,007) 

Outstanding balances as at 31.03.2010 

Investments (as detailed in Schedule 3 to Balance Sheet) 

Aditya Birla Money Limited — 2,483,028,000 — — — 2,483,028,000 

— — — — — — 


— (300,250) — — — (300,250) 

Aditya Birla Shared Services Private Limited — 500,000 — — — 500,000 

— — — — — 

Aditya Birla Customer Services Private Limited — 100,250 — — — 100,250 

— (60,150) — — — (60,150) 

Aditya Birla Trustee Company Private Limited — 500,250 — — — 500,250 

— (100,250) — — — (100,250) 

Birla Sun Life Assest Management Company Limited — — 143,099,052 — — 143,099,052 

— — — — — — 

Birla Sun Life Trustee Company Private Limited — — 99,700 — — 99,700 

— — — — — — 

Birla Insurance Advisory & Broking Services Limited — — — 3,000,120 — 3,000,120 

— — — — — — 

Aditya Birla Finance Limited (Formerly Birla Global Finance Limited) — — — 276,222,550 — 276,222,550 

— 2,519,128,750 — 279,222,670 — 2,519,128,750 

— (460,650) — — — (460,650) 

Amount Payable 

Aditya Birla Finance Limited (Formerly Birla Global Finance Limited) — — — 2,007,632 2,007,632 

— — — — — — 

Amount Receivable 

Birla Insurance Advisory & Broking Services Limited — 101,998 101,998 

— — — — — — 

Birla Sun Life Assest Management Company Limited 763,149 763,149 

— — — — — — 

Aditya Birla Money Mart Limited (Formerly Birla Sun Life Distribution Company Limited) 478,443 478,443 

— — — — — — 

Birla Sun Life Insurance Company Limited 140,754 140,754 

— — — — — — 

Aditya Birla Capital Advisors Private Limited — 9,015 — — — 9,015 

— — — — — — 

Inter Corporate Deposit 

Aditya Birla Customer Services Private Limited — 2,590,000 — — — 2,590,000 

— — — — — — 

— 2,590,000 — — — 2,590,000 

— — — — — — 

Equity Capital 

Equity Shares held by holding company 1,100,000,000 — — — — 1,100,000,000 

(20,000,000) — — — — (20,000,000) 

Equity Shares held by fellow subsidiaries — — — — — — 

— — — (500,000) — (500,000) 

Notes: 1. Figures in brackets represent corresponding amount of previous period. 

(184)

C M Y K 


ADITYA BIRLA FINANCIAL SERVICES PRIVATE LIMITED AS ON 31ST MARCH,2010 

(as required in terms of Paragraph 13 of Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms(Reserve Bank) Direction, 2007 

Particulars (Rs.) 

Liabilities side : 

(1) Loans and advances availed by the Non Banking Financial Amount Amount 

Company inclusive of interest accrued thereon but not paid: out-standing overdue 

(a) Debentures : Secured — — 

: Unsecured — — 

(other than falling within the 

meaning of public deposits*) 

(b) Deferred Credits — — 

(c) Term Loans — — 

(d) Inter-corporate loans and borrowing — — 

(e) Commercial Paper — — 

(f) Other Loans (specify nature) — — 

* Please see Note 1 below 

Assets side : 

Amount outstanding 

(2) Break-up of Loans and Advances including bills 

receivables [other than those included in (4) below] : 

(a) Secured 

(b) Unsecured (Inter Corporate Deposits,Other Receivable & 

Advance Tax Net of Provision) 1,507,619,607 

(3) Break up of Leased Assets and stock on hire and otherr assets 

counting towards AFC activities 

(i) Lease assets including lease rentals under sundry debtors : 

(a) Financial lease — 

(b) Operating lease — 

(ii) Stock on hire including hire charges under sundry debtors: 

(a) Assets on hire — 

(b) Repossessed Assets — 

(iii) Other Loans counting towards AFC activities 

(a) Loans where assets have been repossessed — 

(b) Loans other than (a) above — 

(4) Break-up of Investments : 

Current Investments : 

1 Quoted : 

(i) Shares :(a) Equity — 

(b) Preference — 

(ii) Debentures and Bonds — 

(iii) Units of mutual funds 

(iv) Government Securities — 

(v) Others (please specify) — 

2 Unquoted : 

(i) Shares : (a) Equity — 


(ii) Debentures and Bonds 

(iii) Units of mutual funds 237,414,363 


(v) Others (Please specify) — 

Long Term investments : 

1 Quoted : 

(i) Share : (a) Equity 2,483,028,000 



(iii) Units of mutual funds — 



2. Unquoted : 

(i) Shares : (a) Equity 458,522,172 



(iii) Units of mutual funds/Private Equity Fund 352,252,500 



(5) Borrower group-wise classification of all assets, financed as in (2), and (3), above: 

Please see Note 2 below 

Category 

Amount net of provisions 

Secured Unsecured Total 

1. Related Parties ** 

(a) Subsidiaries — 2,701,013 2,701,013 

(b) Companies in the same group — 1,382,346 1,382,346 

(c) Other related parties — — 

2. Other than related parties — 1,503,536,248 1,503,536,248 

Total — 1,507,619,607 1,507,619,607 

(6) Investor group-wise classification of all investments (current and long term) in shares and 

securities (both quoted and unquoted): 

Please see note 3 below 

Category Market Value / Book Value 

Break up or (Net of Provisions) 

fair value or NAV 


(a) Subsidiaries 2,214,718,873 2,522,128,870 

(b) Companies in the same Group 467,408,042 276,222,550 

(c) Other related parties 703,645,214 143,198,752 

2. Other than related parties 

Total 3,385,772,130 2,941,550,172 

** As per Accounting Standard of ICAI (Please see Note 3) 

(7) Other information 

Particulars 

Amount 

(i) Gross Non-Performing Assets 

(a) Related parties — 

(b) Other than related parties — 

(ii) Net Non-Performing Assets 


(b) Other than related parties — 

(iii) Assets acquired in satisfaction of debt — 

Notes: 

1 . As defined in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public 

Deposits (Reserve Bank) Directions, 1998. 

2 . Provisioning norms shall be applicable as prescribed in Non-Banking Financial (Non Deposit Accepting 

or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. 

3 . All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of 

investments and other assets as also assets acquired in satisfaction of debt. However, market value in 

respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be 

disclosed irrespective of whether they are classified as long term or current in column (4) above. 

(185)

C M Y K 


CRAR 

Items Current Year Previous Year 

i) CRAR (%) 73.65% 

ii) CRAR - Tier I Capital (%) 73.65% 

iii) CRAR - Tier II Capital (%) 0 

Exposure to Real Estate Sector 

Category Current Year Previous Year 

a) Direct Exposure 

i) Residential Mortgages NIL 

Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented;(individual 

housing loan up to Rs. 15 lakhs may be shown separately) 

NIL 

ii) Commercial Real Estate NIL 

Lending secured by mortgages on commercial real estates (office buildings, retail space, multipurpose, commercial premises, 

multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space,hotels,land acquisition, development 

and construction, etc.). Exposure would also include n on-fund based (NFB) limits; 

NIL 

iii) Investments in Mortgage Backed Securities ( MBS ) and other securitised exposures- NIL 

a. Residential NIL 

b. Commercial Real Estate NIL 

b) Indirect Exposure NIL 

Funds based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies(HFCs) 

NIL 

Assets Liability Management 

Maturity pattern of certain items of assets and liabilities 

( Rs. in crores) 

1 day to Over one month Over 2 months Over 3 months over 6 months Over 1 year Over 3 years Over 5 years Total 

30/31days to 2 months upto 3 months to 6 months to 1 year to 3 years to 5 years 

(one month) 

Liabilities 

Borrowings from banks NIL NIL NIL NIL NIL NIL NIL NIL NIL 

Market Borrowings NIL NIL NIL NIL NIL NIL NIL NIL NIL 

Assets 

Advances 150.68 150.68 

Investments 23.74 329.38 353.12 

(186)

C M Y K 

ADITYA BIRLA MONEY LIMITED (Formerly: Apollo Sindhoori Capital Investments Ltd.) 

MANAGEMENT’S DISCUSSION AND ANALYSIS 

MACRO ECONOMIC SCENARIO 

The Indian Economy & Markets 

The financial year 2009-10 was an outstanding one for the Indian equity markets. The Sensex rallied 77% and 

the Nifty surged 72%. Foreign Institutional Investors came back in droves, pumping approximately USD 25 

billion into India’s cash market. India, as a result was one of the best performing equity markets globally. Two 

major events aided the performance - the recovery in global markets resulting from the stimulus packages 

and the establishment of a stable Government in India after the Lok Sabha elections in May 2009. The beneficial 

effects of substantial stimulus packages has effectively countered a deep fall in private consumption, and the 

central banks across the world followed a soft money policy, with lower interest rates, which supported the 

equity markets. 

The year also witnessed a rebound in economic growth and also saw a sustained revival in industry and 

manufacturing. The Index of Industrial Production over the last 18 months indicates a strong recovery across 

various sectors. The Business Confidence Index also portrays the return of confidence. The real turnaround in 

economic performance came in Q2 of financial year 2009-10 when the economy grew by 7.9%. However, there 

are inflationary pressures that India is facing. Inflation moved northwards as food inflation grew and the prices 

of primary products flared up not only due to the vagaries of the monsoon but also due to other supply-side 

factors. The high level of government borrowings and the high level of fiscal deficit were also notable factors 

which influenced financial markets. 

Bank credit picked up momentum and grew at 16% rate during 2009-10 and is expected to gather pace in the 

current year. Capital expenditure from the corporate sector which was slow in the last couple of years is likely 

to enter a growth phase by Q2 or Q3 of 2010. Credit expansion will go hand in hand with economic expansion. 

With the economy expected to grow between 8% to 8.5%, the corporate earnings should also naturally grow 

with it and it is likely to get factored in the prices of equities. The disinvestment in public sector enterprises is 

more or less on course, and one could see more action on this front in the coming year. 

With rising inflation and growing inflationary expectations, and to some extent enthused by the rapid recovery 

in industrial activity, the RBI is most likely to follow a policy of tightening the base rates during the coming 

year. The tightening so far has been moderate and RBI is expected to continue with the tightening but in a 

measured manner. This will have some consequences for the markets. But the fact that most of the government 

borrowings are expected to be completed in H1 of 2010 and that the inflows into emerging markets could 

remain robust should bring some relief to the markets even in a rising interest rate scenario. The global 

scenario is clearly going to play a role in the direction our market’s take. 

Major Global Developments 

Macro-economic data for the US and Europe show some recovery of economic activity compared to the last 

year. The acute phase of financial crisis has apparently passed by, and global economic recovery is under way. 

Financial markets have stabilized. Interbank liquidity has reached a level close to its “normal” pre-crisis range. 

Currencies, which fell against the U.S. Dollar in the immediate aftermath of the crisis, have largely recovered to 

their pre-crisis levels. Also, borrowing costs for emerging market borrowers have stabilized over the last few 

quarters. International capital flows to developing countries have also improved with a rapid run-up during 

the last months of 2009. 

The continuing situation over Greece and some other European countries remains a concern but countered 

action is being taken to deal with this. US unemployment claims still remain a concern within US but still the 

improvement in the jobless claims in early 2010 gives hopes of economic revival . The Fed’s move to keep 

interest rates near- zero indicates the government focus on supporting the economic recovery which is in 

nascent stage. China’s GDP expansion by 8.4% in FY10 once again made it the fastest growing economy in the 

world. The growth was driven by financial stimulus packages to infrastructure projects and also an easy money 

policy. But the recent indications are one of tightening from the Chinese central bank to prevent unnatural 

build up of asset prices. A revaluation of Yuan is also a factor to reckon with. 

(187)

C M Y K 


INDUSTRY STRUCTURE AND DEVELOPMENTS 

In 2008-09, the Equity market was down and investors were shying away from equity and equity linked 

financial products. However in 2009-10, the Nifty closed the year with a gain of 72% and the comparative 

numbers for Sensex, for the same period, showed a gain of 77%. FIIs brought (net inflows of) Rs. 87,987 Crores 

(US$ 18508 million) into the market, during Jan - Dec of 2009, as against Rs. 41, 215 Crores (US$ 9338 million) 

they had taken out (as net outflows) during the same period in 2008. As a result of these inflows and with 

other positive factors, the Rupee appreciated to Rs. 44.94 to an US Dollar end of financial year 2009-10 as 

opposed to Rs. 50.95 in the beginning of the financial year. 

The market comparison data in tabular format is as under. 

Year BSE Sensex S&P CNX Nifty Market Capitalization (Rs. Crores) 

Base: 1978-79 Base: 1983-84 BSE NSE 

= 100 = 100 

1 2 3 4 5 

2008-09 12366 3713 30,86,075 28,96,194 

2009-10 17528 5249 61,39,040 60,09,173 

While the market capitalization increased in absolute and percentage terms during the financial year ended 

March 31, 2010, the average daily turnover recorded in both the exchanges had seen a decline in the last 

quarter of financial year 2009-10. The quarterly comparison of daily average turnover in both cash and 

derivative segments in NSE are as under. 

Period: FY 2009-10 Average Daily Turnover Average Daily Turnover Average Daily Turnover 

in Rs. Crores (NSE Cash) in Rs. Crores in Rs. Crores (NSE) 

(NSE Derivatives) 

Apr’09-June’09 18,915 66,085 85,000 

Jul’09-Sep’09 18,053 69,335 87,388 

Oct’09-Dec’09 16,107 77,077 93,184 

Jan’10-Mar’10 14,567 77,201 91,768 

Source www.nseindia.com 

The Commodities market too witnessed increase in volumes. The combined commodities volumes recorded 

in both MCX and NCDEX increased by 52%, up from Rs. 469,554 Crores in the financial year 2008-09, to 

Rs. 712,033 Crores in the financial year 2009-10. There has been also an increase in the number of demat 

accounts opened in the market during the financial year 2009-10. 

Considering the overall scenario, the performance of the market and the broking industry in particular 

during the financial year 2009-10 was good and it brought back the confidence to the market participants. 

During the financial year 2009-10, the markets also witnessed some important regulatory changes and these 

ensured that the overall investors’ confidence was sustained in the markets. 

Aditya Birla Nuvo took over the reins of the Company in March 2009, when the market was down and 

investors were shying away from equity. The key task was to stabilize business, rationalize costs, bring 

operational efficiencies and get the Company on a track to sustained profits. With support of all the employees 

and management team, this task was achieved successfully in this financial year. Your Company is now part of 

the broad based and integrated Aditya Birla Financial Services Group. The financial services business of 

(188)

C M Y K 


Aditya Birla Nuvo is spread across seven segments viz. Life Insurance, Asset Management, NBFC, Wealth 

Management & Distribution, Equity & Commodity Broking, Insurance Broking and Private Equity. 

During the year, the company’s stock price also performed well in the bourses recording gains in excess of 

3.5 times for the investors. During this period it touched a high of Rs. 71.35 and a low of Rs. 14. 30 in NSE. 

Snapshot of your Company’s stock’s performance viz-a-viz NIFTY. 

5500 

80 

5000 

70 

4500 

60 

4000 

3500 

50 

40 

30 

3000 

20 

2500 

10 

2000 

0 

Apr-09 

May-09 

Jun-09 

Jul-09 

Aug-09 

Sep-09 

Oct-09 

Nov-09 

Dec-09 

Jan-10 

Feb-10 

Mar-10 

NIFTY 

ABML 

FINANCIAL PERFORMANCE AND REVIEW OF OPERATIONS 

Your Company recorded an Income from Operations of Rs. 11,045. 92 Lakhs for the year under review, on a 

consolidated basis. This was 51% higher than the previous year. The total consolidated income for the year 

under review stood at Rs. 11,636.16 Lakhs. The Company’s performance witnessed robust growth in the first 

three quarters, the 4 th Quarter was muted due to a slowdown in the cash market volumes. The Consolidated 

Net Profit for the year stood at Rs. 1,268.33 Lakhs (up from Rs. 120.62 Lakhs for the previous year) and the net 

profit margins increased from 1.4% in 2008-09 to 10.9% during the financial year 2009-10. 

Revenues from equity broking business grew by 49% to Rs. 7,703.84 Lakhs led by increased volumes. 

Commodities business recorded strong growth for the year under review with a brokerage income of 

Rs. 1,259.29 lakhs, 165% higher than the previous year’s brokerage of Rs. 474.37 Lakhs, driven by increased 

volumes. Your Company also obtain credit rating of P1+ from CRISIL Limited for its short term debt programme. 

OUTLOOK 

After an exciting 2009-10 which saw most equity markets around the globe recover sharply from their March 

lows, the markets move into 2010-11 with hope of a steady global economic recovery translating into pickup 

in business and investment cycles. 

Corporate earnings have been good and the strong GDP growth and IIP numbers send signals that the 

economy is positively on revival phase. A stable government that is focused on moving ahead with the 

divestment process and stepping up infrastructure spending should support the recovery. 

(189)

C M Y K 


In India, while the view is positive on equity markets over the medium term, 2010-11 promises to be an 

interesting year as well as a challenging one. 

With this background, and having posted encouraging numbers for the year ended March 31, 2010, your 

company is poised for growth and expansion in 2010-11. The Company now see the need more than ever to 

work on the 5 pillars of our business - Brand, Product, Distribution, Operations, Service and People – in a focused 

and sustained manner. The Company plans to augment its research and product offerings to match the best 

in the industry. Your Company will increase its footprint mainly through business partners. However, additional 

branches are being added predominantly in Western and Northern India which represent a large opportunity 

for broking. This would also help to enhance the Company’s presence in these geographies. 

OPPORTUNITIES AND THREAT 

The key concerns across markets at this point stem from the surge in inflation and the timing of exit of the 

easy monetary policy by the central banks. This is the time when real assets like commodities will be in focus 

and all financial markets are likely to stay volatile. 

The Company’s operations are linked to the general market and economic conditions and any positive or 

negative move can impact revenues. However, the Company looks for diversification and appropriate strategies 

to minimize the impact. 

Technology obsolescence is another area of concern in broking industry and can create impediments to 

growth. However, your Company continues to assess technology and other ancillary requirements on a 

regular basis and take investment decisions at the appropriate time. 

The market conditions and the Company’s plans for expansion and growth in 2010-11 are dependent on 

many external factors. Many of those factors will be regularly monitored as they will be the key for delivery of 

our desired results. The Company however continuously does a SWOT analysis, for ensuring a sustainable 

growth by exploring various opportunities available in the market under the applicable regulatory framework. 

RISK AND CONCERNS 

Like in any other business your Company is no stranger to risks. The Company encounters market risk, credit 

risk and operational risks in its daily operations. The typical risks themes around broking business are 

• Volatility in markets 

• Inadequate client profiling and KYC documentation 

• Failure to execute transactions in line with prescribed processes and procedures 

• Technology failures 

The Company’s philosophy and approach to risk and its management is one of informed investing. The 

Company’s policies, procedures and systems are built around this theme. Some of the broad guiding principles 

that are enumerated in the Company’s Risk Management framework are as below: 

• Systematic and structured risk policy framework 

• Proper and informed client selection process 

• Appropriate monitoring and surveillance for minimization of losses 

• Pro-active handling of operational risk 

INTERNAL CONTROL AND ADEQUACY 

The Company has adequate internal control systems appropriate for the business process having regard to 

efficiency of operations - systems, financial reporting and for compliance with applicable laws. 

(190)

C M Y K 


The Company goes through regular internal audits and all reports emanating from those audits are tabled in 

the Audit Committee meetings of the Board and acted upon. 

HUMAN RESOURCES 

One of the key pillars of our business is people. The Company’s HR policies and practices are built on Aditya 

Birla Group (ABG) core values of Integrity, Passion, Speed, Commitment and Seamlessness. While initially (post 

acquisition by Aditya Birla Nuvo) the challenges were around integration into the ABG system, the current 

challenges revolve around recruiting and providing opportunities to best talent. Your Company had 1525 

employees as on March 31, 2010. 

HR has been instrumental in working out the new organization structure and implementing lot of key policy 

decisions related to people over the last one year. As the Company now embarks on its growth plans, 

recruitment of good talent in a timely manner will be critical to deliver key results and value for the 

shareholders. 

CAUTIONARY NOTE 

Statements in this Report, describing the Company’s objectives, projections, estimates and expectations may 

constitute ‘forward looking statements’ within the meaning of applicable laws and regulations. Forward looking 

statements are based on certain assumptions and expectations of future events. These statements are subject to 

certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are 

accurate or will be realized. The actual results may be different from those expressed or implied since the Company’s 

operations are affected by many external and internal factors, which are beyond the control of the management. 

Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or 

modified in future on the basis of subsequent developments, information or events. 

(191)

C M Y K 


CORPORATE GOVERNANCE REPORT 

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE 

Your Company is fully committed to the adoption of best governance practices and its adherence. Your 

Company aligns itself with Aditya Birla Group values and governance norms and strive for excellence 

through adoption of good Corporate and disclosure practices. The Company’s philosophy on Corporate 

Governance is to practice transparency, accountability and maintain professional approach in dealing 

with all its stakeholders. Your Company believes in fair dealing, strengthening the disclosure practices, 

timely and appropriate compliance of the applicable regulations, strategic guidance and effective 

monitoring by the Board and above all providing value to the shareholders and its stakeholders. 

2. BOARD OF DIRECTORS 

Composition, Category, Size of the Board 

The Board of Directors of the Company is a balanced Board, comprising of a Managing Director and Non- 

Executive Directors which includes independent professionals. As on March 31, 2010, there were six 

Directors on the Board, out of which two are Independent, three are Non-Executive and one is a Managing 

Director. The Company do not have an appointed Chairman and the same is appointed for each such 

Board Meetings. 

None of the Directors of the Board is a member of more than 10 Committees or a Chairman of more than 

5 Committees (as specified under clause 49) across all Companies in which he is a Director. All Directors 

have made necessary disclosures regarding their Directorship and Committee positions occupied by 

them in other Companies. 

The details of other Directorships, positions held either in Committees of Board of Directors as 

well as attendance at Board Meetings/Annual General Meeting are as follows: 

Name of the Category No. of No. of No. of Last AGM 

Director Board Directorships Committee Atten- 

Meetings held in other Membership dance 

Companies# held in other (Yes/No) 

Companies^ 

Held Attended 

Mr. Pankaj Razdan Non–Executive Director 4 4 4 - Yes 

**Mr. Kanwar Vivek Managing Director 4 4 2 - Yes 

Mr. P. Sudhir Rao Independent Director 4 3 3 1 Yes 

Mr. G. Vijayraghavan Independent Director 4 4 4 - Yes 

Mr. Manoj Kedia Non-Executive Director 4 1 3 2 No 

*Mr. Sudhakar 

Ramasubramanian Non-Executive Director 4 4 1 - Yes 

^ includes Membership of Audit Committees and Investor Grievance Committee as per clause 49 of the Listing Agreement. 

# does not include Private and Foreign Companies and Section 25 Companies. 

*appointed as Executive Director with effect March 6, 2009. However, relinquished charge as Executive Director w.e.f 

January 4, 2010. 

** appointed as Managing Director w.e.f. January 4, 2010. 

Number of Board Meetings 

The Board of Directors met four times during the year ended March 31, 2010 i.e on April 21, 2009, July 15, 

2009, October 14, 2009 and January 19, 2010. The maximum gap between the two Board Meetings was not 

more than four months. 

(192)

C M Y K 


Information supplied to the Board 

Detailed agenda notes are sent to each Director well in advance before the Board and Committee meetings. 

The agenda items inter-alia include Secretarial & Legal Compliance matters, business matters and financial 

reporting. A business review presentation is made at each Board Meeting to apprise the Directors and the 

Senior Management team about the performance of the Company. The Board provides strategic direction 

and strategy in improving the performance of the Company. Business plans, annual operating and capital 

expenditure budgets, are also placed and reviewed by the Board along with the senior management team of 

the Company. 

Code of conduct 

The Board of directors of the Company has laid Code of Conduct for the Directors and Senior Management 

Personnel of the Company. The Code has been posted on the Company’s website www.adityabirlamoney.com. 

All the Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct as 

on March 31, 2010. A declaration to this effect signed by the Managing Director forms part of this report. 

Compliance Structure 

The Board also periodically reviews status of compliance of various laws applicable to the Company and also 

the initiatives taken to improve the standards of compliance adherence. 

3. BOARD COMMITTEES 

A. AUDIT COMMITTEE 

In Compliance of the provisions of Section 292A of the Companies Act, 1956 and in accordance with the 

provisions of Clause 49 of the Listing Agreement, the Company has an qualified and independent Audit 

Committee at the Board level. The Audit Committee performs the functions and role in accordance with 

Clause 49 of the Listing Agreement. The Committee acts as a link between the management, the statutory 

and internal auditors and the Board of Directors and oversees the financial reporting process. 

Composition 

The Audit Committee consists of the following three directors, two thirds of whom are independent 

directors. During the year, the Audit Committee was reconstituted on January 19, 2010 and at present 

consists of following directors as its members. 

1. Mr. P. Sudhir Rao - Chairman 

2. Mr. G. Vijayraghavan - Member 

3. Mr. Manoj Kedia - Member (appointed w.e.f January 19, 2010) 

The Chairman of the Audit Committee is an Independent Director. The Chairman of the Audit Committee 

was also present at the previous Annual General Meeting, as mandated under the listing agreement, to 

answer shareholder queries. All the members of the Audit Committee are financially literate and all of 

them have accounting and related financial management expertise. 

Terms of Reference 

The terms of reference for the Audit Committee basically flows and covers all the areas as stipulated 

under clause 49 of the Listing Agreement. This inter-alia include the following 

1. Oversight of Company’s financial reporting processes. 

2. Reviewing the quarterly / annual financial results, financial statements before submission to the 

Board for approval, with particular reference to accounting policies & procedure, major accounting 

policies, related party transactions. 

(193)

C M Y K 


3. Recommending to the Board, the appointment / re-appointment of Statutory Auditors and Internal 

Auditors and fixation of audit fees. 

4. Approving internal audit plan and reviewing efficacy and adequacy of internal control systems / 

function. 

5. Discussion with internal auditors and review of internal audit reports at quarterly intervals 

6. Discussions with external auditors about the scope of audit including the observations of the auditors. 

Meetings and Attendance 

During the year, the Audit Committee met 4 times on April 18, 2009, July 15, 2009, October 14, 2009 and 

January 19, 2010. The details of the attendance of the Committee members are as follows: 

Sl. No. Name of the Member Category / Status No. of No. of Meetings 

Meetings Held Attended 

1 Mr. P. Sudhir Rao Chairman – Independent 4 4 

2 Mr. G. Vijayraghavan Member – Independent 4 4 

3 Mr.Pankaj Razdan Member – Non Executive 4 3 

(resigned as member 

w.e.f.January 19, 2010) 

4 Mr. Manoj Kedia Member – Non Executive 4 - 

(appointed as member 

w.e.f. January 19, 2010) 

At every Audit Committee Meeting, Statutory Auditors, Internal Auditors are present and provide their 

presentation on the financial statements and internal audit reports. The Chief Operating Officer, Head of 

Finance & Accounts, Risk, Internal Audit, Compliance, Legal & Secretarial are also invited at the meeting to 

respond to queries and observations. The Company Secretary acts as Secretary to the Committee. 

B. REMUNERATION COMMITTEE 

Composition 

The Company has a Remuneration Committee consisting of following three Directors, two third of whom are 

Independent Directors, including the Chairman. 

1. Mr. P. Sudhir Rao - Chairman 


3. Mr. Pankaj Razdan - Member 

Terms of Reference 

The terms of reference / charter of the Committee include the following: 

1. To determine and approve the remuneration package payable to the Executive Director / Wholetime 

Director, Directors, other Managerial Persons and such other members of the management 

including salary, bonuses, incentive payments, share options, stock options, pension rights, terms of 

employment and various other components of the compensation payable in this regard; 

2. Key issues / matters as may be necessary in view of Clause 49 of the Listing Agreement, provisions of 

Companies Act, 1956 or any statutory provisions, enactments, rules and regulations as may be 

applicable from time to time; 

3. Such other matters and issues as may be referred by the Board from time to time. 

(194)

C M Y K 


Meetings and Attendance 

The Remuneration Committee met once on October 14, 2009, in which all the members were present. 

Remuneration to Directors 

The independent directors are paid sitting fees of Rs. 20,000/- for every meeting of the Board and the 

Committee thereof. No sitting fee is paid to the Managing Director and other Non – Executive Directors. 

The details of sitting fees paid to the Independent Directors during financial year 2009-10 are as under. 

Name of director Category Sitting Fees Paid 

Mr. G. Vijayraghavan Independent Director 1,80,000 

Mr. P. Sudhir Rao Independent Director 1,60,000 

No other fees or compensation has been paid to non-executive Directors. The Managing Director has 

been appointed without any remuneration; hence do not draw any remuneration from the Company. 

The Non-Executive Directors of the Company do not hold any shares in the Company. No stock options 

as on date have been granted to the Directors of the Company. 

C. SHAREHOLDERS/ INVESTOR’S GRIEVANCE COMMITTEE 

The Company has constituted a Shareholders Grievance Committee to address various matters relating 

to investors’ servicing and grievances like transfer of shares etc. 

Composition 

The Shareholders / Investor’s grievance Committee consist of the following three Directors as its members. 

1. Mr. Pankaj Razdan - Chairman 

2. Mr. P. Sudhir Rao - Member 


The Company Secretary of the Company acts as the Compliance Officer. 

D. FINANCE COMMITTEE 

The Board has constituted a finance committee of Directors to review and provide approvals and 

authorizations arising out of day-to-day business operations and financial matters of the Company. The 

role of the Committee includes matters relating to opening / closing of Bank Accounts, approve signatories 

for the operation of banks accounts, appointment of service providers and other Agencies, availing 

overdraft facility from Banks, borrowing within the limits approved by the Board and other routine 

matters. 

Composition / Attendance etc 

The Finance Committee, consist of following Directors as its members: 

1. Mr. Sudhakar Ramasubramanian 

2. Mr. Kanwar Vivek 

3. Mr. Pankaj Razdan 

The Chairman of the Committee is elected by the members amongst themselves from time to time and 

any two members shall form the quorum of the Committee Meeting. The Committee met three times 

during the year ended March 31, 2010 i.e on September 10, 2009, November 25, 2009 and December 2, 


(195)

C M Y K 


4. CEO/CFO CERTIFICATION 

As required under the provisions of the Clause 49 of the Listing Agreement, Mr. Kanwar Vivek, 

Managing Director of the Company has provided necessary certification to the Board regarding the 

financial statements of the Company. 

5. SUBSIDIARY COMPANY 

The Company has a wholly subsidiary company – Aditya Birla Commodities Broking Limited which is 

engaged in the business of Commodity Broking. However, it is not a material subsidiary company 

within the parameters defined under clause 49 of the Listing Agreement. 

5. DISCLOSURES 

i. The details of Related party transactions during the year have been disclosed in Schedule 17 i.e the 

Notes forming part of Annual Accounts as required under Accounting Standard 18 issued by the 

Institute of Chartered Accountants of India. There were no materially significant related party 

transactions with Directors/ Promoters/ Management, which has a potential conflict with the interest 

of public at large. 

ii. 

iii. 

iv. 

The Company has implemented a whistle blower policy and every employee including ex-employee 

of the Company has the right to report to the Grievances Redressal Committee (GRC) unethical 

behaviours, malpractices, wrongful conduct, fraud, violation of the Company’s policies & values, 

violation of law without any fear of retaliation. The CRC submits periodic report to the Audit 

Committee of the Board of Directors on the issues reported to it, from time to time for its review & 

perusal. 

Certain penalty charges were paid to the Membership department of the Stock Exchanges, arising 

out of routine operational matters. However, the same were not material considering the nature and 

quantum. 

The Company has compiled with mandatory requirements of Clause 49. The Company has also 

complied with the following non mandatory requirements as prescribed in Annexure ID to Clause 49 

of the Listing Agreement. 

a) Constitution of the Remuneration Committee. 

b) There were no qualifications on the financial statements of the Company. 

c) The Company has implemented a Whistler Blower Policy. 

Disclosure of Accounting Treatment 

The Company has followed the applicable guidelines of Accounting Standards laid down by the Institute 

of Chartered Accountants of India in preparation of its financial statements. 

MANAGEMENT DISCUSSION AND ANALYSIS 

A detailed Management Discussion and Analysis Report in terms of Cause 49 of the Listing Agreement 

forms part of the annual report. 

RISK MANAGEMENT FRAMEWORK 

The Company has a well defined risk management framework, policies and procedure in place. The 

details are included in the Management Discussion and Analysis Report. 

SHAREHOLDERS – Re-appointment of Director 

The details of Director(s) seeking appointment / re-appointment in the Annual General Meeting has 

been provided in the Notice of the Annual General Meeting attached with the Annual Report. 

(196)

C M Y K 


4. GENERAL BODY MEETINGS: 

Details of General Meetings:- 

Location and time, where Annual General Meetings (AGMs) and Extra Ordinary General Meeting (EOGMs) 

in the last three years were held:- 

Year AGM/EOGM Day & Date Venue Time 

2006 – 2007 AGM Tuesday, Music Academy, Mini Hall, 11.00 A.M. 

August 28, 2007 New No.168, Old No.306, 

TTK Road, Chennai 600 014. 

2007- 2008 AGM Monday, Music Academy, Mini Hall, 10.15 A.M 

September 15, 2008 New No.168, Old No.306, 

TTK Road, Chennai 600 014 

2008 -2009* AGM Wednesday Music Academy, Mini Hall, 

July 15,2009 New No.168, Old No.306, 3.00 P.M 

TTK Road, Chennai 600 014 

* One special resolution was passed by the shareholders in the AGM held on July 15, 2009 for change in 

name of the Company from “Apollo Sindhoori Capital Investments Limited” to “Aditya Birla Money Limited”. 

Postal Ballot 

During the year, consent of the members of the Company was sought by an Ordinary resolution, through 

postal ballot on one occasion. The details are as under 

Particulars of Date of Total Ballots Total votes for Total votes % to the total 

Postal Ballot approval of received and the resolution against the votes received 

resolution by are valid Resolution for the 

postal Ballot 

resolution 

No. No. of No. No. of No. No. of No. No. of 

Shares Shares Shares Shares 

Seeking Approval 

of Central 

Government for the 

waiver of excess 7 th December, 177 42215490 141 42189165 36 26333 99.93 99.99 

Remuneration 2009 

paid to erstwhile 

Executive Director 

Mr. P. B. Subramaniyan 

Ms. B. Chandra, Practicing Company Secretary was appointed as scrutinizer for conducting the postal 

ballot voting process for the above resolution. The postal ballot process was undertaken in accordance 

with the provisions of Section 192A of the Companies Act, 1956, read with the Companies (Passing of 

Resolution by Postal Ballot) Rules, 2001. 

COMPLIANCE 

A certificate from Practising Company Secretary confirming compliance with the conditions of Corporate 

Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchanges forms part of this 

Annual Report. 

MEANS OF COMMUNICATION 

The unaudited quarterly, half yearly and audited annual financial results are sent to the Stock Exchanges 

where the shares of the Company are listed. The results are also published in all editions of “Business 

Standard” – national daily and “Makkal Kural”, regional language newspapers circulating in the district. 

The unaudited quarterly, half yearly and audited annual results have also been posted in the company’s 

website www.adityabirlamoney.com 

(197)

C M Y K 


7. GENERAL SHAREHOLDERS’ INFORMATION 

AGM date, time and venue : Refer notice to the AGM 

Financial Calendar : 1 st Quarter 1 st April to 30 th June 

2 nd Quarter 1 st July to 30 th September 

3 rd Quarter 1 st October to 31 st December 

4 th Quarter 1 st January to 31 st March 

Date of Book Closure : Refer notice to the AGM 

Dividend Payment Date : N.A. 

Registered Office : “Ali Towers” No. 55 Greams Road, Chennai 600 006. 

Website : www.adityabirlamoney.com 

Listing on Stock Exchanges 

Madras Stock Exchange Limited National Stock Exchange of Bombay Stock Exchange Limited, 

Exchange Building, India Limited, Phiroze Jeejeebhoy Towers, 

Second Line Beach, ”Exchange Plaza”, C-1, Block G, Dalal Street, Mumbai – 400001 

Chennai – 600001 

Bandra – Kurla Complex, 

Bandra (E), Mumbai – 400 051 

Tel No: (044) 25522895 Tel No: (022) 26598100 - 8114 Tel No: (022) 22721233/1234 

Fax No:(044) 25244897 Fax No:(022) 26598120. Fax No:(022) 22721919. 

Stock Code – APOSINDCAP Stock Code – BIRLAMONEY Stock Code – 532974/ABML 

ISIN for Equity Shares (NSDL & CDSL) INE865C01022. 

Note: Listing fees has been paid to all the Stock Exchanges as per their Schedule. 

Stock Price data: Monthly High & Low during FY 09-10 in SENSEX 

MONTH HIGH LOW 

19000 

80 

Apr-09 22.4 10.41 

May-09 29.8 17.35 

Jun-09 33.65 25.9 

Jul-09 40.9 32.45 

Aug-09 40.95 33.7 

Sep-09 45 37.2 

Oct-09 43.95 32.15 

Nov-09 41.3 30.3 

Dec-09 48.75 35.55 

18000 

17000 

16000 

15000 

14000 

13000 

12000 

11000 


9000 

70 

60 

50 

40 

30 

20 


Jan-10 70.75 50.6 

Feb-10 59.6 48.15 

8000 

Apr-09 

May-09 

Jun-09 

Jul-09 

Aug-09 

Sep-09 

Oct-09 

Nov-09 

Dec-09 




0 

Mar-10 62.15 49.8 

SENSEX 

ABML 

(198)

C M Y K 


ABML Stock Price data: Monthly High & Low during FY 09-10 in NIFTY 

MONTH HIGH LOW 

5500 

80 

Apr-09 22.45 10.1 

May-09 29.15 17 

Jun-09 33.5 25.05 

Jul-09 41.5 32 

Aug-09 40.85 33.25 

Sep-09 44.8 37.3 

Oct-09 42.4 30.85 

Nov-09 41.5 30.05 

Dec-09 48.7 35.1 

Jan-10 71.35 50 

Feb-10 59.6 48 

5000 

4500 

4000 

3500 

3000 

2500 

2000 

Apr-09 

May-09 

Jun-09 

Mar-10 62.3 49.1 

NIFTY 

ABML 

There has been no trading in the shares at MSE 

Registrar and Share Transfer Agent 

Cameo Corporate Services Limited, 

SEBI Registration No.INR000003753 

Subramaniam Building, 

No.1, Club House Road, 

Chennai – 600 002 

Ph: 044-28460390 

Fax: 044-28460129 

Email : cameo@cameoindia.com 

Share Transfer System 

The Company’s shares are compulsorily traded in dematerialized form. In the case of transfer of shares in 

physical form, which are lodged at the Registered Office or Registrar & Share Transfer Agent’s Office, are 

normaly processed within a period of 15 days from the date of receipt. 

Investor Services 

Details of Shareholders queries / complaints and other correspondence received and replied during 

2009 – 2010: 

Nature of Complaints/Queries 

No. of Complaints 

Pending Queries / Complaints as on 01.04.2009 

NIL 

For non-receipt of dividend 1 

Issue of duplicate share certificate/new share certificate / 

change of address/transmission of shares etc 29 

Queries / Complaints redressed 30 

Pending Queries / Complaints as on 31.03.2010 

NIL 

Jul-09 

Aug-09 

Sep-09 

Oct-09 

Nov-09 

Dec-09 




70 

60 

50 

40 

30 

20 


0 

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Distribution of Shareholdings as on March 31, 2010. 

No. of Shares 

No. of Shareholders 

Equity Shares Physical Electronic Physical Electronic 

Nos. % Nos. % Nos. % Nos. % 

1 - 5000 879974 1.59 2730699 4.93 1478 98.93 5807 97.14 

5001 - 10000 70460 0.13 688617 1.24 9 0.60 87 1.46 

10001 - 20000 86904 0.16 612447 1.11 6 0.40 43 0.72 

20001 - 30000 22800 0.04 280800 0.51 1 0.07 11 0.18 

30001 - 40000 0 0.00 235054 0.42 0 0.00 7 0.12 

40001 - 50000 0 0.00 148622 0.27 0 0.00 3 0.05 

50001 - 100000 0 0.00 526343 0.95 0 0.00 8 0.13 

100001 & above 0 0.00 49117280 88.66 0 0.00 12 0.20 

Total 1060138 1.91 54339862 98.09 1494 100.00 5978 100.00 

Grand Total 55400000 7472 

The Shareholding Pattern of the Company as on March 31, 2010 was as follows. 

Category No. of Shares % 

Promoter / Promoter Group 41,550,000 75.00% 

Bodies Corporate 5,175,143 9.34% 

Individuals – holding upto Rs. 1 lakhs 4,812,282 8.69% 

Individuals – holding excess of Rs. 1 lakhs 3,537,586 6.39% 

Clearing Members 65,617 0.12% 

HUF 134,029 0.24% 

NRI’s and OCB 125,343 0.23% 

Total 55,400,000 100.00 

Dematerialization of Shares and Liquidity 

As on March 31, 2010, 98.09%of the Company’s Paid-up Equity Capital was held in dematerialized form. The 

shares of the Company are frequently traded on BSE / NSE. 

Useful Information for Shareholders 

Unpaid / Unclaimed Dividend 

1. Pursuant to Section 205A & 205C of the Companies Act, 1956 dividend upto the financial year 2000-2001 

has been transferred to the Investor Education and Protection Fund (IEPF) constituted by the Central 

Government. No claim by the shareholders shall lie against the IEPF or the Company in respect of the 

said unclaimed amount. 

2. Unclaimed dividend for the financial year 2001-2002 onwards, wherever declared, and which remains 

unpaid/unclaimed over a period of 7 years, is required to be statutorily transferred to the IEPF. Shareholders 

who have not claimed / encashed their dividend warrants are requested to lodge their request / claim 

with the Company / RTA for revalidation / issue of duplicate dividend warrants. Unclaimed dividend for 

the year 2002-2003 is due for transfer to IEPF in August 2010. Once the unclaimed dividend is transferred 

to IEPF, no claim by the shareholders shall lie thereof against IEPF or the Company. 

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Other General Information 

1. Shareholders holding shares in physical form are requested to notify to the Company, change in their 

address / PIN Code Number and Bank Account details promptly by written request under the signature 

of sole / first joint holder. 

2. Beneficial owner of shares in demat form are requested to send their instructions regarding change of 

name, change of address, bank details, nomination, power of attorney etc, directly to their DP. 

3. For expeditious transfer of share, shareholders should fill in complete and correct particulars in the 

transfer deed. 

Further, please note that SEBI vide its circular no MRD/ DoP/Cir-05/2009 dated 20.05.2009 has made it 

mandatory for transferee(s) to furnish a copy of PAN card to the Company / RTAs for registration of 

physical transfer of shares. All the intended transferee(s) are, therefore, requested to furnish a self attested 

copy of PAN Card at the time of sending the request for physical transfer of share certificate 

4. Section 109A of the Companies Act, 1956 extends the nomination facility to individuals holding shares in 

the physical mode. Shareholders, in particular, those holding shares in single name may avail the above 

facility by furnishing the particulars of their nominations in the prescribed Nomination Form, which can 

be obtained from the Company / RTA by sending a written request. 

Address for Correspondence: 

Company Secretary, 

Ali Towers, No. 55, Greams Road, 

Chennai – 600006. 

Ph No. : 044 - 3919 0000/01/02 

Fax No.: 044 - 2829 0835 

investorgrievance@adityabirlamoney.com 

DECLARATION ON CODE OF CONDUCT 

As provided under Clause 49 of the Listing Agreement with the Stock Exchanges(s) I hereby declare that the 

Board Members and Senior Management have affirmed compliance with the Code of Conduct for the year 

ended March 31, 2010. 

Place: Chennai 

Kanwar Vivek 



PRACTISING COMPANY SECRETARIES’ CERTIFICATE ON CORPORATE GOVERNANCE 

To: The Shareholders of Aditya Birla Money Limited 

We have examined the compliance of conditions of corporate governance by Aditya Birla Money Limited, for 

the year ended on 31 st March, 2010 as stipulated in clause 49 of the Listing Agreement of the said Company 

with Stock Exchanges. 

The objective of our examination is to give our opinion on whether the company has complied with the 

conditions of Corporate Governance as stipulated in the provisions of Clause 49 of the Listing agreement 

entered into by the company with the listed Stock Exchanges of India. 

The compliance of conditions of Corporate Governance is the responsibility of the management. Our 

examination was limited to review of procedures and implementation thereof, adopted by the Company for 

ensuring the compliance of the conditions of corporate governance as stipulated in the said clause. It is 

neither an audit nor an expression of opinion on the financial statements of the Company. 

In our opinion and to the best of our information and according to the explanations given to us, we certify 

that the Company has complied in all material respects with the conditions of Corporate Governance as 

stipulated in clause 49 of the above-mentioned Listing Agreement. 

We further state that such compliance is neither an assurance as to the future viability of the Company nor 

the efficiency or effectiveness with which the management has conducted the affairs of the Company. 

Place : Chennai B CHANDRA 

Dated: April 23, 2010 

PRACTISING COMPANY SECRETARY 

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DIRECTORS’ REPORT TO THE MEMBERS 

TO THE MEMBERS 

Your Directors have pleasure in presenting the Fourteenth Annual Report of the Company together with the 

audited accounts for the financial year ended March 31, 2010. 

FINANCIAL RESULTS 

The highlights of the financial results of the Company on a standalone and on a consolidated basis are as 

follows: 

(Rs. in lakhs) 

Standalone 

Consolidated 

Year ended Year ended Year ended Year ended 

March 31, March 31, March 31, March 31, 

2010 2009 2010 2009 

Income from Operations 9,746.79 6,778.60 11,045.93 7,309.34 

Other Income 351.96 304.52 590.23 1,357.60 

Expenditure 7,717.17 5,937.47 8,699.17 7,399.84 

Profit before Interest Depreciation and Taxation 2,381.58 1,145.65 2,936.99 1,267.10 

Less : Interest 261.38 542.73 283.98 558.68 

Profit before Depreciation and Taxation 2,120.20 602.92 2,653.01 708.42 

Less : Depreciation 567.44 473.14 600.69 504.45 

Profit before Taxation 1,552.76 129.78 2,052.32 203.97 

Less : Provision for tax including deferred tax 605.06 66.28 783.99 83.35 

Profit after Tax 947.70 63.50 1,268.33 120.62 

Profit brought forward from previous year 1,261.30 1,197.80 1,193.48 1,072.86 

Balance carried to Balance Sheet 2,209.00 1,261.31 2,461.81 1,193.48 


The Financial Year 2009-10 was the first full year of operation of the Company since it was acquired by the 

Aditya Birla Group. During the year, the stock market witnessed a smart recovery and sentiment remained 

bullish compared to the previous year. The equity market revived with the foreign institutional investors 

focused on emerging markets including India. The Sensex rallied 77% and the Nifty surged 72%. The movement 

was in line with the trends in other international markets. Against that backdrop, the Company continued its 

consolidation and growth oriented strategies. On a Standalone basis, the Company’s total income was up by 

43% at Rs. 10,098.75 Lakhs compared to Rs. 7,083.12 Lakhs during the previous year. The Income from Operations 

grew by 44% at Rs 9,746.79 Lakhs, compared to Rs. 6,778.60 Lakhs during the previous year. The profit before 

taxation was also up by 1,096% at Rs.1,552.76 Lakhs compared to Rs.129.78 Lakhs in the previous year. The 

Company’s net profit for the year was Rs. 947.70 Lakhs, compared to Rs. 63.50 Lakhs in the previous year, a 

growth of 1,392% over previous year. 

On a Consolidated basis, your Company’s Income from Operations was up by 51% at Rs. 11,045.93 Lakhs, 

compared to Rs. 7,309.34 Lakhs in the previous year. The Consolidated Profit before taxation was Rs. 2,052.32 

Lakhs compared to Rs. 203.97 Lakhs in the previous year, witnessing a growth of 906% over previous year. The 

Consolidated Net Profit was Rs. 1,268.33 Lakhs compared to Rs. 120.62 Lakhs in the previous year, witnessing a 

growth of 952% over previous year. 

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DIVIDEND 

Considering the future expansion plans and capital requirements, the Directors have decided to conserve 

cash flow and hence have not recommended any dividend for the year under review. 

CHANGE IN NAME 

During the year, the name of your Company was changed to “Aditya Birla Money Limited” vide fresh certificate 

of incorporation, consequent upon change of name, dated August 3, 2009, issued by Registrar of Companies, 

Chennai. The new name of the Company reflects the new ownership / promoters of the Company. 

INTER SE PROMOTER TRANSFER 

To enhance focus on the Financial Services business and to bring all the Financial Services activities under 

one single roof, Aditya Birla Nuvo Limited, on February 23, 2010 transferred its shareholding in the Company 

to Aditya Birla Financial Services Private Limited (ABFSPL) by way of “inter-se” promoter transfer in terms of 

regulation 3(4) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The aforesaid 

transfer of shares did not result in change in control or promoter group of the Company under the SEBI 

(Substantial Acquisition of Shares and Takeovers) Regulations, 1997. With the above change, ABFSPL is now 

the Promoter/ Holding company of your Company . 

CREDIT RATING 

The Company obtained credit rating of P1+ from CRISIL Limited for its short term debt programme. The 

rating indicates the highest degree of safety with regard to timely payment of interest and principal on the 

instrument. 

FINANCE 

During the year, the Company issued Commercial Papers for an aggregate amount of Rs. 40 Crores to meet its 

working capital requirement. The year end outstanding was Rs. 15 Crores. 

FIXED DEPOSITS 

The Company has not accepted any fixed deposits from the public during the year. 

SUBSIDIARY COMPANY 

The Company has a subsidiary viz. Aditya Birla Commodities Broking Limited (“ABCBL”), which is engaged in 

commodity trading. The name of this Company was also changed during the year vide fresh certificate of 

incorporation, consequent upon change of name, dated September 29, 2009 issued by Registrar of Companies, 

Chennai so as to reflect the new Ownership / Promoters of the Company. 

Aditya Birla Commodities Broking Limited continues to perform well and is a significant player in commodity 

trading, especially in gold trading. ABCBL, the subsidiary company, posted total Income of Rs.1,537.41 Lakhs 

compared to Rs.1,583.81 Lakhs during previous year. The net profit was up 461% at Rs. 320.65 Lakhs, compared 

to Rs. 57.11 Lakhs in the previous year. This was due to significant increase in the brokerage income during 

the year and change in revenue mix. 

The Consolidated financial statements of your Company and its subsidiary Company are prepared in 

accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India 

form part of the Annual Report. The statement pursuant to section 212 of the Companies Act, 1956 containing 

details of the subsidiary company is attached to this annual report. 

Pursuant to the application made by the Company under section 212(8) of the Companies Act, 1956, the 

Ministry of Corporate Affairs, Government of India vide its Letter No. 47/117/2010 CL-III dated 03/03/2010 

granted exemption from attaching a copy of the Balance Sheet, Profit and Loss Account, Directors’ Report 

and the Auditors’ Report of the Subsidiary Company and other documents required to be attached under 

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Section 212 of the Companies Act to the Balance Sheet of your Company. In compliance with the terms of 

the exemption, summary financial information for the subsidiary has been also included and forms part of 

the Annual Report. Any shareholder / investor of the holding company or subsidiary company desirous of 

obtaining the annual accounts of the subsidiary company and related information may obtain the same by 

sending a request in writing to the Company at the registered office. These documents are also open for 

inspection at the registered office of the Company / subsidiary Company. 


Your Company complies with the requirements of the Listing Agreement with the Stock Exchange where the 

Company’s shares are listed. The report on Corporate Governance specified under clause 49 of the Listing 

Agreement is included as part of the Directors’ Report. A Certificate from the Practicing Company Secretary 

regarding compliance with the conditions of Corporate Governance as stipulated under clause 49 of the 

Listing Agreement is attached to this report. 

The Ministry of Corporate Affairs has issued a set of Voluntary Guidelines on “Corporate Governance “ and “ 

Corporate Social Responsibility” in December 2009. These guidelines are expected to serve as a benchmark 

for the corporate sector and also help in achieving the highest standard of corporate governance. 

Some of the provisions of these guidelines are already in place as reported elsewhere in this Annual Report. 

The other provisions of these guidelines are being evaluated and your Company will strive to adopt the same 

in a phased manner. 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

The Management Discussion and Analysis Report as stipulated under clause 49 of the Listing Agreement is 

annexed to the Annual Report. 

DIRECTORS 

During the year, Mr. Sudhakar Ramasubramanian relinquished charge as Executive Director of the Company 

with effect from January 4, 2010. He however, continues on the Board as a Non-executive Director. Mr. Kanwar 

Vivek, Director was appointed as the Managing Director of the Company with effect from January 4, 2010. 

Mr. Pankaj Razdan, Director of the Company, retires by rotation at the ensuing Annual General Meeting and 

being eligible has offered himself for re-appointment. The Board recommends his re-appointment. 

AUDITOR & AUDITOR’S REPORT 

M/s. R. Subramanian & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual 

General Meeting. The Company has received a letter from M/s. R. Subramanian & Company, Chartered 

Accountants, expressing their unwillingness to be re-appointed as Auditors. Your Directors have therefore 

proposed the appointment of M/s. S. R. Batliboi & Associates, Chartered Accountants, Mumbai as Statutory 

Auditors of the Company. The Company has received a letter from them to the effect that their appointment, 

if made, would be within the prescribed limits under section 224(1-B) of the Companies Act, 1956, and that 

they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 

1956. 

The observations made by the Auditors in their report read with relevant notes to the Accounts are selfexplanatory 

and do not call for any further comments under section 217(3) of the Companies Act, 1956 

DIRECTORS’ RESPONSIBILITY STATEMENT 

As required under Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby state 

and confirm: 

1. That in the preparation of Annual Accounts for the year, applicable Accounting Standards have been 

followed along with proper explanations relating to material departures; 

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C M Y K 


2. That the Directors have selected such accounting policies and applied them consistently, and made 

judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state 

of affairs of the Company as at the end of the financial year and of the profit of the Company for that 

period; 

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting 

records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the 

Company and for preventing and detecting fraud and other irregularities; 

4. That the Directors have prepared the Annual Accounts on a going concern basis. 

COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 

In view of the nature of activities which are being carried on by the Company, the particulars prescribed 

under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the 

Report of the Board of Directors) Rules, 1988 regarding conservation of Energy & Technology Absorption are 

not applicable to the Company. The Company does not have any foreign exchange earnings and outgo 

during the year. 


In accordance with the provisions of Section 217(2A) read with the Companies (Particulars of Employees) 

Rules 1975, the names and other particulars of employees are to be set out in the Directors’ Report as an 

addendum thereto. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 , 

the Report and accounts, as therein set out, are being sent to all the members of the company excluding the 

information about the employees. Any member, who is interested in obtaining such particulars about 

employees, may write to the Company Secretary at the Registered Office of the Company. 


Your Directors express their sincere appreciation to the regulatory authorities, to Company’s bankers, 

shareholders, stakeholders and clients for their continued co-operation and support. Your Directors take this 

opportunity to recognize and place on record their deep sense of appreciation for the commitment and 

contribution made by all the employees and look forward to receive the same in future. 

For Aditya Birla Money Limited 

(Formerly known as Apollo Sindhoori Capital Investments Limited) 

Kanwar Vivek 


Sudhakhar Ramasubramian 

Director 

Place: Chennai, 


P. Sudir Rao Manoj Kedia 

Director 

Director 

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AUDITORS’ REPORT TO THE MEMBERS 

1. We have audited the attached Balance Sheet of Aditya Birla Money Limited (‘the Company’) as at 

31 st March 2010 and the Profit and Loss Account and Cash Flow Statement for the year ended on that 

date annexed thereto. These financial statements are the responsibility of the Company’s management. 

Our responsibility is to express an opinion on these financial statements based on our audit. 

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those 

Standards require that we plan and perform the audit to obtain reasonable assurance about whether the 

financial statements are free of material misstatement. An audit includes examining on a test basis, 

evidence supporting the amounts and disclosures in the financial statements. An audit also includes 

assessing the accounting principles used and significant estimates made by management, as well as 

evaluating the overall financial statement presentation. We believe that our audit provides a reasonable 

basis for our opinion. 

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central 

Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure 

a statement on the matters specified in paragraphs 4 and 5 of the said order. 

4. Further to our comments in the Annexure referred to in para 3 above, we report that: 

a) We have obtained all the information and explanations, which to the best of our knowledge and 

belief were necessary for the purpose of our audit; 

b) In our opinion, proper books of account as required by law have been kept by the Company so far as 

appears from our examination of such books; 

c) The Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in 

agreement with the books of account; 

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement comply with the 

Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; 

e) On the basis of the written representations received from Directors and taken on record by the 

Board of Directors, we report that none of the directors is disqualified as on 31 st March 2010 from 

being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies 

Act, 1956. 

f) In our opinion and to the best of our information and according to the explanations given to us, the 

said accounts read together with the notes thereon and schedules attached thereto, give the 

information required by the Companies Act 1956, in the manner so required and give a true and fair 

view, in conformity with the accounting principles generally accepted in India 

i) In the case of the Balance Sheet, of the state of affairs of the company as at 31 st March 2010, 

ii) In the case of the Profit and Loss account, of the profit for the year ended on that date, and 

iii) In the case of Cash Flow Statement, of the Cash Flow for the year ended on that date. 

For R. SUBRAMANIAN AND COMPANY 


Firm Registration No. 004137S 

Place : Chennai 

Date : April 23, 2010 

N. KRISHNAMURTHY 

Partner 

Membership No.19339 

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ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE 

(i) (a) The Company has maintained proper records showing full particulars including quantitative details 

and situation of fixed assets; 

(b) During the year, the company has carried out physical verification of all the fixed assets excepting 

VSAT Equipments at all the branches and other premises. As a result of the verification, some of 

the assets have been identified either as missing or not being in use. The written down value of 

such assets has been written off in the accounts by treating it as loss on assets discarded. 

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the 

going concern assumption. 

(ii) The clause relating to Inventory is not applicable to this company. 

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms 

or other parties covered in the register maintained under section 301 of the Companies Act, 1956 

and accordingly, clauses 4 (iii) (b), (c) and (d) of the Companies (Auditors Report) Order, 2003 (as 

amended) are not applicable. 

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms 

or other parties covered in the register maintained under section 301 of the Companies Act, 1956 

and accordingly, clauses 4 (iii) (f) and (g) of the Companies (Auditors Report) Order, 2003 (as 


(iv) According to the information and explanations given to us – 

(a) The Company has given loans to its wholly owned subsidiary Company. In respect of the said 

loans, the maximum amount outstanding at any time during the year is Rs.7 Crores and the yearend 

balance is Nil. 

(b) The rate of interest where applicable and other terms and conditions are prima facie not prejudicial 

to the interest of the company. 

(c) The principal amounts are repayable on demand and there is no repayment schedule. The interest, 

where applicable, is payable on demand. 

(d) In respect of the said loans, the same are repayable on demand and therefore the question of 

overdue amounts does not arise. In respect of interest, where applicable, there are no overdue 

amounts. 

(v) In our opinion and according to the information and explanations given to us, there is an adequate 

internal control system commensurate with the size of the Company and the nature of its business 

with regard to purchase of fixed assets and rendering of services. During the course of our audit, we 

have not observed any major weakness in the internal control system in respect of these areas. 

(vi) According to the information and explanations provided by Management, we are of the opinion that 

there are no contracts and arrangements that need to be entered into the register maintained under 

section 301 of the Companies Act during this year. 

(vii) In our opinion and according to the explanations given to us, the Company has not accepted any fixed 

deposits during the year requiring compliance of provisions of Section 58A, or 58AA or any other 

relevant provisions of the Companies Act 1956. 

(viii) In our opinion, the Company has an internal audit system commensurate with the size of the company 

and the nature of its business. 

(ix) The Central Government has not prescribed maintenance of cost records under clause (d) of sub section 

(1) of Section 209 of the Companies Act, 1956 for any of the services rendered by the Company. 

Accordingly, para 4 (viii) of the Order is not applicable. 

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(x) (a) According to the information and explanations given to us and on the basis of our examination of 

the records of the Company, amounts deducted / accrued in the books of account in respect of 

undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, 

Employees’ State Insurance, Income tax, Sales tax, Wealth Tax, Custom Duty, Excise Duty, Service 

Tax, Cess and any other statutory dues have been generally been regularly deposited during the 

year by the Company with the appropriate authorities 

(b) According to the information and explanations given to us, no undisputed amounts payable in 

respect of Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Service tax and Cess were 

in arrears as at 31 st March 2010 for a period of more than six months from the date they became 

payable. 

(c) According to the information and explanations given to us, the following dues have not been 

deposited by the Company on account of dispute: 

Name of Nature of Amount Period to which the Forum where 

the Statute Dues (Rs.) amount relates dispute is 

pending 

Finance Act, 

1994 

(Service Tax 

Provisions) 

Service Tax 510,325 FY 2004-05 

Service Tax 1,650,169 FY 2005-06 

Service Tax 2,458,217 FY 2006-07 

Service Tax 2,106,735 FY 2007-08 

Service Tax 557,944 FY 2008-09 (upto June 2008) 

Service Tax 376,714 October 2004 to March 2009 

Service Tax 5,244,772 FY 2006-07 

Service Tax 6,778,925 FY 2007-08 

Commissioner 

of Service Tax, 

Nandanam 

Service Tax 1,073,878 FY 2008-09 (upto November 2008) 

Total 20,757,679 

In addition, according to the information and explanations given to us, there are no dues of sales tax, 

customs duty, wealth tax, excise duty and cess, which have not been deposited on account of any 

dispute. 

(xi) The Company does not have any accumulated losses as at 31 st March 2010 and has not incurred cash 

losses in the financial year and in the immediately preceding financial year. Accordingly, para 4 (x) of 

the Order is not applicable. 

(xii) In our opinion and according to the explanations given to us, the Company has not defaulted in the 

payment of dues to Financial Institutions and Banks. 

(xiii) According to the information and explanations given to us and based on the documents and records 

produced to us, the Company has not granted any loans or advances on the basis of security by way of 

pledge of shares, debentures and other securities. 

(xiv) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the 

provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not 

applicable to this company. 

(xv) Based on our examination of the records and evaluation of the related internal controls, the Company 

has maintained proper records of transactions and contracts in respect of its dealing in shares, securities, 

debentures and other securities and timely entries have been made therein. 

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(xvi) In our opinion and according to the information and explanations given to us the Company has not 

during the financial year, given any guarantee for any loans taken by others from banks and financial 

institutions. Accordingly, para 4(xv) of the Order is not applicable. 

(xvii) Based on information and explanations given to us by Management, term loans were applied for the 

purpose for which the loans were obtained. 

(xviii) According to the cash flow statement and other records examined by us and the information and 

explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not 

been used during the year for long term investment (fixed assets, etc.,) other than temporary deployment. 

(xix) The company has not made any preferential allotment of shares during the year to parties or companies 

covered in the Register maintained under section 301 of the Companies Act. Accordingly, para 4(xviii) 

of the Order is not applicable. 

(xx) The company has not raised money by issuing debentures during the year. Accordingly, para 4(xix) of 

the Order is not applicable 

(xxi) The company has not raised any money by way of public issue during the year. Accordingly, para 4(xx) 

of the Order is not applicable 

(xxii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the 

financial statements and as per the information and explanations given by Management, we report 

that no fraud on or by the Company has been noticed or reported during the financial year. 







Partner 


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BALANCE SHEET AS AT 31ST MARCH, 2010 As at As at 

Schedule 31-Mar-2010 31-Mar-2009 

Rs. 

Rs. 


SHAREHOLDERS’ FUNDS 

Share Capital 1 55,400,000 55,400,000 

Reserves And Surplus 2 493,815,100 399,046,229 

549,215,100 454,446,229 

LOAN FUNDS 

Secured Loans 3 50,000,000 — 

Unsecured Loans 4 350,000,000 50,000,000 

400,000,000 50,000,000 

Deferred Tax Liability 53,477,207 41,477,207 

Total Funds Employed 1,002,692,307 545,923,436 


Fixed Assets: 5 

Gross Block (At Cost) 588,499,218 535,776,003 

Less:Accumulated Depreciation 243,377,456 188,748,890 

Net Block 345,121,762 347,027,113 

Capital Work-in-Progress 13,152,319 1,688,335 

358,274,081 348,715,448 

Investments 6 20,076,000 20,292,368 

Current Assets, Loans & Advances 

Cash & Bank Balances 7 769,650,610 407,178,035 

Sundry Debtors 8 814,659,862 275,647,207 

Loans & Advances 9 329,270,584 249,151,170 

1,913,581,056 931,976,412 

Less: Current Liabilities and Provisions 10 

Current Liabilities 1,270,635,548 741,427,944 

Provisions 18,603,282 13,632,848 

1,289,238,830 755,060,792 

Net Current Assets 624,342,226 176,915,620 

Total Funds Utilised 1,002,692,307 545,923,436 

Significant Accounting policies and Notes on Accounts 17 

Schedules referred to above form an integral part of the Balance Sheet 

As per our attached Report of even date 



Firm Registration No.004137S 

Kanwar Vivek 


For ADITYA BIRLA MONEY LIMITED 

(Formerly known as Apollo Sindhoori Capital Investments Ltd) 

Directors: Sudhakar Ramasubramanian 

Manoj Kedia 

P. Sudhir Rao 

N. Krishnamurthy 

Partner Ravishankar Gopalan Nithya Pasupathy 

M. No.19339 Chief Operating Officer Company Secretary 

Chennai, April 23, 2010 

(210)

C M Y K 


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 

INCOME 

Year Ended 

Year Ended 


Rs. 

Rs. 

Income from Operations 11 974,678,879 677,859,609 

Other Income 12 35,196,365 30,452,538 

1,009,875,244 708,312,147 

EXPENDITURE 

Salaries, Wages & Employee Benefits 13 235,580,602 179,610,052 

Operating and Other Expenses 14 536,136,335 414,137,249 

771,716,937 593,747,301 

Profit Before Interest, Depreciation/Amortisation & Tax 238,158,307 114,564,846 

Less: Interest and Finance Expenses 15 26,138,850 54,272,458 

Profit Before Depreciation/Amortisation 212,019,457 60,292,388 

Depreciation/Amortisation 56,744,277 47,313,913 

Profit Before Tax 155,275,180 12,978,475 

Provision for Taxation 16 60,506,309 6,628,000 

Net Profit 94,768,871 6,350,475 

Balance Brought Forward 126,130,589 119,780,114 

Profit Available for Appropriation 220,899,460 126,130,589 


Proposed Dividend on Equity Shares — — 

Corporate Tax on Dividend — — 

General Reserve — — 

Surplus Carried to Balance Sheet 220,899,460 126,130,589 

220,899,460 126,130,589 

Earnings Per Share (Basic and Diluted) (Face Value Re 1/- each) 

(Refer Note No. 3 of Schedule 17) 1.71 0.11 

Significant Accounting Policies and Notes on Accounts form part of 

Profit & Loss Account 17 





Kanwar Vivek 





Manoj Kedia 

P. Sudhir Rao 





(211)

C M Y K 


SCHEDULES 

As at 

As at 

31-Mar-2010 31-Mar-2009 

Rs. 

Rs. 

SCHEDULE 1 

SHARE CAPITAL 

Authorized: 

15,00,00,000 Equity Shares of Re.1/- each 150,000,000 150,000,000 

1,000,000 Preference Share Capital of Rs.100/- each 100,000,000 100,000,000 

250,000,000 250,000,000 

Issued, Subscribed & Paid Up: 

5,54,00,000 Equity Shares of Re.1/- each fully paid 55,400,000 55,400,000 

(Of the above 41,550,000 Equity shares of Re.1/-each 

(as at March 31, 2009 - 42,104,000 are held by 

Aditya Birla Nuvo Ltd) are held by 

Aditya Birla Financial Services Pvt. Ltd. (Holding Company) 

55,400,000 55,400,000 

SCHEDULE 2 

RESERVES & SURPLUS 

Capital Reserve 

Opening Balance 11,538,863 11,538,863 

Add: Additions during the Year — — 

Less: Deductions/Adjustments — — 

Closing Balance 11,538,863 11,538,863 

General Reserve 


Add: Additions during the Year — — 

Less: Deductions/Adjustments — 2,948,918 


Surplus as per Profit Loss Account 


Add: Additions during the Year 94,768,871 6,350,475 

Less: Deductions/Adjustments — — 


493,815,100 399,046,229 

SCHEDULE 3 

SECURED LOANS 

HDFC Bank 50,000,000 — 

(Secured against Pledge of Fixed Deposit) 

50,000,000 — 

SCHEDULE 4 

UNSECURED LOANS 

Commercial Paper 150,000,000 — 

[Maximum Balance outstanding during the year Rs.40 Crs (Previous Year: Nil)] 

Inter Corporate Deposit 200,000,000 50,000,000 

(Amount repayable within one year) 

350,000,000 50,000,000 

(212)

C M Y K 


SCHEDULE : 5 

FIXED ASSETS Rs. 

Particulars Gross Block Depreciation Net Block 

As at Additions Deductions As at As at For the Deductions As at As at As at 

01-Apr-2009 31-Mar-2010 01-Apr-2009 Period 31-Mar-2010 31-Mar-2010 31-Mar-2009 

Tangible Asset: 

Computers 153,475,860 18,808,838 1,115,318 171,169,380 65,935,855 22,319,657 741,056 87,514,456 83,654,924 87,540,005 

V SAT Equipments 113,661,200 1,358,095 — 115,019,295 28,907,748 5,419,308 — 34,327,056 80,692,239 84,753,452 

Office Equipments 63,793,857 4,776,075 908,923 67,661,009 14,177,905 4,892,768 279,383 18,791,290 48,869,719 49,615,952 

Furniture & Fittings 89,240,510 1,283,289 3,675,015 86,848,784 24,150,196 5,450,783 1,095,272 28,505,707 58,343,077 65,090,314 

Land 1,500,000 — — 1,500,000 — — — — 1,500,000 1,500,000 

Vehicles 1,198,382 1,110,413 — 2,308,795 398,528 154,934 — 553,462 1,755,333 799,854 

Intangible Asset: 

Computer Software 112,906,194 31,085,761 — 143,991,955 55,178,658 18,506,827 — 73,685,485 70,306,470 57,727,536 

Total 535,776,003 58,422,471 5,699,256 588,499,218 188,748,890 56,744,277 2,115,711 243,377,456 345,121,762 347,027,113 

Previous Year 463,101,412 75,598,973 2,924,382 535,776,003 142,813,226 47,313,913 1,378,249 188,748,890 347,027,113 320,288,187 

(213)

C M Y K 


SCHEDULE 6 

IN SHARES (QUOTED - LONG TERM) AT COST 

31-Mar-2010 

31-Mar-2009 

S. STOCKS HELD Nos Cost Provision Net Nos Cost Provision Net 

No Rs. Rs. Rs. Rs. Rs. Rs. 

1 Birla 3M Limited — — — — 100 64,670 — 64,670 

2 Godfrey Philips India Limited — — — — 100 60,000 — 60,000 

3 Krone Communications 

Limited — — — — 100 11,393 6,063 5,330 

4 Larsen & Toubro Limited — — — — 50 10,175 — 10,175 

5 Reliance Industries Limited — — — — 9 3,866 — 3,866 

6 Satyam Computer Services 

Limited — — — — 100 61,375 57,540 3,835 

7 State Bank of India — — — — 50 10,645 — 10,645 

8 Timex Watches Limited — — — — 1350 26,358 15,980 10,378 

9 United Breweries Limited — — — — 550 49,500 — 49,500 

10 Vindhya Telelinks Limited — — — — 200 17,724 — 17,724 

11 VST Industries Limited — — — — 300 46,245 — 46,245 

Total — — — 361,951 79,583 282,368 

IN SHARES - (UNQUOTED - LONG TERM) AT COST 



S. STOCKS HELD Nos Cost Provision Net Nos Cost Provision Net 

No Rs. Rs. Rs. Rs. Rs. Rs. 

12 Apollo Sindhoori 

Commodities Trading 

Limited 

(100% Subsidiary) 2,000,000 20,000,000 — 20,000,000 2000000 20,000,000 — 20,000,000 

13 BSE Limited 130,000 10,000 — 10,000 130000 10,000 — 10,000 

14 Apollo Sindhoori Hotels 

Limited 6,600 184,524 118,524 66,000 6600 184,524 184,524 — 

15 Crest Communication 

Limited — — — — 100 30,311 30,311 — 

16 Kerala Chemicals and 

Proteins Ltd — — — — 200 12,600 12,600 — 

17 Mcdowell & Co. Ltd. — — — — 325 32,955 32,955 — 

18 Sun Infoway Limited — — — — 300 192,435 192,435 — 

19 Transmedica India Limited — — — — 2300 43,896 43,896 — 

Total 20,194,524 118,524 20,076,000 20,506,721 496,721 20,010,000 

SUMMARY 



Nos Cost Provision Net Nos Cost Provision Net 

Rs. Rs. Rs. Rs. Rs. Rs. 

Investments in Shares 

Book Value-Quoted — — — — 2909 361,951 79,583 282,368 

Investments in Shares- 

Book Value-Unquoted 2,136,600 20,194,524 118,524 20,076,000 2139825 20,506,721 496,721 20,010,000 

Total 20,194,524 118,524 20,076,000 20,868,672 576,304 20,292,368 

Aggregate of Market Value of 

Quoted Investments — — — — — 415,463 

(214)

C M Y K 


SCHEDULE 7 

CASH & BANK BALANCES 

As at 


Rs. 

As at 


Rs. 

Cash & Stamps On Hand 1,080,949 279,137 

Balances With Scheduled Banks In 

- Fixed Deposits* 536,777,533 268,712,246 

- Current Accounts 230,808,372 137,203,153 

- Other Accounts** 983,756 983,499 

*Under lien towards Bank Guarantee 

**Held towards Unclaimed dividend/Matured deposits 

769,650,610 407,178,035 

SCHEDULE 8 

SUNDRY DEBTORS (UNSECURED) 

Outstanding for more than Six Months 

- Considered Good 118,671,262 61,307,211 

- Considered Doubtful 15,668,394 4,298,569 

Others 

- Considered Good 638,308,460 210,034,195 

772,648,116 275,639,975 

Less:Provision For Doubtful Debts 15,668,394 4,298,569 

756,979,722 271,341,406 

Lease Debtors 


- Considered Good 4,305,801 4,305,801 

- Considered Doubtful 318,750 318,750 

4,624,551 4,624,551 

Less:Provision For Doubtful Debts 318,750 318,750 

4,305,801 4,305,801 

Hire Purchase Debtors 


- Considered Good — — 


15,000 15,000 

Less:Provision For Doubtful Debts 15,000 15,000 

Settlement Dues - Exchanges 



- Considered Doubtful — — 

Others 

- Considered Good 53,374,339 — 

53,374,339 — 

814,659,862 275,647,207 

(215)

C M Y K 


SCHEDULE 9 

LOANS AND ADVANCES 

Unsecured 

As at 


Rs. 

As at 


Rs. 



48,461 48,461 

Less: Provision For Doubtful Loans & Advances 48,461 48,461 

Advances Recoverable In Cash or Kind or For Value 

To Be Received : 

Advance Others 35,792,403 42,626,534 

Aditya Birla Commodities Broking Ltd.-100% Subsidiary — 4,312,024 

Advance Income Tax/Fringe Benefit Tax and TDS (Net of Provision) 47,075,774 43,312,148 

Service Tax Credit 1,517,280 32,779 

Margins 171,834,555 97,590,001 

Prepaid Expenses 19,489,592 9,382,315 

Deposits-others 14,332,018 15,931,761 

Accrued Income 8,248,043 8,091,012 

Advance to Suppliers — 2,536,981 

Rental Advances 30,980,919 25,335,615 

329,270,584 249,151,170 

SCHEDULE 10 

CURRENT LIABILITIES & PROVISIONS 


Trade Creditors 1,154,811,330 677,511,181 

Balances in Current Accounts with bank (Temporarily overdrawn) 55,126,988 4,516,570 

Outstanding Liabilities 59,753,434 21,297,238 

Settlement Dues - Exchanges — 37,119,456 

Investor Protection Fund 

Unclaimed Dividend 758,146 797,739 

Unclaimed Matured Deposits 185,650 185,760 

Provisions For 

1,270,635,548 741,427,944 

Taxation(Net of Advance Payment) — — 

Proposed Dividend — — 

Corporate Tax on Dividend — — 

Retirement Benefits 18,603,282 13,632,848 

18,603,282 13,632,848 

1,289,238,830 755,060,792 

(216)

C M Y K 


SCHEDULE 11 

INCOME FROM OPERATIONS 

As at 


Rs. 

As at 


Rs. 

Brokerage Income 770,383,700 517,944,086 

Income from Transaction Charges 44,412,505 33,624,222 

V-sat rent 1,518,270 4,647,022 

Account Opening Charges 8,454,561 7,945,475 

Income from Depository Services 54,725,384 49,136,352 

PMS Income — 52,501 

Referral Fee 161,605 3,353,003 

Referral Fee-Inter Company 737,263 — 

Interest and Finance Charges 94,285,591 61,156,948 

974,678,879 677,859,609 

SCHEDULE 12 

OTHER INCOME 

Dividends on Long Term Investments 

— Trade 541,699 373,160 

— Subsidiaries — — 

Profit on sale of investments 1,829,218 — 

Interest on fixed deposit & Inter corporate loan (Gross) 23,445,893 29,879,704 

(Tax deducted at source Rs.32,29,860/- Previous Year Rs.65,34,350/-) 

Miscellaneous Income 9,379,555 199,674 

35,196,365 30,452,538 

SCHEDULE 13 

SALARIES WAGES AND EMPLOYEE BENEFITS 

Salaries, Allowances, Bonus & Incentive 211,758,152 156,887,857 

Contribution to Provident Fund 11,845,971 11,133,067 

Staff Welfare Expenses 11,976,479 11,589,128 

235,580,602 179,610,052 

(217)

C M Y K 


As at 

As at 


Rs. 

Rs. 

SCHEDULE 14 

OPERATING AND OTHER EXPENSES 

Advertisement & Publicity 5,143,253 6,080,780 

Auditors Remuneration 

- Financial Audit 800,000 800,000 

- Tax Audit 200,000 200,000 

AMC Charges 23,289,599 17,998,829 

Bandwidth Charges 27,368,718 20,007,617 

Business Development Expenses 36,240,000 — 

Director’s Sitting Fees 340,000 590,000 

Electricity 14,885,459 15,301,142 

Insurance 5,844,962 5,434,330 

Investments Write off 70,856 — 

Legal & Professional Charges 12,141,730 8,437,988 

Loss on Sale/Discard of Fixed Assets 3,477,845 1,229,250 

Loss on Sale of Investments — 9,550 

Management Fee-Business Partners 228,495,687 168,194,949 

Miscellaneous Expenses 10,038,687 14,650,167 

Office Maintenance 11,412,106 9,059,771 

Postage & Telegrams 20,317,288 22,950,882 

Printing & Stationery 16,081,916 15,719,563 

Provision for Doubtful Debts 11,369,825 4,298,569 

Provision for diminution in value of Investment 118,524 220,885 

Rates & Taxes 12,672,732 19,568,261 

Rent 42,348,809 35,829,459 

Repairs & Maintenance: 

-Computer 3,291,242 2,362,158 

-Others 5,055,519 2,512,790 

Telephone Expenses 15,374,811 17,786,016 

Travelling & Conveyance 29,756,767 24,894,293 

536,136,335 414,137,249 

SCHEDULE 15 

INTEREST AND OTHER FINANCE EXPENSES 

Bank Charges 8,416,344 13,244,877 

Interest On Loans 

- Fixed Loans — 4,582 

- ICD 9,397,193 41,022,999 

- Others 8,325,313 — 

26,138,850 54,272,458 

SCHEDULE 16 

PROVISION FOR TAXATION 

Current Tax 48,500,000 1,428,000 

Deferred Tax 12,000,000 1,800,000 

Fringe Benefit Tax — 3,400,000 

Fringe Benefit Tax relating to Previous Year 6,309 — 

60,506,309 6,628,000 

(218)

C M Y K 


SCHEDULE 17 

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31-Mar-2010 

1. SIGNIFICANT ACCOUNTING POLICIES: 

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS: 

The financial statements have been prepared to comply in all material respects with the Notified Accounting 

Standards by Companies Accounting Standard Rules, 2006 (as amended)” and the relevant provisions of 

the Companies Act, 1956. The financial statements have been prepared under the historical cost convention 

and on accrual basis. The accounting policies have been consistently applied by the company and are 


1.2 USE OF ESTIMATES 

The preparation of financial statements in conformity with generally accepted accounting principles requires 

management to make estimates and assumptions that affect the reported amounts of assets and liabilities 

and disclosure of contingent liabilities as at the date of the financial statements and the results of operations 

during the reporting period end. Although these estimates are based upon management’s best knowledge 

of current events and actions, actual results could differ from these estimates. 

1.3 FIXED ASSETS, INTANGIBLE ASSET AND CAPITAL WORK IN PROGRESS 

Fixed assets are stated at historical cost, less accumulated depreciation and impairment losses, if any. Cost 

comprises the purchase price and any attributable cost of bringing the assets to its working condition for 

its intended use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets, the 

cost of fixed assets that are not yet ready for their intended use at the balance sheet date. Intangible assets 

are recorded at the consideration paid for acquisition. 

1.4 DEPRECIATION AND AMORTISATION 

Depreciation on fixed assets is provided on Straight-line basis, in accordance with the rates prescribed in 

Schedule XIV of the Companies Act, 1956. 

The computer software costs are capitalized and recognized as intangible assets in terms of Accounting 

Standard 26 - Intangible Assets based on materiality, accounting prudence and significant economic benefit 

expected there from to flow over a period longer than one year. Capitalized costs include direct costs of 

implementation and expenses directly attributable to the development of the software. Computer software 

cost capitalized is amortized over the estimated useful life of 6 years. 

Additions to fixed assets are depreciated from the date of addition and deletions are depreciated upto the 

date of sale, on pro-rata basis. 

Fixed assets individually costing Rs.5,000 or less are fully depreciated on purchase. 

1.5 IMPAIRMENT 

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment 

based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an 

asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price 

and value in use. In assessing value in use, the estimated future cash flows are discounted to their present 

value at the weighted average cost of capital. After impairment, depreciation is provided on the revised 

carrying amount of the assets over its remaining useful life. 

1.6 INVESTMENTS 

Investments that are readily realizable and intended to be held for not more than a year are classified as 

current investments. All other investments are classified as long – term investments. Current investments 

are carried at lower of cost and fair value determined on an individual investment basis. Long-term 

investments are carried at cost. Provision for diminution in value is made to recognize a decline other than 

temporary in the value of such long term investments. 

1.7 INCOME RECOGNITION 

Brokerage Income and transaction charges are recognized on trade basis of National Stock Exchange of 

India Ltd, the Bombay Stock Exchange Ltd, Mumbai and the MCX Stock Exchange Ltd, Mumbai. 

Income from depository services, referral fee and interest and finance charges are recognised on the basis 

of agreements entered into with clients and when the right to receive the income is established. 

(219)

C M Y K 


Other interest incomes are recognised on time proportion basis. 

Dividend income is recognised when the right to receive the income is established. 

1.8 COMMERCIAL PAPER 

The liability is recognised at face value at the time of issue of commercial paper. The discount on issue of 

commercial paper is amortised over the tenure of the commercial paper. 

1.9 LEASES 

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest 

with the lessor are recognised as operating lease. Lease rentals under operating leases are recognised in 

the profit and loss account on a straight line basis. 

1.10 EMPLOYEE RETIREMENT BENEFITS 

i) A retirement benefit in the form of Provident Fund is a defined contribution scheme and the 

contributions are charged to the Profit and Loss Account of the year when the contributions to the 

fund are due. There are no other obligations other than the contribution payable to the fund. 

ii) Gratuity liability is defined benefit obligations and are provided for on the basis of an actuarial 

valuation on projected unit credit method made at the end of each financial year. 

iii) Long term compensated absences are provided for based on actuarial valuation. The actuarial 

valuation is performed as per the projected unit credit method. 

iv) Actuarial gain or losses are immediately recognised in the Profit and Loss Account and are not 

deferred. 

1.11 PROVISION FOR DOUBTFUL DEBTS 

Provision for doubtful debts is made based on assessment made by management taking into consideration 

securities / comfort available against such debts. 

1.12 TAXES ON INCOME 

Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance 

with the provisions of Income Tax Act 1961. 

Deferred tax is recognized on timing difference, being the difference between taxable income and 

accounting income that originate in one period and are capable of reversal in one or subsequent periods. 

Deferred Tax assets are recognised only to the extent that there is reasonable certainty that sufficient 

future taxable income will be available against which such deferred tax assets can be realized. If the 

company has unabsorbed depreciation or carry forward tax losses, deferred tax assets are recognised only 

if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realized 

against future taxable profits. 

At each balance sheet, the company reassesses unrecognized deferred tax assets. It recognizes deferred tax 

asset to the extent that it has become virtually certain that sufficient future taxable income will be available 

against which such deferred tax assets can be realized. 

1.13 CONTINGENT LIABILITIES AND PROVISIONS 

Contingent Liabilities are possible but not probable obligations as on the balance sheet date based on the 

available evidence. Provisions are recognised when there is present obligation as a result of past event and 

it is probable that an outflow of resources will be required to settle the obligation, in respect of which a 

reliable estimate can be made. Provisions are determined based on best estimate required to settle the 

obligation at the balance sheet date. 

1.14 EARNINGS PER SHARE 

Basic Earnings per share are calculated by dividing the net profit or loss for the period attributable to 

equity shareholders by the weighted average number of equity shares outstanding during the period. 

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable 

to equity shareholders and weighted average number of shares outstanding during the period are adjusted 

for the effect of all dilutive potential equity shares. 

(220)

C M Y K 


2. NOTES ON ACCOUNTS 

2.1 CONTINGENT LIABILITY: 

(Rs.in lacs) 

PARTICULARS 31-Mar-2010 31-Mar-2009 

2.1 Disputed tax liability not provided for: 

Income Tax 269 182 

Service Tax 219 — 

2.2 Contingent Liability not provided for on account of: 

(a) 

Disputed Claim of SEBI towards turnover fees 

contested before Supreme Court. 261 261 

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

Total 1,143 638 

2.2 CHANGE IN HOLDING COMPANY 

During the year 2009-10, Aditya Birla Financial Services Private Limited have on 23 rd February 2010 acquired 

4,15,50,000 shares of Re.1/- each fully paid up representing 75% of total Paid up Share Capital of the 

Company from Aditya Birla Nuvo Limited ( inter-se promoter transfer under Regulation 3(4) of the SEBI 

(Substantial Acquisition of Shares and Takeover) Regulations, 1996. Necessary disclosure under SEBI (SAST) 

Regulations, 1997 and SEBI (Prohibition of Insider Trading), Regulations, 1992 have been made on 24 th 

February 2010 to the Exchanges. 

2.3 EMPLOYEE RETIREMENT BENEFITS 

The company has a defined Gratuity Plan. The table below summarise the components of net benefit 

expense recognised in the Profit and Loss Account and amounts recognised in the Balance Sheet for the 

respective plan. 

(Rs. In Lacs) 

a) The Details of the company’s defined benefit plans for Year ended Year ended 

its employees are given below: 31-Mar-2010 31-Mar-2009 

Amounts recognised in the Balance Sheet in respect of 

gratuity (un-funded by the company) 

Present Value of unfunded Defined benefit obligation at 

the end of the period 121.57 88.61 

Fair Value of plan assets — — 

Net Liability/(Asset) 121.57 88.61 

Amounts Recognised in Salary, Wages and Employees 

Benefits in the Profit and Loss Account in respect of 

gratuity (Non funded by the company) 

Current Service Cost 19.00 22.84 

Interest on Defined Benefit Obligations 5.88 6.60 

Expected Return on Plan Assets — — 

Net Actuarial (Gain)/Loss recognized during the Period 17.27 (21.58) 

Net Gratuity Cost 42.15 7.86 

Actual Return on Plan Assets: 


Actuarial Gain/(Loss) on Plan Assets — — 

(221)

C M Y K 


Actual Return on Plan Assets: — — 

Reconciliation of present value of the obligation and 

the fair value of the plan assets: 

Opening Defined Benefit Obligation 88.60 88.51 


Interest Cost 5.88 0.00 

Actuarial (Gain)/Loss 17.27 21.58 

Liability assumed on Amalgamation — — 

Benefits Paid (9.18) (7.76) 

Closing Defined Benefit Obligation 121.57 102.33 

Change in Fair Value Plan Assets: 

Opening Fair Value of the Plan Assets — — 

Expected Return of Plan Assets — — 

Actuarial Gain/(Loss) — — 

Assets acquired on Amalgamation — — 

Contributions by the Employer 9.18 7.76 

Benefits Paid (9.18) (7.76) 

Closing Fair Value of the Plan Assets — — 

Experience Adjustment 

Defined Benefit Obligation 121.57 88.61 

Experience Adjustment (20.81) (0.13) 

b) Defined Contribution Plans: - 

Contribution to Provident Funds 86.52 76.43 

Contribution to Superannuation Funds — — 

Contribution to ESI 26.97 25.29 

Principal Actuarial Assumptions at the 

Balance Sheet date: 

Discount Rate 7.40% 7.00% 

Estimated Rate of Return on Plan Assets — — 

2.4 RELATED PARTY TRANSACTIONS 

As per AS-18 on “Related Party Disclosures” issued by the ICAI, the disclosures of transactions with the 

related parties of the company are as follows: 

A) LIST OF RELATED PARTIES AND THEIR RELATIONSHIP 

(Rs. In Lacs) 

a) The Details of the company’s defined benefit plans for Year ended Year ended 

its employees are given below: 31-Mar-2010 31-Mar-2009 

(A) 

HOLDING COMPANY 

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

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

(B) 


Aditya Birla Commodities Broking Limited (ABCBL) (formerly known as Apollo Sindhoori 

Commodities Trading Limited) (100% Subsidiary of ABML) (w.e.f. April 2, 2004) 

(222)

C M Y K 


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

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

4, 2008) 

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

11, 2008) 

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFSPL) (w.e.f. November 4, 2008 

and ceased to be a subsidiary w.e.f. March 13, 2009) 

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

28, 2008) 

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

2008 ) 

Aditya Birla Money Mart Limited(ABMML) (formerly known as Birla Sun Life Distribution 

Company Limited) (Subsidiary of ABFSPL) (w.e.f. March 31, 2009) 

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

Aditya Birla Minacs Worldwide Limited.(ABMWL) 

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

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

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

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

Minacs Worldwide Inc.) 

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

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

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

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

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

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

Minacs Limited (100 % Subsidiary of ABMWI) 

Minacs Worldwide GmbH (100 % Subsidiary of Minacs Limited) 

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

Aditya Vikram Global Trading House Limited (AVGTHL) 

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

(BGFCL)) 

Birla Insurance Advisory & Broking Services Limited. (BIABSL) (50.01% Subsidiary of BGCFPL 

upto March 30, 2009 and of ABFL w.e.f March 31, 2009) 

Birla Sun Life Insurance Company Limited (BSLICL) 

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

Madura Garments International Brand Company Limited (MGIBCL) (on becoming Associate, 

ceased to be an subsidiary w.e.f. November 27, 2009) 

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

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

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

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

Madura Garments Lifestyle Retail Company Limited. (MGLRCL) 

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

January 1, 2010) 

Peter England Fashions and Retail Company Limited. (PEFRL) 

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

Birla Technologies Limited (100 % Subsidiary of ABMITS) 

(D) Key Management Personnel 

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

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

(223)

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B) During the year the following transactions were carried out with Related Parties in the ordinary 

course of Business: 

(Rs. In Lacs) 

Sr. Particulars Closing Closing Value of 

No. Balance Balance Transaction 

31-Mar- 31-Mar- 2009- 2008- 


1 Aditya Birla Commodities Broking Ltd 

- Inter corporate loan given including interest — — 700.00 — 

- Employee payments — — 120.00 100.00 

– Others — 43.12 152.20 825.00 

2 Aditya Birla Nuvo Ltd 

- Inter corporate loan received — — 12,500.00 — 

- Inter corporate loan repaid 2,000.00 — 10,500.00 — 

- Interest on Inter corporate loan 1.32 — 53.94 — 

Tax on Interest Rs.13,151/- 

- Rent payment — — 31.59 — 

- Service on rent payment — — 3.25 — 

3 Aditya Birla Finance Ltd 

- Inter corporate loan received — 500.00 — 500.00 

- Inter corporate loan repaid — — 500.00 — 

- Interest on Inter corporate loan — 0.85 30.99 0.85 

- Syndication fee payment 0.57 — 0.57 — 

- Service Tax on Syndication fee payment 0.06 — 0.06 — 

(TDS on Syndication Fee Rs.6,283/-) 

4 Birla Sun Life Insurance Co Ltd 

- Brokerage earned 6.66 — 144.02 9.46 

- Referral fees earned — 8.83 7.37 8.83 

- Other income 5.16 — 7.15 — 

5 Aditya Birla Money Mart Limited 

- Business development fee payment 56.00 — 362.40 — 

(Tax on Business development 

expenses Rs.5,60,000/-) 

- Service tax on Business development 

fee payment 5.77 — 37.33 — 

(Tax on Business development expenses 

Service tax Rs.57,680/-) 

6 Birla Sun Life Asset Management Co. Ltd 

- Brokerage earned 0.54 — 0.54 — 

(TDS receivable on PMS Brokerage Rs.5,350/-) 

- Employee settlement receivable 14.23 — 14.23 — 

- other payable 28.57 — 28.57 — 

7 Aditya Birla Capital Limited 

- Inter corporate loan received — — 1,850.00 — 

- Inter corporate loan repaid — — 1,850.00 — 

- Interest on Inter corporate loan — — 9.05 — 

8 PCR Investments Ltd 

- Inter corporate loan taken — — — 7,500.00 

9 Apollo Hospitals Enterprise Ltd 

- Inter corporate loan taken — — — 2,200.00 

10 Remuneration paid Key Managerial Personnel — — — 54.41 

(erstwhile Executive Director Mr.P.B.Subramaniyan) 

(224)

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2.5 MANAGERIAL REMUNERATION 

2.5.1 The Company has made an application to Central Government under section 309 (5B) of the Companies 

Act,1956 for seeking waiver of excess managerial remuneration amounting to Rs.30,94,634/- (Excluding 

statutory contribution to PF, Gratuity and leave encashment which are exempted under schedule XIII) paid 

to Mr. P. B. Subramaniyan, the erstwhile Whole-time Director (Executive Director) of the Company for the 

period from 1 st April 2008 to 6 th March 2009. 

2.5.2 The Company has appointed Mr.Sudhakar Ramasubramanian, as Executive Director, who relinquished 

charge as Executive Director with effect from 4 th January 2010. Mr.Kanwar Vivek was appointed as 

Managing Director for a period of 3 years, with effect from 4 th January 2010. No remuneration was payable 

to them. 

2.6 SEGMENT REPORTING 

The Company is principally engaged in the business of Stock Broking and related activities. Accordingly, 

there are no reportable segments as per Accounting Standard 17 issued by The Institute of Chartered 

Accountants of India. 

2.7 DEFERRED TAXATION 

Deferred Tax Liability / (Asset) at the year end comprise timing differences on account of: 

(Rs In Lacs) 


a) Depreciation 650.38 589.15 

b) Incremental Asset on transitional provision relating to 

gratuity & leave encashment at the beginning of the year — (15.18) 

c) On account of unpaid Gratuity and Leave Encashment 

outstanding at the end of the year (63.23) — 

d) Expenditure/Provisions Allowable (52.38) (159.20) 

Total 534.77 414.77 

2.8 OPERATING LEASE 

Lease rentals in respect of premises taken on operating lease during the year ended 31 st March 2010 

amounts to Rs.423.48 Lacs (Previous Year Rs.358.29 Lacs). 

Future obligations towards lease rentals under the lease agreements as on 31 st March 2010 amounts to 

Rs.527.41 Lacs (Previous Year Rs.412.60 Lacs). Details of Lease Rentals payable within one year and thereafter 

are as under: 

(Rs In Lacs) 


Within One Year 54.56 81.28 

Later than one year and not later than five year 455.81 308.26 

Later than five years 17.04 23.06 

Future obligations are before recovery of expenses. 

The company has entered into lease / license agreements in respect of immovable properties with different 

parties. Some of the agreements contain escalation clause related to lease rentals / license fees from 5% to 

15% p.a. 

3. EARNINGS PER SHARE (EPS) IS CALCULATED AS UNDER 

(Rs. In Lacs except for EPS) 


Net Profit as disclosed in the Profit Loss Account - (A) 947.68 63.50 

Number of Equity shares for calculation of Basic & 

Diluted Earnings Per Share - (B) 554.00 554.00 

Earnings Per Share Rs. (Basic & Diluted) - A / B 1.71 0.11 

4. Estimated amount of capital contracts remaining to be executed on capital account (net of advances) and not 

provided for is Rs.110.53 Lacs (Previous Year Rs. 15.50 Lacs) 

(225)

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5. FOREIGN EXCHANGE TRANSACTIONS 

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

6. Amounts shown under Sundry Debtors, Loans and Advances and Sundry Creditors are subject to confirmation 

from the parties concerned. However, in the opinion of the Board of Directors of the Company, the current assets, 

loans and advances have a value on realization, not less than the amounts at which they are stated in the Balance 

Sheet. 

7. Information related to Micro, Small and Medium Enterprises Development Act 2006 (Act) is disclosed hereunder. 

The information given below has been determined to the extent such parties have been identified on the basis 

of information available with the Company 

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

(ii) Interest due on above. NIL 

b) Amount of interest paid by the buyer in terms of section 16 of the Act, along with amount of 

the payment made beyond the appointed date during the year 

NIL 

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

d) Amount of interest due and payable for the period of delay in making payment 

(which have been paid but beyond the due date during the year) but without adding the 

interest specified under the Act. 

NIL 

e) Amount of further interest remaining due and payable even in the succeeding years, 

until such date when the interest dues as above are actually paid to the small enterprise, 

for the purpose of disallowance as a deductable expenditure under section 23 of the Act. 

NIL 

8. Previous year’s figures have been regrouped / reclassified wherever necessary to confirm to this year’s classification. 

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

As Per Our attached Report of even date 




Kanwar Vivek 





Manoj Kedia 

P. Sudhir Rao 





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I Registration Details 

Registration No. 3 2 1 1 8 State Code 1 8 

Balance Sheet Date 3 1 0 3 2 0 1 0 


II 

Capital Raised during the Year (Amount in Rs. Thousands) 

Public Issue 

Rights Issue 

N I L N I L 

Bonus Issue 


N I L N I L 

III 

Position of Mobilization and Development of Fund (Amount in Rs. Thousands) 


Total Assets 

1 0 0 2 6 9 2 1 0 0 2 6 9 2 

Source of Funds Paid-up Capital Reserves & Surplus 

5 5 4 0 0 4 9 3 8 1 5 

Secured Loans 


5 0 0 0 0 3 5 0 0 0 0 

Deferred Tax 

5 3 4 7 7 

Application of Funds Net Fixed Assets Investments 

3 5 8 2 7 4 2 0 0 7 6 



6 2 4 3 4 2 N I L 

IV 

Performance of Company (Amount in Rs. Thousands) 

Total Income 


1 0 0 9 8 7 5 8 5 4 6 0 0 

Profit / Loss Before Tax 


1 5 5 2 7 5 9 4 7 6 8 

Earning per Share Rs. Dividend Rate % 

1 . 7 1 N I L 

V 

Generic Names of Principal Products/Services of Company (as per Monetary Terms) 

Item Code No. (ITC Code) 


N I L Stock Broking 




Kanwar Vivek 


Ravishankar Gopalan 

Chief Operating Officer 


Manoj Kedia 

P. Sudhir Rao 

Nithya Pasupathy 


(227)

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 

PARTICULARS 31-Mar-2010 31-Mar-09 

Rupees 

A 


Profit before Tax 155,275,180 12,978,475 


Depreciation 54,628,566 47,313,913 

Provision for bad & doubtful debts & 

advances(Net) 11,412,106 6,008,874 

Diminution in Value of Investments 118,524 220,885 

Interest Expenses 26,138,850 41,027,581 

Interest Income (23,445,893) (30,252,864) 

(Profit) / Loss on Sale of Fixed Assets & 

Discarded 3,477,845 1,229,250 

(Profit) / Loss on Sale of Investments (1,884,542) 9,550 

Dividend Income (541,699) 69,903,757 — 65,557,189 

OPERATING PROFIT BEFORE WORKING 

CAPITAL CHANGES 225,178,937 78,535,664 

Decrease / (Increase) in trade and other 

receivables (896,569,237) 455,191,037 

Increase / (Decrease) in trade and other 

payables 534,233,933 (362,335,304) (805,062,857) (349,871,820) 

CASH GENERATED FROM OPERATIONS (137,156,367) (271,336,156) 

Income Taxes Paid (48,433,766) (17,500,000) 

NET CASH FROM OPERATING ACTIVITIES (185,590,133) (288,836,156) 

B 


Proceeds from Sale of Fixed Assets 3,477,845 201,707 

Purchase of Fixed Assets (71,142,889) (75,598,973) 

Interest Received 21,408,480 30,252,864 

Dividend Received 541,699 — 

Sale of Investments 853,910 15,000 

Purchase of Mutual Fund (780,000,000) — 

Sale of Mutual Fund 781,128,476 — 

NET CASH (USED IN)/FROM INVESTING ACTIVITIES (43,732,479) (45,129,402) 

(228)

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PARTICULARS 31-Mar-2010 31-Mar-09 

Rupees 

C 


Inter Corporate Deposits 150,000,000 50,000,000 

Commercial Paper Placed 400,000,000 — 

Commercial Paper Redeemed (250,000,000) — 

Proceeds from Secured Loans 50,000,000 — 

Repayment of Borrowings (Lease & Asset Loan) — (485,191) 

Dividends paid (including tax thereon) — (6,481,523) 

Interest and Finance Charges paid (26,270,357) (41,027,581) 

NET CASH (USED IN)/FROM FINANCING ACTIVITIES 323,729,643 2,005,705 

NET INCREASE IN CASH AND EQUIVALENTS 94,407,031 (331,959,853) 

CASH AND CASH EQUIVALENTS (OPENING BALANCE) 137,482,290 469,442,143 

CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 231,889,321 137,482,290 

Notes: 

1) Cash and cash equivalents include: 

Cash, cheque in hand and remittance in transit 1,080,949 279,137 

Balance with Banks 230,808,372 137,203,153 

231,889,321 137,482,290 

2) Previous year’s figures have been regrouped / rearranged to confirm to the current year’s presentation, whenever necessary. 





Kanwar Vivek 





Manoj Kedia 

P. Sudhir Rao 





(229)

C M Y K 


STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT 1956, RELATING TO THE SUBSIDIARY COMPANIES 

Name of the Subsidiary Financial year Number of Equity Extent of interest Net aggregate amount of Profits / Net aggregate amount of Profits Additional 

Company of the Subsidiary Shares held by of ABML in the (Losses) of the Subsidiary so far /(Losses) of the Subsidiary so far as Information 

ended on Aditya Birla Capital of the as it concerns the Members of ABML it concerns the Members of ABML under 

Money Limited Subsidiary (%) and is not dealt with in the dealt with or provided for in the section 212(5) 

(ABML) as on Accounts of ABML Accounts of ABML 

March 31, 2010 

for the previous 

for the previous 

financial years 

financial years 

for the financial of the subsidiary for the financial of the subsidiary 

year ended on since it became year ended on since it became 

March 31, 2010 a subsidiary March 31, 2010 a subsidiary 

Rs. Rs. Rs. Rs. 

Aditya Birla Commodities March 31, 2010 2000000 100% 32,064,637 (6,783,463) Nil Nil NA 

Broking Limited 

For and on Behalf of the Board of the Directors 


(Formerly Known as Apollo Sindhoori Capital Investments Ltd) 

Kanwar Vivek Director: Sudhakar Ramasubramanian 


Manoj Kedia 

P. Sudhir Rao 


Ravishankar Gopalan 

Chief Operating Officer 

Nithya Pasupathy 


Particulars of Subsidiary Company as required by the order No. 47/117/2010-CL-III dated 03/03/2010 of Ministry of 

Corporate Affairs, Government of India, issued under section 212(8) of the Companies Act, 1956 for the financial year 

ended 31st March 2010. 

Aditya Birla Commodities Broking Limited 

(formerly known as Apollo Sindhoori Commodities Trading Limited) 

Particulars 

31-03-2010 31-03-2009 

Amount (Rs.) 

Amount (Rs.) 

a. Capital 20,000,000 20,000,000 

b. Reserves 25,281,174 (67,83,463) 

c. Total Assets 48,556,233 15,789,594 

d. Total Liabilities 48,556,233 15,789,594 

e. Investments NIL NIL 

f. Total Income 153,740,695 158,381,765 

g. Profit Before Taxation 49,957,195 74,17,814 

h. Provision for Taxation 17,892,558 17,06,709 

i. Profit After Taxation 32,064,637 57,11,105 

j. Proposed Dividend NIL NIL 

(230)

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ADITYA BIRLA COMMODITIES BROKING LIMITED (Formerly: Apollo Sindhoori Capital Investments Ltd.) 

DIRECTORS’ REPORT TO THE SHAREHOLDERS 

To the Members 

Your Directors have pleasure in presenting the Seventh Annual Report of the Company together with the 

audited accounts for the financial year ended March 31, 2010. 

FINANCIAL RESULTS 

The highlights of the financial results of the Company are as follows: 

(Rs. In Lakhs) 

Particulars Year ended Year ended 


Income from Operations 1,299.14 530.74 

Other Income 238.27 1,053.07 

Total Expenditure 982.01 1,462.37 

Profit before Interest Depreciation and Taxation 555.40 121.45 

Less : Interest 22.59 15.95 

Profit before Depreciation and Taxation 532.81 105.49 

Less : Depreciation 33.24 31.31 

Profit before Taxation 499.57 74.18 

Less : Provision for tax including deferred tax 178.93 17.07 

Profit after Tax 320.64 57.11 

Profit/(Loss) brought forward from previous year (67.83) (124.94) 

Balance carried to Balance Sheet 252.81 (67.83) 


During the year under review the Company achieved a total income of Rs. 1,537.41 Lakhs against Rs. 1.583.82 

Lakhs in the previous year. The income from operations grew by 145% at Rs.1,299.14 Lakhs, compared to 

Rs. 530.74 Lakhs during previous year. The profit before taxation was up by 573% at Rs. 499.57 Lakhs compared 

to Rs. 74.18 Lakhs in the previous year. The Company’s net profit for the year was Rs. 320.64 Lakhs, compared 

to Rs. 57.11 Lakhs in the previous year, a growth of 461% over previous year. 

The brokerage earned was up by 165% at Rs. 1,259.30 Lakhs against Rs. 474.38 Lakhs in the previous year. 

During the year, 30,677 of Gold contracts were sold compared to 10,273 in the previous year. The Company is 

now looking to increase its business in Silver. 

DIVIDEND 

Considering the future expansion plans and capital requirements, the Directors have decided to conserve 

cash flow and hence have not recommended any dividend for the period under review. 


During the year, the name of the Company was changed to “Aditya Birla Commodities Broking Limited” vide 

fresh certificate of incorporation dated September 29, 2009, issued by Registrar of Companies, Chennai. The 

new name of the Company reflects the ownership and leverage the strength of the Aditya Birla Group. 

(231)

C M Y K 


HOLDING COMPANY - INTER-SE PROMOTER TRANSFER 

In order to consolidate all the Financial Services activities under one single roof, Aditya Birla Nuvo Limited, 

the promoter of the holding company –”Aditya Birla Money Limited”, transferred its shareholding to Aditya 

Birla Financial Services Private Limited on February 23, 2010 by way of “inter-se” promoter transfer in terms of 

regulation 3(4) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The aforesaid 

transfer of shares however did not result in any change in control or promoter group of the Company under 

the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Aditya Birla Financial Services 

Private Limited however has become the Promoter Company (holding company) of Aditya Birla Money 

Limited as per the shareholding pattern disclosed by them under clause 35 of the Listing Agreement entered 

into with the stock exchanges. The above transfer of shares did not result in any change in the shareholding 

pattern of the Company and it continues to be a wholly owned subsidiary of Aditya Birla Money Limited. 

OUTLOOK ON COMMODITIES 

The Commodity markets witnessed a sharp rally in 2009. The futures for agri products rallied to Year highs 

due to below average monsoon and restriction of supply. The food inflation reached its peak of 19.95% for 

the period ended December 5, 2009. Along with agri prices, bullion prices, energy and base metals also went 

up due to weakening US dollar. The gold prices went up due to higher demand, weakness of dollar, purchase 

of gold by the central banks and demand from HNI customers. 

In the ensuing year, investment demand for Gold will increase or at most remain intact. This is due to the fact 

that some of the Central banks are accumulating gold in their foreign exchange reserves. Silver prices have 

outperformed Gold due to investment demand. Silver is set to witness increased price due to increased 

investment demand. Crude oil prices doubled in 2009 despite increase in inventories. Oil prices move depend 

on the demand in the US, China and other markets. Agri commodities continues to witness high prices. 

The Company hopes to further expand its market share in the Commodity business and increase its volume 

through appropriate sales and marketing strategies. 


The Company has not accepted any fixed deposits from the public during the year. 

DIRECTORS 

Mr. Kanwar Vivek, Director of the Company retires by rotation at the ensuing Annual General Meeting and 

being eligible has offered himself for re-appointment. The Board recommends his re-appointment. 

AUDITOR & AUDITOR’S REPORT 

M/s. R. Subramanian & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual 

General Meeting. The Company has received a letter from M/s R. Subramanian & Company, Chartered 

Accountants, expressing their unwillingness to be re-appointed as Auditors. Your Directors have therefore 

proposed the appointment of M/s. S.V. Ghatalia & Associates, Chartered Accountants, Mumbai as Statutory 

Auditors of the Company. The Company has received a letter from them to the effect that their appointment, 

if made, would be within the prescribed limits under section 224(1-B) of the Companies Act, 1956, and that 

they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 

1956. 

The observations made by the Auditors in their report read with relevant notes to the Accounts are selfexplanatory 

and do not call for any further comments under section 217(3) of the Companies Act, 1956 

(232)

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As required under Section 217(2AA) of the Companies Act, 1956, the Directors of the Company hereby state 

and confirm: 

1. That in the preparation of Annual Accounts for the year, applicable Accounting Standards have been 

followed along with proper explanations relating to material departures; 

2. That the Directors have selected such accounting policies and applied them consistently, and made 

judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state 

of affairs of the Company as at the end of the financial year and of the profit of the Company for that 

period; 

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting 

records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the 

Company and for preventing and detecting fraud and other irregularities; 

4. That the Directors have prepared the Annual Accounts on a going concern basis. 

SECRETARIAL COMPLIANCE CERTIFICATE 

Pursuant to Section 383A of the Companies Act, 1956, a Secretarial Compliance Certificate Under Companies 

(Compliance Certificate) Rules, 2001 issued by Ms. B. Chandra, Practicing Company Secretary, is attached to 

this report. 

COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 

In view of the nature of activities which are being carried on by the Company, the particulars prescribed 

under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the 

Report of the Board of Directors) Rules, 1988 regarding conservation of Energy & Technology Absorption are 

not applicable to the Company. There was no foreign exchange earnings and outgo during the year. 


There is no employee coming under the purview of Section 217(2A) of the Companies Act, 1956 and hence 

the particulars are not furnished. 


Your Directors express their sincere appreciation to the regulatory authorities, the company’s bankers, 

shareholders, stakeholders and the clients for the continued co-operation and support. Your Directors take 

this opportunity to recognize and place on record their deep appreciation for the commitment and 

contribution made by all the employees and look forward to receive the same in all the endeavours of the 

Company in future. 

For Aditya Birla Commodities Broking Limited 

(Formerly known as Apollo Sindhoori Commodities Trading Limited) 

Kanwar Vivek 

Director 

Sudhakar Ramasubramian 

Director 

Place: Chennai 


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Registration No : 18-U51501TN2003PLC051742 

Authorised Share Capital : Rs 25,000,000.00 

Paid Up Share capital : Rs. 20,000,000.00 

To, 

The Members 

ADITYA BIRLA COMMODITIES BROKING LIMITED 

NO.55, GREAMS ROAD, 

ALI TOWERS, 

CHENNAI - 600006 

I have examined the registers, records, books and papers of M/s. ADITYA BIRLA COMMODITIES BROKING 

LIMITED as required to be maintained under the Companies Act, 1956, (the Act) and the rules made there 

under and also the provisions contained in the Memorandum and Articles of Association of the Company for 

the financial year ended on 31 st March 2010. In my opinion and to the best of my information and according 

to the examinations carried out by me and explanations furnished to me by the Company, its officers and 

agents, I certify that in respect of the aforesaid financial year: 

1. The Company has kept and maintained all registers as stated in Annexure ‘A’ to this certificate, as per the 

provisions and the rules made there under and all entries therein have been recorded. 

2. The Company has filed forms and returns as stated in Annexure ‘B’ to this certificate, with the Registrar 

of Companies Regional Director, Central Government, Company Law Board or other authorities, as may 

be required, under the Act and the rules made there under. 

3. The Company is a public limited company. 

4. The Board of Directors duly met 4 (Four) times respectively on 21-04-2009, 15-07-2009,14-10-2009 & 19- 

01-2010 in respect of which meetings, proper notices were given and the proceedings were properly 

recorded and signed. 

5. The Company was not required to close its Register of Members during the financial year. 

6. Annual General Meeting for the financial year 2008-09 was conducted on 15-07-2009. 

7. No Extra Ordinary General Meeting was held during the financial year. 

8. The company has not advanced any loans to its directors or persons of firms or companies referred to 

under section 295 of the Act. 

9. The Company has not entered into any contracts falling within the purview of section 297 of the Act. 

10. The Company was not required to make any entry in the register maintained Under Section 301 of the Act. 

11. As there were no instances falling within the purview of Section 314 of the Companies Act, 1956, the 

Company has not obtained any approvals from the Board of Directors, members or Central Government. 

12. The Company has not issued any duplicate share certificates during the financial year. 

13. The Company: 

i. Delivered Certificates on lodgment for Transfer of Securities in accordance with the provisions of the 

Act during the financial year. 

ii. has not deposited any amount in a separate bank account as no dividend was declared during the 

financial year. 

iii. was not required to post warrants to any member of the company as no dividend was declared 


iv. was not required to transfer any amounts to Investor Education Protection Fund as there were no 

unpaid dividend account, application money due for refund, matured deposits, matured debentures 

and the interest accrued unclaimed or unpaid thereon. 

(234)

C M Y K 


v. As per the information/explanation provided by management, the company has complied with the 

requirements of Section 217 of the Act. 

14. The Board of Directors of the Company is duly constituted. There was no appointment of additional 

directors, alternate directors and directors to fill casual vacancy during the financial year. However, the 

three additional Directors i.e Mr. Pankaj Razdan, Mr. Kanwar Vivek and Mr. Sudhakar Ramasubramanian 

were appointed as Directors in the Annual General Meeting. The requirements of Section 303 were 

complied with. 

15. The company has not appointed any Managing Director/Whole-time Director/Manager as the provisions 

of Section 269 are not applicable. 

16. The Company has not appointed any sole-selling agents during the financial year. 

17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, 

Regional Director, Registrar of Companies and/or such authorities prescribed under the various provisions 

of the Companies Act, 1956 during the financial year. 

18. The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant 

to the provisions of the Act and the rules made there under. 

19. The Company has not issued any shares/debentures/other securities during the financial year. 

20. The Company has not bought back any shares during the said financial year. 

21. Company has not issued any Preference shares or debentures. 

22. There were no transactions necessitating the company to keep in abeyance the rights to dividend, rights 

shares and bonus shares pending registration of transfer of shares. 

23. The Company has not invited/accepted any deposits including any unsecured loans falling within the 

purview of Section 58A of the Companies Act, 1956, during the financial year. 

24. The Company has not made any borrowings during the financial year ended 31 st March 2010. 

25. The Company has not made any loans or advances or given any guarantees or provided securities to 

other bodies corporate and consequently no entries have been made in the register kept for the purpose. 

26. The Company has not altered the provisions of the Memorandum with respect to situation of the 

Company’s registered office from one state to another during the year under scrutiny. 

27. The Company has not altered the provisions of the Memorandum with respect to the objects of the 

company during the year under scrutiny. 

28. The Company has altered the provisions of the Memorandum with respect to name of the company 

during the year under scrutiny and complied with the provisions of the act. 

29. The Company has not altered the provisions of the Memorandum except with respect to the name of 

the company during the year under scrutiny. 

30. The Company has not altered its Articles of Association except with reference to the name of the Company 

during the financial year. 

31. There was no prosecution initiated against or show cause notices received by the company, and no fines 

or penalties or any other punishment was imposed on the company during the financial year, based on 

our information, for offences under the Companies Act, 1956. 

32. The Company has not received any money as security Deposit from its employees during the financial 

year. 

33. The Company has registered under the EPF and Miscellaneous Provisions Act, 1952 and has not created 

any trust as defined Under Section 418 of the Companies Act 1956. Hence the provisions of Section 418 

of the Act, is not applicable to the Company. 

B. CHANDRA 



Date : April 23, 2010 C.P.No : 7859 

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C M Y K 


ANNEXURE TO THE DIRECTORS’ REPORT 

ANNEXURE A 

Registers as maintained by the Company 

1. Register of Members u/s.150 and Index of Members u/s. 151. 

2. Minutes of General Meetings and Board meetings u/s 193. 

3. Register of Directors u/s 303. 

4. Register of Directors’ Shareholding u/s 307. 

5. Register of Transfers 

6. Register of Charges U/s.143. 

7. Register of Investments. 

8. Register of Contracts, Companies and firms in which Directors of the Company are interested u/s. 

297,299,301 and 301 (3). 

9. Register of Common Seal 

10. Books of Accounts U/s.209 

ANNEXURE B 

Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central 

Government or other authorities during the financial year ending on 31 st March 2010. 

S.No eForm Filed U/s For Date of Filing Whether If delay in 

No/Return & SRN filed within filing whether 

prescribed requisite 

time Yes/No additional fee 

paid Yes/No 

1 Form 32 303(2) Appointment of directors A59241257 Yes N.A 

dated 02-04-2009 

2 Form 32 303 Change in directorship A60418381 No Yes 


3 Form 32 303(2) Appointment of directors A67095893 Yes N.A 


4 Form 66 383 A Compliance certificate P3379904 Yes N.A 

for the year ended 08-09 dated 13-08-2009 

5 Form 23AC 220 Balance sheet for the P33800319 Yes N.A 

year ended 08-09 dated 13-08-2009 

6 Form 23 293/192 Increasing Borrowing A67174953 No Yes 

powers dated 13-08-2009 

7 Form 1A 20 Availability of name A64555097 Yes NA 


8 Form 1AR 21 Name Renewal A68087055 Yes N.A 


9 Form 20B 159 Annual return for the P34454215 Yes N.A 

year ended 08-09 dated 10-09-2009 

10 Form 1B 21 Change of name of A69728210 Yes N.A 

the company dated 22-09-2009 

11 Form 23 21/192 Alteration of Memo- A69842185 Yes N.A 

randum of association dated 24-09-2009 

–Name Clause 

12 From 22B 187C Declaration of beneficial A70183017 Yes N.A 

interest dated 01-10-2009 

13 Form 23 21/192 Resolution for change A67176966 Yes NA 

of name dated 13-08-2009 

B. CHANDRA 



Date : April 23, 2010 C.P.No : 7859 

(236)

C M Y K 


AUDITORS’ REPORT TO THE MEMBERS 

1. We have audited the attached Balance Sheet of Aditya Birla Commodities Broking Limited as at 

31 st March 2010 and the Profit and Loss Account and Cash Flow Statement for the year ended on that 

date annexed thereto. These financial statements are the responsibility of the Company’s management. 

Our responsibility is to express an opinion on these financial statements based on our audit. 

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those 

Standards require that we plan and perform the audit to obtain reasonable assurance about whether the 

financial statements are free of material misstatement. An audit includes examining, on a test basis, 

evidence supporting the amounts and disclosures in the financial statements. An audit also includes 

assessing the accounting principles used and significant estimates made by management, as well as 

evaluating the overall financial statement presentation. We believe that our audit provides a reasonable 

basis for our opinion. 

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India 

in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the 

matters specified in paragraphs 4 and 5 of the said order to the extent they are applicable to the 

company. 

4 Further to our comments in the Annexure referred to above, we report that: 

a) We have obtained all the information and explanations, which to the best of our knowledge and 

belief were necessary for the purpose of our audit. 

b) In our opinion, the company has kept proper books of account as required by law, so far as it appears 

from our examination of such books. 

c) The Balance Sheet, Profit and Loss account and Cash Flow Statement referred to in this report are in 

agreement with the books of account. 

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement comply with the 

Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. 

e) On the basis of the written representations received from directors and taken on record by the 

Board of Directors, we report that none of the director is disqualified as on 31 st March 2010 from 

being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies 

Act, 1956. 

f) In our opinion and to the best of our information and according to the explanations given to us, the 

said accounts read together with the notes thereon and schedules attached thereto, give the 

information required by the Companies Act 1956, in the manner so required and give a true and fair 

view, in conformity with the accounting principles generally accepted in India 

i) In so far as it relates to the Balance Sheet, the state of affairs of the company as at 31 st March 

2010, 

ii) In so far as it relates to the Profit and Loss account, of the profit for the year ended on that date, 

and 

iii) In so far as it relates to the Cash Flow Statement, of the Cash Flow for the year ended on that 

date. 







Partner 


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C M Y K 


ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE 

(i) (a) The Company has maintained proper records showing full particulars including quantitative 

details and situation of fixed assets; 

(b) The physical verification of Fixed Assets was conducted in a phased manner and there is a 

regular programme of verification, which, in our opinion is reasonable having regard to the size 

of the company and nature of Fixed Assets. No Material discrepancies were noticed during such 

verification. 

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the 

going concern assumption. 

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during 

the year. 

(b) The procedures of physical verification of inventory followed by management are reasonable 

and adequate in relation to the size of the Company and the nature of its business. 

(c) The company has maintained proper records of inventory and material discrepancies on physical 

verification have been properly dealt with in the books of account. 

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms 

or other parties covered in the register maintained under section 301 of the Companies Act, 

1956 and accordingly, clauses 4 (iii) (b), (c) and (d) of the Companies (Auditors Report) Order, 

2003 (as amended) are not applicable. 

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms 

or other parties covered in the register maintained under section 301 of the Companies Act, 

1956 and accordingly, clauses 4 (iii) (f) and (g) of the Companies (Auditors Report) Order, 2003 (as 


(iv) During the year, the company has taken unsecured loans amounting to Rs.7 Crores from its Holding 

Company and repaid the same during the year. The maximum amount received during the year is Rs.7 

Crores and the balance outstanding at the year-end is Nil. The rate of interest where applicable and 

other terms and conditions are prima facie not prejudicial to the interest of the company. The principal 

amounts are repayable on demand and there is no repayment schedule. The interest, where applicable, 

is payable on demand. In respect of the said loans, the same are repayable on demand and therefore 

the question of overdue amounts does not arise. In respect of interest, where applicable, there are no 

overdue amounts. 

(v) In our opinion and according to the information and explanations given to us, there is an adequate 

internal control system commensurate with the size of the Company and the nature of its business 

with regard to purchase of fixed assets and rendering of services. During the course of our audit, we 

have not observed any major weakness in the internal control system in respect of these areas. 

(vi) According to the information and explanations provided by Management, we are of the opinion that 

there are no contracts and arrangements that need to be entered into the register maintained under 

section 301 of the Companies Act during this year. 

(vii) In our opinion and according to the explanations given to us, the Company has not accepted any 

fixed deposits during the year requiring compliance of provisions of Section 58A, or 58AA or any 

other relevant provisions of the Companies Act 1956. 

(viii) In our opinion, the Company has an internal audit system commensurate with the size of the company 

and the nature of its business. 

(ix) The Central Government has not prescribed maintenance of cost records under clause (d) of sub 

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C M Y K 


section (1) of Section 209 of the Companies Act, 1956 for any of the services rendered by the Company. 

Accordingly, para 4 (viii) of the Order is not applicable. 

(x) (a) According to the information and explanations given to us and on the basis of our examination 

of the records of the Company, amounts deducted / accrued in the books of account in respect 

of undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, 

Employees’ State Insurance, Income tax, Sales tax, Wealth Tax, Custom Duty, Excise Duty, Service 

Tax, Cess and any other statutory dues have been generally been regularly deposited during the 

year by the Company with the appropriate authorities 

(b) According to the information and explanations given to us, no undisputed amounts payable in 

respect of Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Service tax and Cess were 

in arrears as at 31 st March 2010 for a period of more than six months from the date they became 

payable. 

(c) According to the information and explanations given to us, the following dues have not been 

deposited by the Company on account of dispute: 

Name of the Nature of Amount Period to which Forum where dispute 

Statute Dues (Rs.) the amount relates is pending 

Finance Act, Service Tax 793,777 FY 2006-07 & Commissioner of 

1994 (Service Tax and Penalty FY 2007-08 Service Tax, 

Provisions) 

Nandanam 

In addition, according to the information and explanations given to us, there are no dues of sales 

tax, customs duty, wealth tax, excise duty and cess, which have not been deposited on account of 

any dispute. 

(xi) The Company does not have any accumulated losses as at 31 st March 2010 and has not incurred cash 

losses in the financial year and in the immediately preceding financial year. Accordingly, para 4 (x) of 

the Order is not applicable. 

(xii) In our opinion and according to the explanations given to us, the Company has not defaulted in the 

payment of dues to financial institutions and Banks. 

(xiii) According to the information and explanations given to us and based on the documents and records 

produced to us, the Company has not granted any loans or advances on the basis of security by way 

of pledge of shares, debentures and other securities. 

(xiv) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore the provisions of 

clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to this 

company. 

(xv) Based on our examination of the records and evaluation of the related internal controls, the Company 

has maintained proper records of transactions and contracts in respect of its dealing in shares, securities, 

debentures and other securities and timely entries have been made therein. 

(xvi) In our opinion and according to the information and explanations given to us the Company has not 

during the financial year, given any guarantee for any loans taken by others from banks and financial 

institutions. Accordingly, para 4(xv) of the Order is not applicable. 

(xvii) Based on information and explanations given to us by Management, term loans were applied for the 

purpose for which the loans were obtained. 

(xviii) According to the cash flow statement and other records examined by us and the information and 

explanations given to us, on an overall basis, funds raised on short term basis have, prima facie, not 

been used during the year for long term investment (fixed assets, etc.,) other than temporary 

deployment. 

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C M Y K 


(xix) 

(xx) 

(xxi) 

(xxii) 

The company has not made any preferential allotment of shares during the year to parties or companies 

covered in the Register maintained under section 301 of the Companies Act. Accordingly, para 4(xviii) 


The company has not raised money by issuing debentures during the year. Accordingly, para 4(xix) of 

the Order is not applicable 

The company has not raised any money by way of public issue during the year. Accordingly, para 4(xx) 

of the Order is not applicable 

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the 

financial statements and as per the information and explanations given by Management, we report 

that no fraud on or by the Company has been noticed or reported during the financial year. 







Partner 


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C M Y K 


BALANCE SHEET AS AT 31ST MARCH, 2010 As at As at 


Rs. 

Rs. 



Share Capital 1 20,000,000 20,000,000 

Reserves And Surplus 25,281,174 (6,783,463) 

45,281,174 13,216,537 

Deferred Tax Liability (vide note 2.6 of Schedule 15) 3,275,059 2,573,057 

Total Funds Employed 48,556,233 15,789,594 



Gross Block (At Cost) 24,752,461 22,909,734 

Less:Accumulated Depreciation 11,530,719 8,206,468 

Net Block 13,221,742 14,703,266 

Capital Work-in-Progress 33,080 — 

13,254,822 14,703,266 


Inventories 3 — 996,246 

Cash & Bank Balances 4 143,501,132 91,295,462 



336,756,471 125,901,652 

Less:Current Liabilities and Provisions 7 

Current Liabilities 299,406,125 124,815,324 

Provisions 2,048,935 — 

301,455,060 124,815,324 


Total Funds Utilised 48,556,233 15,789,594 

Significant Accounting policies and Notes on Accounts 15 

Schedules referred to above form an integral part of the Balance Sheet 





For ADITYA BIRLA COMMODITIES BROKING LIMITED 

(Formerly known as Apollo Sindhoori Commodities Trading Ltd) 

N. Krishnamurthy Kanwar Vivek Sudhakar Ramasubramanian 

Partner Director Director 



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C M Y K 


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 

Schedule Year Ended Year Ended 


Rs. 

Rs. 

INCOME 

Income From Operations 8 129,913,803 53,074,403 

Sale of Gold 19,114,731 102,058,571 

Other Income 9 4,712,161 3,248,791 

153,740,695 158,381,765 

EXPENDITURE 

(Increase)/Decrease in Stocks 10 996,246 2,335,914 

Purchase of Gold 17,816,422 102,396,905 

Salaries, Wages & Employee Benefits 11 15,789,427 13,929,670 

Operating and Other Expenses 12 63,598,260 27,574,594 

98,200,355 146,237,083 

Profit Before Interest, Depreciation/Amortisation & Tax 55,540,340 12,144,682 

Less: Interest and Finance Expenses 13 2,258,894 1,595,433 

Profit Before Depreciation/Amortisation 53,281,446 10,549,249 

Depreciation/Amortisation 3,324,251 3,131,435 

Profit Before Tax 49,957,195 7,417,814 

Provision For Taxation 14 17,892,558 1,706,709 

Net Profit 32,064,637 5,711,105 

Balance Brought Forward (6,783,463) (12,494,568) 

Profit Available for Appropriation 25,281,174 (6,783,463) 


Surplus Carried to Balance Sheet 25,281,174 (6,783,463) 

25,281,174 (6,783,463) 

Earnings Per Share (Basic and Diluted) (Face Value Rs 10/- each) 16.03 2.86 

(Refer Note No. 2.7 of Schedule 15) 

Significant Accounting Policies and Notes on accounts form 

part of Profit & Loss Account 15 











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SCHEDULES As at As at 


Rs. 

Rs. 

SCHEDULE 1 

SHARE CAPITAL 

Authorized: 

25,00,000 Equity Shares of Rs.10/ each 25,000,000 25,000,000 

25,000,000 25,000,000 

Issued, Subscribed & Paid Up 

20,00,000 Equity Shares of Rs.10/- each fully paid up 20,000,000 20,000,000 

(All the above 20,00,000 Equity shares of Rs.10 each 

(as at March 31,2009 -20,00,000) are held by 

M/s. Aditya Birla Money Ltd(Holding Company) 

20,000,000 20,000,000 

SCHEDULE 2 

FIXED ASSETS 

Rs. 

Particulars GROSS BLOCK DEPRECIATION NET BLOCK 

As at Additions Deductions As at As at For the Deductions As at As at As at on 

01.04.2009 31.03.2010 01.04.2009 Period 31.03.2010 31.03.2010 31.03.09 

TANGIBLE ASSET: 

Computers 124,990 — — 124,990 77,262 18,083 — 95,345 29,645 47,728 

V SAT Equipments 283,982 — — 283,982 85,031 13,489 — 98,520 185,462 198,951 

Furniture & Fittings 634,469 — — 634,469 182,979 31,251 — 214,230 420,239 451,490 

Office Equipments 120,156 — — 120,156 37,936 4,270 — 42,206 77,950 82,220 

INTANGIBLE ASSET: 

Computer Software 21,746,137 1,842,727 — 23,588,864 7,823,260 3,257,158 — 11,080,418 12,508,446 13,922,877 

Total 22,909,734 1,842,727 — 24,752,461 8,206,468 3,324,251 — 11,530,719 13,221,742 14,703,266 

Previous Year 19,542,275 3,367,459 22,909,734 5,075,033 3,131,435 8,206,468 14,703,266 14,467,242 

As at 

As at 


Rs. 

Rs. 

SCHEDULE 3 

INVENTORIES 

Stock of Gold — 996,246 

— 996,246 

SCHEDULE 4 

CASH & BANK BALANCES 

Cash On Hand — — 

Balances With Scheduled Banks In 

Fixed Deposits Account 55,375,000 55,000,000 

Current Account 88,126,132 36,295,462 

143,501,132 91,295,462 

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C M Y K 


As at 

As at 


SCHEDULE 5 

SUNDRY DEBTORS (Unsecured & Considered Good) 

More than Six Months 

Rs. 

3,765,443 

Rs. 

2,981,477 

Others 3,300,497 2,149,483 

7,065,940 5,130,960 

Settlement Dues - Exchanges 

More than Six Months — — 

Others 6,067,795 563,818 

6,067,795 563,818 

13,133,735 5,694,778 

SCHEDULE 6 


Advance Income Tax/FBT and TDS (Net of Provision) — 339,547 

Advance Others 967,961 12,853 

Margin 171,678,845 21,700,001 

Deposits 3,066,393 2,936,893 

Service Tax (Credit) 762,815 703,977 

Prepaid Expenses 1,161,044 1,023,700 

Accrued income 2,484,546 1,198,195 

180,121,604 27,915,166 

SCHEDULE 7 

CURRENT LIABILITIES & PROVISIONS 

Current Liabilities: 

Trade Creditors 295,099,897 105,418,700 

Due to Holding Company — 4,312,024 

Settlement Dues-Exchange — 913,541 

Balances in current accounts with banks( Temporarily overdrawn) 1,063,121 11,925,944 

Outstanding Liabilities 3,243,107 2,245,115 

299,406,125 124,815,324 

Provisions For 

Taxation(Net of Advance Payment) 2,048,935 — 

2,048,935 — 

301,455,060 124,815,324 

SCHEDULE 8 


Brokerage Income 125,929,856 47,437,670 

Income from Transaction Charges 3,671,164 2,260,624 

V-sat Rent 312,783 310,000 

Interest and Finance Charges — 3,066,109 

129,913,803 53,074,403 

SCHEDULE 9 

OTHER INCOME 

Interest on Fixed Deposits 4,705,982 3,248,791 

(Tax deducted at source Rs.5,32,488/- Previous Year Rs. 7,43,570/- ) 

Miscellaneous Income 6,179 — 

4,712,161 3,248,791 

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As at 

As at 


Rs. 

Rs. 

SCHEDULE 10 

(INCREASE)/DECREASE IN STOCKS 

Closing Stocks: 

Stock of Gold — 996,246 

— 996,246 

Less: Opening Stocks: 

Stock of Gold 996,246 3,332,160 

996,246 3,332,160 

(Increase)/Decrease 996,246 2,335,914 

SCHEDULE 11 

SALARIES WAGES AND EMPLOYEE BENEFITS 

Salaries, Allowances, Bonus & Incentive 15,783,573 13,929,670 

Staff Welfare Expenses 5,854 — 

15,789,427 13,929,670 

SCHEDULE 12 

OPERATING AND OTHER EXPENSES 

Advertisement & Publicity 12,500 2,808,103 

Auditors remuneration 

- Financial Audit 100,000 100,000 

- Tax Audit — — 

- Certification Charges — — 

AMC Charges 5,782,837 6,504,614 

Bandwidth Charges 294,267 244,340 

Business Development Expenses 35,560,000 - 

Insurance 153,181 33,638 

Legal & Professional Charges 734,898 233,750 

Management Fee-Business Partners 17,183,236 12,554,753 

Miscellaneous Expenses 611,567 1,586,575 

Printing & Stationery 1,123,462 803,710 

Rates & Taxes 1,800,857 2,289,711 

Repairs & Maintenance 37,265 113,180 

Telephone Expenses 1,999 2,473 

Travelling & Conveyance 202,191 299,747 

63,598,260 27,574,594 

SCHEDULE 13 

INTEREST AND OTHER FINANCE EXPENSES 

Bank Charges 1,450,430 1,168,277 

Interest 808,464 427,156 

2,258,894 1,595,433 

SCHEDULE 14 


Current Tax 16,900,000 477,450 

Deferred Tax 702,000 1,198,659 

Fringe Benefit Tax — 30,600 

Provision of Income Tax & FBT Relating to earlier year 290,558 — 

17,892,558 1,706,709 

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SCHEDULE NO. 15 

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31.03.2010 

1. SIGNIFICANT ACCOUNTING POLICIES: 

1.1 BASIS OF PREPARATION 

The financial statements have been prepared to comply in all material respects with the Notified Accounting 

Standard by Companies Accounting Standard Rules, 2006 (as amended)” and the relevant provisions of the 

Companies Act, 1956. The financial statements have been prepared under the historical cost convention and 

on accrual basis. The accounting policies have been consistently applied by the company and are consistent 

with those used in the previous year. 

1.2 USE OF ESTIMATES 

The preparation of financial statements in conformity with generally accepted accounting principles requires 

management to make estimates and assumptions that affect the reported amounts of assets and liabilities 

and disclosure of contingent liabilities as at the date of the financial statements and the results of operations 

during the reporting period end. Although these estimates are based upon management’s best knowledge of 

current events and actions, actual results could differ from these estimates. 

1.3 FIXED ASSETS, INTANGIBLE ASSET AND CAPITAL WORK IN PROGRESS 

Fixed assets are stated at historical cost, less accumulated depreciation and impairment losses, if any. Cost 

comprises the purchase price and any attributable cost of bringing the assets to its working condition for its 

intended use. Capital work-in-progress comprises outstanding advances paid to acquire fixed assets, the cost 

of fixed assets that are not yet ready for their intended use at the balance sheet date. Intangible assets are 

recorded at the consideration paid for acquisition. 

1.4 DEPRECIATION AND AMORTISATION 

Depreciation on fixed assets is provided on Straight-line basis, in accordance with the rates prescribed in 

Schedule XIV of the Companies Act, 1956. 

The computer software costs are capitalized and recognized as intangible assets in terms of Accounting 

Standard 26 - Intangible Assets based on materiality, accounting prudence and significant economic benefit 

expected there from to flow over a period longer than one year. Capitalized costs include direct costs of 

implementation and expenses directly attributable to the development of the software. Computer software 

cost capitalized is amortized over the estimated useful life of 6 years. 

Additions to fixed assets are depreciated from the date of addition and deletions are depreciated upto the 

date of sale, on pro-rata basis. 

Fixed assets individually costing Rs.5,000 or less are fully depreciated on purchase. 

1.5 IMPAIRMENT 

The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment 

based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an 

asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and 

value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at 

the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying 

amount of the assets over its remaining useful life. 

1.6 VALUATION OF INVENTORY 

Inventories are stated at the lower of cost and net realizable value. Cost includes all expenses incurred in 

bringing the inventory to its present location and condition and is determined on a first-in-first-out basis. Net 

realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary 

to make the sale. 

1.7 INCOME RECOGNITION 

Brokerage Income and transaction charges are recognized on trade basis of Multi Commodities Exchange Ltd, 

National Commodity and Derivatives Exchange of India Ltd, Mumbai. Profit or loss on Gold trading is recognized 

and accounted on accrual basis. 

Other interest incomes are recognised on time proportion basis. 

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1.8 PROVISION FOR DOUBTFUL DEBTS 

Provision for doubtful debts is made based on assessment made by the management taking into consideration 

securities available against such debts. 

1.9 TAXES ON INCOME 

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with 

the provisions of Income Tax Act 1961. 

Deferred tax is recognized on timing difference, being the difference between taxable income and accounting 

income that originate in one period and are capable of reversal in one or subsequent periods. Deferred Tax 

assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income 

will be available against which such deferred tax assets can be realized. If the company has unabsorbed 

depreciation or carry forward tax losses, deferred tax assets are recognised only if there is virtual certainty 

supported by convincing evidence that such deferred tax assets can be realized against future taxable profits. 

At each balance sheet, the company reassesses unrecognized deferred tax assets. It recognises deferred tax 

asset to the extent that it has become virtually certain that sufficient future taxable income will be available 

against which such deferred tax assets can be realized. 

1.10CONTINGENT LIABILITIES AND PROVISIONS 

Contingent Liabilities are possible but not probable obligations as on the balance sheet date based on the 

available evidence. Provisions are recognised when there is present obligation as a result of past event and it 

is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable 

estimate can be made. Provisions are determined based on best estimate required to settle the obligation at 

the balance sheet date. 

1.11EARNINGS PER SHARE 

Basic Earnings per share are calculated by dividing the net profit or loss for the period attributable to equity 

shareholders by the weighted average number of equity shares outstanding during the period. 

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to 

equity shareholders and weighted average number of shares outstanding during the period is adjusted for 

the effect of all dilutive potential equity shares. 

2 NOTES ON ACCOUNTS 

2.1 CONTINGENT LIABILITY (Amount in Rs.) 

PARTICULARS 31-03-2010 31-03-2009 

2.1 Disputed tax liability not provided for: 

Service tax 7,93,777 — 

2.3 PURCHASES/SALES OF TRADED GOODS 

Particulars Quantity (in lots) Value (Rs.) 

Purchases 

2009-10 2008-09 2009-10 2008-09 

Gold 100 grams 109 823 1,77,09,777 10,11,94,155 

Gold 8 grams 8 125 1,06,645 12,02,750 

Total 1,78,16,422 10,23,96,905 

Sales 

Gold 100 grams 111 847 1,81,18,494 10,15,24,814 

Gold 8 grams 86 47 9,96,237 5,33,757 

Total 1,91,14,731 10,20,58,571 

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INCREASE/DECREASE IN STOCK 

Particulars Quantity (in lots) Value (Rs.) 

Opening Stock 


Gold 100 grams 2 26 2,38,242 33,32,160 

Gold 8 grams 78 — 7,58,004 — 

Total 9,96,246 33,32,160 

Closing Stock 

Gold 100 grams — 2 — 2,38,242 

Gold 8 grams — 78 — 7,58,004 

Total — 9,96,246 

2.4 RELATED PARTY TRANSACTIONS 

As per AS-18 on “Related Party Disclosures” issued by the ICAI, the disclosures of transactions with the related 

parties of the company are as follows: 

A) LIST OF RELATED PARTIES AND THEIR RELATIONSHIP 

(A) HOLDING COMPANY 

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

ADITYA BIRLA NUVO LTD (upto February 23, 2010) 

ADITYA BIRLA MONEY LTD (w.e.f. April 2, 2004) 

(B) FELLOW SUBSIDIARY COMPANY (W.E.F. MARCH 6, 2009) 

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

2008) 

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

2008) 

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFSPL)(w.e.f. November 4, 2008 and 

ceased to be a subsidiary w.e.f. March 13, 2009) 

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

2008) 

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

Aditya Birla Money Mart Limited(ABMML) (formerly known as Birla Sun Life Distribution Company 

Limited) (Subsidiary of ABFSPL) (w.e.f. March 31, 2009) 


Aditya Birla Minacs Worldwide Limited.(ABMWL) 



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

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

Worldwide Inc.) 


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

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

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


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



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

Birla Insurance Advisory & Broking Services Limited. (BIABSL) (50.01% Subsidiary of BGCFPL upto 

March 30, 2009 and of ABFL w.e.f March 31, 2009) 


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

Madura Garments International Brand Company Limited (MGIBCL) (on becoming Associate, ceased 

to be an subsidiary w.e.f. November 27, 2009) 

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

w.e.f. November 27, 2009) 

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



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

1, 2010) 

Peter England Fashions and Retail Company Limited. (PEFRL) 

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


(C) KEY MANAGEMENT PERSONNEL 

Mr. Sudhakar Ramasubramanian, Director 

Mr. Kanwar Vivek, Director 

B) During the year the following transactions were carried out with Related Parties in the ordinary 

course of Business: 

(Rs. In Lacs) 

Sr. No. Particulars Closing Balance Value of Transaction 

a 

b 

2.5 SEGMENT REPORTING 

Aditya Birla Money Ltd 


- Inter corporate loan taken including interest — — 700.00 —- 

- Employee payments — — 120.00 100.00 

- Others — 43.12 152.23 825.00 

Aditya Birla Money Mart Limited 

- Business development fee payment — — 355.60 — 

- Service tax on Business development 

fee payment — — 36.63 — 

The Company is principally engaged in the business of Commodities Broking and related activities. Accordingly, 

there are no reportable segments as per Accounting Standard 17 issued by The Institute of Chartered 

Accountants of India. 

2.6 DEFERRED TAXATION 

In conformity with the Accounting Standard 22 issued by the Institute of Chartered Accountants of India on 

Accounting for Taxes on Income, an amount of Rs.7.02 lacs has been transferred from profit and loss account 

towards Deferred Tax Liability. The components of Deferred Tax liability / assets are given below: 

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(Rs. In lacs) 

PARTICULARS 31-03-2010 31-03-2009 

a) Depreciation (Deferred Tax Liability) 32.75 26.46 

b) Loss carried forward to subsequent years (Deferred Tax Asset) — (0.73) 

TOTAL 32.75 25.73 

2.7 EARNINGS PER SHARE (EPS) IS CALCULATED AS UNDER (Rs. In lacs except EPS) 


Net Profit as disclosed in the Profit Loss Account - (A) 320.64 57.11 

Number of Equity shares for calculation of Basic & 

Diluted Earnings Per Share - (B) 20.00 20.00 

Earnings Per Share (Basic & Diluted) - A / B 16.03 2.86 

2.8 FOREIGN EXCHANGE TRANSACTIONS 

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

2.9 Amounts shown under Sundry Debtors, Loans and Advances and Sundry Creditors are subject to confirmation 

from the parties concerned. However, in the opinion of the Board of Directors of the Company, the current 

assets, loans and advances have a value on realization, not less than the amounts at which they are stated in 

the Balance Sheet. 

2.10 No Provision is considered necessary for the retirement benefits of employees, as none of them are in the 

direct payroll of the company. 

2.11 Previous year’s figures have been regrouped / reclassified wherever necessary to confirm to this year’s 

classification. 

2.12 Figures have been rounded off to the nearest rupee. 











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A 

B 

C 

PARTICULARS 31-Mar-2010 31-Mar-2009 


Net Profit before tax 49,957,195 7,417,814 


Depreciation 3,324,251 3,131,435 

Provision for bad & doubtful debts & 

advances(Net) — 499,391 

Diminution in Value of Investments — 

Interest Expenses 808,464 427,156 

Interest Income (4,705,982) (3,248,791) 

(573,267) 809,191 

OPERATING PROFIT BEFORE WORKING 

CAPITAL CHANGES 49,383,928 8,227,005 

Decrease / (Increase) in trade and other 

receivables (160,020,395) (18,580,066) 

Increase / (Decrease) in trade and other 

payables 173,649,180 13,628,785 20,574,191 1,994,125 

CASH GENERATED FROM OPERATIONS 63,012,713 10,221,130 

Income Taxes Paid (14,200,000) (477,502) 

Rupees 

NET CASH FROM OPERATING ACTIVITIES 48,812,713 9,743,628 



Interest Received 4,705,982 3,248,791 

NET CASH (USED IN)/FROM INVESTING 

ACTIVITIES 2,830,175 (118,668) 


Interest and Finance Charges paid (808,464) (427,156) 

NET CASH (USED IN)/FROM FINANCING 

ACTIVITIES (808,464) (427,156) 

NET INCREASE IN CASH AND EQUIVALENTS 50,834,424 9,197,804 

CASH AND CASH EQUIVALENTS 

(OPENING BALANCE) 37,291,708 28,093,904 

CASH AND CASH EQUIVALENTS 

(CLOSING BALANCE) 88,126,132 37,291,708 

Notes: 

1) Cash and cash equivalents include: 

Cash, cheque in hand and remittance in transit 

Balance with Banks 88,126,132 37,291,708 

88,126,132 37,291,708 

2) Previous year’s figures have been regrouped / rearranged to confirm to the current year’s presentation, whenever necessary. 

As Per Our attached Report of even date 




(Formerly Known as Apollo Sindhoori Commodities Trading Ltd) 






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I 

II 

Registration Details 

Registration No. 5 1 7 4 2 State Code 1 8 



Capital Raised during the Year (Amount in Rs. Thousands) 

Public Issue 

Rights Issue 

N I L N I L 

Bonus Issue 


N I L N I L 

III 

Position of Mobilization and Development of Fund (Amount in Rs. Thousands) 


Total Assets 

4 8 5 5 6 4 8 5 5 6 

Source of Funds Paid-up Capital Reserves & Surplus 

2 0 0 0 0 2 5 2 8 1 

Secured Loans 


N I L N I L 

Deferred Tax 

3 2 7 5 

Application of Funds Net Fixed Assets Investments 

1 3 2 5 5 N I L 



3 5 3 0 1 N I L 

IV 

Performance of Company (Amount in Rs. Thousands) 

Total Income 


1 5 3 7 4 0 1 0 3 7 8 3 

Profit / Loss Before Tax 


4 9 9 5 7 3 2 0 6 4 

Earning per Share Rs. Dividend Rate % 

1 6 . 0 3 N I L 

V 

Generic Names of Principal Products/Services of Company (as per Monetary Terms) 

Item Code No. (ITC Code) 


N I L Commodity Broking 



Kanwar Vivek 

Director 

Sudhakar Ramasubramanian 

Director 


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ADITYA BIRLA CAPITAL ADVISORS PRIVATE LIMITED 



Your Directors are pleased to present the 2 nd Annual Report together with 

the Audited Accounts of the Company for the year ended March 31, 2010. 

FINANCIAL HIGHLIGHTS 

Rs. Crores 

Profit and Loss Account 2009-10 2008-09 

Net Income from Operations 3.72 — 

Other Income 0.07 — 

Operating Profit/(Loss) (1.19) (0.01) 

Financial Expenses (0.01) — 

Depreciation (0.15) — 

Profit/(Loss) before Tax and 

Exceptional items (1.35) (0.01) 

FINANCIAL PERFORMANCE REVIEW 

Your Directors are pleased to inform that the First Closing of Aditya Birla 

Private Equity – Fund I (“ABPE – Fund I”) in January 2010 at Rs678.75 crore 

leading up to the Final Closing in the month of March with a cumulative 

fund size of Rs880.63 crore. 

The Company started generating operating income since the month of 

January 2010 by way of Management Fees. The operating expenditure 

including administrative and other expenses were incurred for the full FY 

2009-10. This accordingly led to a loss before tax of Rs.1.35 crore for the 

year. 

OPERATIONAL PERFORMANCE REVIEW 

Despite the global economic and capital market conditions improving 

gradually in the year under review as compared with the previous year, the 

Private Equity (PE) investments in India (excluding Real Estate investments) 

reached only to the level of US $ 3.82 billion in calendar year 2009 as 

against the peak level of US $14 billion in calendar year 2007 and against 

US $10.5 billion in calendar year 2008. The fund raising by PE Funds is yet 

to revert to the high levels it reached during calendar year 2007 [Source: 

Venture Intelligence]. 

Notwithstanding the challenges of weak fund-raising environment in India 

as well as globally and rising competition in India with increasing number of 

players starting to offer PE products, your Company was successful in 

converting its strengths to conclude raising ABPE – Fund I with a respectable 

size of Rs.880.63 crores. This demonstrates the trust of investors in the 

investment management team of the Fund, the product features, besides 

their trust in the Aditya Birla Financial Services Group and the parent, the 

Aditya Birla Group, in general. 

ACTIVITIES UPDATE ON FUNDS UNDER INVESTMENT MANAGEMENT 

ABPE – Fund I had drawn-down 20% of corpus from Contributors 

which was collected along with signing of Contribution Agreements. Out of 

the drawn-down amount of Rs.176.12 crore; ABPE – Fund I has already 

invested and disbursed Rs.61.47 crores while another Rs.10 crores is 

committed for disbursement to a portfolio company in second phase 

during Q1 FY2010-11. 

While the ABPE – Fund I is sector-agnostic, it avoids hard-core real estate 

projects and on-paper type start-up companies from its scope. The ABPE – 

Fund I is over-weight on infrastructure and related opportunities besides 

various other growth oriented companies in the mid-market with potential 

for profitable growth and of becoming leaders in their areas of operations. 

BUSINESS OUTLOOK 

In recent years, Private Equity has become an important component of means 

of equity financing for unlisted (and in certain cases, listed) companies and 

the Promoters of such companies are increasingly realizing the potential of 

a right PE investor to benefit their companies in multifold way. An interesting 

business model of PE has started emerging whereby a larger number of 

serious and long-term focused entrepreneurs see immense value in active 

investment management style of select PE Funds which help them through 

vast networks, reach, strategic inputs and value-addition of the PE investment 

team. Your Company targets to customize this model for this maiden 

ABPE – Fund I. 

The favorable outlook on India with the improved working of medium size 

companies is expected to provide multiple investment opportunities for the 

ABPE – Fund I. The investment management team has looked at multiple 

deals in mid-market segment and is carefully focusing on zeroing in the 

deals that best meet the value-creation criterion. The sustained growth in 

the Indian economy across sectors, and especially in infra related segments, 

shall be conducive for ABPE – Fund I to be able to generate profitable 

avenues and deals across multiple industries. 

DIVIDEND 

In view of the loss, your directors do not recommend any dividend for the 


DIRECTORS 

Mr. Ajay Srinivasan, Director, retires by rotation at the ensuing Annual General 

Meeting and, being eligible, offers himself for re-appointment. 


Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors 

confirm that: 

• In the preparation of the annual accounts, the applicable standards 

have been followed. 

• The Directors have selected such accounting policies and applied them 



the Company at the end of the financial year and of the profit of the 

Company for that year. 

• The Directors have taken proper and sufficient care for the maintenance 




• The Directors have prepared the attached Statement of Accounts for 

the period ended March 31, 2010 on a “going concern basis”. 

HUMAN RESOURCES 

There were no employees in the Company during the FY 2009-10. 

AUDITORS 

M/s. S.R Batliboi & Co., Chartered Accountants, Mumbai, Statutory Auditors 

of the Company retire at the ensuing Annual General Meeting and are 

eligible for re-appointment. The Company has received a certificate from 

the Auditors to the effect that their appointment, if made, would be within 

the prescribed limits under section 224(1B) of the Companies Act, 1956. 

The members are requested to appoint the Auditors and authorize the Board 

to fix their remuneration. 


The observations, if any, made by the Auditors of the Company in their 

report read with relevant notes to the Accounts are self-explanatory and, 

therefore do not call for any further comments under section 217(3) of the 

Companies Act, 1956. 

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The Company has not accepted or renewed any deposit from the public 

during the year under review. 


During the year under review, there were no employees in the Company 

and therefore the disclosure as prescribed under section 217(2A) of the 

Companies Act, 1956 and the rules made there under are not applicable to 

the Company. 

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, 

FOREIGN EXCHANGE EARNINGS AND OUTGO 

The requirements of disclosures in terms of Section 217(1)(e) of the 

Companies Act, 1956 read with the Companies (Disclosures of the Particulars 

in the Report of the Board of Directors) Rules, 1988 pertaining to the 

conservation of energy and technology absorption are not applicable to the 

Company due to the very nature of the industry in which it operates. 

During the year under review, there was no foreign exchange earnings 

and outgo. 

ACKNOWLEDGMENTS 

The Directors wish to express their gratitude to the bankers and all business 

associates for their continuous support to the Company and to the 

Shareholders for the confidence reposed in the Company’s management. 



Director 

Bharat Banka 

Director 

Mumbai 

April 29, 2010. 

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AUDITORS REPORT 

To, 

The Members of Aditya Birla Capital Advisors Private Limited 

1. We have audited the attached Balance Sheet of Aditya Birla Capital 

Advisors Private Limited (the ‘Company’) as at March 31, 2010 and 

also the Profit and Loss Account, and the Cash Flow Statement for 

the year ended on that date annexed thereto. These financial 

statements are the responsibility of the Company’s management. Our 

responsibility is to express an opinion on these financial statements 

based on our audit. 

2. We conducted our audit in accordance with auditing standards 

generally accepted in India. Those Standards require that we plan 

and perform the audit to obtain reasonable assurance about whether 

the financial statements are free of material misstatement. An audit 

includes examining, on a test basis, evidence supporting the amounts 

and disclosures in the financial statements. An audit also includes 

assessing the accounting principles used and significant estimates 

made by management, as well as evaluating the overall financial 

statement presentation. We believe that our audit provides a 

reasonable basis for our opinion. 

3. As required by the Companies (Auditor’s Report) Order, 2003 (as 

amended) issued by the Central Government of India in terms of 

sub-section (4A) of Section 227 of the Companies Act, 1956, we 

enclose in the Annexure a statement on the matters specified in 

paragraphs 4 and 5 of the said Order. 


that: 

i. We have obtained all the information and explanations, which 

to the best of our knowledge and belief were necessary for the 

purposes of our audit. 

ii. In our opinion, proper books of account as required by law 

have been kept by the Company so far as appears from our 

examination of those books. 

iii. The balance sheet, profit and loss account, and cash flow 

statement dealt with by this report are in agreement with the 

books of account. 




211 of the Companies Act, 1956. 





director in terms of clause (g) of sub-section (1) of section 274 

of the Companies Act, 1956. 






a) in the case of the balance sheet, of the state of affairs of 

the Company as at March 31, 2010; 

b) in the case of the profit and loss account, of the loss for the 




For S. R. Batliboi & Co., 




Partner 


Place: Mumbai 


Annexure referred to in paragraph [3] of our report of even 

date 

Re: Aditya Birla Capital Advisors Private Limited (the ‘Company’) 

(i) (a) The Company has maintained proper records showing full 

particulars, including quantitative details and situation of 

fixed assets. 

(ii) 

(b) 

(c) 

Fixed assets have been physically verified by the 

management during the year and no material discrepancies 

were identified on such verification. 

There was no disposal of fixed assets during the year. 

The Company does not have any inventory. Hence, the provisions 

of Clauses 4(ii) (a), (b) and (c) of the Companies (Auditor’s Report) 

Order, 2003 (as amended) are not applicable to the Company. 

(iii) (a) As informed, the Company has not granted any loans, 

secured or unsecured to companies, firms or other parties 

covered in the register maintained under section 301 of 

the Companies Act, 1956. Hence, the provisions of clauses 

4 (iii) (a), (b) (c) and (d) of the Companies (Auditor’s Report) 

Order, 2003 (as amended) are not applicable to the 

Company. 

(iv) 

(b) 

As informed, the Company has not taken loan from a 

Company covered in the register maintained under section 

301 of the Companies Act, 1956. Hence, the provisions 

of clauses 4 (iii) (e) and (f) of the Companies (Auditor’s 

Report) Order, 2003 (as amended) are not applicable to 

the Company. 

In our opinion and according to the information and explanations 

given to us, there is an adequate internal control system 

commensurate with the size of the Company and the nature of its 

business, for the purchase of fixed assets and for the sale of goods 

and services. During the course of our audit, no major weakness 

has been noticed in the internal control system in respect of these 

areas. During the course of our audit, we have not observed any 

continuing failure to correct major weakness in internal control 

system of the Company. 

(v) (a) According to the information and explanations provided 

by the management, we are of the opinion that the 

particulars of contracts or arrangements referred to in 

section 301 of the Act that need to be entered into the 

register maintained under section 301 have been so 

entered. 

(vi) 

(vii) 

(viii) 

(b) 

In our opinion and according to the information and 

explanations given to us, the transactions made in 

pursuance of such contracts or arrangements exceeding 

value of Rupees five lacs have been entered into during 

the financial year at prices which are reasonable having 

regard to the prevailing market prices at the relevant time. 

The Company has not accepted any deposits from the public. 

The provisions relating to internal audit are not applicable to the 

Company for the year. 

To the best of our knowledge and as informed to us, Central 

Government has not prescribed maintenance of cost records under 

clause (d) of sub-section (1) of section 209 of the Companies Act, 

1956 for the products of the Company. 

(ix) (a) The Company is regular in depositing with appropriate 

authorities undisputed statutory dues including incometax, 

sales-tax, wealth-tax, service tax, cess and other 

material statutory dues applicable to it. Provisions related 

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C M Y K 


(x) 

(xi) 

(xii) 

(xiii) 

(xiv) 

(b) 

(c) 

to provident fund, investor education and protection fund, 

employees’ state insurance, customs duty, excise duty are 

not applicable to the Company. 

According to the information and explanations given to 

us, no undisputed amounts payable in respect of provident 

fund, investor education and protection fund, employees’ 

state insurance, income-tax, wealth-tax, service tax, salestax, 

customs duty, excise duty, cess and other undisputed 

statutory dues were outstanding, at the year end, for a 

period of more than six months from the date they became 

payable. 


us, there are no dues of income tax, sales-tax, wealth tax, 

service tax, , customs duty, excise duty and cess which have 

not been deposited on account of any dispute. 

The Company has been registered for a period of less than five 

years and hence we are not required to comment on whether or 

not the accumulated losses at the end of the financial year is fifty 

per cent or more of its net worth and whether it has incurred cash 

losses in such financial year and in the immediately preceding 

financial year. 

Based on our audit procedures and as per the information and 

explanations given by the management, we are of the opinion 

that the Company does not have any dues to a financial institution, 

bank or debenture holders. 

According to the information and explanations given to us and 

based on the documents and records produced to us, the Company 

has not granted any loans and advances on the basis of security 

by way of pledge of shares, debentures and other securities. 

In our opinion, the Company is not a chit fund or a nidhi / mutual 

benefit fund / society. Therefore, the provisions of clause 4(xiii) of 

the Companies (Auditor’s Report) Order, 2003 (as amended) are 



given to us, the Company has not dealt/traded in shares, securities, 

debentures and other investments. Therefore provisions of Clause 

4(xiv) of the Companies (Auditor’s Report) Order, 2003 

(as amended) are not applicable to the Company. 

(xv) 

(xvi) 

(xvii) 

(xviii) 

(xix) 

(xx) 

(xxi) 

According to the information and explanations given to us, the 

Company has not given any guarantee for loans taken by others 

from bank or financial institutions. 

As informed to us, the Company has not raised any term loans 

during the year. Hence provision of clause 4(xvi) of the Companies 

(Auditor’s Report) Order, 2003 (as amended) is not applicable to 

the Company. 

According to the information and explanations given to us and on 

an overall examination of the balance sheet of the Company, we 

report that no funds raised on short-term basis have been prima 

facie used for long-term investment. 

The Company has not made any preferential allotment of shares 

to parties or companies covered in the register maintained under 

section 301 of the Companies Act, 1956. 

According to the information and explanations given to us, during 

the period covered by our audit report, the Company has not 

issued any debentures during the year and hence provision (xix) of 

the Companies (Auditor’s Report) Order, 2003 (as amended) is 


As informed to us, the Company has not raised any money by way 

of public issues during the year. Hence, the provision of clause 

(xx) of the Companies (Auditor’s Report) Order, 2003 (as amended) 

is not applicable to the Company. 

Based upon the audit procedures performed for the purpose of 

reporting the true and fair view of the financial statements and as 

per the information and explanations given by the management, 

we report that no fraud on or by the Company has been noticed 

or reported during the course of our audit. 


Partner 


Place: Mumbai 





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C M Y K 


BALANCE SHEET AS AT MARCH 31, 2010 

Amount in Rupees 

Schedules As at As at 





Share capital 1 35,000,000 300,000 

Deferred tax liabilities 

(Refer note no. 7 of Schedule 10) — — 

Total 35,000,000 300,000 




Less: Accumulated 

Depreciation / Amortization 1,457,422 — 

Net Block 9,938,068 — 

Investments 3 55,083,479 — 

Current assets, 

loans and advances 

Cash and bank balances 4 22,537,112 250,725 

Loans and advances 5 89,504,679 — 

(A) 112,041,791 250,725 

Less: Current liabilities 

and provisions 

Current liabilities 6 155,688,139 56,481 

(B) 155,688,139 56,481 

Net current assets (A-B) (43,646,348) 194,244 

Debit balance in Profit 

and Loss Account 13,624,801 105,756 

35,000,000 300,000 




PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 



Schedules Year ended Period ended 



Management Fee (Gross) 40,982,406 — 

Less: Service Tax 3,827,006 — 

Management Fee (Net) 37,155,400 

(Tax Deducted at source 

Rs. 4,098,241/-(Previous Year Rs.Nil) 

Dividend from mutual fund 762,271 

Total 37,917,671 — 

EXPENDITURE 

Personnel costs 7 29,780,273 — 

Administrative and other expenses 8 20,023,430 98,206 

Financial expenses 9 155,591 — 

Depreciation / Amortization 2 1,457,422 — 

Preliminary expenses — 7,550 

Total 51,416,716 105,756 

(Loss) before tax (13,499,045) (105,756) 

Provision for tax: 

- Current tax — — 

- Wealth tax 20,000 

- Deferred tax 

(Refer note No. 7 of Schedule 10 ) — — 

(Loss) after tax (13,519,045) (105,756) 

Balance for the previous period (105,756) — 

Loss after tax carried forward to 

Balance Sheet (13,624,801) (105,756) 

Basic/ Diluted Earnings Per Share 

(Refer note 6 of Schedule 10) (15.13) (4.84) 

[Nominal value per share Rs. 10] 

(Previous year Rs.10/-) 


The schedules referred to above and notes to accounts form an integral part of Profit and 

Loss Account. 





Partner 



Aditya Birla Capital Advisors Private Limited 


Director 

Bharat Banka 

Director 





Partner 





Director 

Bharat Banka 

Director 

Place: Mumbai 


Place: Mumbai 


Place: Mumbai 


Place: Mumbai 


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CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 


For the 

For the 

year ended 

period ended 


A. CASH FLOW FROM OPERATING ACTIVITIES 

Net (Loss) before tax (13,499,045) (105,756) 


Divident Reinvestment (762,271) — 

Depreciation/ amortisation 1,457,422 — 

Preliminary expneses 7,550 

Interest on inter corporate deposits 155,591 

Operating profit before working capital changes (12,648,303) (98,206) 

Adjustment for changes in working capital: 

Increase/(Decrease) in Current liabilities 155,611,658 56,481 

(Increase)/Decrease in Loans and advances (73,586,618) — 

Cash from operating activities 69,376,736 (41,725) 

Preliminary expneses paid — (7,550) 

Tax deducted at source (15,918,061) — 

A 53,458,675 (49,275) 

B. CASH FLOW FROM INVESTING ACTIVITIES — 0 

Dividend from mutual fund units 

Purchase of Fixed Assets (11,395,490) — 

Purchase of Investment (289,651,164) — 

Sale proceeds from investments 235,329,957 

Net Cash used in Investing Activities B (65,716,697) — 

C. CASH FLOW FROM FINANCING ACTIVITIES 

Proceeds from issue of equity shares 34,700,000 300,000 

Interest on inter corporate deposits (155,591) 

Net Cash From Financing Activities C 34,544,409 300,000 

Net increase in Cash and Cash Equivalents during the year (A+B+C) 22,286,387 250,725 

Cash and Cash equivalent at beginning of the period 250,725 — 

Cash and Cash equivalent at end of the period 22,537,112 250,725 

Notes : 

1) Cash and Cash equivalent includes : 

Cash in hand 14,161 107 

Balance with Banks 22,522,951 250,618 

Total 22,537,112 250,725 

2) The Company was incorporated on February 22, 2008. Accordingly the comparative previous period figures given are not fully comparable as in the current year the 

figures are for whole financial year. 

3) The figures for the previous period have been re-grouped/re-arranged wherever necessary. 





Partner 


Place: Mumbai 




Ajay SrinivasanAjay Srinivasan 

Director 

Bharat BankaBharat Banka 

Director 

Place: Mumbai 


(258)

C M Y K 


Schedules annexed to and forming part of Balance Sheet as at 

March 31, 2010 


As at 

As at 


SCHEDULE 1 - SHARE CAPITAL 

Authorised 

5,000,000 Equity Shares of Rs. 10/- each 50,000,000 600,000 

(Previous year 60,000 Equity shares) 

50,000,000 600,000 


3,500,000 (Previous year 30,000) Equity Shares of 

Rs.10/- each fully paid up 35,000,000 300,000 

(Out of the above, 3,500,000 (Previous year 30,000 shares) 

shares are held by the Holding Company: viz, 

Aditya Birla Financial Services Private Limited and its nominees) 

Total 35,000,000 300,000 


As at 

As at 


SCHEDULE 3 - INVESTMENTS 

Current Investments (At lower of cost and 

Net asset value) (Unquoted) 

5,504,604,706 units (previous period Nil) of 

Birla Sun Life Saving Fund Institutional 

Daily Dividend Reinvestment Scheme 55,083,479 — 

of Rs.10 each fully paid 

[Net asset value Rs 55,083,478 (Previous period Nil)] 

55,083,479 — 


Details of investments purchased and For the year For the period 

sold during the year No. of units* March 31, 2010 March 31, 2009 

Birla Sun Life Saving Fund Institutional 

Daily Dividend Reinvestment 8,034,936 (-) 80,404,000 — 

Birla Sun Life Cash Plus - Institutional 

Daily Dividend Reinvement 1,394,062(-) 15,059,078 — 


Premium Daily Dividend Reinvesment 13,456,784(-) 134,830,256 — 

Birla Sun Life Cash Plus - Retail Daily 

Dividend Reinvestment 307,685(-) 5,036,623 — 

*(figures in brackets relate to previous year figures) 



GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK 

Description Balance Additions Deductions Balance Balance For the Deductions Balance Balance Balance 

as on during the during the as on as on year during the as on as on as on 

April 1, year year March 31, April 1, year March 31, March 31, March 31, 

2009 2010 2009 2010 2010 2009 

Computers and Printers — 2,878,029 — 2,878,029 — 431,889 — 431,889 2,446,140 — 

Furniture & Fixtures* — 519,678 — 519,678 — 51,272 — 51,272 468,406 — 

Office Equipments** — 397,071 — 397,071 — 62,476 — 62,476 334,595 — 

Vehicles*** — 3,183,526 — 3,183,526 — 249,208 — 249,208 2,934,318 — 

Lease Hold Improvements**** — 4,417,186 — 4,417,186 — 662,577 — 662,577 3,754,609 — 

Total — 11,395,490 — 11,395,490 — 1,457,422 — 1,457,422 9,938,068 — 

Previous Period — — — — — — — — — — 

Note 

* Includes assets amounting to Rs.120,336 held joinlty with the Group Company. 

** Includes assets amounting to Rs.11,119 held joinlty with the Group Company. 

*** Company has purchased these Vehicles in the last quarter of the year and are in the process of registration of the same in the name of the company. 

**** Includes assets amounting to Rs. 1,773,596 held jointly with the Group Company. 


As at 

As at 



Cash on hand 14,161 107 

Balance with scheduled banks: 

- on current account 22,522,951 250,618 

Total 22,537,112 250,725 


Unsecured, considered good 

Advance income taxes (net of provision for tax) 15,918,061 — 

Advances recoverable in cash or kind or for value to be received 2,758,986 — 

Prepaid distribution expense (Refer note no.10 of schedule 10) 70,821,073 — 

Others 6,559 — 

89,504,679 — 


As at 

As at 


SCHEDULE 6 - (A) CURRENT LIABILITIES 

Sundry creditors (Refer note no. 9 of Schedule 10) 



(b) total outstanding dues of creditors other than micro 

enterprises and small enterprises 46,154,326 50,081 


Management fees received in advance 107,160,658 — 

Total 155,688,139 56,481 

(259)

C M Y K 



Year ended Period ended 


SCHEDULE 7 - PERSONNEL COSTS 

Manpower Costs 29,695,511 — 

Staff welfare expenses 84,763 — 

29,780,273 — 

SCHEDULE 8 - ADMINISTRATIVE AND MARKETING EXPENSES 

Rent 10,422,755 — 

Maintenance 842,807 — 

Rates and taxes 849,749 18,020 

Stamp duty and filing fees 516,680 — 

Facilities management expenses 321,957 — 

Distribution expense (Refer note no.10 of schedule 10) 3,943,039 — 

Electricity 721,081 — 

Travelling 79,814 — 

Telephone Expenses 226,648 — 

Printing and stationery 157,640 — 

Legal and professional 401,121 12,000 

Directors’ sitting fees 100,000 — 

Auditors’ remuneration 

Audit fee 200,000 50,000 

Tax audit fee 75,000 — 

Out-of-pocket expenses 3,000 — 

Software license expenses 310,668 11,232 

Miscelleneous expenses 851,471 6,954 

20,023,430 98,206 

SCHEDULE 9 - FINANCIAL EXPENSES 

Interest (other than banks) 154,019 — 

Bank Charges 1,572 

155,591 — 

(260)

C M Y K 


SCHEDULE 10 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 

1. BACKGROUND 

Aditya Birla Capital Advisors Private Limited (‘the Company’) was incorporated on February 

22, 2008 under the provisions of Companies Act, 1956 (the ‘Act’). The main object of the 

Company is to provide financial advisory services and management services and to carry 

on business of advising and managing venture capital funds. The Company was appointed 

as Investment Manager to the “Aditya Birla Private Equity – Fund I” (the ‘Fund’). 

2. SIGNIFICANT ACCOUNTING POLICIES 

(i) Basis of Accounting 


the notified Accounting Standard by Companies Accounting Standard Rules, 2006 

(as amended) and the relevant provisions of the Act. The financial statements have 

been prepared under the historical cost convention on an accrual basis. The accounting 

policies have been consistently applied by the Company and are consistent with 

those used in the previous period. 

(ii) 

(iii) 

Use of estimate 







estimates. 

Fixed Assets 

Fixed assets are stated at cost less accumulated depreciation. Cost comprises the 

purchase price and any attributable cost of bringing the asset to its working condition 

for its intended use. 

Fixed assets costing Rs. 5,000 or less are individually depreciated or amortized in the 

year of purchase. 

Dividends 

Revenue is recognised when right to receive payment is established by the balance 

sheet date. 

(viii) Income taxes 

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax 

and fringe benefit tax is measured at the amount expected to be paid to the tax 

authorities in accordance with the Indian Income Tax Act. Deferred income taxes 

reflects the impact of current year timing differences between taxable income and 

accounting income for the year and reversal of timing differences of earlier years. 

(ix) 


substantively enacted at the balance sheet date. Deferred tax assets are recognised 

only to the extent that there is reasonable certainty that sufficient future taxable income 

will be available against which such deferred tax assets can be realised. In situations 

where the Company has unabsorbed depreciation or carry forward tax losses, all 

deferred tax assets are recognised only if there is virtual certainty supported by 

convincing evidence that they can be realised against future taxable profits. 

At each balance sheet date the Company re-assesses unrecognized deferred tax 

assets. It recognises unrecognised deferred tax assets to the extent that it has become 

reasonably certain or virtually certain, as the case may be that sufficient future taxable 

income will be available against which such deferred tax assets can be realized. 

The carrying amount of deferred tax assets are reviewed at each balance sheet date. 

The company writes down the carrying amount of a deferred tax asset to the extent 

that it is no longer reasonably certain or virtually certain, as the case may be, that 

sufficient future taxable income will be available against which deferred tax asset can 

be realised. Any such write-down is reversed to the extent that it becomes reasonably 

certain or virtually certain, as the case may be, that sufficient future taxable income 

will be available. 

Preliminary expenditure 

Preliminary expenses are charged to profit and loss account in the year in which it is 

incurred. 

(iv) 

(v) 

Depreciation is provided using the Straight Line Method as per the useful lives of the 

assets estimated by the management, or at the rates prescribed under schedule XIV 

of the Companies Act, 1956 whichever is higher. 

Leasehold improvements are amortised on the straight line basis over the period of 

five years. 

Impairment 

The carrying amounts of assets are reviewed at each balance sheet date to ascertain 

if there is any indication of impairment based on internal/external factors. In assessing 

value in use, the estimated future cash flows are discounted to their present value at 

the weighted average cost of capital. 

After impairment, depreciation is provided on the revised carrying amount of the 

asset over its remaining useful life. 

Leases 


ownership of the leased item, are classified as operating leases. Operating lease 

payments are recognized as an expense in the Profit and Loss Account on a straightline 

basis over the period of five years. 

(x) 

(xi) 

Earnings per share 

Basic earnings per share are calculated by dividing the net profit for the period 



Provisions 

Provision is recognized when the enterprise has a present obligation as a result of 



discounted to their present value and are determined based on management estimate 



3. Capital Commitments 

Estimated amounts of contracts remaining to be executed on capital account not provided 

for amounts to Rs. NIL/- (Previous year NIL). 

4. Contingent Liabilities 

The Company has no contingent liabilities as at March 31, 2010 (Previous year NIL). 

(vi) 

Investments 







(vii) Revenue recognition 



Management Fees 

Management fees have been accrued in accordance with the investment management 

agreement entered into between the Company and the Fund. 

5. Related Party Disclosures: 

Name and relationship with the parties where control exits:- 

Parties where control exits: 

Ultimate Holding Company 




Entity being governed by the 

Company as Manager to the Trust 

Key Management Person 

Other Related party with whom 

the Company has transactions 

during the year: 


Aditya Birla Private Equity Fund – I (A scheme 

floated by the Aditya Birla Private Equity Trust) 

Mr. Bharat Banka, Director 


Schemes of Birla Sun Life Mutual Fund 

(261)

C M Y K 


Related Parties Transactions 


Particulars For the For the 

year ended 

period ended 


Transactions 


Unsecured loan taken 6,000,000 — 

Interest on loan Paid 33,658 — 

Repayment of loan taken 6,000,000 — 


Reimbursement of expenses to the company 3,544,633 — 

Reimbursement for the acquisition of fixed assets 6,453,234 — 

Issue of equity shares 34,700,000 200,000 


Reimbursement of tax deducted at source 14,527 — 

Reimbursement of interest 120,362 — 

Paymet made by the Aditya Birla Capital Advisors 

to the trustee company in respect of initial 

expenses incurred by trustee on behalf of Trust 3,435,921 — 

Aditya Birla Private Equity Trust 

Receipt of money against initial expeses 

incurred by the company on behalf of the trust 3,435,921 — 

Receipt of Management fees 

(Inclusive service tax and management fee 

received in advance) 159,180,612 — 


Purchase of investments of the following schemes 

Birla Sun Life saving fund Institutional Daily 

Dividend Reinvestment 135,487,478 — 

Birla Sun Life Cash Plus - Institutional Daily 



Premium Daily Dividend Reinvestment 134,830,256 — 

Birla Sun Life Cash plus - Retail Daily 


Sale of investments of the following schemes 

Birla Sun Life Saving fund Institutional Daily 



Daily Dividend Reinvestment 15,059,078 — 


Premium Daily Dividend Reinvestment 134,830,256 — 



Dividend Income from the following schemes 

Birla Sun Llife Saving fund Daily Dividend Reinvestment 658,277 — 

Birla Sun Life Cash Plus - Institutional Daily 

Dividend Reinvestment 57,190 — 


Premium Daily Dividend Reinvestment 10,428 — 


Dividend Reinvestment 36,376 — 

Closing balance as at March 31, 2010: 


3,500,000 (previous year 28,000) equity shares of 

Rs. 10 each Fully Paid 34,98,0000 3000,000 

Creditors 9,015 — 


Particulars For the For the 

year ended 

period ended 




Aditya Birla Private Equity Trust 



Investments in units of Birla Sun Life Saving 

Fund Daily Dividend Reinvestment 55,083,478 — 

6. Earnings Per Share: 

Basic Earnings Per Share (EPS) is calculated by dividing the net loss for the year attributable 

to equity shareholders by the weighted average number of equity shares outstanding during 

the year. There are no diluted potential equity shares outstanding during the year. 

Particulars Year ended Period ended 


Net loss after tax (Rs.) (13,519,045) (105,756) 

Weighted average number of shares 893,562 21,832 

Nominal value per share (Rs.) 10 10 

Basic / Diluted earnings per share (Rs.) (15.13) (4.84) 

7. Deferred tax 

During the year, the company has recognized deferred tax asset to the extent of deferred tax 

liability. 


Deferred tax liability As at As at 


Fixed Assets 279,245 — 

Unamortized distribution expense 24,072,083 — 

Sub-Total (A) 24,351,327 — 

Deferred tax assets 

Unabsorbed losses and allowances 25,595,383 — 

Preliminary expenses 1,540 — 

Sub-Total (B) 25,596,922 — 

Deferred tax assets recognised to the 

extent of Deferred tax liabilities 24,351,327 

Deferred tax assets/Liabilities (net) — — 

8. Operating leases 

Office premises are obtained on operating lease. The lease term is for 3 years and renewable 

for further 3 years of two terms at the option of the Company. There is an escalation clause 

in the lease arrangement. There are no restrictions imposed by lease arrangements. There 

are no subleases. 




Lease rental payment for the year 10,422,755 — 

Future minimum lease payments are as under. 

Lease Obligations As at As at 


Not later than one year 10,422,755 — 

Later than one year but not later than five years 41,691,021 — 

Later than 5 years — — 

Total 52,113,776 — 

9. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 

The company has initiated the process of the identification of suppliers registered under 

Micro, Small and Medium Enterprise Development Act, 2006, by obtaining confirmation 

from all suppliers. Information has been collated only to the extent of information received 

as at the balance sheet date. 

(262)

C M Y K 


Based on the information available with the company there are no suppliers who are 

registered as micro, small and medium enterprise under the Micro, Small and Medium 

Enterprise Development Act, 2006 as at March 31, 2010. 

Particulars Year ended Period Ended 



the principal amount and the interest due 

thereon (to be shown separately) remaining 

unpaid to any supplier as at the end of 

each accounting year; Nil Nil 

the amount of interest paid by the buyer 

in terms of section 16, of the Micro, Small 

and Medium Enterprise Development Act, 

2006 along with the amounts of the payment 

made to the supplier beyond the appointed 

day during each accounting year; Nil Nil 

The amount of interest due and payable for 

the period of delay in making payment 

(which have been paid but beyond the 

appointed day during the year) but without 

adding the interest specified under Micro, Small 

and Medium Enterprise Development Act, 2006; Nil Nil 

the amount of interest accrued and remaining 

unpaid at the end of each accounting year; and Nil Nil 

the amount of further interest remaining due 

and payable even in the succeeding years, 

until such date when the interest dues as above 

are actually paid to the small enterprise for the 

purpose of disallowance as a deductible 

expenditure under section 23 of the Micro, Small 

and Medium Enterprise Development Act, 2006; Nil Nil 

10. Distribution Cost 

Distribution costs incurred by the Company in respect of Aditya Birla Private Equity - Fund I 

has been accrued over the Commitment Period of the Fund I as defined in the Fund’s 

Private Placement Memorandum. 


Since the Company operates in single segment (i.e., rendering of management services), 

no further disclosure is required to be given as per the notified AS -17 ‘Segmental Reporting’. 

12. Additional Information Pursuant to Schedule VI 

Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of part II of 

the Schedule VI to the Companies Act, 1956 is not provided, as these provisions do not 

apply to the Company. 

13. Prior Period Comparatives 

These financial statements have been prepared from April 1, 2009 to March 31, 2010, 

whereas previous period was from February 22, 2008 to March 31, 2009. The corresponding 

figures for the previous period are therefore not comparable with those of current year. 

Previous period figures have been regrouped/reclassed wherever necessary. 





Partner 


Place: Mumbai 





Director 

Bharat Banka 

Director 

Place: Mumbai 


(263)

C M Y K 

ADITYA BIRLA TRUSTEE COMPANY PRIVATE LIMITED 

Directors' Report to the Shareholders 


Your Directors are pleased to present the 2nd Annual Report together with 

the Audited Accounts of the Company for the year ended March 31, 2010. 

Financial Highlights 

Rs. Lacs 

Profit and Loss Account 2009-10 2008-09 

Net income from Operations 1.05 — 

Operating Profit/(Loss) (0.69) (1.55) 

Financial Performance Review 

Your Directors are pleased to inform the First Closing of Aditya Birla Private 

Equity - Fund I ("ABPE - Fund I") in January, 2010 at Rs678.75 crore led up 

to the Final Closing in the month of March with a cumulative fund size of 

Rs880.63 crore. 

The Company started generating operating income since the month of 

January 2010 by way of Trusteeship Fees. The operating expenditure including 

administrative and other expenses were incurred for the full FY 2009-10. 

This accordingly led to a loss before tax of Rs.0.69 lacs for the year. 

Operational Performance Review 

Despite the global economic and capital market conditions improving 

gradually in the year under review as compared with the previous year, the 

Private Equity (PE) investments in India (excluding Real Estate investments) 

reached only to the level of US $ 3.82 billion in calendar year 2009 as 

against the peak level of US $14 billion in calendar year 2007 and against 

US $10.5 billion in calendar year 2008. The fund raising by PE Funds is yet 

to revert to the high levels it reached during calendar year 2007 [Source: 

Venture Intelligence]. 

Notwithstanding the challenges of weak fund-raising environment in India 

as well as globally and rising competition in India with increasing number of 

players starting to offer PE products, ABPE - Fund I raised Rs.880.63 crores. 

Activities Update on Funds 

ABPE - Fund I had drawn-down 20% of corpus from Contributors which was 

collected along with signing of Contribution Agreements. Out of the drawndown 

amount of Rs.176.12 crore; ABPE - Fund I has already invested and 

disbursed Rs.61.47 crores while another Rs.10 crores is committed for 

disbursement to a portfolio company in second phase during Q1 FY2010-11. 

Business Outlook 

The favorable outlook on India with the improved working of medium size 

companies is expected to provide multiple investment opportunities for the 

ABPE - Fund I. The sustained growth in the Indian economy across sectors, 

and especially in infra related segments, shall be conducive for ABPE - Fund 

I to be able to generate profitable avenues and deals across multiple 

industries. 

Dividend 

In view of the loss, your directors do not recommend any dividend for the 


Directors 

Mr. Anil Chirania, Director, retires by rotation at the ensuing Annual General 


● 

● 

● 

● 

in the preparation of the annual accounts, the applicable standards 


the Directors have selected such accounting policies and applied them 




Company for that year. 

the Directors have taken proper and sufficient care for the maintenance 




the Directors have prepared the attached Statement of Accounts for the 

period ended March 31, 2010 on a "going concern basis". 

Human Resources 

There were no employees in the Company during the FY 2009-10. 

Auditors’ 

M/s. S.R Batliboi & Co., Chartered Accountants, Mumbai, Statutory Auditors 

of the Company retire at the ensuing Annual General Meeting and are 

eligible for re-appointment. The Company has received a certificate from 

the Auditors to the effect that their appointment, if made, would be within 

the prescribed limits under section 224(1B) of the Companies Act, 1956. 

The members are requested to appoint the Auditors and authorize the Board 

to fix their remuneration. 


The observations, if any made by the Auditors of the Company in their 

report read with relevant notes to the Accounts are self-explanatory and, 

therefore do not call for any further comments under section 217(3) of the 





Particulars of Employees 



Companies Act, 1956 and the rules made there under are not applicable to 

the Company. 

Conservation of Energy, Technology Absorption, Foreign Exchange 

Earnings and Outgo 


Companies Act, 1956 read with the Companies (Disclosures of the Particulars 





and outgo. 

Acknowledgments 

The Directors wish to express their gratitude to the bankers and all business 

associates for their continuous support to the Company and to the 

Shareholders for the confidence reposed in the Company's management. 




confirm that: 

Place: Mumbai 


Director 

Director 

(264)

C M Y K 


Auditors' Report 

To, 

The Members of Aditya Birla Trustee Company Private Limited 

1. We have audited the attached Balance Sheet of Aditya Birla Trustee 

Company Private Limited (the 'Company') as at March 31, 2010 and 



are the responsibility of the Company's management. Our responsibility 


audit. 







assessing the accounting principles used and significant estimates made 

by management, as well as evaluating the overall financial statement 



3. This report does not include a statement on the matters specified in 

paragraphs 4 and 5 of the Companies (Auditor's Report) Order, 2003 

(as amended), issued by the Central Government of India, in terms of 

Section 227(4A) of the Companies Act, 1956, since in our opinion 

and according to the information and explanations given to us, the 

said Order is not applicable to the Company. 

iii. 

iv. 

The balance sheet, profit and loss account, and cash flow 

statement dealt with by this report are in agreement with the 


In our opinion, the balance sheet, profit and loss account, and 








director in terms of clause (g) of sub-section (1) of section 274 


vi. 

In our opinion and to the best of our information and according 





a) in the case of the balance sheet, of the state of affairs of 


b) in the case of the profit and loss account, of the loss for 

the year ended on that date; and 

c) in the case of cash flow statement, of the cash flows for 

the year ended on that date. 


that: 

i. We have obtained all the information and explanations, which 



ii. 

In our opinion, proper books of account as required by law 



Mumbai, April 30, 2010 





Partner 


(265)

C M Y K 



Profit and Loss Account for the year ended on March 31, 2010 






Shareholders' Funds 

Share capital 1 500,000 100,000 

Loan Funds 

Unsecured Loan 2 — 3,350,000 

Total 500,000 3,450,000 



Cash and bank balances 3 517,086 74,071 

Loans and advances 4 170,362 3,357,207 

(A) 687,448 3,431,278 

Less: Current Liabilities and Provisions 

Current liabilities 5 411,221 136,034 

(B) 411,221 136,034 

Net Current Assets (A-B) 276,227 3,295,244 

Debit balance in Profit and Loss Account 223,773 154,756 

500,000 3,450,000 

Notes to Accounts 6 




Schedules Year ended Period ended 



Trusteeship fees received 

[(TDS Rs.10,547 (Previous year NIL)] 105,479 — 

Total 105,479 — 

EXPENDITURE 

Professional Fees 12,134 — 

Directors' Sitting Fees 90,000 10,000 

Auditors’ remuneration - audit fees 55,559 56,180 

Interest on unsecured loan — 68,854 

Miscellaneous expenses 16,803 3,497 

Preliminary expenses — 16,225 

Total 174,496 154,756 

Loss before tax (69,017) (154,756) 

Provision for tax: — — 

— Current tax — — 

— Deferred tax — — 

(Loss) brought forward for the 

previous period (154,756) — 

Loss after tax carried forward 

to Balance Sheet (223,773) (154,756) 

Basic/Diluted Earnings Per Share (6.90) (24.81) 

(Refer note 6 of Schedule 6) 

[Nominal value per share Rs.10] 

(Previous period Rs.10) 




Firm Registration No.: 301003E 









per Shrawan Jalan Director Director 

Partner 




Date : April 30, 2010 Date : April 30, 2010 

per Shrawan Jalan Director Director 

Partner 





(266)

C M Y K 


Cash Flow Statement for the year ended March 31, 2010 


Year ended March 31, 2010 Period ended March 31, 2009 


Net (Loss) before tax (69,017) (154,756) 

Interest on unsecured loan — 68,854 

Preliminary expneses — 16,225 

Operating (Loss) before working capital changes (69,017) (69,677) 

Adjustment for : 

Increase/(Decrease) in Current liabilities 275,187 136,034 

(Increase)/Decrease in Loans and advances 3,236,845 (3,357,207) 

Cash from operating activities 3,443,015 (3,290,850) 

Tax deducted at source (50,000) 

Preliminary expneses paid — (16,225) 

NET CASH (USED IN)/FROM OPERATING ACTIVITIES A 3,393,015 (3,307,075) 

B. CASH FLOW FROM INVESTING ACTIVITIES B — — 


Proceeds from borrowings — 3,350,000 

Repayment of borrowings (3,350,000) 

Proceeds from issue of Equity Shares 400,000 100,000 

Interest on unsecured loan — (68,854) 

NET CASH (USED IN)/FROM FINANCING ACTIVITIES C (2,950,000) 3,381,146 

Net Increase/(Decrease) in Cash and Cash equivalent (A+B+C) 443,015 74,071 

Cash and Cash equivalent at beginning of the period 74,071 — 

Cash and Cash equivalent at end of the period 517,086 74,071 

Notes : 

1) Cash and Cash equivalent includes : 

Cash in hand 154 14 

Balance with Banks 516,932 74,057 

Total 517,086 74,071 

2) The Company was incorporated on September 11, 2008. Accordingly the comparative previous period figures given are not fully comparable as in the current year the figures 

are for whole financial year. 



For S. R. Batliboi & Co. 











(267)

C M Y K 




As at 

As at 



Authorised 

50,000 (Previous year 10,000) Equity Shares 

of Rs. 10/- each 500,000 100,000 

500,000 100,000 


50,000 (Previous year 10,000) Equity Shares 

of Rs.10/- each fully paid up 500,000 100,000 

(Out of the above, 50,000 (Previous year 10,000) 

shares are held by the Holding Company, viz., 


and its nominees) 

Total 500,000 100,000 

SCHEDULE 2 - UNSECURED LOANS 

Unsecured loans from Ultimate Holding Company, 

viz., Aditya Birla Nuvo Limited — 3,350,000 

(Repayable within year Rs.Nil (Previous year 

Rs. 3,350,000) 

Total — 3,350,000 


Cash on hand 154 14 

Balance with scheduled banks: 

-on current account 516,932 74,057 

Total 517,086 74,071 


(Unsecured, considered good) 

Recoverable from Aditya Birla Private Equity-Fund I — 3,357,207 

Recoverable from Aditya Birla Captial 

Advisors Private Limited 120,362 — 

Advance tax (Net of provision for tax) 50,000 — 

Total 170,362 3,357,207 

SCHEDULE 5 - (A) CURRENT LIABILITIES 

Sundry creditors (Refer note 8 of Schedule 6) 



(b) total outstanding dues of creditors other than 

micro enterprises and small enterprises 12,409 59,814 

(Includes payable to Directors Rs. NIL 

(Previous year Rs.10,000) 

(Maximum outstanding during the year 

Rs. 10,000 (Previous year Rs.10,000) 

Interest accrued but not due on unsecured loan — 53,252 

Trusteeship fees received in advance 394,521 — 

Other liabilities 4,291 22,968 

411,221 136,034 

SCHEDULE 6: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS FOR 

THE YEAR ENDED MARCH 31, 2010 

1. BACKGROUND: 

Aditya Birla Trustee Company Private Limited (the 'Company') was incorporated on 

September 11, 2008 under the provisions of Companies Act, 1956 (the 'Act). The main 

object of the Company is to act as trustee and provide trustee related services. 


(i) Basis of accounting 

The financial statements have been prepared to comply in all material respects 

with the notified Accounting Standard by Companies Accounting Standard Rules 

2006 (as amended) and the relevant provisions of the Act. The financial statements 

have been prepared under the historical cost convention on an accrual basis. The 

accounting policies have been consistently applied by the Company are consistent 

with those used in the previous year. 

(ii) Use of estimate 


accounting principles requires management to make estimates and assumptions 

that affect the reported amounts of assets and liabilities and disclosure of contingent 


the reporting period end. Although these estimates are based upon management's 

best knowledge of current events and actions, actual results could differ from 

these estimates. 

(iii) Revenue recognition 

Revenue from rendering of trusteeship services has been recognised on accrual 

basis in accordance with the Private Placement Memorandum of the Aditya Birla 

Private - Fund I. 

(iv) Taxation 

Tax expense comprises of current and deferred. Current income tax is measured at 

the amount expected to be paid to the tax authorities in accordance with the 

Indian Income Tax Act, 1961. Deferred income taxes reflects the impact of current 

year timing differences between taxable income and accounting income for the 

year and reversal of timing differences of earlier years. 


substantively enacted at the balance sheet date. Deferred tax assets are recognised 

only to the extent that there is reasonable certainty that sufficient future taxable 

income will be available against which such deferred tax assets can be realised. In 

situations where the company has unabsorbed depreciation or carry forward tax 

losses, all deferred tax assets are recognised only if there is virtual certainty supported 

by convincing evidence that they can be realised against future taxable profits. 

At each balance sheet date; the Company re-assesses unrecognized deferred tax 

assets. It recognises unrecognised deferred tax assets to the extent that it has 

become reasonably certain or virtually certain, as the case may be that sufficient 

future taxable income will be available against which such deferred tax assets can 

be realized. 

(v) Preliminary expenditure 

Preliminary expenses are charged to profit and loss account in the year in which it 

is incurred. 

(vi) Earnings per share 

Basic earnings per share are calculated by dividing the net profit for the year 



(vii) 

Provisions 

Provision is recognized when the enterprise has a present obligation as a result of 

past event and it is probable that an outflow of resources will be required to settle 

the obligation, in respect of which a reliable estimate can be made. Provisions are 

not discounted to their present value and are determined based on management 

estimate required to settle the obligation at the balance sheet date. These are 

reviewed at each balance sheet date and adjusted to reflect the current management 

estimates. 

3. Capital Commitments 

Estimated amounts of contracts remaining to be executed on capital account not provided 

for amounts to Rs. NIL/- (Previous Year Rs. Nil). 


The Company has no contingent liabilities as at March 31, 2010 (Previous Year Rs. Nil). 

(268)

C M Y K 


5. Related Party Disclosure 

Name and relationship with the parties:- 

Parties where control exits: 

Ultimate Holding Company 




Other Parties: 

Entity being governed by the 

Company as Trustee 

Fellow Subsidiary 

Aditya Birla Private Equity - Fund I 

(a scheme floated by the Aditya Birla 

Private Equity Trust) 


The following transactions were carried out with the related parties in the ordinary course of business: 

Nature of Transactions Ultimate Holding Company Holding Company and Fellow Subsidiaries Entity being governed by 

its Nominee 

the Company as Trustee 

Transactions: 

Unsecured loan taken from — — — — 

(Previous Year) (Rs. 3,350,000) — — — 

Interest on Unsecured loan paid to Rs. 120,362 — — — 

(Previous Year) (Rs. 68,854) — — — 

Expenses incurred on behalf Aditya Birla Private Equity - Fund I — — — — 

(Previous Year) — — — (Rs.3,357,207) 

Issue of Equity Shares — Rs. 4,000,00 — — 

(Previous Year) — — — — 

Repayment of unsecured loan to Rs. 3,350,000 — — — 


Amount recovered from Aditya Birla Capital Advisors Private — — Rs.3,357,207 — 

Limited for expenses incurred by the Company on behalf of 

Aditya Birla Private Equity - Fund I 


Amount paid to Aditya Birla Capital Advisors Private Limited — — Rs.14, 527 — 

for TDS payment on behalf of the Company 


Receipt of amount from Aditya Birla Capital Advisors Private — — Rs. 120,362 — 

Limited for interest paid by the Company 


Receipt of trusteeship fee from (Including receipt in advance) — — — Rs. 500,000 


Closing balance as at March 31, 2010: 

Equity share capital held — Rs.100,000 — — 

(Previous Year) — (Rs.100,000) — — 

Issue of Equity share — Rs.400,000 — — 


Unsecured loans taken — — — — 

(Previous Year) Rs.3,350,000 — — — 

Interest on unsecured loan — — — — 

(Previous Year) (Rs.53,252) — — — 

Amount Recoverable from Aditya Birla Private Equity - Fund I — — — — 

(Previous Year) — — — (Rs.3,357,207) 

Amount Recoverable from Aditya Birla Capital Advisors — — Rs. 120,362 — 

Private Limited 


* (figures in brackets relate to previous year) 

6. Earnings Per Share: 

Basic Earnings Per Share (EPS) is calculated by dividing the net loss for the year attributable 

to equity shareholders by the weighted average number of equity shares outstanding 


Basic/Diluted Earnings Per Share 

Particulars For Year ended For Period ended 


Net Loss after tax (Rs.) 69,017 154,756 

Weighted average number of shares 10,000 6,238 

Nominal value per share (Rs.) 10 10 

Earnings per share (Rs.) (6.90) (24.81) 

7. Deferred Tax Assets. 

The Company has not recognized deferred tax asset in respect of timing difference related 

to preliminary expenses and unabsorbed losses at the end of the year as there is no virtual 

certainty supported by convincing evidence that sufficient future taxable income will be 

available against which such net deferred tax asset can be realized. 

8. Details of Dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 

The company has initiated the process of the identification of suppliers registered under 

Micro, Small and Medium Enterprise Development Act, 2006, by obtaining confirmation 

from all suppliers. Information has been collated only to the extent of information received 

as at the balance sheet date. 

Based on the information available with the company there are no suppliers who are 

registered as micro, small and medium enterprise under the Micro, Small and Medium 

Enterprise Development Act, 2006 as at March 31, 2010. 

(269)

C M Y K 




The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier 

as at the end of each accounting year; Nil Nil 

the amount of interest paid by the buyer in terms of section 16, of the Micro, Small and Medium Enterprise 

Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed 

day during each accounting year; Nil Nil 

the amount of interest due and payable for the period of delay in making payment (which have been paid but 

beyond the appointed day during the year) but without adding the interest specified under Micro, Small and 

Medium Enterprise Development Act, 2006; Nil Nil 

the amount of interest accrued and remaining unpaid at the end of each accounting year; and Nil Nil 

the amount of further interest remaining due and payable even in the succeeding years, until such date when the 

interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible 

expenditure under section 23 of the Micro, Small and Medium Enterprise Development Act, 2006. Nil Nil 


Since the Company operates in single segment (i.e. rendering of trusteeship services), no 

further disclosure is required to be given as per the notified AS -17 'Segmental Reporting'. 

10. Additional Information Pursuant to Schedule VI 

Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of part II of 

the Schedule VI to the Companies Act, 1956 is not provided, as these provisions are not 

relevant to the Company during the year. 

11. Prior Period Comparatives 

These financial statements have been prepared from April 1, 2009 to March 31, 2010, 

Whereas previous period was from September 11, 2008 to March 31, 2009. The 

corresponding figures for the previous period are therefore not comparable with those of 

current year. Previous period figures have been regrouped/ reclassed whenever necessary. 










Place: Mumbai 

Place: Mumbai 

Date: April 30, 2010 Date: April 30, 2010 

(270)

C M Y K 

ADITYA BIRLA CUSTOMER SERVICES PRIVATE LIMITED 

NOTICE 

NOTICE is hereby given that the 2nd Annual General Meeting of the 

shareholders of Aditya Birla Customer Services Private Limited will be held 

on Thursday, the 24th day of June, 2010 at 10.30 A.M. at the registered 

office of the Company at Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai 

– 400 030 to transact the following business: 

ORDINARY BUSINESS 

1. To receive, consider and adopt the Audited Balance Sheet and the 

Profit & Loss Account of the Company for the year ended on 31st 

March, 2010 and the Directors’ and Auditors’ report thereon. 

2. To appoint a Director in place of Mr. Anil Chirania, who retires from 

office by rotation, being eligible offers himself for re-appointment. 

3. To appoint Auditors and to fix their remuneration. 


Place: Mumbai 

Shriram Jagetiya 

Date: May 5, 2010 Director 

NOTES: 

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO 

APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF 

AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. 

2. PROXIES IN ORDER TO BE EFFECTIVE MUST BE LODGED AT THE 

REGISTERED OFFICE OF THE COMPANY NOT LESS THAN FORTY 

EIGHT HOURS BEFORE THE MEETING. 



Yours Directors have pleasure in presenting to you the Second Report together 

with the Audited Accounts of the Company for the period ended 31st March, 


Financial Results 

(Rs.) 

Income 

NIL 

Less: Expenditure 23,44,773 

Profit/(Loss) before Tax (23,44,773) 

Less: Provision for Taxation 

Add: Balance of profit/loss brought from the previous year (3,44,717) 

Profit/(Loss) after Tax carried forward to Balance Sheet (26,89,490) 

During the period, your Company has reported a Net Loss of Rs. 23.45 

Lakh as against Rs. 3.45 Lakh in the previous year. 

Business Operations 

Your Company has not yet started its business operations. Your Directors 

are hopeful that the business operations will be started in the Current Financial 

Year. 

NIL 


Your Directors confirm that: 

i. in the preparation of the Annual Accounts, the applicable accounting 


to material departures, if any; 

ii. the Directors have selected such accounting policies and applied them 



the Company at the end of financial year ended on 31st March, 2010, 

and of the loss of the Company for that year; 

iii. the Directors have taken proper and sufficient care for the maintenance 


the Companies Act, 1956, for safeguarding the assets of the Company 

and for preventing and detecting fraud and other irregularities; and 

iv. the Directors have prepared the annual accounts on a going concern 

basis. 


The Company has not accepted any deposits from the public during the 

year under review. 

Particulars of Employees 



Companies Act, 1956, and the rules made there under are not applicable 

to the Company. 

Auditors 

M/s S. V. Ghatalia & Associates, Chartered Accountants, the Statutory Auditors 

of the company retire and, being eligible, offer themselves for re-appointment. 

The Company has received a certificate from the Auditors to the effect that 

their appointment, if made, would be within the prescribed limits under 

section 224(1B) of the Companies Act, 1956. 


The observations made in the Auditors’ Report are self explanatory and 

therefore, do not call for any further comments. 

Conservation of Energy, Technology Absorption and Foreign Exchange 

Earnings and Outgo 

The particulars as required under the provisions of Section 217(1)(e) of the 

Companies Act, 1956, in respect of conservation of energy and technology 

absorption have not been furnished considering the fact that the Company 

has not undertaken any manufacturing activity during the year under review. 

Further, during the year under review, the Company has neither earned nor 

used any foreign exchange. 

Appreciation 

Your Directors place on record their deep appreciation of the assistance 

and contribution received from their bankers, shareholders, etc. 


Dividend 

In view of the loss incurred during the year, your Directors are unable to 

recommend any dividend for the year under review. 

Directors 

Mr. Anil Chirania, Director, retires by rotation from the Board and, being 

eligible, offers himself for re-appointment. 

Place: Mumbai 

Date: May 05, 2010 

Sd/- 

Shriram Jagetiya 

Director 

Sd/- 

Anil Chirania 

Director 

(271)

C M Y K 



To 

The Members of Aditya Birla Customer Services Private Limited 

1. We have audited the attached Balance Sheet of Aditya Birla Customer 

Services Private Limited (the ‘Company’) as at March 31, 2010, and 



are the responsibility of the Company’s management. Our responsibility 


audit. 









presentation. We believe that our audit provides a reasonable basis for 

our opinion. 

3. This report does not include as statement on the matters specified in 

paragraphs 4 and 5 of the Companies (Auditor’s Report) Order, 2003 

(as amended), issued by the Central Government of India, in terms of 

Section 227(4A) of the Companies Act, 1956, since in our opinion 

and according to the information and explanations given to us, the 

said Order is not applicable to the Company. 


that: 






of those books. 


dealt with by this report are in agreement with the books of account. 








disqualified as on March 31, 2010, from being appointed as 


the Companies Act, 1956. 






a) In the case of the balance sheet, of the state of affairs of the 


b) In the case of the profit and loss account, of the loss for the 

period ended on that date; and 

c) In case of the cash flow statement, of the cash flow for the 

period ended on that date. 

For S.V. Ghatalia & Associates, 

Firm Registration No.: 103162W 


Place: Mumbai 

Date: May 5, 2010 

Per Amit Kabra 

Partner 

Membership No.: 94533 

(272)

C M Y K 


BALANCE SHEET 

As at March 31, 2010 






Share Capital 1 100,000 100,000 

Loan Funds 

Unsecured Loan 2,590,000 100,000 

Total 2,690,000 200,000 



Cash and Bank Balances 2 14,298 48,582 

(A) 14,298 48,582 


Current Liabilities 3 13,788 193,299 

(B) 13,788 193,299 

Net Current Assets (A-B) 510 (144,717) 

Debit balance in Profit and Loss Account 2,689,490 344,717 

Total 2,690,000 200,000 

Notes to Accounts 4 0 0 




For S.V. Ghatalia & Associates For and on behalf of the Board of Directors of 



per Prasad V. Paranjape 


Membership No. 47296 

Place: Mumbai 

Place: Mumbai 

Date: May 05, 2010 Date: May 05, 2010 

PROFIT AND LOSS ACCOUNT 

For the year ended on 31/03/2010 



March 31, March 31 

Schedules 2010 2009 

Income from operations — — 

Total — — 

Expenditure 

Auditors’ remunerations — Audit fees 27,576 27,575 

Legal & Professional Fees 2,288,709 300,000 

Interest on Unsecured Loan 12,139 274 

Miscellaneous Expenses 16,349 643 

Preliminary Expenses — 16,225 

Total 2,344,773 344,717 

Profit/(Loss) before tax (2,344,773) (344,717) 

Provision for tax: 

— Current Tax — — 

— Deferred Tax — — 

— Fringe Benefit Tax — — 

Profit/(Loss) after Tax carried forward to 

Balance Sheet (2,344,773) (344,717) 

Add: Profit/(Loss) brought forward from 

earlier years (344,717) (344,717) 

Balance carried to Balance Sheet (2,689,490) (689,434) 

Basic/Diluted Earnings Per Share (EPS) 

(Refer Note 6 of Schedule 4) 

[Nominal value per share Rs. 10] (234.48) (57.55) 



Profit and Loss Account. 





CASH FLOW STATEMENT 

For the year ended on 31/03/2010 



March 31, March 31 


A. CASH FLOW FROM 

OPERATING ACTIVITIES 

Net Profit/(Loss) before Tax (2,344,773) (344,717) 

Adjustment for: 

Increase/(Decrease) in 

Current Liabilities (179,511) 193,299 

CASH GENERATED FROM 

OPERATIONS (2,524,284) (151,418) 

Income Taxes Paid 

(Net of Refund) — — 

NET CASH (USED IN)/FROM 

OPERATING ACTIVITIES (2,524,284) (151,418) 

B. CASH FLOW FROM 

INVESTING ACTIVITIES — — 

C. CASH FLOW FROM 

FINANCING ACTIVITIES 

Proceeds from issue of 

Share Capital — 100,000 

Proceeds from Unsecured 

Loan (Net) 2,490,000 100,000 

NET CASH (USED IN)/FROM 

FINANCING ACTIVITIES 2,490,000 200,000 

Net Increase/(Decrease) in 

Cash and Cash equivalents (34,284) 48,582 

Cash and Cash equivalents at 

beginning of the period 48,582 — 

Cash and Cash equivalents at the 

end of the period 14,298 (34,284) 48,582 48,582 

Notes: 

1) Cash and Cash Equivalents include: 

Cash in Hand 422 752 

Balance with Banks 13,876 47,830 

Total 14,298 48,582 

2) The Company was incorporated on September 11, 2008. Accordingly the comparative 

previous periods’ figures given are not fully comparable as in the current year the figures 

are for whole financial year. 









Place: Mumbai 

Place: Mumbai 





Place: Mumbai 

Place: Mumbai 


(273)

C M Y K 


SCHEDULES ANNEXED TO AND FORMING PART OF BALANCE SHEET 



As at 

As at 

March 31, 2010 March 31 2009 


Authorised 

10,000 Equity Shares of Rs. 10/- each 100,000 100,000 

100,000 100,000 


10,000 equity shares of Rs. 10/- each fully paid up 100,000 100,000 

(Out of the above, 6,000 shares are held by the 

Holding Company, viz., Aditya Birla Financial 

Services Private Limited) 

Total 100,000 100,000 


Cash on Hand 422 752 

Balance with Scheduled Bank: 

— on Current Account 13,876 47,830 

Total 14,298 48,582 


Sundry Creditors (Refer Note 8 of Schedule 4) 

(a) Total outstanding dues of micro enterprises 


(b) Total outstanding dues of creditors other 

than micro enterprises and small enterprises 13,788 159,558 

Other liabilities — 33,741 

Total 13,788 193,299 

SCHEDULE 4 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO 

ACCOUNTS 

1. BACKGROUND 

Aditya Birla Customer Services Private Limited (the ‘Company’) was incorporated 

on September 11, 2008, under the provisions of Companies Act, 1956. The main 

object the Company is to provide all kinds of financial services including, but not 

limited to customer interaction, management services and consultancy services. 

The Company has incurred loss during the Financial Year. The accumulated loss 

primarily reflects the start-up costs associated with the commencement of the business 

of the Company. During the current financial year, the Company has not yet 

commenced its operations. 

Further, the Company’s holding company, viz., Aditya Birla Financial Services Private 

Limited has informed the Company of its intention of providing operational and 

financial support to the Company to meet its obligations as they fall due and 

accordingly, the financial statements have been prepared on a going concern basis. 


(i) Basis of Accounting 

The financial statements have been prepared to comply in all material respects 

in respects with the notified Accounting Standards Rules, 2006, and the relevant 

provision of the Companies Act, 1956. The financial statements have been 

prepared under the historical cost convention on an accrual basis. 

(ii) 

Use of Estimate 


accounting principles requires management to make estimates and 

assumptions that affect the reported amounts of assets and liabilities and 

disclosure of contingent liabilities at the date of the financial statements and 

the results of operations during the reporting period end. Although these 

estimates are based upon management’s best knowledge of current events 

and actions, actual results could differ from these estimates. 

(iii) Taxation 

Tax expense comprises of current, deferred and fringe benefit tax. Current 

income tax and fringe benefit tax is measured at the amount expected to be 

paid to the tax authorities in accordance with the Indian Income Tax Act. 

Deferred income taxes reflects the impact of current year timing differences 

between taxable income and accounting income for the year and reversal of 

timing differences of earlier years. 


substantively enacted at the balance sheet date. Deferred tax assets and 

deferred tax liabilities across various countries of operation are not set off 

against each other as the company does not have a legal right to do so. 

Deferred tax assets are recognised only to the extent that there is reasonable 

certainty that sufficient future taxable income will be available against which 

such deferred tax assets can be realised. In situations where the company has 

unabsorbed depreciation or carry forward tax losses, all deferred tax assets 

are recognised only if there is virtual certainty supported by convincing evidence 

that they can be realised against future taxable profits. 

At each balance sheet date the Company re-assesses unrecognised deferred 

tax assets. It recognises unrecognised deferred tax assets to the extent that it 

has become reasonably certain or virtually certain, as the case may be that 

sufficient future taxable income will be available against which such deferred 

tax assets can be realised. 

(iv) Preliminary Expenses 

Preliminary expenses are charged to profit and loss account in the year in 

which it is incurred. 

(v) 

Earnings Per Share 

Basic earnings per share are calculated by dividing the net profit for the year 

attributable to equity shareholders by the weighted average number of equity 

shares outstanding during the year. 

(vi) Provisions 

Provision is recognized when the enterprise has a present obligation as a 

result of past event and it is probable that an outflow of resources will be 

required to settle the obligation, in respect of which a reliable estimate can be 

made. Provisions are not discounted to their present value and are determined 

based on management estimate required to settle the obligation at the balance 

sheet date. These are reviewed at each balance sheet date and adjusted to 

reflect the current management estimates. 

3. CAPITAL COMMITMENTS 

Estimated amounts of contracts remaining to be executed on capital account not 

provided for amounts to Rs. Nil. 

4. CONTINGENT LIABILITIES 

Contingent liabilities as at March 31, 2010 – Rs. Nil (as at March 31, 2009 – Rs. 

Nil). 

5. RELATED PARTY DISCLOSURE 

(a) List of Related Parties:- 

Name and Relationship with the parties:- 

Parties where control exist: 

Ultimate Holding Company Aditya Birla Nuvo Limited 


Aditya Birla Financial Services 

Private Limited 

Other related parties with 

whom the Company has entered 

into transactions during the year: 


Aditya Birla Finance Limited 

(Formerly Birla Global Finance 


(274)

C M Y K 


(b) During the period following transactions were carried out with the related 

parties in the ordinary course of business:- 


Nature of Transaction Holding Fellow 

Company Subsidiary 

For the Year For the Year 

ended ended 



Interest - free advance taken 25,90,000 — 

(Nil) — 

Unsecured loan taken — 7,50,000 

— (1,00,000) 

Interest — 12,139 

— (274) 

Closing Balance:- 

Interest - free advance taken 25,90,000 — 

(Nil) — 

Equity shares capital 1,00,000 — 

(60,000) — 

6. EARNINGS PER SHARE: 

Basic Earnings Per Share (EPS) is calculated by dividing the Net Profit for the period 


outstanding during the period. There are no diluted potential equity shares 

outstanding during the period. 

Particulars For the Year For the Year 

ended ended 



Net Loss after Tax (Rs.) 23,44,773 3,44,717 

Weighted-average Number of Shares 10,000 5,990 

Nominal Value per Share (Rs.) 10 10 

Basic/Diluted Earnings per Share (Rs.) (234.48) (57.55) 

7. DEFERRED TAX ASSETS 

The company has not recognized deferred tax asset in respect of timing difference 

related to preliminary expenses and unabsorbed business loss at the end of the 

period as there is no virtual certainty supported by convincing evidence that sufficient 

future taxable income will be available against which such net deferred tax asset 

can be realized. 

8. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 

Particulars For the Year For the Year 

ended ended 



the principal amount and the interest due 

thereon (to be shown separately) remaining 

unpaid to any supplier as at the end of each 

accounting year; Nil Nil 

the amount of interest paid by the buyer 

in terms of section 16, of the Micro, Small and 

Medium Enterprise Development Act, 2006, 

along with the amounts of the payment made 

to the supplier beyond the appointed day 

during each accounting year; Nil Nil 

The amount of interest due and payable for 

the period of delay in making payment (which 

have been paid but beyond the appointed day 

during the year) but without adding the interest 

specified under Micro, Small and Medium 

Enterprise Development Act, 2006; Nil Nil 

the amount of interest accrued and remaining 

unpaid at the end of each accounting year; and Nil Nil 

the amount of further interest remaining due 

and payable even in the succeeding years, 

until such date when the interest dues as above 

are actually paid to the small enterprise for the 

purpose of disallowance as a deductible 

expenditure under section 23 of the Micro, 

Small and Medium Enterprise Development 

Act, 2006 Nil Nil 

9. SEGMENTAL REPORTING 

The Company has not commenced its business activities during the period. Hence, 

no disclosure is required pursuant to the notified ‘AS17 - Segmental Reporting’. 

10. ADDITIONAL INFORMATION PURSUANT TO SCHEDULE VI 

Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of 

part II of the Schedule VI to the Companies Act, 1956 is not provided, as these are 


11. PRIOR PERIOD COMPARATIVES 

The Company was incorporated on September 11, 2008. Accordingly the 

comparative previous periods’ figures given in this year’s financial statement are 

not fully comparable as in the current year the figures are for whole financial year. 

The figures for the previous period have been re-grouped/re-arranged wherever necessary. 


For S.V. Ghatalia & Associates 







Place: Mumbai 

Place: Mumbai 


(275)

C M Y K 

ADITYA BIRLA FINANCIAL SHARED SERVICES LIMITED 

DIRECTORS' REPORT 

To the Members, 

Your Directors have pleasure in presenting the Second Annual Report of 

your Company for the financial year ended March 31, 2010. 

OPERATIONAL PERFORMANCE 

The Company provides a common pool of facilities and resources like 

technology, application, business processes, etc., to companies of the Aditya 

Birla Financial Services Group, with a view to optimize the benefits of 

specialization and minimize cost for each such company. Accordingly, there 

has been no income and expenditure for the Company. All expenses are 

shared by the respective ABFSG companies and there is no income earned. 

DIVIDEND 

No Dividend has been recommended by Board of Directors for the financial 

year ended 31 st March, 2010. 

TRANSFER OF SHARES TO ABFSPL 

During the year under review, all the equity shares of the Company were 

transferred to Aditya Birla Financial Services Private Limited (‘ABFSPL’) from 

Laxminarayan Investment Limited (‘LIL’). Consequent upon the transfer of 

shares, the Company became a wholly owned subsidiary of ABFSPL. ABFSPL 

is a wholly owned subsidiary of Aditya Birla Nuvo Limited (ABNL). By virtue 

of such arrangement, ABNL will continue to be an ultimate Holding Company, 

being the holding company of ABFSPL. This was part of the Aditya Birla 

Group’s initiative to enhance focus on the Financial Services business and 

in order to bring all the Financial Services activities under one single roof. 

DIRECTORS 

Mr. Pankaj Razdan, Director of the Company, shall retire by rotation at the 

ensuing Annual General Meeting and, being eligible, offers himself for reappointment. 

Your Board recommends his re-appointment. 


Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors 

confirm that: 

a. In preparation of the annual accounts, the applicable accounting 

standards have been followed along with proper explanation for material 

departures, if any. 

b. The Directors have selected such accounting policies and applied them 

and made judgments and estimates that are reasonable and prudent 

so as to give a true and fair view of the state of affairs of the Company 

at the end of the financial year and of the profit or loss of the Company 

for that period. 

c. The Directors have taken proper and sufficient care for the maintenance 




d. The Directors have prepared the annual accounts on a ‘going concern 

basis’. 


There were no employees falling under the purview of section 217(2A) of 

the Companies Act, 1956 read with Companies (Particulars of Employees) 

Rules, 1975. 


M/s Haribhakti & Co., Chartered Accountants, retire at the conclusion of 

the ensuing Annual General Meeting. The Company has received letter 

from them to the effect that their appointment, if made, would be within the 

prescribed limits under section 224(1-B) of the Companies Act, 1956, and 

that they are not disqualified for such appointment within the meaning of 

Section 226 of the Companies Act, 1956. 

Your Directors have therefore proposed the appointment M/s. Haribhakti & 

Co., Chartered Accountants, as Statutory Auditors of the Company. 

The observations made by the Auditors in their report read with relevant 

notes to the Accounts are self-explanatory and do not call for any further 

comments under section 217(3) of the Companies Act, 1956. 

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND 


Since the Company is engaged in financial services and has no activity 

pertaining to manufacturing, furnishing the details on conservation of energy 

are not applicable. There were no transactions pertaining to foreign exchange 

earnings and outgo during the financial year 2009-10. 


The Board places on record its appreciation to the continued support and 

guidance provided by all its shareholders and the stakeholders. 

Place: Mumbai 



G. V. Gopalakrishnan Pankaj Razdan 

Director 

Director 

(276)

C M Y K 



TO, 

THE MEMBERS OF ADITYA BIRLA FINANCIAL SHARED SERVICES LIMITED 

We have audited the attached Balance Sheet of Aditya Birla Financial Shared 

Services Limited as at 31 st March, 2010, the related Profit and Loss Account 

for the year ended on that date annexed thereto and the Cash Flow Statement 

for the year ended on that date, which we have signed under reference to 

this report. These Financial Statements are the responsibility of the Company’s 

management. Our responsibility is to express an opinion on these Financial 

Statements based on our audit. 

We conducted our audit in accordance with Auditing Standards generally 

accepted in India. Those Standards require that we plan and perform the 

audit to obtain reasonable assurance about whether the Financial Statements 

are free of material misstatement. An audit includes examining, on a test 

basis, evidence supporting the amounts and disclosures in the Financial 

Statements. An audit also includes assessing the accounting principles used 

and significant estimates made by management, as well as evaluating the 

overall presentation of the Financial Statements. We believe that our audit 

provides a reasonable basis for our opinion. 

(I) As required by the Companies (Auditor’s Report) Order, 2003 issued 

by the Central Government of India in terms of sub-section (4A) of 

Section 227 of the Companies Act, 1956, on the basis of such checks 

of the books and records as we considered appropriate and the 

information and explanations given to us during the course of the 

audit, we annex hereto a statement on the matters specified in 

paragraphs 4 and 5 of the said Order, to the extent they are applicable 


(II) Further to our comments in the Annexure referred to in paragraph I 

above, we report as under: 

(a) we have obtained all the information and explanations which to 


purpose of our audit; 

(b) in our opinion, proper books of account as required by law 


examination of such books; 

(c) 

(d) 

(e) 

(f) 

the Balance Sheet, Profit and Loss Account, and Cash Flow 

Statement dealt with by this report are in agreement with the 

books of account; 

in our opinion, the Balance Sheet, Profit and Loss Account, and 

Cash Flow Statement dealt with by this report comply with the 

Accounting Standards referred to in sub-section (3C) of the 

section 211 of the Companies Act, 1956 to the extent they are 

applicable to the Company; 

on the basis of the written representations received from the 

directors of the Company as on 31 st March, 2010 and taken on 

record by the Board of Directors of the Company, we report that 

none of the directors is disqualified as on 31 st March, 2010 

from being appointed as a director in terms of clause (g) of 

sub-section (1) of section 274 of the Companies Act,1956; 

in our opinion and to the best of our information and according 

to the explanations given to us, the said Balance Sheet, the 

Profit and Loss Account, and Cash Flow Statement read together 

with Notes thereon give the information required by the 

Companies Act, 1956 in the manner so required, and give a 

true and fair view in conformity with the accounting principles 

generally accepted in India: 

(i) in so far it relates to the Balance Sheet, of the state of 

affairs of the Company as at 31 st March, 2010; 

(ii) in the case of the Profit and Loss Account, the Company 

has not made any Profit or Loss for the year ended on that 

date; and 

(iii) in the case of Cash Flow Statement, of the cash flows for 


For Haribhakti & Co., 

Chartered Accountants, 

Firm Membership No. 103523W 

(Rakesh Rathi) 

Place: Mumbai, 

Partner 

Date : 20 th April, 2010 Membership No: 45228 

(277)

C M Y K 


ANNEXURE REFERRED TO IN PARAGRAPH I OF OUR REPORT 

OF EVEN DATE TO THE MEMBERS OF ADITYA BIRLA 

FINANCIAL SHARED SERVICES LIMITED ON THE ACCOUNTS 

FOR THE YEAR ENDED 31 ST MARCH, 2010 

1. The Company has maintained proper records showing full particulars 

and situation of fixed assets. 

2. The Company has physically verified the fixed assets in accordance 

with a programme of verification, which in our opinion provides for 

physical verification of all fixed assets at reasonable intervals. We have 

been informed that the physical verification of fixed assets was carried 

out in the current year and discrepancies noticed on such verification 

have been dealt with in the books of account. 

3. The Company has not disposed off a substantial part of the fixed 

assets during the year. 

4. The Company has neither granted nor taken any loans, secured or 

unsecured from Companies, firms or other parties listed in the register 

maintained under section 301 of the Companies Act, 1956. 

5. In our opinion and according to the information and explanations 

given to us, there are adequate internal control procedures 

commensurate with the size of the Company and nature of its business 

with regards to purchase of fixed assets and sale of services. During 

the course of our audit, we have not observed any continuing failure 

to correct major weaknesses in internal controls. 

6. Based on the audit procedures applied by us and according to the 

information and explanations provided by the management, we are 

of the opinion that the Company has not entered into any transactions 

that need to be entered in the register maintained under section 301 


7. The Company has not accepted any deposits from the public. 

8. In our opinion, the Company has an adequate internal audit system 

commensurate with the size of the Company and nature of its business. 

9. We are informed that no cost records are required to be maintained 

by the Company under section 209(1)(d) of the Companies Act, 1956. 

10. According to the information and explanations given to us, the 

Company is regular in depositing with appropriate authorities 

undisputed statutory dues including provident fund, income-tax, service 

tax and any other statutory dues applicable to it. 

11. According to the information and explanations given to us, no 

undisputed amounts payable in respect of income tax and service tax 

were outstanding as at 31 st March, 2010 for a period of more than six 

months from the date they became payable. 

12. According to the information and explanations given to us, there are 

no dues of Income Tax. Service Tax and Cess which have not been 

deposited on account of any dispute. 

13. The Company has accumulated losses during the year ended as at 

31 st March, 2010 but there is no cash losses during the financial year 

covered by our audit. 

14. The Company has not taken any loan from Financial Institution, Bank 

and the Company has not issued any Debentures. 

15. The Company has not granted loans and advances on the basis of 

security by way of pledge of shares, debentures and other securities. 

16. The Company has not dealt or traded in shares, securities, debentures 

and other investments during the year. 

17. The Company has not given any guarantee for loans taken by others 

from Bank or Financial Institutions. 

18. During the year, the Company has taken term loans and also financing 

under lease and has utilized the monies for the same purpose for 

which it was borrowed. 

19. According to the information and explanations given to us and on an 

overall examination of the Balance Sheet of the Company, funds raised 

on short term basis have, prima-facie, been used during the period 

for long term investment. 

20. The Company has not made any preferential allotment of shares to 

the parties and companies covered in the register maintained under 

section 301 of the Companies Act, 1956 during the year. 

21. The Company has not issued any Debentures during the year. 

22. The Company has not raised any money by public issue during the 

year. 

23. Based upon the audit procedures performed and information and 

explanations given by the management, we report that no fraud on 

the Company or by the Company has been noticed or reported during 

the course of our audit. 

24. The clause (ii), (iii) and (xiii) of para 4 are not reported upon as these 

are not applicable to the Company. 






Partner 


(278)

C M Y K 




Schedule As at As at 



Rupees 

Rupees 


Share Capital 1 500,000 500,000 


Unsecured Loans 3 24,925,051 

Total 39,030,773 500,000 




Less : Accumulated Depreciation 7,136,454 — 

Net Block 38,045,061 — 

Capital Work-in-Progress 11,705,000 — 

49,750,061 — 


Sundry Debtors 5 5,637,592 — 

Cash and Bank Balances 6 4,757,100 218,831 

Loans and Advances 7 9,399,530 — 

19,794,222 218,831 

Less: Current Liabilities and Provisions 8 

Current Liabilities 22,265,817 121,683 

Provisions 8,650,543 — 

30,916,360 121,683 

Net Current Assets/(Liabilities) (11,122,138) 97,149 

Profit and Loss Account (Debit Balance) 402,851 402,851 

Total 39,030,773 500,000 


Schedule Year ended Period ended 


Rupees 

Rupees 

INCOME 

Other Income — — 

Total — — 

EXPENDITURE 

Personnel Cost 9 — — 

Administration & other Overheads 10 — 402,851 

Finance Charges 11 — — 

Total — 402,851 

Profit before Depreciation — (402,851) 

Depreciation 12 — — 

Profit before Tax — (402,851) 

Provision for Tax 

Income Tax 

Profit after Taxation — (402,851) 

Balance brought forward from 

last Balance Sheet — — 

Profit available for Appropriation — (402,851) 

Balance carried to Balance Sheet — (402,851) 

Basic and Diluted Earnings 

Per Share (Rs) — (8.06) 

(Face value of Rs. 10/- each) 

(Refer Note C (iii) of Schedule 13) 

Significant Accounting Policies 

and Notes to Accounts 13 

Schedules referred to above form 

an integral part of the accounts 





Haribhakti & Co., 


Firm Memebrship No : 103523W 




Rakesh Rathi G.V. Gopalakrishnan Pankaj Razdan 



Dated : 20th April, 2010 





(279)

C M Y K 


Cash Flow Statement for the period ended 31st March 2010 (as per indirect method) 

Cash flow from operating activities (A) 

For the period ended For the period ended 

March 2010 March 2009 

Rupees 

Rupees 

Net Loss as per Profit & Loss Account before taxes — 402,851 

Adjustment for Non Cash Items 

Add: Depreciation 7,136,454 — 

Operating Profit before working capital changes 7,136,454 402,851 

(Increase) / Decrease in Current Assets, Loans & Advances (15,037,123) — 

Increase / (Decrease) in Current Liabilities & Provisions 30,794,677 121,683 

Net cash flow from operating activities 22,894,008 281,168 

Cash flow from investing activities (B) 

Purchase of fixed assets (42,509,080) — 

Sale of fixed assets 645,178 — 

Net cash used in investing activities (41,863,902) — 

Cash flow from financing activities (C) 

Share capital issued — 500,000 

Loans taken 24,925,051 — 

Repayment of lease rental (1,416,888) 

Net cash inflow from financing activities 23,508,163 500,000 

Net increase / (decrease) in cash and cash equivalents (D=A+B+C) 4,538,269 218,831 

Cash and cash equivalents at beginning of the period 218,831 — 

Cash and cash equivalents at end of the period 4,757,100 218,831 










(280)

C M Y K 


Schedules forming part of the Balance Sheet as at March 31, 2010 

As at 

As at 


Rupees 

Rupees 


Authorised : 

50,000 Equity Shares of Rs.10 each 500,000 500,000 

Issued, Subscribed and Paid up: 

50,000 Equity Shares of Rs.10 each, fully paid up 500,000 500,000 

500,000 500,000 

Note : The Equity shares are held by Aditya Birla Financial Services Private Limited (Holding 

Company) since 03/08/09. Earlier the entire Shares were held by Aditya Birla Capital 

Limited [formerly known as Laxminarayan Investment Limited (Holding Company)] 

As at 

As at 


Rupees 

Rupees 

SCHEDULE 2 - SECURED LOANS 

(Secured by Assets) 

From Other than banks 

Lease Finance 13,605,722 — 

13,605,722 — 


From Other than banks 

Loans 

(Amount Payable within One Year Rs. 77,37,204/-) 24,925,051 — 

24,925,051 — 


Rupees 

Gross Block Depreciation Net Block 

As at Additions Deductions As at As at For the Deductions As at As at As at 

Particulars April 1, during the during the March 31, April 1, year during the March 31, March 31, March 31, 

2009 year year 2010 2009 year 2010 2010 2009 

Office Equipment — 12,900 — 12,900 0 6,543 — 6,543 6,357 — 

Computers & Servers — 15,822,004 — 15,822,004 0 1,177,871 — 1,177,871 14,644,133 — 

Furniture and Fixtures — 2,824 — 2,824 0 2,824 — 2,824 — — 

Vehicles — 1,080,246 645,178 435,068 0 83,243 54,239 29,004 406,064 

Intangible Asset 

Specialised Software — 28,908,719 — 28,908,719 0 5,920,212 — 5,920,212 22,988,507 — 

Total 

— 45,826,693 645,178 45,181,515 0 7,190,693 54,239 7,136,454 38,045,061 — 

Previous year — — — — — — — — — 

As at 

As at 


Rupees 

Rupees 

SCHEDULE 5 - SUNDRY DEBTORS 


Debts due for a period exceeding six months — — 

Other debts 5,637,592 — 

5,637,592 — 


Cash in Hand 847 — 

Balances with Scheduled Banks — 

in Current Accounts 4,756,253 218,831 

in Fixed Deposit Accounts — — 

4,757,100 218,831 



Advances 872,954 — 

Deposits 1,307,376 — 

Prepaid Expenses 1,137,424 

Service Tax Receivable 1,722,603 — 

Tax Deducted at Source 4,359,173 — 

9,399,530 — 

SCHEDULE 8 - CURRENT LIABILITIES AND PROVISIONS 


Sundry Creditors 18,720,692 — 

TDS Payable 2,659,469 97,232 

Service Tax Payable 679,606 

Expenses Payable 8,087,168 24,451 

Other Liabilities 206,050 — 

30,352,985 121,683 

Provisions: 

For Leave Encashment [Refer Note C (iv) (a) of Schedule 13] 277,716 — 

For Gratuity [Refer Note C (iv) (a) of Schedule 13] 285,659 — 

563,375 — 

30,916,360 121,683 

Schedules forming part of Profit & Loss Account for the year ended March 31, 2010 

As at 

As at 

March 31,2010 March 31, 2009 

Rupees 

Rupees 

SCHEDULE 9 - PERSONNEL COST 

Salary, Wages & Bonus 48,322,675 — 

Contribution to PF & other funds 438,136 — 

Staff Welfare 2,020,321 — 

Recruitment fees 604,851 

51,385,983 — 

Less : Recovery as Professional Services Cost (51,385,983) — — — 

— — 

SCHEDULE 10 - ADMINISTRATION & OTHER OVERHEADS 

Rent 14,386,974 — 

Software & Support Expenses 3,703,189 — 

Auditors’ Remuneration 77,500 66,901 

Communication Expenses 16,650,158 — 

Repairs & Maintainance 2,578,840 — 

Travel & Conveyance 1,763,871 — 

Printing & Stationery 811,497 — 

Electricity charges 2,905,065 — 

Insurance 269,797 — 

Professional fees 3,688,871 201,420 

Miscellaneous Expenses written off — 134,530 

Miscellaneous Expenses 1,010,522 — 

47,846,284 402,851 

Less : Recovery as Professional Services Cost (47,846,284) — — 402,851 

— 402,851 

SCHEDULE 11 - FINANCE CHARGES 

Bank Charges 1,324 — 

Interest on Service Tax 2,109 — 

Interest on Loans 40,274 — 

Lease / Loan finance Charges 1,699,257 — 

1,742,964 — 


— — 

SCHEDULE 12 - DEPRECIATION 

Depreciation 7,136,454 — 


— — 

(281)

C M Y K 


SCHEDULE - 13 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 

A. Nature of Operations: 

Aditya Birla Financial Shared Services Limited (‘the Company’) was incorporated on 

19th June 2008. It is a subsidiary of Aditya Birla Financial Services Private Limited. 

The object of this Company is to provide a common pool of facilities and resources like 

providing technology, application and business process services to its group companies, 

with a view to optimize the benefits of specialisation and minimize the cost for each 

member company. The member companies have participated in the common pool of 

facilities and shared the expenses incurred by the Company and member companies. 

B. Significant Accounting Policies: 

(i) Basis of Preparation 

The financial statements have been prepared under the historical cost convention 

on an accrual basis in compliance with all material aspect of the notified accounting 

standard by Companies Accounting Standard Rules, 2006 (as amended) and the 

relevant provisions of the Companies Act, 1956. The accounting policies have 

been consistently applied by the Company and are consistent with those used in 

the previous year. 

(ii) Fixed Assets 

Fixed assets are stated at cost, less accumulated depreciation and impairment 

loss, if any. Cost comprises the purchase price and any attributable cost of bringing 

the asset to its working condition for its intended use. 

(iii) Depreciation / Amortization 

Depreciation on fixed assets is provided using the straight-line method based on 

the economic useful life of assets as estimated by the management, which are not 

greater than the period underlying computed with reference to the rates prescribed 

in Schedule XIV to the Companies Act, 1956. Depreciation is charged for the 

complete month, if acquired in the first half of the month. Management’s estimates 

of the economic useful life of the various fixed assets are as follows: 

Depreciation on fixed assets is provided on the straight-line method, at the rates 

prescribed under schedule XIV of the Companies Act, 1956, except as mentioned 

below: 

Asset Type 

Management’s estimate 

of useful life (In years) 

i) Intangible Assets (Softwares) 3 years 

ii) Office Computers 4 years 

iii) Furniture & Fixtures 5 years 

iv) Vehicles 5 years 

(viii) 

(ix) 

(x) 

(xi) 

Compensated absences are entitled to be carried forward for future encashment 

or availment, at the option of the employee during the tenure of the employment, 

subject to the rules framed by the company in this regard. Accumulated 

compensated absences entitlements outstanding at the close of the year are 

accounted on the basis of an independent actuarial valuation. Accumulated 

entitlements at the time of separation are entitled to be encashed. 

Finance Leases 

Assets acquired under finance leases are capitalised at the fair value of the leased 

asset at the inception of the lease and are depreciated on a straight-line basis over 

the useful life in accordance with the Company’s depreciation policy. 

Income-Tax 

The accounting treatment for income-tax in respect of the Company’s income is 

based on the Accounting Standard 22 on ‘Accounting for Taxes on Income’ issued 

by the Institute of Chartered Accountants of India. The provision made for incometax 

in the accounts comprises both, the current tax and deferred tax. The deferred 

tax assets and liabilities for the year, arising on account of timing differences, are 

recognized in the Profit & Loss Account and the cumulative effect thereof is reflected 

in the Balance Sheet. 

In case of unabsorbed losses and unabsorbed depreciation, all deferred tax assets 

are recognised only if there is virtual certainty supported by convincing evidence 

that they can be realized against future taxable profit. 

Provisions 

A provision is recognised when the Company has a present obligation as a 

result of past event/s and it is probable that an outflow of resources will be 

required to settle the obligation, in respect of which a reliable estimate can be 

made. Provisions are not discounted to its present value and are determined 

based on best estimate required to settle the obligation at the balance sheet 

date. These are reviewed at each balance sheet date and adjusted to reflect the 

current best estimates. 

Contingent liabilities are not provided for in the accounts and are disclosed by 

way of notes. A contingent asset is neither recognised nor disclosed. 


Basic earnings per share are calculated by dividing the net profit or loss for the 

year attributable to equity shareholders by the weighted average number of equity 

shares outstanding during the year. 

For the purpose of calculating diluted earning per share, the net profit or loss for 

the year attributable to equity shareholders and the weighted average number of 

shares outstanding during the year are adjusted for the effects of all dilutive potential 

equity shares. 

(iv) 

(v) 

(vi) 

(vii) 

Fixed assets having an original cost of less than Rs. 5,000 individually are 

depreciated fully in the year/period of purchase. Intangible assets are amortised 

over period of 3 years on straight-line method. 

Impairment of Assets 

The carrying amounts of assets are reviewed at each Balance Sheet date if there is 

any indication of impairment based on internal/external factors. An asset is treated 

as impaired when the carrying cost of the assets exceeds its recoverable value. An 

impairment loss, if any, is charged to Profit and Loss Account in the year in which 

an asset is identified as impaired. Reversal of impairment losses recognized in 

prior years is recorded when there is an indication that the impairment losses 

recognized for the assets no longer exist or have decreased. 

Investments 

Current Investments are stated at lower of cost and fair value. Long term investments 

are stated at cost after deducting provisions made, if any, for other than temporary 

diminution in the value. 

Foreign Currency Transaction 

Transactions in foreign currency are recorded at the rate of exchange prevailing at 

the date of the transaction. Monetary assets and liabilities in foreign currency are 

translated at the rates existing as at the balance sheet date. The resulting exchange 

gain or loss for revenue transactions is reflected in the profit and loss account. 

Employee Benefits 

The Company has established defined contribution schemes for Provident Fund 

and ESI to provide retirement benefits to its employees. Contributions to the Provident 

Fund and ESI are made on a monthly basis and are charged to profit and loss 

account when due. Gratuity liability is defined benefit obligation and is non funded. 

The Company accounts for liability for future gratuity benefits based on independent 

Actuarial valuation done as per revised Accounting Standard 15. 

C. Notes to Accounts : 

(i) Deferred Tax (Net) 

Deferred tax assets are recognized only if there is virtual certainty supported by 

convincing evidence that they can be realized against future taxable profit. During 

the year there is no deferred tax in the books. 

(ii) Segment Information 

The Company has single reporting segment, i.e., to provide for common pool of 

facilities and resources identified to Aditya Birla Group Companies. As such, there 

are no separate reportable segments as per Accounting Standards 17 on ‘Segment 

Reporting’ issued by the Institute of Chartered Accountants of India. 

(iii) Earnings Per Share 


year attributable to equity shareholders by the weighted average number of equity 

shares outstanding during the year. The relevant details as described above are as 

follows: 

Current Year Previous Year 

(Rs) 

(Rs) 

Profit / (loss) as per profit and loss account Nil (402,851) 

Weighted average number of share 50,000 50,000 

Earnings per share (Basic and Diluted) Nil (8.06) 

Face Value per share-Rs 10 10 

(282)

C M Y K 


(iv) Disclosure under (AS) – 15 (Revised 2005) 

The Company has classified the various benefits provided to employees as under: 

Defined Contribution Plans 

Contributions to defined contribution plans recognized as expense for the year are 

as under: 


Rs. 

Rs. 

Employer’s Contribution to Provident Fund 481,375 Nil 

Defined Benefit Plan 

a. Contribution to Gratuity Fund 

Gratuity is payable to all eligible employees on superannuation, death 

or on separation / termination in terms of the provisions of the Payment 

of Gratuity Act or as per the Company’s policy whichever is beneficial 

to the employees. 

The following table sets out the unfunded status of the gratuity plan and 

unfunded status of paid leave encashment and the amounts recognized in 

the Company’s financial statements as at 31 March, 2010. 

Current Year 

Previous Year 

Rs. 

Rs. 

Gratuity Paid Leave Gratuity Paid Leave 

(Unfunded) Encashment (Unfunded) Encashment 

(Unfunded) 

(Unfunded) 

a) Change in present 

value of obligation 

Present value of 

obligation as at 

1 April 2009 242,802 145,926 Nil Nil 

Interest cost 11,380 8,026 Nil Nil 

Service cost 75,539 129,841 Nil Nil 

Benefits paid 47,160 Nil Nil Nil 

Actuarial (gain)/ 

loss on obligation (3,098) (6,077) Nil Nil 


obligation as at 

31 March 2010 285,659 277,716 Nil Nil 


obligation, as at 

31 March 2010 285,659 277,716 Nil Nil 

Fair value of plan 

assets as at 

31 March 2010 Nil Nil Nil Nil 

Assets/(Liabilities) 

recognized in the 

Balance Sheet 285,659 277,716 Nil Nil 

b) Expenses 

recognized during 

the year 

Current service cost 75,539 129,841 Nil Nil 

Interest cost 11,380 8,026 Nil Nil 

Expected return 

on plan assets Nil Nil Nil Nil 

Net Actuarial (gain)/ 

loss to be recognized (3,098) (6,077) Nil Nil 

Net cost 90,017 131,790 Nil Nil 

c) Assumptions used 

in accounting for 

the gratuity plan 

Mortality rate LIC LIC LIC LIC 

(1994-96) (1994-96) (1994-96) (1994-96) 

Discount rate 8.25% 8.25% N.A. N.A. 

Salary escalation 

rate (p.a) 6% 6% N.A. N.A. 

Expected rate of 

return on plan 

assets (p.a) 8.25% 8.25% N.A. N.A. 

(v) Related Party Disclosures under Accounting Standard 18: 

During the year ended 31st March 2010, the Company has had transactions with 

related parties as defined in Accounting Standard 18 on ”Related Party Disclosures”. 

Related Parties have been identified by the management on the basis of the 

information available with the Company. Details of these parties with whom the 

Company has had transactions, nature of the relationship, transactions with them 

and balances at year-end, are detailed in Annexure 1 : 

(vi) Micro, Small and Medium Enterprises 

Sundry Creditors do not include any amount payable to Small Scale Industrial 

Undertakings and Micro, Small and Medium Enterprises. Under the Micro, Small 

and Medium Enterprises Development Act, 2006 (MSMEDA), which came into 

force from October 02, 2006, certain disclosures, are required to be made relating 

to Micro, Small and Medium Enterprises. On the basis of the information and 

records available with the management, the following disclosures are made for 

the amounts due to the Micro, Small and Medium Enterprises, who are registered 

with the competent authorities. 

Particulars 

Amount 

Principal amount remaining unpaid to any supplier as at 

the period end 

Nil 

Interest due thereon 

Nil 

Amount of Interest paid by the company in terms of section 

16 of the MSMEDA, along with the amount of the payment 

made to the supplier beyond the appointed day during 

the accounting period 

Nil 

Amount of interest due and payable for the period of delay 

in making payment (which have been paid but beyond the 

appointed day during the period) but without adding the 

interest specified under the MSMEDA 

Nil 

Amount of interest accrued and remaining unpaid at the 

end of the accounting period 

Nil 

(vii) There are no contingent liabilities as at March 31, 2010. 

(viii) Value of contracts remaining to be executed on capital account pending is 

Rs.18,024,882 (Previous year: Rs. Nil). 

(ix) Capital Work in Progress includes advance paid to suppliers for Rs.11,705,000/- 

(Previous year: Rs. Nil). 

(x) Expenses incurred exclusively for the benefit of a member Company are recovered 

from the concerned member Company and accordingly have been shown as 

recovered from concerned members. 

(xi) Assets acquired under finance leases 

Fixed assets stated below as at 31st March 2010 have been acquired on finance 

lease. 

Computer & Servers 

Financial Year Cost Accumulated Net Book 

Depreciation Value 

Current Year (Rs) 15,022,610 1,177,871 14,290,533 

Previous Year (Rs) NIL NIL NIL 

Softwares 

Financial Year Cost Accumulated Net Book 

Depreciation Value 

Current Year (Rs) 752,556 104,515 648,048 

Previous Year (Rs) NIL NIL NIL 

(283)

C M Y K 


The lease rentals charged during the current year and the maximum obligations 

on finance leases payable at the balance sheet date, as per the rentals stated in 

the agreements are as follows: 

Particulars 


(Rs) (Rs) 

Lease payments made 1,700,711 Nil 

Interest paid 283,823 Nil 

Present Value of lease payments 1,416,888 Nil 

(xii) 

(xiii) 

There was no impairment loss on fixed assets on the basis of review carried out by 

the management in accordance with the Accounting Standard (AS) – 28 “Impairment 

of Assets” issued by the ICAI. 

Previous year’s figures have been regrouped / rearranged, wherever necessary to 

conform to the current year’s figures. 

Particulars Not Later than Later Than One Later Than 

One Year year but not five years 

later than 

five years 

Minimum Lease 

payments outstanding 3,920,103 13,927,420 Nil 

Future Interest 

Outstanding 1,665,425 2,575,564 Nil 

Present Value of 

lease payments 2,254,678 11,351,856 Nil 

G. V. Gopalakrishnan Pankaj Razdan 

Director 

Director 

Place: Mumbai 

Date: 20th April, 2010 


(284)

C M Y K 



Discl;osures in Terms of Accounting Standard 18 on Related Party Disclosure for the year ended 31st March, 2010 

(A) Enterprises where control exists 


1) Aditya Birla Fianacial Services Pvt. Ltd 

Annexture : 1 

Disclosures in respect of transactions with related parties and outstanding balances as at the period end : 31st March 2010 

Sr. Name of the related party Description of Nature of Transaction For the year For the year Amount Amount 

No. with whom the transaction has been Relationship with ended on ended on Outstanding Outstanding 

made the party 3/31/2010 3/31/2009 as recoverable/ as recoverable/ 

(payable) (payable) 

3/31/2010 3/31/2009 

1 2 3 4 5 6 7 8 

1 Aditya Birla Financial Services Pvt. Ltd Holding Company Share Capital 500,000 — — — 

2 Aditya Birla Minacs Worldwide Ltd Fellow Subsidiary Reimbursement of expenses payable 192,257 — (192,257) — 

(Formerly known as Transworks 

Information Services Ltd) 

3 Aditya Birla Minacs IT Services Limited Fellow Subsidiary Reimbursement of Expenses Payable 1,380,039 — (17,389) — 

(Formerly known as PSI 

Data Systems Limited) 

4 Aditya Birla Money Mart Limited Fellow Subsidiary a) Reimbursement of expenses receivable. 

(Formerly known as (net of service tax Rs 297,868) 2,891,921 — (712,233) — 

Birla Sun Life Distribution b) Reimbursement of expenses Payable 89,444 — — 

Compnay Limited ) 

c) Advance Recd towards premises 

security deposit 130,800 — — — 

5 Birla Sun Life Insurance Fellow Subsidiary a) Reimbursement of expenses 88,401,811 — (1,614,089) — 

Company Limited receivable. 

b) Reimbursement of expenses Payable 1,146,164 — — — 

c) Advance Recd towards premises 

security deposit 915,000 — — — 

6 Birla Sun Life Asset Management 

Company Limited Joint Venture of a) Reimbursement of expenses receivable. 27,655,588 — 5,637,592 — 

Holding Company b) Reimbursement of expenses Payable 8,681,212 — — — 

7 Aditya Birla Capital Limited Fellow Subsidiary a) Share Capital 500,000 — — — 

(Formerly Known as Laxminarayan 

Investment Limited) b) Inter Corporate Loan Taken 4,000,000 — — — 

c) Interest paid on Inter corporate Loan 40,274 — — — 

(285)

C M Y K 



I. REGISTRATION DETAILS 

REGISTRATION NO. U 6 5 9 9 9 M H 2 0 STATE CODE 2 2 

BALANCE SHEET DATE 3 1 0 3 2 0 1 0 

D D M M Y Y Y Y 

II. 

CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS) 

PUBLIC ISSUE N I L RIGHTS ISSUE N I L 

BONUS ISSUE N I L PRIVATE PLACEMENT N I L 

III. 

POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS) 

TOTAL LIABILITIES 3 9 0 3 1 TOTAL ASSETS 3 9 0 3 


PAID-UP CAPITAL 5 0 0 RESERVES AND SURPLUS N I L 

SECURED LOANS 1 3 6 0 5 UNSECURED LOANS 2 4 9 2 


NET FIXED ASSETS 4 9 7 5 0 INVESTMENTS N I L 

NET CURRENT ASSETS (–) 1 1 1 2 2 MISC. EXPENDITURE N I L 

ACCUMULATED LOSSES 4 0 . 2 9 DEFERRED TAX LIABILITY N I L 

IV. 

PERFORMANCE OF THE COMPANY (AMOUNT IN RS. THOUSANDS) 

TURNOVER N I L TOTAL EXPENDITURE N I L 

PROFIT/(LOSS) BEFORE TAX N I L PROFIT/(LOSS) AFTER TAX N I L 

EARNINGS PER SHARE IN RS N I L DIVIDEND RATE % 

V. GENERIC NAMES OF THE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY (AS PER MONETARY TERMS) 

ITEM CODE NO N A 

(ITC CODE) 

PRODUCT 

DESCRIPTION 


G.V. Gopalakrishnan 

Director 

Pankaj Razdan 

Director 



(286)

CMYK 

BIRLA INSURANCE ADVISORY & BROKING SERVICES LIMITED 


Dear Members, 

The Directors have pleasure in presenting their Eighth Annual Report together 

with the Audited Statement of Accounts of the Company for the year ended 

31 st March, 2010. 

FINANCIAL PERFORMANCE: 

Rs. in Lac 

Particulars Year ended Yea r ended 

31 st March, 31 st March, 


Total Income 2205 1766 

Total Expenses 1626 1072 

Profit before depreciation / 

amortisation and tax 579 694 

Less: Depreciation / amortization 54 31 

Profit Before Tax 525 663 

Less: Provision for tax including 

fringe benefit tax and deferred tax 154 187 

Profit After Tax 371 476 

Balance of Profit brought from 

the previous year 1305 844 

Profit Before Appropriations 1676 1320 

Proposed Dividend on 

Equity Shares — 14 

Corporate Dividend Tax — 2 

Balance of Profit / (loss) carried 

to Balance Sheet 1676 1304 

OPERATIONAL REVIEW: 

The Company’s performance during 2009-10 was reasonably good 

considering the intense competitive business environment. The General 

Insurance industry premium grew by 13.42% over the previous year. The 

year witnessed hardening of prices in the health insurance towards the end. 

In view of the adverse loss experience, the insurance companies also capped 

the brokerage on health insurance at 7.5%, which in turn impacted our 

earnings. Pressure on brokerage was high in view of the increasing losses 

for the insurance companies. However, with significant increase in revenue 

from the reinsurance and retail broking operations the Company recorded 

a total income of Rs. 2205 Lac during 2009-10 as compared to Rs. 1766 

Lac during the corresponding period last year, a growth of around 25%. 

The net profit after tax of the Company is Rs.371 Lac as against Rs.476 Lac 

in financial year 2009. 

The company’s composite broking license has been renewed by IRDA for a 

period of three years effective from 10 th April’ 2009. 

BUSINESS PROSPECTS: 

During the year 2010-11, the general insurance industry is expected to 

grow by more than 15%. The market is expected to witness hardening of 

rates following higher losses incurred by insurance companies and restrictions 

imposed by the reinsurers. Improved economic outlook is also likely to boost 

growth in general insurance premium. 

Your Company had engaged the services of Ernst & Young for assessing the 

market potential and based on their recommendations the company has 

drawn business plan for next 3 years. The company has decided to raise 

three product verticals for focused growth in Health, Liability and Project 

insurances. Necessary manpower is being recruited for this purpose. We 

also propose to expand our retail and reinsurance broking activities and 

generate higher revenue from these two segments. Overall the outlook for 

the company is positive. 

DIVIDEND: 

In view to conserve the resources your directors do not recommend dividend 

this year as against dividend of 5% in the previous year. 

DIRECTORS’ RESPONSIBILITY STATEMENT: 


confirm the following: 

1. In the preparation of the annual accounts, the applicable accounting 

standards have been followed; 

2. Your Directors have selected such accounting policies and applied 

them consistently and made judgments and estimates that are 

reasonable and prudent so as to give a true and fair view of the state 

of affairs of the Company at the end of the financial year ended on 

March 31, 2010 and of the profit of the Company for that year; 

3. Your Directors have taken proper and sufficient care for the 

maintenance of adequate accounting records in accordance with the 

provisions of this Act for safeguarding the assets of the Company and 

for preventing and detecting fraud and other irregularities; 

4. Your Directors have prepared the attached Statement of Accounts for 

the year ended March 31, 2010 on a going concern basis. 

DIRECTORS: 

Mr. Adesh Gupta Director, retires by rotation and being eligible, offers himself 

for re-appointment at the ensuing Annual General Meeting. Your Board 

recommends his re-appointment. 

AUDITORS: 

M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai, Statutory 

Auditors of the Company have expressed their inability to continue as the 

statutory auditors of the Company. 

M/s S.V.Ghatalia & Associates, Chartered Accountants have expressed their 

willingness and have issued us letter stating that if appointed, their 

appointment will be within the ceiling specified under Section 224(1B) of 


Your Board recommends the appointment of M/s S.V.Ghatalia & Associates, 

Chartered Accountants as the Statutory Auditors of the Company. The 

members are requested to appoint the Auditors and authorise the Board to 

fix their remuneration. 

AUDITORS’ REPORT: 

The Observations made in the Auditors’ Report are self-explanatory and 

therefore, do not call for any further comments under Section 217(3) of the 


FIXED DEPOSITS: 

The Company has not accepted or renewed any deposit as covered under 

Section 58A of the Companies Act, 1956 read with the Companies 

(Acceptance of Deposit) Rules, 1975 from public during the year under review. 

PARTICULARS OF EMPLOYEES: 

The Particulars of employees, as required under Section 217(2A) of the 

Companies Act, 1956 are given in a separate statement attached to this 

Report and forms part of it. 


FOREIGN EXCHANGE EARNINGS AND OUTGO: 


Companies Act, 1956, read with the Companies (Disclosures of the Particulars 




The information on Foreign Exchange earnings and outgo is contained in 

Schedule 15 of Accounts. 

SECRETARIAL COMPLIANCE CERTIFICATE: 

Secretarial Compliance Certificate as required under Section 383A(1) of 

the Companies Act, 1956, as amended by Companies (Appointment and 

Qualifications of Secretary) Amendment Rules, 2009 - Amendment in Rule 

3 issued by M/s. Dilip Bharadiya & Associates, Practising Company Secretaries 

is attached herewith. 

(287)

CMYK 


APPRECIATION: 

The Board places on record its heartfelt appreciation for the dedicated efforts 

put in by the employees at all levels and thanks the shareholders for their 

unstinted support, guidance and cooperation. 

The Board also places on record its appreciation to banks, business associates 

and insurance companies for their support and cooperation. 

The Board also expresses its gratitude to the support and advise received 

from IRDA and other statutory authorities from time to time. 


Date : 31 st May, 2010 


Sd/- Sd/- 

Director 

Director 

Annexure I 

Particulars of Employees as required U/S 217(2a) of the Companies Act, 1956 and forming part of Directors’ Report for the year ended as 

on 31st March, 2010. 

A) Employees who were employed throughout the Financial Year and were in receipt of remuneration in aggregate of not less than 

Rs.24,00,000/- per annum. 

Details of Previous Employment 

Name Designation Remuneration Qualifications Age Experience Date of Name of Employer Designation Period of 

(Rs.) (Years) (Years) joining Service 

the Company 

(Years) 

Satish Deshpande Sr. Vice President 56,66,732 M. Sc., 57 31 29-06-2006 Cholamandalam MS General Head – Claims & 4 Yrs 

B.J (Bachelor of Insurance Company Ltd. Reinsurance 

Journalism) A.I.I. 

K V Satheesh Vice President 33,86,896 ICWAI 22 06-09-2006 HSBC Insurance Asst Director Mkt 1.8 Yrs 

Brokers (I) Pvt Ltd 

Rajesh Sadar Vice President 26,03,176 BE, MBA 20 28-09-2007 IFFCO Tokio 4.6 

B) Employees who were employed for a part of the Financial Year and were in receipt of remuneration in aggregate of not less than Rs.2,00,000/- per month. 




the Company 

(Years) 

NIL 

Notes : 

1. Remuneration includes salary, allowances, medical benefits, Company’s contribution to Provident Fund and Superannuation Fund, wherever applicable, 

leave encashment, leave travel assistance and monetary value of taxable perquisites 

2. None of these Executives are related to any Director of the Company. 

3. Appointment is non contractual, other terms and conditions are as per rules of the Company. 

(288)

CMYK 




Birla Insurance Advisory & Broking Services Limited 

1. We have audited the attached Balance Sheet of Birla Insurance 

Advisory & Broking Services Limited (hereinafter referred to as “the 

Company”) as at March 31, 2010 and also the Profit and Loss Account 

and Cash Flow Statement for the year ended on that date annexed 

thereto. These financial statements are the responsibility of the 

Company’s management. Our responsibility is to express an opinion 

on these financial statements based on our audit. 







assessing the accounting principles used and significant estimates made 

by management, as well as evaluating the overall financial statement 




amended) (hereinafter referred to as “the order”) issued by the Central 

Government of India in terms of sub–section (4A) of section 227 of 

the Companies Act, 1956 (hereinafter referred to as “the Act”), we 

enclose in the Annexure a statement on the matters specified in 



that: 

(i) 

(ii) 

(iii) 

(iv) 

(v) 

(vi) 

We have obtained all the information and explanations, which 



In our opinion, proper books of account as required by law 

have been kept by the Company so far as it appears from our 

examination of those books; 

The Balance Sheet, Profit and Loss Account and Cash Flow 



In our opinion, the Balance Sheet, Profit and Loss Account and 

Cash Flow statement dealt with by this report comply with the 

accounting standards referred to in section 211 (3C) of the Act; 

On the basis of the written representations received from the 

directors as on March 31, 2009 and taken on record by the 



director in terms of section 274 (1)(g) the Act; 


to the explanations given, the said accounts give the information 

required by the Act in the manner so required and give a true 

and fair view in conformity with the accounting principles 

generally accepted in India; 

a) in the case of the Balance Sheet, of the state of affairs of 

the Company as at March 31, 2010 

b) in the case of the Profit and Loss account, of the profit of 

the Company for the year ended on that date; and 

c) in the case of Cash Flow statement, of the cash flows of 

the Company for the year ended on that date. 

Mumbai, 

Dated : 15 th April, 2010 

For and on behalf of 

Khimji Kunverji & Co. 



R V Chaniyari 

Partner(F-31083) 

Annexure referred to in paragraph 3 of our report of even date of 

Birla Insurance Advisory & Broking Services Limited as at March 31, 



particulars, including quantitative details and situation of Fixed 

Assets. 

(b) 

(c) 

The company has a program for phased physical verification of 

all its fixed assets which in our opinion, is reasonable having 

regard to the size of the company and nature of its assets. As 

informed, no material discrepancies were noticed on such 

verification 

During the year the Company has not disposed off substantial 

part of its fixed assets. 

(ii) (a) The company had no inventories during the year. Hence clause 

(ii) of the Order are not applicable to the Company. 

(iii) (a) The Company has not granted any loans, secured or unsecured 

to companies, firms, and other parties listed in the register 

maintained under Section 301 of the Act. Hence clause (iii) of 

the Order are not applicable to the Company. 

(iv) 

(v) 

(vi) 

(vii) 

(viii) 

(b) 

The Company has not taken any loans, secured or unsecured 

from companies, firms, and other parties listed in the register 

maintained under Section 301 of the Act. Hence clause (iii) (f) 

and (g) of the Order are not applicable to the Company. 


given, there is adequate internal control system commensurate with 

the size of the Company and the nature of its business for the purchase 

of fixed assets and for sale of services. As informed, the Company has 

taken corrective steps to overcome weakness observed in sale of services 

Based on the Audit procedure applied, and according to information 

and explanations provided by the management, there are no contracts 

or arrangements referred to in section 301 of the Act that need to be 

entered in the register maintained under the section. In view of this, 

clause (v) of the Order is not applicable. 

According to the information and explanation given, the Company 

has not accepted any deposit during the year. 

In our opinion, the Company has an internal audit system 

commensurate with its size and nature of its business. 

The Company is not required to maintain any cost records prescribed 

by the Central Government under clause (d) of sub–section (1) of 

section 209 of the Act. 

(ix) (a) According to the records of the Company, the Company is 

generally regular in depositing with appropriate authorities 

undisputed statutory dues including Provident fund, Income Tax, 

Service Tax, Cess and any other statutory dues applicable to it 

and there are no arrears as at March 31, 2010 for a period of 

more than six months from the date they became payable. Further, 

as informed, the company in not liable to pay Employees’ State 

Insurance, Sales Tax, Custom Duty, Excise Duty and Investor 

Education and Protection fund. 

(x) 

(xi) 

(xii) 

(b) 

According to the information and explanations given there are 

no dues in respect of Income tax, Service tax, and Cess that 

have not been deposited on account of some dispute 

The Company has no accumulated losses at the end of the financial 

year and it has not incurred any cash losses in the current financial 

year or in the immediately preceding financial year. 

The company has not taken any loans from Financial Institutions, banks 

or issued Debentures. Thus clause (xi) of the order is not applicable. 

According to the information and explanations given, the Company 

has not granted any loans and advances on the basis of security by 

way of pledge of shares, debentures and other securities. Thus clause 

(xii) of the order is not applicable. 

(289)

CMYK 


(xiii) 

(xiv) 

(xv) 

(xvi) 


given, the Company is not a chit fund or nidhi/ mutual benefit fund/ 

society. Therefore, clause (xiii) of the order is not applicable. 

In our opinion, the company is not dealing in or trading in shares, 

securities, debentures and other investment. Accordingly the provisions 

of clause 4(xiv) of the order, are not applicable to the Company. 

According to the information and explanation given, the Company 

has not given any guarantee for loans taken by others from banks or 

financial institutions. 

According to the information and explanation given, the company 

has not taken any term loans during the year. 

(xvii) According to the information and explanations given and on overall 

examination of the balance sheet of the Company, we report that no 

funds raised on short–term basis have been used for long–term 

investment. 

(xix) 

(xx) 

(xxi) 

The company has not issued any debentures. Hence the provisions of 

clause (xix) of the order are not applicable. 

The company has not raised any money by public issue. Hence 

provisions of clause (xx) of the order are not applicable. 

During the course of our examination of the books and records of the 

Company, carried out in accordance with the auditing standards 

generally accepted in India, we have neither come across any instance 

of fraud on or by the Company, noticed or reported during the year 

nor we have been informed of such case by the management. 


Khimji Kunverji & Co. 



(xviii) The Company has not made preferential allotment of shares during 

the year to parties and companies covered in the register maintained 

under section 301 of the Act. 

Mumbai, 

Dated : 15 th April, 2010 

R V Chaniyari 

Partner(F-31083) 

(290)

CMYK 






31st March, 31st March, 


Rs. 

Rs. 

Share Capital 1 27,000,000 27,000,000 


DEFERRED TAX LIABILITIES 543,000 684,643 


FIXED ASSETS 

195,104,794 158,155,312 

Gross Block 3 25,626,999 13,011,360 

Less : Depreciation 10,887,446 5,500,166 

Net Block 14,739,553 7,511,194 

Capital Work In Progress — 644,243 

14,739,553 8,155,437 

INVESTMENTS 4 — 118,969,342 

CURRENT ASSETS, 



Cash and Bank Balances 6 15,135,330 15,198,109 

Other Current Assets 141,877 748,566 

Loans and Advances 7 138,627,583 31,690,919 

LESS:- CURRENT LIABILITIES 

AND PROVISIONS 

205,929,853 66,007,937 


Provisions 9 6,060,931 4,906,844 

25,617,518 35,083,220 

NET CURRENT ASSETS 180,312,335 30,924,717 

MISCELLANEOUS EXPENDITURE 10 52,906 105,816 

(to the extent not written off or adjusted ) 

195,104,795 158,155,312 

Schedules referred to above form an 

integral part of the financial statements 


INCOME 

Schedule April 2009 to April 2008 to 

March 2010 March 2009 

Rs. 

Rs. 


Interest Income 5,583,154 984,667 

Miscellaneous Income 12 8,938,736 10,646,549 

EXPENDITURE 

220,490,595 176,620,805 

Personnel Cost 13 79,941,676 59,278,131 

Administrative and Other Expenses 14 82,626,401 47,862,175 

Depreciation 5,412,904 3,067,713 

167,980,981 110,208,019 

PROFIT BEFORE TAXATION 52,509,614 66,412,786 


Current Tax 15,500,000 19,000,000 

Deferred Tax Liabilities/ (Assets)-Net (141,643) 88,050 


Income Tax relating to earlier years 60,130 1,111,689 

PROFIT AFTER TAX 37,091,127 47,681,425 

Balance brought from last 

Balance Sheet 130,470,667 84,368,744 

PROFIT AVAILABLE FOR 

APPROPRIATION 167,561,794 132,050,168 


Transferred to General Reserve 

Proposed Dividend — 1,350,000 

Interim Dividend — — 

Corporate Dividend Tax — 229,500 

Balance carried to Balance Sheet 167,561,794 130,470,668 

167,561,794 132,050,168 

Basic and Diluted Earnings per share 

(not annualised) 13.74 17.66 

Significant Accounting Policies and 

Notes on Accounts 15 

Schedules referred to above form 

an integral part of the financial statements 



Chartered Accountan\ts 






R V Chaniyari 

Partner (F-31083) Director Director 

Mumbai, 

Dated: 

R V Chaniyari 


Mumbai, 

Dated: 

(291)

CMYK 


Cash Flow Statement for the year ended March 31, 2010 

Year March 2010 Year March 2009 


A. Cash Flow From Operating Activities 

Net Profit before Tax and Extraordinary items 52,509,614 66,412,786 


Depreciation 5,412,904 3,067,713 

Preliminary Expenses / Share Issue Expenses 

Written off 52,910 52,910 

Provision for Leave Encashment 2,058,084 (26,480) 

(Gain) / Loss due to Foreign Exchange 245,021 (57,445) 

Loss/ (Profit) on sale of Fixed Asset 17,632 (17,100) 

Income from Investment (9,183,757) (10,586,049) 

Interest Income (5,583,154) (984,667) 

(6,980,360) (8,551,118) 

Operating Profit before Working Capital changes 45,529,254 57,861,668 


Trade and Other Receivables (31,942,763) (2,224,464) 

Trade Payables and Other Trade Liabilities (10,189,307) 22,158,759 

(42,132,070) 19,934,294 

Cash Generated from Operations 3,397,184 77,795,963 

Less: Direct Taxes Paid 33,602,061 35,181,094 

Net Cash From Operating Activities (30,204,877) 42,614,869 

B. Cash Flow From Investing Activities 


Net Sale Proceed from Sale of Fixed Assets 49,819 17,100 

Sale of Investment in Mutual Fund units 118,969,342 (37,869,342) 

Income from Investment 9,183,757 10,586,049 

Interest Received 5,583,154 756,064 

Intercorporate Deposits (90,000,000) — 

Net Cash used in Investing Activities 31,721,598 (32,525,327) 

C. Cash Flow From Financing Activities 

Dividend Paid (including tax thereon) (1,579,500) (1,579,500) 

Net Cash used in Financing Activities (1,579,500) (1,579,500) 

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) (62,779) 8,510,042 

Cash and Cash Equivalents (Opening Balance) 15,198,109 6,688,066 

Cash and Cash Equivalents (Closing Balance) 15,135,330 15,198,109 

Net Increase/(Decrease) as Disclosed Above (62,779) 8,510,042 

Notes to Cash Flow Statement 

1) Cash and Cash Equivalents include 

Cash in hand — — 

Balances with Scheduled Banks 15,135,330 15,198,109 

2) Previous years figures has been regrouped and rearranged where ever necessary 

15,135,330 15,198,109 





R V Chaniyari 


Mumbai, 

Dated: 

(292)

CMYK 


Schedules Forming Part of Balance Sheet as at 31st March, 2010 

As at 

As at 

31st March, 2010 31st March, 2009 

Rs. 

Rs. 


AUTHORISED: 

3,000,000 Equity shares of Rs. 10 each 30,000,000 30,000,000 

30,000,000 30,000,000 

ISSUED, SUBSCRIBED AND PAID UP: 

2,700,000 ( Previous year 2700,000) 

Equity shares of Rs.10 each 27,000,000 27,000,000 

(Of the above 2,100,000 equity shares are allotted as 

fully paid-up bonus shares by capitalisation of 

General Reserve) 

(Refer Note No.B - 8 and B 6 a (ii) of Schedule 15) 

27,000,000 27,000,000 


As at 

As at 


Rs. 

Rs. 

PROFIT AND LOSS ACCOUNT OPENING BALANCE 130,470,667 84,368,744 

Add: Surplus as per Profit and Loss Account 37,091,127 46,101,924 

Closing balance 167,561,794 130,470,668 




As at Additions Deductions As at Up to For the Deductions Up to As at As at 

Discription of Asset 31.03.2009 31.03.2010 31.03.2009 year 31st March, 31.03.2010 31.03.2009 


Lease Hold Property 353,619 5,827,909 — 6,181,528 353,619 1,541,024 — 1,894,643 4,286,885 0 

Plant and Machinery 6,550,553 5,563,677 93,074 12,021,157 3,253,903 2,240,083 25,623 5,468,363 6,552,794 3,296,650 

Furniture and Fixtures 317,457 1,212,070 — 1,529,527 183,029 165,275 — 348,304 1,181,223 134,428 

Vehicle 2,541,927 — — 2,541,927 632,819 508,385 — 1,141,204 1,400,723 1,909,108 

Intangible Assets 

Computer Software 3,247,804 105,056 — 3,352,860 1,076,795 958,136 — 2,034,932 1,317,928 2,171,008 

Total 13,011,360 12,708,712 93,074 25,626,999 5,500,166 5,412,904 25,623 10,887,446 14,739,553 7,511,194 

Previous Year 7,910,405 5,370,955 270,000 13,011,360 2,702,453 3,067,713 270,000 5,500,166 7,511,194 

SCHEDULE 4 - UNQUOTED, FULLY PAID UP AND NON TRADE 

As on 31st March, 2010 As on 31st March, 2009 

Particulars No. of Units Amt in Rupees No. of Units Amt in Rupees 

Mutual Fund units of Rs. 10 Each 

Long Term Investment 

Birls FTP INSTL Series AL Growth 760,000.000 7,600,000 

Birla FTP - INSTL - Series AY - Growth — — 1,130,968.133 11,309,681 

Birls FTP INSTL Series AW Growth — — 3,000,000.000 30,000,000 

Reliance Fixed Horizon Fund - IX Series Inst Growth Plan — — 2,500,000.000 25,000,000 

— — 7390968.133 73,909,681 

Current Investment 

LIC Liquid Fund-Growth Plan — — 638,822.328 10,254,951 

Birla Sunlife Income Plust Qtrly Dividend Reinvestment — — 1,315,816.540 16,347,057 

Birla Sunlife Dynamic Bond Fund-Retail Plan-Monthly Dividend — — 1,949,003.469 19,273,201 

— — 3,903,642.337 45,875,209 

— — 11,294,610.470 119,784,890 

Less Provision for Diminution value in Investment 815,548 

Total Book value of Investments — — 11,294,610.470 118,969,342 



As at 

As at 


Rs. 

Rs. 

Outstanding for a period exceeding six months 2,753,699 633,082 

Other debts 49,271,364 17,737,261 


52,025,063 18,370,343 


Balance with scheduled banks in: 

Current account 7,521,369 8,798,109 

Fixed deposits (lien marked in favour of IRDA Rs 64,00,000) 7,613,961 6,400,000 

15,135,330 15,198,109 


(Unsecured, Considered good ) 

Advances recoverable in cash or in kind 

As at 

As at 


Rs. 

Rs. 

or for value to be received 2,874,780 2,874,314 

Service tax receivable (Input Credit) 241,107 91,664 

Soft Loan 937,411 1,269,928 

Deposits 93,838,439 4,314,663 

Advance to Holding Company * — 446,435 

Advance payment of income tax & FBT(net of provision) 40,735,846 22,693,915 

138,627,583 31,690,919 

* Maximum balance due at any time during the year 27,191,347 Cr (previous year Rs 25,555,880 Dr) - Refer 

Note: 6 a (B) and B - 8 of Schedule 15) 

(293)

CMYK 




As at 

As at 


Rs. 

Rs. 

Sundry Creditors 12,694,305 27,873,550 

Other Liabilities 1,546,840 2,302,826 

Due to Holding Company 5,315,442 — 

Ref Note :6.a (B) 

SCHEDULE 9 - PROVISIONS 

19,556,587 30,176,375 

Provisions for Leave encashment 5,206,910 3,148,826 

Gratuity Payable 854,021 178,518 

Proposed Dividend — 1,350,000 

Corporate Dividend Tax — 229,500 

SCHEDULE 10 - MISCELLANEOUS EXPENDITURE 

(to the extent not written off or adjusted) 

6,060,931 4,906,844 

Preliminary Expenses 20,936 41,876 

Share issue Expenses 31,970 63,940 

52,906 105,816 

SCHEDULE 11 - INCOME FROM OPERATIONS 

General Insurance Advisory Services: 

For the For the 

Year Ended Year Ended 

31st Mar 10 31st Mar-09 

Rs. Rs. 

Administrative Services and Consultancy Charges 968,862 5,976,622 

Brokerage 204,999,843 159,012,967 

SCHEDULE 12 - MISCELLANEOUS INCOME 

Income from Long Term Investment 

205,968,705 164,989,589 

Gain on Redemption of Mutual Fund units 8,797,667 8,517,720 

Income From Current Investment 

Gain on Redemption of Mutual Fund units (617,296) 238,371 

Dividend 1,003,386 1,829,958 

Others — 3,055 

Profit on sale of Fixed Assets — — 

Foreign Exchange Gain/(Loss) (Net) (245,021) 57,445 


8,938,736 10,646,549 

Salaries, Gratuity and Other Allowances 71,924,344 53,403,585 

Contribution to Provident and Other funds 3,503,557 2,927,565 


79,941,676 59,278,131 

SCHEDULE 14 - ADMINISTRATIVE AND OTHER EXPENSES 

Legal and Professional charges 9,623,362 3,216,173 

Advertisement and Business Promotion Expenses 1,540,281 3,885,067 

Telephone and Communication Expenses 3,934,749 3,391,423 

Travelling and Conveyance Expenses 5,466,241 7,336,498 

Motor Car Expenses 1,235,656 1,234,093 

Auditors’ Remuneration : 

– Audit 86,667 86,667 

– ax Audit 40,000 40,000 

– For Certification 76,840 148,888 

– Out of Pocket Expenses 18,254 

Rent 20,063,932 7,819,201 

Rates and Taxes 2,201,204 518,700 

Repair and Maintenance : 

– Building 1,375,377 — 

– Plant and Machinery — — 

– Others 1,684,845 502,491 

Insurance Expenses 2,124,961 1,293,616 

Service Charges 27,561,399 11,049,638 

Electricity Expenses 2,891,719 2,695,926 

Printing and Stationery 770,037 518,889 

(Profit)/Loss on sale of Assets 17,632 (17,100) 

Miscellaneous Expenses 2,694,137 4,151,082 

Preliminary Expenses Written Off 20,940 20,940 

Share Issue Expenses Written Off 31,970 31,970 

Diminution in Value of Current Investments (815,548) 815,548 

82,626,401 48,757,964 

Less: Excess Provision for Expenses Written Back — (895,789) 

82,626,401 47,862,175 

(294)

CMYK 


SCHEDULE - 15 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 

(A) 

SIGNIFICANT ACCOUNTING POLICIES 

1. ACCOUNTING CONVENTION 

The financial statements have been prepared under the historical cost convention on an 

accrual basis in compliance with all material aspect of the applicable Accounting Standards 

by Companies Accounting Standards Rules, 2006 and the relevant provisions of the 

Companies Act, 1956. The accounting policies have been consistently applied by the 

Company and are consistent with those used in the previous year. 

2. TRANSLATION OF FOREIGN CURRENCY ITEMS 

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date 

of transaction. Foreign currency monetary items are reported using closing rate of exchange 

at the end of the year. The resulting exchange gain/loss is reflected in the profit and loss 

account. Other non-monetary items, like fixed assets, investments in equity shares are 

carried in terms of historical cost using the exchange rate at the date of transaction. 

3. FIXED ASSETS 

Fixed assets are stated at cost, less accumulated depreciation and impairment loss if any. 

Cost comprises the purchase price and any attributable cost of bringing the asset to its 

working condition for its intended use. 

DEPRECIATION/ AMORTIZATION 

a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in 

the manner specified in the Schedule XIV of the Companies Act, 1956 except in the 

case of the following, where depreciation is equally charged over the estimated 

useful lives. 

Capital Expenditure on assets not owned 

Office Computers 

Vehicles 

Furniture, Fixtures and Electrical Fittings 

Office Electronic Equipments 

Leasehold Land/Improvements 


- 5 Years 

- 4 Years 

- 5 years 

- 7 years 

- 4 years 

b) INTANGIBLE ASSETS ARE AMORTIZED EQUALLY OVER: 

Specialized Software 

- Over the primary period of the lease 

- 3 years 

c) Depreciation on the Fixed Assets added/disposed off/discarded during the year is 


“Continuous process plants” are classified based on technical assessment and depreciation 

is provided accordingly. 

4. IMPAIRMENT OF ASSETS 

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any 

indication of impairment based on internal/ external factors. An asset is treated as impaired 

when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any is 

charged to Profit and Loss Account in the year in which an asset is identified as impaired. 

Reversal of impairment losses recognized in prior years is recorded when there is an indication 

that the impairment losses recognized for the assets no longer exist or have decreased. 

5. INVESTMENTS 

Current Investments are stated at lower of cost and fair value. Long term investments are 

stated at cost after deducting provisions made, if any, for other than temporary diminution 

in the value. 

6. REVENUE RECOGNITION 

Brokerage Income is recognized based on insurance business booked from the client. 

Interest income is recognized in the profit or loss account on accrual basis. Dividend income 

on investment is accounted for when the right to receive the payment is established. 

7. RETIREMENT AND OTHER EMPLOYEE BENEFITS 

(i) 

(ii) 

Defined Contribution Plan 

The company makes defined contribution to Provident Fund and Superannuation 

Schemes which are recognized in the Profit and Loss Account on accrual basis. 


The company’s liabilities under Payment of Gratuity Act , long term compensated 

absences and pension are determined on the basis of actuarial valuation made at 

the end of each financial year using the projected unit credit method except for Short 

term compensated absences which are provided for on based on estimates. Actuarial 

gain and losses are recognized immediately in the statement of Profit and Loss Account 

as income or expense. Obligation is measured at the present value of estimated 

future cash flows using a discounted rate that is determined by reference to market 

yields at the Balance Sheet date on Government bonds where the currency and 

terms of the Government bonds are consistent with the currency and estimated terms 

of the defined benefit obligation. 

8. TAXATION 

Tax expense comprises of current and deferred tax. 

Provision for current tax is made on the basis of estimated taxable income for the current 

accounting year in accordance with the Income Tax Act, 1961. 

The deferred tax for timing differences between the book and tax profits for the year is 

accounted for, using the tax rates and laws that have been substantively enacted as of the 

balance sheet date. Deferred tax assets arising from timing differences are recognized to 

the extent there is reasonable certainty that these would be realized in future. 

Deferred tax assets in case of unabsorbed losses and unabsorbed depreciation are recognized 

only if there is virtual certainty that such deferred tax asset can be realized against future 

taxable profits. 

9. OPERATING LEASES 

Leases where significant portion of risk and reward of ownership are retained by the Lessor 

are classified as Operating Leases and lease rentals thereon are charged to Profit and Loss 

account. 

10. PROVISIONS AND CONTINGENCIES 

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, 

based on the available evidence. 

Provisions are recognized when there is a present obligation as a result of past event and it 

is probable that an outflow of resources will be required to settle the obligation, in respect 

of which a reliable estimate can be made. 

Provisions are determined based on best estimate required to settle the obligation at the 

balance sheet date. 

11. MISCELLANEOUS EXPENDITURE 

Share issue expenses and preliminary expenses are equally amortized over a period of ten 

Years. 

(B) NOTES TO ACCOUNTS: 

1. Estimated amount of contracts remaining to be executed on capital account and not provided 

for (net of advances) Rs.4,953,243 (Previous year Rs.7,305,468). 

2. Contingent liability not provided for: 


a) Claims against the Company not 

acknowledged as debts Rs. Nil Rs. Nil 

3. The Company is not engaged in providing or rendering of services in relation to any industry 

specified in the First Schedule to the Industries (Development and Regulation) Act, 1951. 

Accordingly, no disclosure is required to be made under the provisions of the Micro, Small, 

and Medium Enterprise Development Act, 2006. 

4. Deferred income taxes 

The breakup of deferred tax liability/ (asset) at the year end is as under: 

As at As at 


(Rs) 

(Rs) 

Deferred tax liability: 

Depreciation 543000 684,643 

Net deferred tax liability/ (asset) 543000 684,643 

5. The Company is considering Accounting Standard 15 (Revised 2005) “Employee Benefits” 

at the end of 31 st March, 2010 and pro–rata charges has been debited to the profit loss 

account of the year. The status of employees benefits as on 31 st March 2010 as per actuarial 

valuation was as under: 

Year Ended 

31-Mar-10 31-Mar-09 

(in Rs.) 

Change in Defined Benefit Obligation 

Opening Defined Benefit Obligation 2,111,801 1,620,546 

Current Service Cost 1,124,066 871,747 

Interest Cost 257,296 203,588 

Actuarial Losses/(Gain) (458,370) (584,080) 

Closing Defined Benefit Obligation 3,034,793 2,111,801 

Change in Fair Value of Assets 

Opening Fair Value of Plan Assets 1,933,283 953,217 

Expected Return on Plan Assets 193,089 95,153 

Actuarial Gain/ (Losses) (124,118) 180,922 

Contributes by Employer 178,518 703,991 

Closing Fair Value of Plan Assets 2,180,772 19,33,283 

Expected Employer’s Contribution 1,000,000 1,000,000 

Reconciliation of present value of the Obligation & 

fair value of Plan Assets 

As at As at 

31.03.2010 31.03.2009 

(Rs.) 

(Rs.) 

Fair value of plan assets at the end of the year 2,180,772 (1,933,283) 

Present value of defined benefits obligation at end of period 3,034,793 2,111,801 

Liability recognised in the balance sheet 854,021 178,518 

Current Service Cost 1,124,066 871,747 


Expected return on Plan Assets (193,089) (95,153) 

Actuarial Gains/(Losses) (334,252) (765,002) 

Net Gratuity Cost 854,021 215,180 

(295)

CMYK 


Investment details of Plan assets 

Government of India 22% 0% 

Corporate Bonds 2% 0% 

Insurer Managed Fund 76% 100% 

Experience Adjustment As at As at 


(Rs.) 

(Rs.) 

Defined Benefit Obligation 3,034,793 2,111,801 

Plan Assets 2,180,772 1,933,283 

Surplus/(Deficit) (854,021) (178,518) 

Experience Adjustment on Plan Liabilities (398,553) 445,373 

Experience Adjustment on Plan Assets (124,118) 180,922 

Actual return on Plan Assets 3,034,793 2,111,801 

Principal Actuarial Assumptions at the Balance Sheet Date 

Discount Rate (p.a) 8.15% 8.00% 

Expected Rate of return on Assets (p.a) 8.00% 8.00% 

Defined Contribution Plan – 



(Rs.) 

(Rs.) 

Contribution to Employees Provident Fund 32,09,736 2,709,693 


Related Party Disclosures 

a. List of related parties: 

I Ultimate holding company : Aditya Birla Nuvo Limited (ABNL) 

II Holding company : Upto 14.03.2010 Aditya Birla Finance Ltd (Formerly 

known as Birla Global Finance Company Ltd) 

From 15.03.2010 Aditya Birla Finance Services Private 

Ltd (ABFSPL) (Subject to regulatory Approval) 

III) Fellow subsidiaries : Aditya Birla Capital Advisors Pvt. Limited (ABCAPL) 

(subsidiary of ABFSPL w.e.f.November4,2008) 

Aditya Birla Customer Services Private Limited (ABCSPL) 

(subsidiary of ABFSPL w.e.f.December 11,2008) 

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary 

of ABFSPL) (w.e.f. November 4,2008 and ceased to 

be a subsidiary w.e.f. March 13, 2009) 

Aditya Birla Trustee Company Private Limited (ABTCPL) 

(Subsidiary of ABFSPL) (w.e.f. November 28,2008) 

Aditya Birla Minacs Worldwide Inc. (ABMWL) (formerly 

MWI) (100% Subsidiary of AVTL) 

Aditya Birla Money Mart Limited (ABMML) (formerly 

known as Birla Sun Life Distribution Company Limited 

(subsidiary of ABFSPL w.e.f. 31.03.2009) 

BSDL Insurance Advisory Services Limited (100% 

Subsidiary of ABMML) 

Aditya Birla Minacs Worldwide Limited (ABMWL) 

Transworks Inc. (TW Inc) (100% Subsidiary of ABMWL) 

Aditya Birla Minacs Philippines Inc. (ABMPI) (100% 

Subsidiary of ABMWL) 

AV Trans Works Limited (AVTL) (100% subsidiary of 

ABMWL) 

Aditya Birla Minacs Worldwide Inc. (ABMWL) (formerly 

MWI) (100% Subsidiary of AVTL) 

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

Compass BPO Inc, USA (w.e.f. March 9, 2010) 

Compass Business Process Outsourcing Ltd; India 

(w.e.f. March 9, 2010) 

Minacs Worldwide S.A. de C.V. (100%Subsidiary of 

ABMWI) 

Minacs Group USA Inc. (Subsidiary of ABMWI) 

Minacs Limited (Subsidiary of ABMWI) 

Minacs Worldwide Kft. (Subsidiary of Minacs GmbH) 

Aditya Birla Finance Ltd (Formerly known as Birla 

Global Finance Company Ltd) (w.e.f . March 15, 2010) 

Birla Sunlife Insurance Company Limited (BSLICL) 

Aditya Birla Capital Ltd (ABCL) (formerly known as 

Laxminarayan Investment Limited) 

LIL Investment Limited (w.e.f July27, 2009 and on 

becoming Associates, ceased to be subsidery w.e.f. 

November27,2009) 

Madura Garments Export Limited (MGEL) (merged with 

ABNL w.e.f January 1,2010) 

Madura Garments Exports US, Inc. (ceased to be 

subsidery from. February 09,2010) 

Madura Garments Lifestyle Retail Company Limited 

(MGLRCL) 

M G Lifestyle Clothing Company Private Limited 

(MGCCPL) (merged with ABNL w.e.f January 1,2010) 

Peter England Fashions and Retail Limited (PEFRL) 

Aditya Birla Minacs IT Services Limited (ABMITSL) 

(formerly known as PSI Data Systems Limited) 

Birla Technologies Limited (100% subsidiary of ABMITS) 

b. Transactions with Related parties: (Figures in Rupees) 

Particulars Aditya Birla Aditya Birla BGFL Aditya Birla Aditya Birla Birla Sunlife Birla Sunlife Aditya Birla Aditya Birla Total 

Nuvo Ltd - Nuvo Ltd - Corporate Finance Financial Asset Insurance Money Mart Minacs IT 

Corporate Indo Gulf Finance Ltd Services Management Co Ltd Limited Services Ltd 

Fin Div Div Pvt. Ltd Private Ltd Co. Ltd 

INCOME 

Interest income — — — 337,510 — — — — — 337,510 

— — — (439,874) — — — — — (439,874) 

Business support services (including service tax) — — — — — — — — — — 

— — — — — — — — — — 

Administrative Income — — — — — — — — — — 

— — — — — — — — — — 

EXPENSE 

Dividend Expenses — — — 675,027 — — — — — 675,027 

— — (675,027) — — — — — — (675,027) 

Administrative Expenses 675,000* 1900 — 1,006,3048 15,642 235,161 68,953*** — 498,222***** 11,557,926 

— — — (6,867,270) — — — — — (6,867,270) 

Purchase of Fixed Asset — — — — 9,443,053 9,986 — 18,000 — 9,471,039 

— — — — — — — — — — 

Reimbursement of exp — — — — — 995,562 — — — 995,562 

— — — — — — — — — — 

FINANCE 

Inter corporate deposit placed received — — — — — — — — — — 

— — — — — — — — — — 

Security Deposit given — — — — — — — — — — 

— — — — — — — — — — 

Loan granted/Recd back — — — 116,626,549 8,155,941 — — — — 124,782,490 

— — — (93,274,003) (1,200,750) — — — — (94,474,753) 

Loan obtained /Repaid — — — 122,286,422 9,458,695 — — — — 131,745,117 

— — — (99,267,270) — — — — — (99,267,270) 

OUTSTANDING 

Deposit receivable as on 31.03.2010 — — — 105,000 — — — — — — 

— — — (105,000) — — — — — — 

Receivables as on 31.03.2010 — — — — — 994399**** — — — 994,399 

— — — (551,435) (1,200,750) — — — — (1752185) 

Payable as on 31.03.2010 670073** 1,900 — 5,213,438 102,004 — — — 10,743 5893158 

— — — — — — — — — — 

* Net of service tax of Rs 69526 

** Net of TDS of Rs 74453 

*** Net of service tax of Rs 7102 

**** Net of service tax of Rs 110 

***** Net of service tax of Rs48751 

(296)

CMYK 


Notes: 

a) The related party relationships have been identified by the management on the basis of the 

requirements of the Accounting Standard AS–18 ‘Related Party Disclosures’ issued by the 

Institute of Chartered Accountants of India and the same have been relied upon by the 

auditors. 

b) The relationships as mentioned above except where control exists pertain to those related 

parties with whom transactions have taken place during the year. 

c) The figures in brackets represent corresponding amounts of previous year. 

6. The Company has entered into an operating lease agreement for use of premises which is 

non cancelable for a period of three years. 

The future minimum lease payments for the leases at the balance sheet date are as follows: 

Future minimum lease payments As at As at 

payables for the period 31/03/2010 31/03/2009 

Rs 

Rs 

1) Not later than one year 15,324,252 1,548,000 

2) Later than one year and not later than five years 16,498,692 645,000 

3) Later than five years – – 

The amount of minimum lease payments with respect to the above leases recognized in the 

profit and loss account up to 31 st March, 2010 is Rs 15,324,252 (consisting only minimum 

lease period)(previous year Rs15,48,000) 

7. The company was a subsidiary of Aditya Birla Financial Limited (Formerly : Birla Global 

Finance Co Ltd) which held 1,35,00,54 shares. Subsequently these shares have been 

acquired by Aditya Birla Financial services Pvt Ltd and pending for transfer which is subject 

to regulatory approvals. 

8. The Company has single reportable segment viz–insurance advisory & broking services for 

the purpose of Accounting Standard 17 on ‘Segment Reporting’. The Company does not 

have any reportable geographical segment 

9. Earnings per share: 

Sr Particulars Current Previous 

No Year Year 

Basic and diluted 

(i) Net profit after tax available for equity shareholders (Rs) 34,721,127 47,681,425 

(ii) Weighted average number of equity shares outstanding (Nos) 

Number of shares at the beginning of the year 

Bonus Shares issued during the year 2,700,000 2,700,000 

Nil 

Nil 

Number of equity shares at the end of the year/ half year 2,700,000 2,700,000 

(iii) Nominal value of share (Rs) 10 10 

a. Earning in foreign currency (Reinsurance) : Rs1,350,375 (Previous Year Rs 1,613,339) 

b. Expenditure in foreign currency (Travelling Expense) : Rs888,201 (Previous Year Rs1, 

254,862) 

10. Statement required under Schedule VI Part IV is given in Annexure I attached hereto 

11. Disclosure requirements as required under Para 3, 4C & 4D of part II of Schedule VI of 

Companies Act, 1956 are not given as the same is not applicable to the company 

12 Sundry Debit/Credit balances are subject to confirmation and reconciliation 

13 Information related to Micro, Small and Medium Enterprise Development Act,2006 (Act) 

has been determined to the extend such parties have been identified on the basis of 

information available with the Company. There is no outstanding balance due to such 

parties as at year end 

14 Previous year’s figures have been regrouped / rearranged, whatever considered necessary, 

to conform with the current year’s presentation. 

Annexure I 

Balance Sheet Abstract and Company’s General Business Profile 

(As per GSR No. 388(E) [F No. 3/24/94–CLV] dated 15/05/1995) 

I 

Registration Details 

Registration No. : 134328 State Code: 11 

Balance Sheet Date : 31/03/2010 

II. Capital raised during the year : (Amount in Rs) 

III. 

Public Issue (Net of allotment money in arrears) : Nil 

Rights Issue : Nil 

Bonus Issue : Nil 

Private Placement : Nil 

Position of Mobilisation and 

Deployment of Funds : (Amount in Rs) 

Total Liabilities : 195,104,794 

Total Assets : 195,104,794 


Paid–up Capital : 27,000,000 

Reserves and surplus : 

Secured Loans : Nil 

Unsecured Loans : Nil 

Deferred tax Liability : 543,000 


Net Fixed Assets : 14,739,553 

Investments : NIL 

Net Current Assets : 180,312,334 

Miscellaneous Expenditure : 52,906 

Accumulated Losses : Nil 

IV. Performance of Company : (Amount in Rs.) 

Turnover/ Receipts : 220,490,595 

Total Expenditure : 167,980,981 

Profit before tax : 52,509,614 

Profit after tax : 37,091,127 

Earning per share in Rs. : 13.74 (Face value Rs10) 

(Basic/ Diluted) 

For Khimji Kunverji & Co 


Signatures to Schedules ‘1 to 15’ 

For Birla Insurance Advisory & Broking Services Ltd. 

Dividend rate : 

Generic Names of Three Principal Products/ : (As per monetary 

Services of the Company 

terms) 

Item Code No. (ITC Code) : Not Applicable 

R V Chaniyari 

Partner (F- 31083) Director Director 

Service Description 

: General Insurance 

Advisory & broking 

Services 

Place: Mumbai 

Dated: 

(297)

C M Y K 

ADITYA BIRLA FINANCE LIMITED (Formerly: Birla Global Finance Company Limited) 


Dear Members, 

The Directors have pleasure in presenting the 19 th Annual Report on the 

business operations along with the Audited Accounts of the Company for 

the year ended 31 st March, 2010. 

FINANCIAL RESULTS: 

(Rs. in Lacs) 




Total Income 14,261 14,367 

Total Expenses 9,548 9,887 

Profit before depreciation / 

amortisation and tax 4,713 4,480 

Less: Depreciation / amortization 146 114 

Profit Before Tax 4,567 4,366 

Less: Provision for tax including 

fringe benefit tax, deferred tax and 

Income tax relating to previous years 1,565 1,404 

Profit After Tax 3,002 2,962 

Balance of profit/ loss brought from 

the previous year 1,965 1,472 

Profit Before Appropriations 4,967 4,435 

Transfer to Special Reserve 610 600 

Interim Dividend on Compulsorily 

Convertible Preference Shares 537 537 

Interim Dividend on Equity Shares — 1,059 

Corporate Dividend Tax 91 271 

Balance of Profit carried to 

Balance Sheet 3,729 1,965 

OPERATIONAL REVIEW: 

During the year total income earned by your Company was Rs.14,261 

Lac as against Rs.14,367 Lac of previous year. The total expenses incurred 

during the year have come down to Rs. 9,548 Lac from Rs.9,887 Lac in 

the previous year. 

The capital market initially started on a sluggish note and then gained 

momentum towards the end of the financial year 2010. The 3 rd quarter 

witnessed bearish sentiment because of high volatility in the secondary 

market. The total income generated by ‘Capital Market’ group is around 

Rs.5,992 lakh as against Rs. 9,479 lakh of previous year. 

The economic slowdown affected the Corporate Finance Group (CFG). 

Given the Global weakness in the Industry, Insurance companies took a 

conservative stand on giving us a cover for this book which resulted in 

higher cost of funds to us. Total amount of trade finance extended by the 

Company aggregated to Rs.33,084 lakh as against Rs.85,145 lakh 

financed during last year. 

Treasury division was able to achieve a return of Rs.7,168 lakh by 

borrowing and redeploying money with mutual funds,. The Company was 

able to fully recover the provision made for Non Performing Assets (NPA) 

last year worth Rs. 600 lakh. The Company has provided Rs.100 lakh for 

NPAs during the year. 

BUSINESS PROSPECTS: 

Indian economy is on the recovery path after the global economic 

meltdown. The GDP is estimated to grow at 8.5% during FY11 up from 

7.2% (estimated) in FY10; robust Index of Industrial Production (IIP) 

numbers suggest higher industrial activity and growth in credit off-take is 

expected to be around 20% in FY11. The Company is focusing on 

innovative structuring of credit solutions, strong processes’ and prudent 

risk management. 

CFG has set ambitious growth targets, with a stronger focus on financing 

the ecosystem partners of the Aditya Birla Group of Companies. The 

division plans to enhance its product basket by re-aligning the existing 

products to market requirements and offer additional short term facilities. 

In the long run, the Company envisages providing a holistic solution to its 

customers by addressing his enterprise and personal finance needs. 

CMG focuses on leveraging the strength of Aditya Birla Financial Services 

Group and on the expansion of its existing product lines by introducing 

newer products, viz., ESOP Financing, Loan Against Shares for Individuals 

(Margin Trade Funding) and Loans Against Bond. CMG endeavours to 

have niche to add value to its consumers. The Company continues to be 

optimistic in its outlook for the year 2010-11. 

ABFL is on an accelerated growth path and intends to develop many 

product lines in both short and long term secured funding space in its 

quest to get to a leadership position in the industry. 

DIVIDEND: 

During the year the Company has paid interim dividend at the prescribed 

coupon rate to the holders of Compulsory Convertible Cumulative 

Preference Shares (interim/final dividend at coupon rate in previous year) 

and NIL to the holders of Equity shares (as against 10% previous year). 

The Company has decided to plough back its profits to meet its aggressive 

growth plans and hence no equity dividend is recommended nor paid for 

the year 2009-10. The total outflow on account of dividend on Preference 

amounted to Rs. 629 lakh (inclusive of Rs. 91.35 lac as Corporate Dividend 

Tax). Your directors recommend that the Interim Dividend paid during the 

year be considered as final dividend. 

DIRECTORS’ RESPONSIBILITY STATEMENT: 


confirm that: 

i. In the preparation of the annual accounts, the applicable standards 


ii. The Directors have selected such accounting policies and applied 

them consistently and made judgments and estimates that are 

reasonable and prudent so as to give a true and fair view of the 

state of affairs of the Company at the end of the financial year and 

of the profit of the Company for that year. 

iii. The Directors have taken proper and sufficient care for the 

maintenance of adequate accounting records in accordance with 

the provisions of this Act for safeguarding the assets of the Company 

and for preventing and detecting fraud and other irregularities. 

iv. The Directors have prepared the attached Statement of Accounts for 

the year ended March 31, 2010 on a going concern basis. 

DIRECTORS: 

Mr. Ajay Srinivasan, Directors’ is liable to retire by rotation and, being 

eligible, offers himself for re-appointment at the ensuing Annual General 

Meeting. Your Board recommends his re-appointment. 

AUDITORS: 

M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai, Statutory 

Auditors of the Company have expressed their inability to continue as the 

statutory auditors of the Company. 

M/s S.V. Ghatalia & Associates, Chartered Accountants, have expressed 

their willingness and have issued us letter stating that if appointed, their 

(298)

C M Y K 


appointment will be within the ceiling specified under Section 224(1B) of 


The Audit Committee has recommended the appointment of 

M/s S.V. Ghatalia & Associates, Chartered Accountants, as the Statutory 

Auditors of the Company. The members are requested to appoint the 

Auditors and authorise the Board to fix their remuneration. 

AUDITORS’ REPORT: 

Observations made by the Auditors of the Company in their report read 

with relevant Notes to the Accounts are self-explanatory and do not call 

for any further comments under Section 217(3) of the Companies Act, 

1956. 

SUBSIDIARY: 

During the year your Company sold stake of 50.02% in its subsidiary 

Birla Insurance Advisory & Broking Services Ltd (BIASL) to Aditya Birla 

Financial Services Pvt Ltd. BIASL ceased to be subsidiary of your Company 

and hence Statement pursuant to Section 212 of the Companies Act, 

1956 is not attached. 

FIXED DEPOSITS: 



to the conservation of energy and technology absorption are not applicable 

to the Company due to the very nature of the industry in which it operates. 


and outgo. 

PARTICULARS AS PER SECTION 217(2A) OF COMPANIES ACT, 1956: 

The Statement of particulars of employees pursuant to the provisions of 

Section 217(2A) the Companies Act, 1956, read with the Companies 

(Particulars of Employees) Rules, 1975, as amended is set out in Annexure 

1 to this report. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

Management Discussion and Analysis forming part of this report has been 

separately attached. 

ACKNOWLEDGEMENTS: 

Your Directors take this opportunity to place on record their appreciation 

towards bankers, clients and all the business associates for their continuous 

support to the Company and to the Shareholders for the confidence reposed 

in the Company’s management. The Directors also convey their 

appreciation to the employees at all levels for their enormous personal 

efforts as well as collective contribution. 


Conservation of Energy, Technology Absorption, Foreign Exchange 

EARNINGS AND OUTGO: 


Companies Act, 1956, read with the Companies (Disclosures of the 

Particulars in the Report of the Board of Directors) Rules, 1988 pertaining 

Place: Mumbai 

Date: 31st May, 2010 

Sd/- 

B.N. Puranmalka 

Director 

Sd/- 


Director 

(299)

C M Y K 


Annexure I 

Particulars of Employees as required U/S 217(2a) of the Companies Act, 1956 and forming part of Directors’ Report for the year ended as 

on 31st March, 2010. 

A) Employees who were employed throughout the Financial Year and were in receipt of remuneration in aggregate of not less than 

Rs.24,00,000/- per annum. 




the Company 

(Years) 

K G Ajmera Sr. Vice President 49,42,780 FCA, CISA 57 34 16-12-1993 Cemphan Organics Ltd General Manager 3.5 

Sanjay Miranka Sr. Vice President 47,99,625 CA, CS 39 15 10.04.2003 Walchand Capital Group Head – 

Portfolio Management 2.5 

Srinivas L. S. Vice President 43,08,425 MBA 42 19 19.06.2006 Savant Consulting Group (USA) Vice President – HR 4.5 

Anil Phalod Vice President 28,11,570 CA 44 20 22.02.1990 Jain Synthetics Ltd 1 

B) Employees who were employed for a part of the Financial Year and were in receipt of remuneration in aggregate of not less than 

Rs.2,00,000/- per month. 




the Company 

(Years) 

NIL 

Notes : 1. Remuneration includes salary, allowances, medical benefits, Company’s contribution to Provident Fund and Superannuation Fund, 

wherever applicable, leave encashment, leave travel assistance and monetary value of taxable perquisites. 

2. None of these Executives are related to any Director of the Company. 

3. All appointments are non-contractual except of Mr. K G Ajmera, other terms and conditions are as per rules of the Company. 

(300)

C M Y K 




ADITYA BIRLA FINANCE LIMITED (Formerly: Birla Global Finance 


1. We have audited the attached Balance Sheet of Aditya Birla Finance 

Limited (Formerly: Birla Global Finance Company Limited) 

(hereinafter referred to as “the Company”) as at March 31, 2010 

and also the Profit and Loss Account, and the Cash Flow statement 

for the year ended on that date annexed thereto. These financial 

statements are the responsibility of the Company’s management. 

Our responsibility is to express an opinion on these financial statements 








assessing the accounting principles used and significant estimates 

made by management, as well as evaluating the overall financial 

statement presentation. We believe that our audit provides a 


3. As required by the Companies (Auditor’s Report) Order, 2003 

(as amended) (hereinafter referred to as “the Order”) issued by the 

Central Government of India in terms of sub–section (4A) of section 

227 of the Companies Act, 1956 (hereinafter referred to as 

“the Act”), we enclose in the Annexure a statement on the matters 

specified in paragraphs 4 and 5 of the said Order. 

4. Further to our comments referred to above, we report that: 

(i) We have obtained all the information and explanations, which 



(ii) In our opinion, proper books of account as required by law 

have been kept by the Company so far as it appears from our 


(iii) The Balance Sheet, Profit and Loss Account, and Cash Flow 



(iv) In our opinion, the Balance Sheet, Profit and Loss Account, and 

Cash Flow statement dealt with by this report comply with the 

accounting standards referred to in section 211 (3C) of the Act. 

(v) On the basis of the written representations received from the 

directors as on March 31, 2010 and taken on record by the 



director in terms of section 274 (1)(g) the Act. 

(vi) In our opinion and to the best of our information and according 


required by the Act in the manner so required and give a true 

and fair view in conformity with the accounting principles 


a. in the case of the Balance Sheet, of the state of affairs of 


b) in the case of the Profit and Loss Account, of the profit of 

the Company for the year ended on that date; and 

c) in the case of Cash Flow statement, of the cash flows of the 

Company for the year ended on that date. 


Khimji Kunverji & Co., 


Registration No.105146W 

R V Chaniyari 

Partner (F-31083) 

Mumbai 

Dated : April 15, 2010 

Annexure referred to in paragraph 3 of our report of even 

date 

Re: Aditya Birla Finance Limited (Formerly Birla Global Finance 



particulars, including quantitative details and situation of 

Fixed Assets. 

(b) The Company has a program for phased physical 

verification of all its fixed assets which in our opinion, is 

reasonable having regard to the size of the Company and 

nature of its assets. As informed, no material discrepancies 

were noticed on such verification. 

(c) During the year the Company has not disposed off 

substantial part of its fixed assets. 

(ii) (a) The inventory of securities has been verified by the 

management at reasonable intervals with respect to 

Statement of Accounts of the mutual fund scheme and 

depository’s statements. 

(b) The procedures of physical verification of inventory of 

securities followed by the management is reasonable and 

adequate in relation to the size of the Company and the 

nature of its business. 

(c) The Company is maintaining proper records of inventory 

of securities and no material discrepancies were noticed 

on physical verification. 

(iii) (a) The Company has not granted any loans, secured or 

unsecured, to companies, firms, and other parties listed in 

the register maintained under Section 301 of the Act. Hence 

clauses (iii) (b) to (e) of the Order are not applicable to the 

Company. 

(b) The Company has not taken any loans, secured or 

unsecured, from companies, firms and other parties listed 

in the register maintained under Section 301 of the Act. 

Hence clauses (iii) (f) and (g) of the Order are not applicable 


(iv) In our opinion and according to the information and explanations 

given, there is adequate internal control system commensurate 

with the size of the Company and the nature of its business for the 

purchase of securities, fixed assets and for sale of securities and 

services. During the course of audit, no major weakness has been 

noticed in those internal control systems in respect of these areas. 

(v) Based on the Audit procedure applied, and according to 

information and explanations provided by the management, there 

are no contracts or arrangements referred to in section 301 of the 

Act that need to be entered in the register maintained under the 

section. In view of this, clause (v) of the Order is not applicable. 

(vi) 

(vii) 

(viii) 


has not accepted any deposit during the year. No order has been 

passed by the Company Law Board or National Company Law 

Tribunal or the Reserve Bank of India or any Court or any other 

Tribunal. 

In our opinion, the Company has an internal audit system which is 


The Company is not required to maintain any cost records 

prescribed by the Central Government under clause (d) of sub– 

section (1) of section 209 of the Act. 

(ix) (a) According to the records of the Company, the Company is 

generally regular in depositing with appropriate authorities 

undisputed statutory dues including Provident Fund, 

(301)

C M Y K 


(b) 

Employees State Insurance, Income Tax, Service Tax, Cess 

and any other statutory dues applicable to it and there are 

no arrears as at March 31, 2010 for a period of more 

than six months from the date they became payable. 

Further, as informed, the Company is not liable to pay 

Sales Tax, Wealth Tax, Custom Duty, Excise Duty and 

Investor Education and Protection Fund. 


us, there are no dues of income tax, service tax and cess 

which have not been deposited on account of any dispute 

except as follows: 

Name of Nature of Period Amount Forum where 

the Statute the dues (Rs.) Dispute is 

Pending 

Income Tax Income Tax Assessment 9,33,383 Bombay 

Act, 1961 Year 2003-2004 High Court 

(x) 

(xi) 

(xii) 

(xiii) 

Assessment 3,97,401 Bombay 

Year 2004-2005 

High Court 


year and it has not incurred any cash losses in the current financial 

year or in the immediately preceding financial year. 

Based on our audit procedures and according to the information 

and explanations given by the management, we are of the opinion 

that the Company has not defaulted in repayment of dues to any 

financial institution or bank. 

Based on our audit procedures and according to the information 

and explanations given by the management, we are of the opinion 

that the Company has maintained adequate documents and 

records in respect of loans and advances granted against security 

by way of pledge of shares and other securities. 


given, the Company is not a chit fund or nidhi/ mutual benefit 

fund/ society. Therefore, clause (xiii) of the order is not applicable. 

(xiv) 

(xv) 

(xvi) 

(xvii) 

According to the records maintained, the Company has kept 

adequate records of its transactions and contracts in respect of 

dealing in shares, securities, debentures and other investments 

and timely entries have been made therein. The shares, securities, 

debentures and other investments have been held in its own name. 

According to the informations and explanations given, the 


from banks or financial institutions. 


has not taken any term loans during the year. 

According to the information and explanations given and on overall 

examination of the balance sheet of the Company, we report that 

no funds raised on short–term basis have been used for long– 

term investment. 

(xviii) The Company has not made preferential allotment of shares during 

the year to parties and companies covered in the register 

maintained under section 301 of the Act. 

(xix) The Company has not issued any secured debentures. Hence the 

provisions of clause (xix) of the order is not applicable. 

(xx) The Company has not raised any money by public issue. Hence 

provisions of clause (xx) of the order is not applicable. 

(xxi) During the course of our examination of the books and records of 

the Company, carried out in accordance with the auditing standards 

generally accepted in India, we have neither come across any 

instance of fraud on or by the Company, noticed or reported during 

the year nor we have been informed of such case by the 

management. 




Registration No.105146W 

R V Chaniyari 


Mumbai 

Dated : April 15, 2010 

(302)

C M Y K 


BALANCE SHEET AS AT 31ST MARCH, 2010 

As at 31st As at 31st 


Schedule Rs. Rs. 



Share Capital 1 1,809,648,420 1,809,648,420 

Reserves & Surplus 2 539,869,541 302,548,966 

LOAN FUNDS 


Unsecured Loans 4 7,520,611,500 7,777,446,435 

10,320,129,461 9,889,643,821 


FIXED ASSETS 5 

Gross Block 74,079,764 48,432,280 

Less:Depreciation 36,677,769 23,685,829 

Net Block 37,401,995 24,746,451 

Capital Work-in-Progress — 1,457,182 

37,401,995 26,203,633 

INVESTMENTS 6 300,074,860 3,114,980 

DEFERRED TAX ASSETS 4,204,384 21,788,322 

CURRENT ASSETS, LOANS 

AND ADVANCES 

Sundry Debtors 7 1,660,161 414,149 

Stock of Securities 969,198,000 3,500,000,000 

Cash and Bank Balances 8 105,360,223 51,286,918 

Loans and Advances 9 9,067,315,382 6,518,255,516 

10,143,533,766 10,069,956,583 

LESS: CURRENT LIABILITIES 


Current Liabilities 10 92,558,222 53,237,920 

Provisions 11 72,527,321 178,181,777 

165,085,543 231,419,697 

NET CURRENT ASSETS 9,978,448,223 9,838,536,886 

Particulars as per 

NBFC Directions 

21A & 21B 

Significant accounting policies 

and notes on accounts 22 


integral part of the Financial Statements 

10,320,129,461 9,889,643,821 

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 

31ST MARCH, 2010 


31st March,10 31st March ,09 


INCOME 

Income from Operations 

Capital Market Activity 12 599,228,397 947,939,774 

Corporate Finance Activity 13 102,698,209 228,185,006 

Treasury Operations 14 690,432,767 229,550,966 

Interest income on 

Rent Securitisation 3,234,754 4,652,850 

Syndication and Other 

Fee Income 15 23,174,074 22,221,483 

Other Income 16 7,338,100 4,228,265 

Total 1,426,106,301 1,436,778,344 

EXPENDITURE 

Interest 17 773,069,231 792,067,462 

Personnel Cost 18 109,423,504 75,526,035 

Administrative and Other Expenses 19 123,632,278 59,338,995 

Bad debts and Provision for 

Non-Performing Assets (Net) 20 (51,315,209) 61,831,781 

Total 954,809,804 988,764,273 

PROFIT BEFORE DEPRECIATION/ 

AMORTISATION 471,296,497 448,014,071 

Depreciation/ Amortisation 14,550,893 11,437,227 

PROFIT BEFORE TAX 456,745,604 436,576,844 

Provision for Taxation 

Current Tax 139,000,000 174,000,000 


Deferred Tax expense/(benefit) - Net 17,583,940 (21,944,456) 

Income Tax relating to earlier years (43,724) (12,500,000) 

PROFIT AFTER TAX 300,205,388 296,171,300 

Balance brought forward from 

last Balance Sheet 196,548,966 147,236,044 

APPROPRIATIONS: 

Special Reserve 61,000,000 60,000,000 

Dividend 

Interim Dividend on Compulsorily 

Convertible Preference Shares 53,750,000 53,750,000 

Interim Dividend on Equity Shares — 105,964,842 

Corporate Dividend Tax 9,134,813 27,143,536 

Balance carried to Balance Sheet 372,869,541 196,548,966 

Basic Earnings per share 2.24 2.20 

Significant accounting policies 

and notes on accounts 22 



As per our attached report of even date 

On behalf of the Board of Directors 



For Khimji Kunverji & Co., 


Manager 

Director 



Manager 

Director 

R. V. . Chaniyari 


Place: Mumbai 

Dated: 15th April, 2010 

Director 



R. V. . Chaniyari 


Place: Mumbai 


Director 



(303)

C M Y K 



Current Year 

Previous Year 


A) Cash Flow from Operating Activities : 

Net Profit before Tax 456,745,604 436,576,844 


Financial Expenses 773,069,231 792,067,462 

Depreciation/ Amortisation 14,550,893 11,437,227 

Leave Encashment 2,640,977 (5,614,405) 

Loss/(Gain) on sale of Fixed Assets (47,085) (67,704) 

Dividend Income (675,027) (2,210) 

789,538,989 797,820,370 

Operating Profit before Working Capital changes 1,246,284,593 1,234,397,214 


Corporate Finance 177,793,859 280,324,357 

Collateral Finance / Intercorporate Deposits and Others 

(Net of provision for doubtful debts) (2,900,778,724) 2,801,999,667 

Loan against Rent Receivable 37,351,074 (37,351,074) 

Stock of Securities 2,530,802,000 (3,400,000,000) 

Loans and Advances 146,185,181 (194,337,712) 

Sundry Debtors / Other Receivables (Net of provision for doubtful debts) (1,246,012) 2,009,931 

Current Liabilities (78,150,044) 111,164,306 

(88,042,665) (436,190,525) 

Cash Generated from Operations 1,158,241,928 798,206,689 

Financial Expenses (763,894,318) (834,164,069) 

Direct Taxes Paid (148,567,532) (194,287,825) 

(912,461,850) (1,028,451,894) 

Net Cash from/(used in) Operating Activities 245,780,078 (230,245,205) 

B) Cash Flow from Investing Activities : 


Capital Work-in-Progreess 1,457,182 2,142,818 

Investment in shares and Securities (net) (296,959,880) (3,040,440) 

Dividend Received 675,027 2,210 

Sale of Fixed Assets 703,391 81,434 

Net Cash from/(used in) Investing Activities (321,987,024) (21,544,013) 

C) Cash Flow from Financing Activities : 

Short Term Loans and Advances (256,834,935) 461,101,612 

Dividend on Preference & Equity Share (62,884,813) (186,858,378) 

Secured Loan 450,000,000 (99,897,118) 

Share Capital — — 

Net Cash from/(used in) Financing Activities 130,280,253 174,346,116 

Net Increase/(decrease) in Cash and Cash Equivalents 54,073,307 (77,443,102) 

Cash and Cash Equivalents ( Opening Balance ) 51,286,918 128,730,017 

Cash and Cash Equivalents ( Closing Balance ) 105,360,223 51,286,918 

Net Increase/(decrease) in Cash and Cash Equivalents 54,073,307 (77,443,102) 

Significant accounting policies and notes on accounts are given in Schedule ‘22’ 

Notes to Cash Flow Statement 

1) Cash and Cash Equivalents include 


Cheque in hand — 8,000,000 

Balances with Scheduled Banks in Current accounts 105,360,223 43,286,918 

2) Previous period figures has been regrouped and rearranged wherever necessary 

105,360,223 51,286,918 





R V Chaniyari 


Place: Mumbai 


Manager 

Director 

Director 



(304)

C M Y K 


SCHEDULE 1 - SHARE CAPITAL As at 31st As at 31st 

AUTHORISED March, 2010 March, 2009 

Rs. 

Rs. 

210,000,000 (210,000,000) Equity Shares of Rs. 10 each 2,100,000,000 2,100,000,000 

100,000,000 (100,000,000) Preference Shares of Rs. 10 each 1,000,000,000 1,000,000,000 

[Figures in the brackets are of the previous year] 

3,100,000,000 3,100,000,000 

Equity Share Capital 

ISSUED, SUBSCRIBED AND PAID UP 

105,964,842 ( 105,964,842) Equity Shares of 

Rs. 10 each, fully paid up 1,059,648,420 1,059,648,420 

{of the above, 6,998,702 shares were allotted as 

fully paid-up pursuant to a contract for consideration other than cash.} 

75,000,060 (105,964,841) shares held by the holding company, 

i.e., Aditya Birla Nuvo Ltd. (ABNL) 

Preference Share Capital 

50,000,000 (50,000,000), 7% Compulsory Convertible 

Cumulative Preference Shares of Rs. 10 each 500,000,000 500,000,000 

(of the above 25,000,000 (25,000,000), shares are 

held by the holding company i.e. Aditya Birla Nuvo Ltd.) 

25,000,000 (25,000,000), 7.5% Compulsory Convertible 

Cumulative Preferene Share of Rs.10 each 250,000,000 250,000,000 

(of the above 25,000,000 (Nil), shares are held by 

the holding company i.e. Aditya Birla Nuvo Ltd.) 

[Figures in the brackets are of the previous year] 

(Refer Note no.B 4 of schedule 22) 

1,809,648,420 1,809,648,420 


As at 31st 

March, 2010 

As at 31st 

March, 2009 

Rs. 

Rs. 

Special Reserve 

(In terms of section 45 IC of RBI Act,1934) 

As per last Balance Sheet 106,000,000 46,000,000 

Add : Transferred from Profit and Loss Account 61,000,000 60,000,000 

167,000,000 106,000,000 


Surplus as per Profit and Loss Account 372,869,541 196,548,966 

372,869,541 196,548,966 

539,869,541 302,548,966 


From the Banks 450,000,000 — 

(Secured by Hypothecation of specific receivables) 

450,000,000 — 


Short Term 

Unsecured Redeemable Non-convertible Debentures 560,000,000 2,500,000,000 

Commercial Papers (Maximum outstanding Rs.6,300,000,000) 5,800,000,000 5,250,000,000 

Inter Corporate Borrowings (includes Rs.650,000,000 

received from holding company; previous year Rs. Nil) 1,150,000,000 27,000,000 

Due to Others 10,611,500 — 

Due to Subsidiary Company — 446,435 

7,520,611,500 7,777,446,435 


GROSS ASSETS DEPRECIATION NET BLOCK 

Particulars As at Additions Deductions As at As at For the Deductions As at As at As at 

31st Mar., During During 31st Mar., 31st Mar., Period During 31st Mar., 31st Mar., 31st Mar., 

2009 the period the period 2010 2009 the period 2010 2010 2009 

Tangible asset 

Leasehold Improvements 6,459,388 11,214,726 0 17,674,114 2,934,230 4,837,920 7,772,150 9,901,964 3,525,158 

Computer & Office Equipment 23,391,737 10,832,838 856,573 33,368,002 14,010,276 5,206,737 802,016 18,414,997 14,953,005 9,381,461 

Furniture & Fixtures 4,820,690 2,680,984 528,687 6,972,987 4,335,109 431,464 528,689 4,237,884 2,735,103 485,581 

Vehicles 3,582,094 0 830,000 2,752,094 1,053,084 654,169 228,250 1,479,003 1,273,091 2,529,010 

Intangible asset 

Software 10,178,371 3,134,195 0 13,312,566 1,353,131 3,420,602 0 4,773,733 8,538,833 8,825,240 

Total 48,432,280 27,862,743 2,215,260 74,079,764 23,685,829 14,550,893 1,558,955 36,677,770 37,401,994 24,746,450 

Previous Year 29,083,615 20,730,035 1381,370 48,432,280 13,616,243 11,437,227 1,367,640 23,685,829 24,746,451 

Note: The following assets are jointly owned with other body corporate: 

Assets Gross Block Depreciation Net Block 

as at 31st as at 31st as at 31st 

March, 2010 March, 2010 March, 2010 

Computer/Office Equipment 0 0 0 

Total 0 0 0 

Previous Year 1,270,239 1,270,239 0 

(305)

C M Y K 



Long Term, Fully Paid up and other than Trade 

Face Value 

As at 31st March, 2010 As at 31st March, 2009 

(Rs.) 

Numbers 

(Rs.) 

Numbers 

(Rs.) 

(A) Equity shares 

(i) 

Quoted 

HDFC Bank Ltd 10 260 4,000 260 4,000 

(ii) 

Unquoted 

Birla Management Centre Services Ltd 10 7,000 70,000 7,000 70,000 

Birla Sun Life Trustee Co. Pvt. Ltd. 10 20 860 20 860 

Aditya Birla Customer Service Pvt Ltd 10 — — 4,000 40,000 

Investment in Subsidiary Company 

Birla Insurance Advisory & Broking Services Ltd 10 — — 1,350,054 3,000,120 

(B) 

Debentures 

(i) 

Unquoted 

ABK Consultants Pvt Ltd 10,000,000 30 300,000,000 — — 

Non-Convertiable Debentures carrying fixed 

coupon rate of 10% (2.47% payable quarterly). 

Debenture holders shall also be entitled to a minimum 

redemption premium of 6.5%. 

Total 300,074,860 3,114,980 

Aggregate book value of Quoted Investments 4,000 4,000 

Aggregate book value of Unquoted Investments 300,070,860 3,110,980 

Aggregate market value of Quoted Investments 502,450 251,641 

SCHEDULE 7 - SUNDRY DEBTORS As at 31st As at 31st 

(Unsecured, considered good unless otherwise stated) March, 2010 March, 2009 

Rs. 

Rs. 

Outstanding for a period exceeding six months 189,339 176,191 

Less: Provision for Doubtful Debts (26,315) (18,486) 

163,024 157,705 

Other debts 1,497,137 256,444 

1,660,161 414,149 



Cheques in hand — 8,000,000 

Balances with Scheduled Banks in Current Accounts 105,360,223 43,286,918 

105,360,223 51,286,918 


(Unsecured, considered good unless otherwise stated) 

Corporate Finance (Bills Discounted/Purchased/Invoice Factoring) 802,981,534 970,285,136 

Less: Provision for Doubtful advances (10,490,257) — 

792,491,277 970,285,136 

Collateral Finance 

Loan against Securities ( Secured Rs.6,102,658,564; 

Previous year Rs.3,318,084,470) 6,102,658,563 3,374,869,165 

Less: Provision for Doubtful advances — (61,813,295) 

6,102,658,563 3,313,055,870 

Loan against IPO — — 

Loan against Rent Receivable — 37,351,074 

Inter Corporate Deposits* 1,893,202,957 1,782,311,000 

(Include Rs.Nil: previous year (Rs.119,000,000) 

given to holding Company) 

Loan to employees 1,601,553 1,317,479 

Advances recoverable in cash or in kind or for value to be received** 8,926,675 8,492,786 

Less: Provision for Doubtful Debts (41,077) (41,077) 

8,885,598 8,451,709 

Prepaid Discount on Commercial Paper 99,063,212 196,941,722 

Interest Receivable 62,522,234 44,398,450 

Advance payment of Taxes (Net of provisions for taxation 

of Rs 432,980,000 /-; previous year Rs 320,409,030) 81,925,300 72,314,044 

Other Deposits 19,742,514 91,829,032 

Due from Fellow Subsidiary Company 5,222,174 — 

(Refer note B13 of Schedule 22) 9,067,315,382 6,518,255,516 

SCHEDULE 10 - CURRENT LIABILITIES AND PROVISIONS As at 31st As at 31st 

Current Liabilities March, 2010 March, 2009 

Rs. 

Rs. 

Sundry Creditors (Refer note B3 in Schedule 22) 70,080,376 35,520,017 

Book Overdraft (since cleared) — — 

Interest accrued but not due on Loans * 10,433,306 1,258,393 

Income received in advance 6,783,492 13,297,274 


*( includes Rs.9,682,151 payable to holding 

company; previous year Rs. Nil) 

92,558,222 53,237,920 


Interim Dividend (Preference Shares) 53,750,000 40,349,314 

Proposed Dividend (Equity Shares) — 105,964,842 

Provision for Corporate Dividend Tax 9,134,813 24,866,090 

Retirement Benefits 9,642,508 7,001,531 

72,527,321 178,181,777 



Rs. 

Rs. 

SCHEDULE 12 - CAPITAL MARKET ACTIVITY 

Interest on Loan against Securities 537,394,307 947,625,286 

(Tax deducted at source Rs.61,281,610 /-; 

previous year Rs.100,183,987/- ) 

Interest on Long Term Investment (TDS Rs. Nil; previous year Rs. Nil) 19,583,014 — 

Interest on Loan against IPO Funding 42,251,076 314,488 

(Tax deducted at source Rs.3,187,818 /-; previous year Rs.34,764 ) 

599,228,397 947,939,774 

SCHEDULE 13 - CORPORATE FINANCE 

Bills Discounting/Invoice Factoring Charges 102,698,209 228,185,006 

102,698,209 228,185,006 

SCHEDULE 14 - TREASURY OPERATIONS 

Income from Long Term Investments 

Dividend (Refer note B.9 (iii) of schedule 22) 675,027 2,210 

Income from Current Investments 

Gain on sale of Investments — 442,350 

Securities Trading Income 409,815,858 63,416,299 

(Refer note no. B.15 of Schedule 22) 

Interest Income 

Inter Corporate Deposits * 279,941,882 165,690,107 

*(Include Rs.479,259: previous year (Rs.3,301,343) received / 

receivable from holding Company) (Tax deducted at source 

Rs.39,225,951 /-; previous year Rs.29,593,823/-) 

690,432,767 229,550,966 

(306)

C M Y K 


SCHEDULE 15 - SYNDICATION AND OTHER FEE INCOME Year Ended Year Ended 


Rs. 

Rs. 

Corporate Finance 11,604,790 14,085,723 

Retail asset finance — 237,883 

Capital Market 9,134,083 5,355,433 

Distribution Fees 2,435,201 2,542,444 

23,174,074 22,221,483 

SCHEDULE 16 - OTHER INCOME 

Other Interest (TDS Rs. Nil:Previous year Rs. Nil) 7,216,173 551,033 

Miscellaneous Income [includes excess provision and 

sundry balances written back (net)] 121,927 3,677,232 

7,338,100 4,228,265 

SCHEDULE 17 - INTEREST 

Unsecured Debentures 196,469,496 309,805,623 

Commercial Paper 403,455,510 466,670,565 

Others * 173,144,225 15,591,274 

*(Include Rs.169,311,202: previous year Rs.1,035,548) 

paid /payable to Holding Company) 

773,069,231 792,067,462 


Salaries, Bonus and Allowances 100,209,365 67,383,599 

Contribution to Provident and Other Funds 3,972,103 3,549,041 


ESOP Expenses 68,196 129,213 

109,423,504 75,526,035 

SCHEDULE 19 - ADMINISTRATIVE AND OTHER EXPENSES 

Rent 34,538,007 3,452,579 

Travelling and Conveyance 2,914,956 2,907,138 

Water and Electricity 4,308,316 2,485,038 


Audit Fees 516,667 516,667 

Tax Audit Fees 156,250 156,249 

For Certification Work 302,853 879,260 

Out of Pocket Expenses (including service tax) 95,032 156,651 

Repairs and Maintenance: 

Plant and Machinery 134,082 119,391 

Others 6,925,517 4,153,029 

Insurance 10,734,725 5,197,913 

Communication Expenses 5,439,764 4,329,175 

Legal and Professional Charges 33,743,956 9,752,856 

Loss/(Gain) on sale of Fixed Assets (Net) (47,085) (67,704) 

Rates and Taxes 2,408,173 100,631 

Share Issue Expenses — 7,000,010 

Rating Expenses 3,840,601 2,324,193 

Brokerage and Commission 198,488 1,762,640 


123,632,278 59,338,995 

SCHEDULE 20 - BAD DEBTS AND PROVISION FOR 

NON-PERFORMING ASSETS (NET) 

Provision for doubtful debts and advances 10,498,086 61,831,781 

Provision for doubtful debts writtenback (61,813,295) — 

(51,315,209) 61,831,781 

SCHEDULE: 21 A 

Disclosure in terms of Paragraph 13 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies 

Prudential Norms (Reserve Bank) Directions, 2007 

Particulars 

(Rs.) 


1. Loans and advances availed by the NBFCs Amount Amount 

inclusive of interest accrued thereon but not paid: Outstanding Overdue 


Unsecured (including interest accrued but not 

due of Rs. 194,531) 560,194,531 — 

(other than falling within the meaning of public deposits*) 



(d) Inter-corporate loans and borrowings (including interest 

accrued but not due of Rs.9,783,863) 1,159,783,863 — 

(e) Commercial Paper 5,800,000,000 — 

(g) Other Loans (Working Capital) & Others 460,611,501 — 

Total 7,980,589,895 — 


Assets side : 

Amount 

Outstanding 

2. Break-up of Loans and Advances including bills 

receivables [other than those included in (4) below] : 

(a) Secured 6,402,658,563 

(b) Unsecured 2,854,103,407 

(includes those in nature of loans and excludes 

Advances Recoverable in cash or kind or for value 

to be received, Advance Payment of Taxes 

and Other Deposits) 

3. Break up of Leased Assets and stock on hire and 

hypothecation loans counting towards AFC activities 



(b) Operating lease — 




(iii) Other loans counting towards AFC activities 



4. Break-up of Investments : 


1. Quoted : 

(I) Shares : (a) Equity — 






2. Unquoted : 

(I) Shares : (a) Equity — 







1. Quoted : 

(I) Shares : (a) Equity 4,000 






2. Unquoted : 

(I) Shares : (a) Equity 70,860 


(ii) Debentures and Bonds 300,000,000 



(307)

C M Y K 


(v) Others (National Saving Certificate) — 

5 Borrower group-wise classification of assets financed as in (2) and (3) above : 


Category (Rs.) net of provisions 


1. Related Parties** 

(a) Subsidiaries — — — 

(b) Companies in the same group — 87,401,099 87,401,099 

(c) Other related parties — — — 

2. Other than related parties 6,402,658,563 2,766,702,308 9,169,360,871 

Total 6,402,658,563 2,854,103,407 9,256,761,970 

6 Investor group-wise classification of all investments (current and long term) in shares and 



(Rs.) 

Category 

Market Value / Book Value (Net 

Break-up or Fair of Provisions) 

Value or NAV 

1. Related Parties** 

(a) Subsidiaries — 

(b) Companies in the same group — 

(c) Other related parties 1,713 860 

2. Other than related parties 7,658,677 74,000 

Total 7,660,390 74,860 

Note: Break up value derived from the latest 

available balance sheet of the Company 


7. Other information 

Particulars 

(Rupees) 



(b) Other than related parties 72,099,400 



(b) Other than related parties 61,609,143 


Notes: 

1. As defined in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public Deposits 

(Reserve Bank) Directions, 1998. 

2. Provisioning norms shall be applicable as prescribed in the Non-Banking Financial (Non-Deposit 

Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. 

3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of 

investments and other assets as also assets acquired in satisfaction of debt. However, market value in 

respect of quoted investments and break-up/fair value/NAV in respect of unquoted investments should 

be disclosed irrespective of whether they are classified as long term or current in (4) above. 

4. Unquoted debentures shall be trated as term loans or types of credit facilities depending upon the 

tenure of such debentures for the purpose of income recognisation and asset classification. 

SCHEDULE: 21-B 

CRAR 

Items Current Year Previous Year 

(i) CRAR (%) 22.72 20.54 

(ii) CRAR - Tier I capital (%) 22.72 20.54 

(iii) CRAR - Tier II Capital (%) 0 0 

Exposures 

Exposure to Real Estate Sector 

(Rs.in crore) 

Category Current Year Previous Year 

(a) Direct exposure 

(i) Residential Mortgages - 

Lending fully secured by mortgages on residential property Nil Nil 

that is or will be occupied by the borrower or that is rented; 

(Individual housing loans up to Rs. 15 lakhs may be shown 

separately). 

(ii) Commercial Real Estate - 

Lending secured by mortgages on commercial real estates Nil Nil 

(office buildings, retail space, multipurpose commercial 

premises, multi-family residential buildings, multi-tenanted 

commercial premises, industrial or warehouse space, hotels, 

land acquisition, development and construction, etc.) 

Exposure would also include non-fund based (NFB) limits; 

(iii) Investments in Mortgage Backed Securities (MBS) and 

other securitised exposures - 

a. Residential Nil Nil 

b. Commercial Real Estate 

(ii) Indirect Exposure 

Fund based and non-fund based exposures on National Nil Nil 

Housing Bank (NHB) and Housing Finance Companies 

(HFCs). 

Asset Liability Management 

Maturity pattern of certain items of assets and liabilities 

(Rs.in crore) 

1 day to 30/31 Over one Over 2 Over 3 Over 6 Over 1 Over 3 Over 5 Total 

days month to months upto months to months to year to years to years 

(one month) 2 months 3 months 6 months 1 year 3 years 5 years 

Liabilities 

Borrowings from banks 45.00 — — — — — — — 45.00 

Market borrowings * 215.66 64.49 218.34 171.42 72.23 — — — 742.15 

Assets 

Advances ** 236.86 118.51 30.99 158.65 326.51 34.16 0.38 — 906.06 

Investments — — — — — — 30.00 0.01 30.01 

Stock of Securities 96.92 — — — — — — — 96.92 

* Net of Prepaid Discount on Commercial Paper amounting to Rs. 9.91 Cr. 

** a) Overdue Receivable on account of Corporate Finance Activities have been slotted in respective time bucket category as per instructions contained in Appendix 1 of Guidelines for Assets Liabilities Management 

(ALM) system in NBFC. 

b) Advances: Includes Loan and Advances in the nature of Loans and excludes Advances Recoverable in cash or kind or for value to be received Advance Payment of Taxes and Other Deposits. 

(308)

C M Y K 


SCHEDULE 22 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 

A. ACCOUNTING CONVENTION 

1. BASIS OF PREPARATION 

The financial statements have been prepared under the historical cost convention on an 

accrual basis in compliance with all material aspect of Notified Accounting Standards 

Rules, 2006 (as amended) and relevant provisions of the Companies Act, 1956. The 

Accounting Policies have been consistently applied by the Company and are consitent with 

those used in previous year. 

The Company follows the prudential norms issued by Reserve Bank of India for asset 

classification, income recognition and provisioning for non–performing assets. Besides, 

additional amount is written off/provided for where the management, on a review, considers 

it necessary. 

Except otherwise mentioned, the accounting policies have been consistently applied by the 

Company and are consistent with those used in the previous year. 

2. FIXED ASSETS 

Fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. 

Cost comprises the purchase price and any attributable cost of bringing the asset to its 

working condition for its intended use. 

DEPRECIATION / AMORTIZATION 

a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in 

the manner specified in the Schedule XIV of the Companies Act, 1956 except in the 

case of the following where depreciation is equally charged over the estimated useful 

lives. 


Capital Expenditure on assets not owned - 5 years 

Office Computers - 4 years 

Vehicles - 5 years 

Furniture, Fixtures and Electric Fittings - 7 years 

Office Electronic Equipments - 4 years 


- Over the primary period 

of the lease 

B) INTANGIBLE ASSETS ARE AMORTIZED EQUALLY OVER: 

Trademarks/Brands - 10 years 

Specialized Software - 3 years 

Goodwill - Not being amortized. 

c) Depreciation on the Fixed Assets added/disposed off/discarded during the year is 


3. IMPAIRMENT OF ASSETS 

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any 

indication of impairment based on internal/external factors. An asset is treated as impaired 

when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, 

is charged to Profit and Loss Account in the year in which an asset is identified as impaired. 

Reversal of impairment losses recognized in prior years is recorded when there is an indication 

that the impairment losses recognized for the assets no longer exist or have decreased. 

4. INVESTMENTS 

Long Term Investments are stated at cost after deducting provision, if any, made for decline, 

other than temporary, in the values. 

Current Investments are stated at lower of cost and market/fair value. 

5. INVENTORIES 

Stocks of securities are valued at lower of cost and Net realizable value. 

6. REVENUE RECOGNITION 

Interest income is recognised in the profit or loss account on accrual basis, except in the 

case of non–performing assets. 

Income on discounted instruments is recognised over the tenor of the instrument on a 

constant yield basis. 

Fees and commission income is recognised when due. 

Dividend income on investments is accounted for when the right to receive the payment is 

established. 

Sales are recorded net of trade discounts, rebates and securities transaction tax. 

7. TAXATION 

Tax expenses comprises of current, deferred and fringe benefit tax. 

Provision for current tax is made on the basis of estimated taxable income for the current 

accounting year in accordance with the Income Tax Act, 1961. 

Deferred tax for timing differences between the book profits and tax profits for the year is 

accounted for using the tax rates and laws that have been enacted or substantively enacted 

as of the balance sheet date. 

Deferred tax assets arising from timing differences are recognized to the extent there is 

reasonable certainty that these would be realized in future. 

Deferred tax Asset in case of unabsorbed losses are recognized only if there is virtual 

certainty that such deferred tax asset can be realized against future taxable profits. 

8. RETIREMENT BENEFITS 

(i) Defined Contribution Plan 

The Company makes defined contribution to Provident Fund and Superannuation 

Schemes which are recognised in the Profit and Loss Account on accrual basis. 

(ii) 


The company’s liabilities under Payment of Gratuity Act and long term compensated 

absences are determined on the basis of actuarial valuation made at the end of each 

financial year using the projected unit credit method except for Short term compensated 

absences which are provided for based on estimates. Actuarial gain and losses are 

recognised immediately in the statement of Profit and Loss Account as income or 

expense. Obligation is measured at the present value of estimated future cash flows 

using a discounted rate that is determined by reference to market yields at the Balance 

Sheet date on Government bonds where the currency and terms of the Government 

bonds are consistent with the currency and estimated terms of the defined benefit 

obligation. 

9. EMPLOYEE STOCK OPTIONS PLAN (ESOP) 

The Holding Company has granted Employee Stock Options to the Company’s employees. 

The same is accounted for by the Holding Company as per the accounting treatment 

prescribed by Employee Stock Options Scheme and Employee Stock Purchase Guidelines, 

1999, issued by Securities and Exchange Board of India (SEBI), whereby the intrinsic value 

of the option being excess of market value of the underlying share immediately prior to date 

of grant over its exercise price is recognized as deferred employee compensation. The 

Holding Company has debited the Company’s share of ESOP compensation cost which is 

charged to Profit & Loss Account. 

10. CONTINGENCIES 

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, 

based on the available evidence. 

Provisions are recognized when there is a present obligation as a result of past event and it 

is probable that an outflow of resources will be required to settle the obligation, in respect 

of which a reliable estimate can be made. 

Provisions are determined based on best estimate required to settle the obligation at the 

balance sheet date. Contingent Liabilities are not provided for and disclosed by way of 

notes. 

11. LEASES 


are classified as Operating Leases and lease rentals thereon are charged to Profit and Loss 

Account on straight-line basis. 

B. NOTES ON ACCOUNTS 

1) Estimated amount of contracts remaining to be executed on capital account and not 

provided for (net of advances) Rs. 7,186,469/- (Previous year Rs.20,027,197). 

2) Contingent Liabilities not provided for as on March 31, 2010: 

(a) Disputed Income tax Liability Rs.7,303,059/- (Previous year Rs.12,491,000). 

(b) Liabilities for pro-rata refund on insurance claim to the insurance company 

arising as a result of any part of outstanding debt not recognized in the final 

judgement, is not ascertainable as the legal matter for recovery of such amounts 

is still under process. 

(309)

C M Y K 


3) Information related to Micro, Small and Medium Enterprises Development Act, 2006 

(Act) has been determined to the extent such parties have been identified on the 

basis of information available with the Company. There is no outstanding balance 

dues to such parties at year end (Previous year Nil). 

4) Issued, Subscribed and Paid up capital includes [(50,000,000 7% Compulsory 

Convertible Cumulative Preference Share (CCPS) and 25,000,000 7.50% Compulsory 

Convertible Cumulative Preference Share (CCPS)] of Rs.10/-each,fully paid up, which 

are convertible at any time after three months from the date of allotment, at a price 

and time to be decided by the Board of Directors of the Company. In the event these 

CCPS are not converted in to fully paid up equity shares prior to date of maturity, 

then these CCPS shall be converted in to appropriate numbers of fully paid up equity 

shares at twice the fair value of equity shares as on the date of conversion, as per the 

terms of issue of CCPS. 

5) Managerial Remuneration 

Remuneration paid/ payable to Manager: 

(Excluding gratuity and leave encashment provision) 


(Rs) 

(Rs) 

Salary, bonus and allowances 4,515,363 3,643,324 

Contribution to provident and other funds 352,398 326,332 

Perquisites 39,000 4,057 

Total 4,906,761 3,973,713 

In the determination of managerial remuneration, perquisites have been evaluated 

as per Income Tax Rules, 1962, wherever necessary. 

6) There was no impairment loss on fixed assets on the basis of review carried out by the 

management in accordance with the Accounting Standard (AS) 28 – “Impairment of 

Assets” issued by ICAI. 

7) Deferred taxes 

The components of deferred tax arising on account of timing differences are as 

under: 



(Rs.) 

(Rs.) 

Deferred Tax Liabilities 

Depreciation (615,839) (757,742) 

Deferred Tax Assets 

Provision for doubtful debts (3,588,545) (21,030,580) 

(4,204,384) (21,788,322) 

8) The Company has single reportable segment, viz., investment and financial activity 

for the purpose of Accounting Standard (AS)–17 on ‘Segment Reporting’. The 

Company does not have any reportable geographical segment. 

9) Related party disclosures 

(i) List of related parties 

a) Where control exists : Aditya Birla Nuvo Limited (Holding Company) 

b) Subsidiaries/ 

Fellow subsidiaries 

: Aditya Birla Capital Advisors Pvt. Limited 

(ABCAPL) (subsidiary of ABFSPL 

w.e.f. November 4, 2008) 


(ABCSPL) (subsidiary of ABFSPL w.e.f. 

December 11, 2008) 


(ABFSPL) ( w.e.f.November 4,2008) 


(ABFSSL) (Subsidiary of ABFSPL w.e.f. 

June 19,2008) 

Aditya Birla Minacs Philippines Inc. (ABMPI) 

(100% Subsidiary of ABMWL) 

Aditya Birla Minacs Worldwide Inc. (ABMWL) 

(formerly MWI) (100% Subsidiary of AVTL) 

Aditya Birla Minacs Worldwide Limited 

(ABMWL) 

Aditya Birla Securities Private Limited (ABSPL) 

(subsidiary ABFSPL) (w.e.f. November 4, & 

ceased to be subsidiary w.e.f 13 March 2009) 


(ABTCPL) (subsidiary of ABFSPL November 

28,2008) 

Aditya Vikram Global Trading House Limited 

(AVGTHL) 

Aditya Birla Money Limited (ABML)(formerly 

known as Apollo Sindhoori Capital IInvestment 

Limited (Subsidiary of ABFSPL w.e.f March 6, 

2009) 

Aditya Birla Commodities Broking Limited 

(formerly known as Apollo Sindhoori 

Commodities Trading Limited) (100% subsidiary 

of ABML w.e.f. March 6, 2009) 

AV Trans Works Limited (AVTL) (100% subsidiary 

of ABMWL) 

Birla Insurance Advisory & Broking Services 

Limited (BIABSL) (Subsidiary of ABFL Upto 

March 14, 2010 and of ABFSPL w.e.f. 

March 15, 2010) 

Aditya Birla Money Mart Limited (ABMML) 

(formerly known as Birla Sun Life Distribution 

Company Limited (subsidiary of ABFSPL w.e.f. 

31.03.2009) 

Birla Sun Life Insurance Company Limited 

(BSLICL) 

Birla Technologies Limited (Subsidiary of 

ABMITSL) 

BSDL Insurance Advisory Services Limited 

(100% Subsidiary of ABMML) 

Aditya Birla Capital Ltd (ABCL) (formerly known 

as Laxminarayan Investment Limited) 

Compass BPO Limited, UK (w.e.f. March 

9,2010) 

Compass BPO, Inc , USA (w.e.f. March 9,2010) 

Compass Business Processing Outsourcing Ltd 

India, (w.e.f March 9,2010) 

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

9,2010) 

LIL Investment Limited (w.e.f. July27, 2009 and 

on becoming Associates, ceased to be 

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

Madura Garments Export Limited (MGEL) 

(merged with ABNL w.e.f. January 1, 2010) 

Madura Garments Exports US, Inc. (ceased to 

be subsidery from. February 09, 2010) 

Madura Garments International Brand 

Company Limited (MGIBCL) (on becoming 

Associates, ceased to be subsidery w.e.f. 

November 27, 2009) 

Madura Garments Lifestyle Retail Company 

Limited (MGLRCL) 

M G Lifestyle Clothing Company Private Limited 

(MGCCPL) (merged with ABNL w.e.f. 


Minacs orldwide Kft. (Subsidiary of Minacs 

GmbH) 

Minacs Limited (Subsidiary of ABMWI) 

Minacs Worldwide S.A. de C.V. (100% 

Subsidiary of ABMWI) 

Peter England Fashions and Retail Limited 

(PEFRL) 

Aditya Birla Minacs IT Services Limited 

(ABMITSL) (formerly known asPSI Data Systems 

Limited) 

Minacs Worldwide GmbH (Subsidiary of 

Minacs Ltd) 

Minacs Group USA Inc. (Subsidiary of ABMWI) 

Transworks Inc. (TW Inc) (100% Subsidiary of 

ABMWL) 

c) Key management Mr. K.G. Ajmera 

personnel 

Mrs. Krishna Ajmera 

Relative of Key 

Managerial personnel : 


C M Y K 


(ii) 

Transactions with Related parties: 

(Figure in Rupees) 

Particulars Referred in Referred in Referred in Total 

(i) (a) above (i) (b) above (i)(c) above 

EXPENSE 

Remuneration – – 4,906,761 4,906,761 

(–) (–) (3,973,713) (3,973,713) 

Rent/Other expenses 68,196 122,176 – 190,372 

(101,827) (–) (–) (101,827) 

Interest expenses 169,311,202 337,510 – 169,648,712 

(1,035,548) (1,927,519) (–) (2,963,067) 

Administrative Expenses — 1,651,763 – 1,651,763 

(–) (–) (–) (–) 

Dividend 36,250,000 – – 36,250,000 

(119,101,827) (14,075,343) (–) (133,177,170) 

INCOME 

Interest income 479,259 13,423,072 45,707 13,948,038 

(3,301,343) (8,300,138) (–) (11,601,481) 

Administrative Income – 10,063,048 – 10,063,048 

(–) (6,867,269) (–) (6,867,269) 

Dividend – 675,027 – 675,027 

(–) (–) (–) (–) 

Others/ Brokerage – 747,984 – 747,984 

(–) (–) (–) (—) 

Loan granted (including ICDs) – 318,750,000 12,175,943 330,925,943 

(369,000,000) (372,090,917) (–) (741,090,917) 

Loan granted received back (including ICDs) 119,000,000 393,925,000 12,175,943 525,100,943 

(250,000,000) (355,200,000) (–) (605,200,000) 

Loan obtained (including ICBs) 24,372,500,000 116,626,549 – 24,489,126,549 

(315,000,000) (95,424,003) (–) (410,424,003) 

Loans repaid (including ICBs) 23,722,500,000 122,286,422 – 23,844,786,422 

(315,000,000) (118,857,142) (–) (433,857,142) 

Preference Share Capital – – – — 

(250,000,000) (–) (–) (250,000,000) 

Purchase of Fixed Assets – 21,839,298 – 21,839,298 

(–) (2,469,675) (–) (2,469,675) 

Sale of Investment – 3,040,120 – 3,040,120 

(–) (–) (–) (–) 

Purchase of Investment – – – – 

(–) (3,000,440) (–) (3,000,440) 

Loan taken 659,682,151 — – 659,682,151 

(–) (106,237) (–) (106,237) 

Amount Payable 36,373,320 198,322 – 36,571,642 

(119,101,827 ) (17,143,591) (–) (136,245,418) 

Loan Granted — 85,213,438 – 85,213,438 

(119,000,000) (66,890,917) (–) (185,890,917) 

Amount Receivable 155,522 2,136,357 – 2,291,879 

(52,952) (114,716) (–) (167,668) 

(311)

C M Y K 


(iii) 

Disclosure in respect of transactions which are more than 10% of the 

total transactions of the same type with related parties during the year: 

Particulars Current Previous 

Year Year 

(Rs) (Rs) 

Rent /other expenses 

Adtiya Birla Nuvo Ltd 68,196 101,827 

Aditya Birla Money Mart Ltd 122,176 — 

Dividend expenses 

Adtiya Birla Nuvo Ltd 36,250,000 119,101,827 

Aditya Birla Capital Ltd — 14,075,343 

Remuneration 

K.G. Ajmera 4,906,761 3,973,713 

Administrative Expenses 

Aditya Birla Money Mart Ltd 30,515 — 

Aditya Birla Minacs IT Services Limited 1,621,248 — 

Interest expenses 

Adtiya Birla Nuvo Ltd. 169,311,202 1,035,548 

BGFL Corporate Finance Pvt. Ltd. — 1,487,645 


Broking Services Ltd. 337,510 439,874 


Aditya Birla Capital Ltd 1,819,700 7,286,854 

Aditya Birla Minacs Worldwide Limited — 906,161 

Adtiya Birla Nuvo Ltd 479,259 3,232,877 

Aditya Birla Money Mart Ltd 8,492,602 1,455,618 

Aditya Birla Money Ltd 3,098,631 106,849 

K.G. Ajmera 45,707 — 

Aditya Birla Customer Services Pvt Ltd 12,139 — 

Rent Income 

Aditya Birla Money Mart Ltd — 1,241,988 

Brokerage & Other Income 

Aditya Birla Money Mart Ltd 691,025 1,160,853 

Aditya Birla Money Ltd 56,959 — 

Administrative Income 


Broking Services Ltd. 10,063,048 6,867,269 

Dividend Income 


Broking Services Ltd. 675,027 — 

Loan granted (including ICDs) 


Adtiya Birla Nuvo Ltd (CFD) — 250,000,000 

Adtiya Birla Nuvo Ltd (FSD) — 119,000,000 


K.G. Ajmera 12,175,943 — 

Aditya Birla Money Ltd — 50,000,000 


Loan granted received back 

(including ICDs) 

Aditya Birla Nuvo Ltd. 119,000,000 250,000,000 

K.G.Ajmera 12,175,943 — 


Aditya Birla Minacs Worldwide Limited — 50,000,000 

Aditya Birla Money Ltd 50,000,000 — 

Aditya Birla Money Mart Ltd 99,000,000 — 


Loan obtained (including ICBs) 

Aditya Birla Nuvo Ltd. 24,372,500,000 315,000,000 


Broking Services Ltd. 116,626,549 93,274,003 

Loan repaid (including ICBs) 

Aditya Birla Nuvo Ltd. 23,722,500,000 315,000,000 


Broking Services Ltd. 122,286,422 99,771,949 

BGFL Corporate Finance Pvt. Ltd — 19,085,193 

Preference Share Capital 

Aditya Birla Nuvo Ltd — 250,000,000 

Purchases of Fixed Assets 

Aditya Birla Minacs IT Services Limited 726,326 2,469,675 

Aditya Birla Financial Services Pvt Ltd 21,112,972 — 


Year Year 

(Rs) (Rs) 

Purchases of Investments 

BGFL Corporate Finance Pvt. Ltd — 3,000,440 

Sale of Investments 


Payable 

Aditya Birla Nuvo Ltd. 696,055,471 119,101,827 


Broking Services Ltd. 105,000 551,435 

BSDL Insurance Adisory Services Ltd 77,207 — 

Aditya Birla Minacs IT Services Limited 16,115 2,623,050 


Receivable 




Broking Services Ltd 5,213,438 — 

Aditya Birla Nuvo Ltd 155,522 119,052,952 

Aditya Birla Money Ltd 62,826 50,106,849 


Notes: 

a) The related party relationships have been as identified by the management on the 

basis of the requirements of the Accounting Standard AS–18 ‘Related Party Disclosures’ 

issued by the Institute of Chartered Accountants of India and the same have been 

relied upon by the auditors. 

b) The relationships as mentioned above except where control exists pertain to those 

related parties with whom transactions have taken place during the period. 

c) Figures in brackets represent corresponding amounts of previous year. 

10) Earnings/(Loss) per share: 


Net profit/(loss) after tax available for 

equity shareholders (Rs.) 300,205,388 296,171,300 

Less: Dividend on Preference Share 

(including Corporate Dividend Tax) 62,884,813 62,884,812 

237,320,575 233,286,488 

Weighted average number of equity 

shares outstanding (Nos) 105,964,842 105,964,842 

Basic and Diluted EPS (Rs.) 2.24 2.20 

In absence of the rate at which, 7% Compulsory Convertible Cumulative Preference Share 

and 7.5% Compulsory Convertible Cumulative Preference Share of the Company shall be 

converted, its effect on diluted EPS has not been worked out. 

11) Retirement benefits: 

The details of the Company’s defined benefit plans for its employees are given below: 

Amount recognized in the Balance Sheet in respect of gratuity (funded by the Company) 

As at 

As at 


(Rs.) 

(Rs.) 

Present Value of Funded defined benefit obligation 

at the end of the period 8,742,429 7,120,310 

Fair Value of Plan Assets 8,804,566 8,065,626 

Net Liablity/(Assets) (62,137) (945,316) 

Amount recognized in Salary, Wages and 

Employees Benefits in the Profit and 

Loss Account in respect of gratuity 

(funded by the Company): 

Current Service Cost 1,633,013 1,660,051 

Interest on Defined Benefit Obligation 671,546 771,734 

Expected Return on Plan Assets (678,193) (534,941) 

Net Actuarial Gains/(Loss) recognized 

during the period (743,187) (2,668,872) 

Net Gratuity Cost 883,179 (772,028) 

Actual Return on Plan assets 738,940 637,398 

(312)

C M Y K 


Reconciliation of present value of the obligation and the fair value of the plan assets: 

As at 

As at 


(Rs.) 

(Rs.) 

Opening Defined Benefit Obligation 7,120,310 7,832,639 



Actuarial Losses/(Gain) (682,440) (2,566,415) 

Benefits Paid — (577,699) 

Closing Defined Benefit Obligation 8,742,429 7,120,310 

Change in Plan Assets 

Opening Fair Value of the Plan Assets 8,065,626 6,613,847 


Actuarial Gains/(Losses) 60,747 102,457 

Contributions by the Employer — 1,392,080 

Benefits Paid — (577,699) 

Closing Fair Value of the Plan Assets 8,804,566 8,065,626 

Investment details of Plan assets 

100% of plan assets are invested with Life Insurance Corporation of India 

Experience Adjustment As at As at 


(Rs.) 

(Rs.) 

Defined Benefit Obligation 8,742,429 7,120,310 

Plan Assets 8,804,566 8,065,626 

Surplus/(Deficit) 62,137 945,316 

Experience Adjustment on Plan Liabilities (216,809) 407,018 

Experience Adjustment on Plan Assets 60,747 102,457 

Principal Actuarial Assumptions at the Balance Sheet Date 

Discount Rate (p.a) 8.15% 7.75% 

Expected Rate of return on Assets (p.a) 8.00% 8.00% 

The estimates of future salary increases, considered in actuarial valuation, take account of 

inflation, seniority, promotion and other relevant factors, such as supply and demand in the 

employment market. 

During the year the following cost have been incurred on account of. 

Defined Contribution Plans - 

Amount recognised as an expense and included in the Schedule 18 - “Contribution to 

Provident & Other Funds– 


(Rs.) 

(Rs.) 

i) Contribution to Employees Provident Fund 3,601,537 3,210,571 

ii) Contribution to Superannuation Fund 351,364 312,812 

iii) Contribution to ESIC Fund 18,014 25,658 

iv) Contribution to MLW Fund 1,188 — 

12) The Company had entered into an operating lease agreements for use of premises which is 

non-cancellable for a period of three years. 

The future minimum lease payments for the leases at the balance sheet date are as follows: 

Future minimum lease payments As at As at 

payables for the period 31/03/2010 31/03/2009 

(Rs) 

(Rs) 

1) Not later than one year 29,700,618 — 

2) Later than one year and not 

later than five years 29,700,618 — 

3) Later than five years — — 

The amount of minimum lease payments with respect to the above leases recognised in the 

profit and loss account for the period is Rs 29,665,563 (previous period Rs430,000). 

13) Loans & Advances include: 

Amount Receivable From Balance Balance Maximum Maximum 

as on as on Balance Balance 

31st March, 31st Mach, outstanding outstanding 

2010 2009 during the during the 

Year Previous Year 

(i) Fellow Subsidiaries 

Aditya Birla Money Mart Ltd 80,065,897 91,000,000 91,691,703 91,052,864 

Aditya Birla Capital Ltd Nil 14,075,000 80,000,000 334,127,240 

Aditya Birla Customer 

Services Pvt Ltd Nil 100,000 850,000 100,000 

Aditya Birla Money Ltd Nil 50,000,000 50,002,016 50,000,000 

Aditya Birla Financial 

Services Pvt Ltd 2,007,634 2,715,917 21,708,768 4,008,000 

Birla Sun Life Insurance Co. Ltd. 52,925 155,664 52,925 155,664 


Broking Services Ltd 5,222,174 Nil 5,213,438 Nil 

(ii) Associates/Joint Ventures 

Birla Sun Life Asset 

Management Company Ltd. 20,513 Nil 300,045,000 78,652 

(iii) Employees loan given in the 

ordinary course of the business 

and as per the service rules 

of the Company 

- no interest or at an 

interest rate below 

which is specified in 

section 372A of the 

Companies Act, 1956 1,601,553 1,317,479 2,075,733 1,369,075 

14) Expenditure in foreign currency: 


(Rs.) 

(Rs.) 

Traveling expenses 22,404 Nil 

C.I.F. value of imports: 

Capital goods Nil Nil 

15) Details of opening stock, purchases, sales and closing stock in respect of trading in securities are as follows: 

Particulars/Year Opening Stock Purchase Sales Closing Stocks 

Qty. No. Rs. Qty. No. Rs. Qty. No. Rs. Qty. No. Rs. 

Units of Mutual 

Funds 2009-2010 266642662 350000000 56281717499 961812790717 56531382924 961912790717 16977237 250000000 

2008-09 7743774 100000000 12648702447 198347000000 12389803559 195010416299 266642662 3500000000 

Stock of Bonds/ 

Govt secutrities-2009-2010 245129 796316147 240049 77118147 5080 719198000 

2008-2009 — — — — — — — — 

(313)

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16) Aditya Birla Management Corporation Private Limited (ABMCL), a company limited by 

guarantee, formed to provide a common pool of facilities and resources to its members, 

with a view to optimize the benefits of specialization and minimize cost to each member. 

The Company’s share of expenses under the common pool has been accounted for under 

the appropriate heads of account. 

17) a) Based on the resolution for Employee Stock Options as approved by the shareholder 

of Holding Company, the Holding Company has granted 3,360 numbers of stock 

options on 23 rd August 2007 to eligible employees of the Company comprising of 

840, 840, 840 and 840 options, with a vesting period of 12, 24, 36 and 48 months 

respectively from the award date and an exercise period of 5 years from the respective 

vesting dates. 

The stock option discount in the aforesaid scheme, computed as per SEBI guidelines 

in this respect, is being amortised on a straight line basis over the vesting period. 

Accordingly, during the period Rs. 68,196 (129,213) being the proportionate net 

charge of discount for the period, has been included in the schedule of “Personnel 

Cost” (Schedule “18”) as ESOP Compensation cost. 

b) During the period NIL options were exercised. 

18) Previous year/period’s figures have been regrouped/rearranged, wherever considered 

necessary, to conform with Current year/ period’s presentation. 

19) Other disclosure under Paras 3, 4C & 4D of part II of Schedule VI are not given as the same 

are not applicable to the Company during the year. 

Signatures to Schedules ‘1 to 22’ 



R. V. Chaniyari 

Partner (F–31083) 


Mumbai Manager Director Director 


Balance Sheet Abstract and Company’s General Business Profile 

(As per GSR No. 388(E) [F No. 3/24/94-CLV] dated 15/05/1995) 

I. Registration Details 

Registration No. : 63111 State Code: 11 

Balance Sheet Date : 31/03/2010 

II. Capital raised during the year : (Amount in Rs.) 

III. 

Public Issue (Net of allotment money in arrears) : Nil 

Rights Issue : Nil 

Bonus Issue : Nil 

Private Placement : Nil 

Position of Mobilisation and 

Deployment of Funds : (Amount in Rs.) 

Total Liabilities : 10,485,215,005 

Total Assets : 10,485,215,005 

Sources of Funds : 

Paid-up Capital : 1,809,648,420 

Reserves and Surplus : 539,869,541 

Secured Loans : 450,000,000 

Unsecured Loans : 7,530,611,500 


Net Fixed Assets : 37,401,995 

Investments : 300,074,860 

Net Current Assets : 9,978,448,223 

Deferred Tax : 4,204,384 

IV. Performance of the Company : (Amount in Rs. ) 

Turnover/ Receipts : 1,426,106,301 

Total Expenditure : 969,360,697 

Profit/(loss) before tax : 456,745,604 

Profit/(loss) after tax : 300,205,388 

Earnings/(loss) per share in Rs. 

(Basic / Diluted) : 2.24 (Face value Rs. 10) 

Dividend rate : 

Generic Names of Three Principal Products/ 

Services of the Company 

:(As per monetary terms) 

Item Code No. 

(ITC Code) : Not Applicable 

Service/ Product Description : Collateral Finance 

Item Code No. 

(ITC Code) : Not Applicable 

Service/ Product Description 

Item Code No. 

(ITC Code) : Trade Finance 

(314)

C M Y K 

ADITYA BIRLA MONEY MART LIMITED (Formerly: Birla Sun Life Distribution Company Ltd.) 



Your Directors have pleasure in presenting the 13 th Annual Report together 

with the audited accounts of your Company for the financial year ended 


FINANCIAL HIGHLIGHTS 


(Rs. in millions) (Rs. in millions) 

Total Revenue 533.21 233.30 

Total Expenditure 622.41 310.72 

(Loss) before Depreciation and Tax (89.20) (77.42) 

Less: Depreciation 12.81 12.24 

(Loss) Before tax (102.01) (89.66) 

Less: Provision for Taxation — 1.55 

(Loss) After Tax (102.01) (91.21) 

Profit / (Loss) brought forward from 

previous year (62.28) 28.93 

Profit/(Loss) carried to Balance Sheet (164.29) (62.28) 


Your Company achieved a gross revenue of Rs. 533.21 million during the 

year against the gross revenue of Rs. 233.30 million during the previous 

year, an increase of 128%. 

The Company continues to expand its operations and, as a result, the total 

loss before depreciation and tax was Rs. 89.20 million against a loss of Rs. 

77.42 million in the previous year. The loss after tax was Rs. 102.01 million 

against a loss of Rs. 91.21 million in the previous year. The Company also 

increased its range of product offerings to include investment solutions like 

Private Equity, Alternative Investments, Structured Products and Real Estate 

Broking Services. 

During the year, your Company has mobilized funds under different asset 

classes aggregating Rs. 3,440 billion. The Assets under Advice as at March 

31, 2010 were Rs. 163.87 billion as against Rs. 95.25 billion last year. The 

market share of the Company’s average assets under advice has increased 

to 2.66% in the current year, from 2.28% last year. 

DIVIDEND 

Considering the growth plans of the Company and the loss for the year 

under consideration, the Directors do not recommend any dividend. 


During the year, the name of the Company was changed to Aditya Birla 

Money Mart Limited vide fresh certificate of incorporation dated February 1, 

2010, issued by Registrar of Companies, Maharashtra, Mumbai. The new 

name of the Company reflects the parent brand “Aditya Birla” after the exit 

of the erstwhile joint venture partner Sun Life last year. The new name now 

truly reflects the parentage of the Company, and the Group’s commitment 

to the business. It also brings more synergy in the distribution segment and 

facilitates higher client acquisition under the brand “Aditya Birla Money”. 

INCREASE IN CAPITAL AND RIGHTS ISSUE 

During the year under review, the Authorised Share Capital of the Company 

was increased from Rs. 10 Crores to Rs. 25 Crores. 

The Company also made a Rights Issue of 12,825,001 Equity Shares of 

Rs.10/- each for cash at par aggregating to Rs. 128,250,010/-, which was 

fully subscribed. As a result, the Company’s total paid up share capital has 

increased from Rs. 71,749,990/- to Rs. 200,000,000/-. 


Your Company has a wholly owned subsidiary whose name was also changed 

during the year to Aditya Birla Money Insurance Advisory Services Limited 

from BSDL Insurance Advisory Services Limited. 

Aditya Birla Money Insurance Advisory Services Limited is engaged in 

distribution of life insurance products as a Corporate Agent of Birla Sun Life 

Insurance Company Limited. 

During the year, Aditya Birla Money Insurance Advisory Services Limited 

posted total revenue of Rs. 102.24 million against the Rs. 40.47 million last 

year, a growth of 153% over last year. As a result, the net loss was Rs. 13.48 

million compared to net loss of Rs. 18.70 million last year. 

The Company continues to increase its focus on growth & expansion in life 

Insurance business and tap the opportunities presented by this sector in 

significantly enhancing its business volume. 

REGULATORY DEVELOPMENTS AND OPPURTUNITIES 

During the year, the market regulator SEBI implemented some significant 

policy changes in the mutual fund distribution space. In order to empower 

investor through transparency in payment of commission and load structure, 

SEBI abolished the payment of entry load for all Mutual Funds Scheme w.e.f. 

August 1, 2009. It also paved way for distributors to charge investors by 

directing that the scheme application form should carry a suitable disclosure 

to the effect that the upfront commission to the distributor will be paid by the 

investor directly to the distributor, based on his assessment of various factors 

including service rendered. The Regulator also put a cap on payment of 

commission by mandating that of the exit load charged to the investor, a 

maximum of 1 per cent of the redemption proceeds should be maintained 

in a separate account which can be used to pay commissions to the distributor 

and to take care of other marketing and selling expenses. Any balance 

should be credited to the scheme immediately. The distributors were further 

directed to disclose all commissions (in the form of trail commission or any 

other mode) payable to them for the different competing schemes of various 

Mutual Funds from the amongst schemes which are being recommended to 

the investor. SEBI later instructed the Mutual Fund houses that in order to 

have parity among all classes of unit holders, no distinction among unit 

holders should be made based on the amount of subscription while charging 

exit loads. 

During the year, SEBI also permitted the units of mutual fund schemes to be 

transacted through registered stock brokers of recognized stock exchanges, 

thus allowing the option of holding and trading mutual fund units in 

dematerialized form. The stock exchanges came out with detailed operating 

guidelines to facilitate the same which increased competition from the stock 

brokers. During the year, AMFI also revised the existing code of conduct for 

the mutual fund intermediaries and it was advised by SEBI that all 

intermediaries of mutual funds shall follow the code of conduct strictly. 

In the wake of above dynamic regulatory changes witnessed during the 

year, the Company continued to explore various new measures, sales 

strategies and services in order to increase the customer base and mitigate 

the impact on direct MF distribution. The Company diversified into a larger 

product mix offering for its customers encompassing Private Equity, Alternative 

Investments, Structured Products and Real Estate. The Company also launched 

online platform “MF Insta-Invest” enabling the customers to transact mutual 

fund through online mode. The Company has plans to generate revenues in 

the investment advisory proposition through financial planning and offering 

research-based advice for its customers. 

MARKET OUTLOOK AND ECONOMY 

The global economy is showing sustained signs of life as we finish the first 

quarter of 2010. The purchasing managers indexes increased in nearly all 

major economies in March; giving a good indication that the global 

manufacturing sector continues to recover with remarkable speed. The 

breadth of the snapback across the world has seen exports rising virtually 

everywhere which points to the interconnected nature of the global economy. 

Both the manufacturing and private service sectors in the U.S. added jobs 

for the third consecutive month in March 2010. This indicates that the recovery 

is translating into a stronger labour market even apart from the effects of 

Census hiring. 

Headline inflation, as measured by the monthly Wholesale Price Index (WPI), 

stood at 9.89% year-on-year for February 2010, compared to 8.56% yearon-year 

inflation in the previous month. In the previous month, the Reserve 

Bank of India (RBI) hiked the Repo and the Reverse Repo rates by 25bps 

each to 5.0% pa and 3.5% pa, respectively. The RBI has cited the strong 

(315)

C M Y K 


IIP data as a sign of economic consolidation was being well underway and 

hence the need to take action, keeping the risk of WPI reaching double 

digits in March 2010 in mind. This has been done with a view to balance 

economic growth and inflation. 

Exports for the month of February 2010 grew by 34.8% y-o-y compared 

with 11.5% y-o-y in January 2010 on the back of improving global macro 

economic environment while Imports showed a massive increase of 66.4% 

y-o-y compared to 35.5% y-o-y in January due to strong domestic demand 

and low base effect. The monthly trade deficit grew by 187.3% y-o-y in 

February 2010 compared to an increase of 93.4% yo-y in the previous 

month. 

The Indian equity markets continued their upward movement in March 2010 

and remained one of the best performing emerging markets. This upward 

market movement was helped by strong FII inflows, global economic strength 

and the positive sentiment emanating from the annual budget announced 

earlier in the year. 

Macro indicators remain strong with credit growth accelerating to 

approximately 18% y-o-y. India’s GDP growth has remained consistent over 

the past few quarters. Against this backdrop of strong economic growth, 

corporate earnings should increase in the range of 20-25% for FY2011 

and this could underpin a strong equity market performance. 

In the near/medium term, while Indian equities could benefit from strong 

foreign inflows, steady pick in economic activity and increasing consumption 

demand, the negative effects of rising inflation, increasing interest rates and 

sustainability of the global recovery could keep the equity markets trading in 

a band. The net FII inflows during March 2010 has amounted to Rs 49,438 

Crores. 

In March 2010, the Indian Rupee appreciated by 2.5% against the US 

Dollar and by 3.6% against the EURO. The USD/INR FX rate closed the 

month at 44.92 against 46.09 as at previous month end. The EURO/INR 

FX rate closed the month at 60.56 against 62.84 as at the previous month 

end. 

Gold price slipped 0.5% during March 2010 to close the month at USD 

1,113/ounce. Oil price went up by 6.4% during March 2010 to close the 

month at USD 83.76 per barrel. 

The MSCI India outperformed MSCI EM during March 2010 for the second 

consecutive month across 3m, 6m and 12m time frames. India’s performance 

ranking remained unchanged at 10th position from the previous month. 

On a 1-month basis, the MSCI India index moved up by 9.2%, MSCI China 

moved up by 5.4% and MSCI Brazil moved up by 7% while MSCI USA and 

MSCI Japan showed movement of 5.8% and 4.2%, respectively. 

The BSE Sensex Index closed the month up 6.7% m-o-m. On a year-onyear 

basis, the BSE Sensex Index has gone up 80.5%. 

In March, Large Cap Index (BSE 100) outperformed the BSE Mid Cap and 

BSE Small Cap Indices. 

In the above backdrop and the revival of the economy, your Company is 

poised for further expansion of customer base and footprint by adopting 

appropriate strategies, offering of product mix, leveraging on group synergy 

and ABG ecosystem. 

HUMAN RESOURCES AND TRAINING 

The Company pays significant emphasis to its Human Resources and consider 

them as its greatest assets. The Company being engaged in financial services 

believes that training, retention and development of its employees is very 

critical. During the year, the Company tied up with a leading training institute 

to provide Financial Planning Certification course for its sales employees. 

This process inter-alia involves imparting training on financial planning 

module both through webinar and classroom training by highly experienced 

and learned professionals. 

The Company’s employee strength stood at 361 as on March 31, 2010 

against 219 employees last year. 


Your Company believes in transparency, empowerment, accountability and 

following fair business practices and takes pride in adhering to the corporate 

culture and values set by Aditya Birla Group. The Company strives to take 

all the necessary steps to fulfill its role as a good corporate citizen. 

COMPOSITION OF THE BOARD AND EXTERNAL DIRECTORSHIPS HELD 

Name of Directors Position No. of Other 

directorships held as 

on March 31, 2010** 

Mr. Ajay Srinivasan Non-Executive Director 3 

Mr. B. N. Puranmalka Non-Executive Director 2 

Mr. Pankaj Razdan Non-Executive Director 4 

Mr. Manoj Kedia Non-Executive Director 4 

** excluding private limited and section 25 companies 

Number of Board meetings and attendance during financial year 

2009-2010 

Name of Directors No. of No. of Whether 

Meetings held Meetings attended 

during the year attended last AGM 

Mr. Ajay Srinivasan 4 3 Yes 

Mr. B. N. Puranmalka 4 4 No 

Mr. Pankaj Razdan 4 4 Yes 

Mr. Manoj Kedia 4 4 Yes 

AUDIT COMMITTEE 

In terms of the provisions of Section 292A of the Companies Act, 1956, the 

Company has constituted an Audit Committee. 

The Audit Committee of the Company consists of following members. 

1. Mr. Ajay Srinivasan 

2. Mr. B. N. Puranmalka 

3. Mr. Manoj Kedia 

NUMBER OF AUDIT COMMITTEE MEETINGS AND ATTENDANCE 

DURING FINANCIAL YEAR 2009-2010 

Name of Members No. of Meetings No. of Meetings 

held during the year attended 


Mr. B. N. Puranmalka 4 4 

Mr. Manoj Kedia 4 4 


The particulars of the employees, as required under section 217(2A) of the 

Companies Act, 1956, read with the Companies (Particulars of Employees) 

Rules, 1975, as amended, is set out as an Annexure to the Directors’ Report. 

DIRECTOR 

Mr. Pankaj Razdan, Director of the Company, shall retire by rotation at the 

ensuing Annual General Meeting and, being eligible, offers himself for reappointment. 

Your Board recommends his re-appointment. 

RE-APPOINTMENT OF MANAGER 

Mr. Lal Tahilramani was re-appointed as the Manager of the Company for a 

further period of 2 years w.e.f. 6 th November 2009 to 5 th November 2011. 

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C M Y K 



As stipulated under section 217 (2AA) of the Companies Act, 1956, your 



standards have been followed along with proper explanation for material 

departures, if any. 

b. The Directors have selected such accounting policies and applied them 

and made judgments and estimates that are reasonable and prudent 

so as to give a true and fair view of the state of affairs of the Company 

at the end of the financial year and of loss of the Company for that 

year. 

c. The Directors have taken proper and sufficient care for the maintenance 





basis’. 

AUDITORS & AUDITORS’ REPORT 


the ensuing Annual General Meeting. The Company has received letters 

from them to the effect that their appointment, if made, would be within the 

prescribed limits under section 224(1-B) of the Companies Act, 1956, and 

that they are not disqualified for such appointment within the meaning of 

Section 226 of the Companies Act, 1956. Your Directors have therefore 

proposed the appointment of M/s. Haribhakti & Co., Chartered Accountants, 

as Statutory Auditors of the Company. 







pertaining to manufacturing, furnishing the details on conservation of energy 

are not applicable. During the year, there was no foreign exchange earnings 

and outgo. 


The Board would like to express its deep sense of gratitude to every employee 

for the commendable contribution made by them to the Company. The 

Board also acknowledges the support that it has received from various fund 

houses and expresses its gratitude to the regulatory authorities and other 

Government agencies for their continuous support. 

Your directors also wish to express their gratitude to banks, valued clients, 

business associates and shareholders for their continued support. 




Sd/- 

Pankaj Razdan 

Director 

Sd/- 

Manoj Kedia 

Director 

(317)

C M Y K 



TO, 

THE MEMBERS OF ADITYA BIRLA MONEY MART LIMITED (FORMELY 

KNOWN AS BIRLA SUN LIFE DISTRIBUTION COMPANY LIMITED) 

We have audited the attached Balance Sheet of Aditya Birla Money Mart 

Limited (Formely Known as Birla Sun Life Distribution Company Limited) as 

at 31 st March, 2010, the related Profit and Loss Account for the year ended 

on that date annexed thereto and the Cash Flow Statement for the year 

ended on that date, which we have signed under reference to this report. 

These Financial Statements are the responsibility of the Company’s 




























(c) 

(d) 

(e) 

(f) 









on the basis of the written representations received from the 




from being appointed as a director in terms of clause (g) of subsection 

(1) of section 274 of the Companies Act, 1956; 









affairs of the Company as at 31 st March, 2010, 

(ii) in the case of the Profit and Loss Account, of the Loss of 

the Company for the year ended on that date, and 








Partner 


(318)

C M Y K 


ANNEXURE REFERRED TO IN PARAGRAPH I OF OUR REPORT OF EVEN 

DATE TO THE MEMBERS OF ADITYA BIRLA MONEY MART LIMITED 

(FORMELY KNOWN AS BIRLA SUN LIFE DISTRIBUTION COMPANY 

LIMITED) ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH, 2010 




































were outstanding as at 31 st March, 2010 for a year of more than six 





13. The Company has accumulated losses as at 31 st March, 2010 and 

has incurred cash losses during the year covered by our audit. 









18. The Company has not taken term loans during the year. 



on short term basis have, prima-facie, not been used during the year 







year. 





24. The clauses (ii), (iii) and (xiii) of para 4 are not reported upon as these 







Partner 


(319)

C M Y K 






Rupees 

Rupees 



Share Capital 1 200,000,000 71,749,990 



Long Term Loan - 

From Group Company 3 80,000,000 91,000,000 



FIXED ASSETS 4 

Gross Block 148,100,988 130,365,121 

Less: Accumulated Depreciation/ 

Amortisation 90,079,285 83,933,471 

Net Block 58,021,703 46,431,650 


INVESTMENTS 5 4,900,000 20,400,726 

CURRENT ASSETS, LOANS AND ADVANCES 




229,388,155 135,500,008 

LESS: CURRENT LIABILITIES 



Provisions 10 5,486,260 4,631,770 

138,455,154 63,490,688 


MISCELLANEOUS EXPENDITURE 11 — — 

(To the extent not written off or adjusted) 

Profit and Loss Account (Debit Balance) 164,289,424 62,280,795 



Notes to Accounts 17 (0.00) 



PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED ON 


INCOME 

Schedule For the For the 



Rupees 

Rupees 


Other Income 13 5,004,928 10,263,709 

EXPENDITURE 

533,207,165 233,292,021 

Sub Brokerage and Fees 193,054,287 107,069,515 

Personnel Cost 14 263,736,844 123,133,664 

Administrative and 

Other Expenses 15 155,901,216 78,960,320 

Finance Charges 16 9,716,333 1,551,995 

622,408,680 310,715,494 

PROFIT BEFORE DEPRECIATION / 

AMORTISATION (89,201,515) (77,423,473) 

Less: Depreciation / Amortisation 4 12,807,114 12,242,426 

PROFIT / (LOSS) BEFORE TAXATION (102,008,629) (89,665,899) 


– Current Tax — — 

– Deferred Tax expense /(credit) 

(Refer Note 10 of Schedule 17) — (628,291) 

– Fringe Benefit Tax — 2,173,000 

PROFIT / (LOSS) AFTER TAXATION (102,008,629) (91,210,608) 

Balance brought forward from last 

Balance Sheet (62,280,795) 28,929,813 

PROFIT AVAILABLE FOR 

APPROPRIATION (164,289,424) (62,280,795) 

BALANCE CARRIED TO 

BALANCE SHEET (164,289,424) (62,280,795) 

Basic and Diluted Earnings per 

Share - Annualised (Rs.) (6.60) (12.71) 

(Face value of Rs 10 each) 

Refer Note No 11 of Schedule 17 









Firm Membership No 103523W 






Rakesh Rathi 


Membership No: 45228 

Rakesh Rathi 



Kanwar Vivek 


Lal Tahilramani 

Manager 

Kanwar Vivek 



Manager 

Mumbai 


Amber Gupta 


Mumbai 


Amber Gupta 


(320)

C M Y K 


CASH FLOW STATEMENT AS ON 31ST MARCH, 2010 


A 

B 

C 

Year ended 

Period ended 



Net Profit / (Loss) before tax (102,008,629) (89,665,899) 

Adjustments for: 

Depreciation / Amortisation 12,807,114 12,242,426 

Loss on Sale of Assets 1,500,261 2,926,229 

Profit on Sale of Investments (1,290,800) (4,022,244) 

Dividend on Investments (653,540) (1,817,041) 

Interest on Inter Corporate Deposit 9,660,959 1,455,617 

Debit balance written off 57,894 344,560 

Preliminary expenses written off — 55,007 

Operating Profit before Working Capital Changes (79,926,741) (78,481,345) 


(Increase) / Decrease in Debtors (40,157,453) 9,769,047 

(Increase) / Decrease in Loans & Advances (47,854,148) (88,011,601) (43,157,098) (33,388,050) 

Increase / (Decrease) in Current Liabilites 74,109,976 (27,381,166) 

Increase / (Decrease) in Provisions 854,490 74,964,466 1,664,253 (25,716,913) 

Cash Generated from Operations (92,973,876) (137,586,308) 

Direct taxes paid (335,000) (6,827,667) 

Net Cash from Operating Activities (93,308,876) (144,413,975) 


Purchase of Fixed Assets (including CWIP) (32,992,588) (25,600,997) 

Sale of Fixed Assets 6,866,787 979,505 

Inter Corporate Deposit received / (repaid) - net (11,000,000) 91,000,000 

Decrease in Investment 15,500,726 58,019,096 

Profit on Sale of Investments 1,290,800 4,022,244 

Dividend on Investments 653,540 1,817,041 

Interest on Inter Corporate Deposit (9,660,959) (1,455,617) 

Net Cash used in / raised from Investing Activities (29,341,693) 128,781,272 


Issue of Share Capital 128,250,010 — 

128,250,010 — 

Net Changes in Cash & Cash Equivalent (a+b+c) 5,599,441 (15,632,703) 

Opening Cash and Cash Equivalent 5,784,113 21,416,816 

Closing Cash and Cash Equivalent 11,383,554 5,784,113 

Increase / Decrease in Cash & Cash Equivalent 5,599,441 (15,632,703) 





Rakesh Rathi Director Director 

Partner 

Membership No: 45228 Kanwar Vivek Lal Tahilramani 

Chief Executive Officer Manager 

Mumbai 


Amber Gupta 


(321)

C M Y K 


SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH, 2010 

As at 

As at 


Rs. 

Rs. 


Authorised 

25,000,000 Equity Shares of Rs. 10 each 250,000,000 100,000,000 

(Previous Year 10,000,000 Equity Shares of Rs. 10 each) 

Issued, Subscribed and Paid up 

20,000,000 (Previous Year 7,174,999) 

Equity Shares of Rs. 10 each fully paid up) 200,000,000 71,749,990 

(All the above Equity Shares are held by the 

Holding Company Aditya Birla Nuvo Limited 

(Previous year 7,174,999 Equity Shares held by 

Aditya Birla Nuvo Limited) 

(During the year, the Company has issued 

1,28,25,001 Nos of Equity Shares of Rs 10 each 

at par to Aditya Birla Nuvo Limited on 6th August, 2009) 

200,000,000 71,749,990 

As at 

As at 


Rs. 

Rs. 


Capital Redemption Reserve 28,250,000 28,250,000 

General Reserve 10,122,500 10,122,500 

38,372,500 38,372,500 


Long Term 

Loan from Group Company 

– Aditya Birla Finance Limited 80,000,000 91,000,000 

80,000,000 91,000,000 




Description of Asset As at Additions Deductions/ As at As at For the Deductions/ As at As at As at 

1st April, during Adjustments 31st March, 1st April, period Adjustments 31st March, 31st March, 31st March, 

2009 the period during the 2010 2009 during the 2010 2010 2009 

period period 


Trade names and other business rights 36,718,080 — — 36,718,080 36,718,080 — — 36,718,080 — — 

Computer Softwares 17,600,055 8,161,021 — 25,761,076 16,027,892 3,571,427 — 19,599,319 6,161,757 1,572,163 


Leasehold Improvements 11,444,242 8,210,448 5,605,086 14,049,604 5,732,313 2,027,496 3,726,430 4,033,379 10,016,225 5,711,929 

Computers 33,332,018 4,757,781 761,063 37,328,736 17,016,058 4,441,785 645,881 20,811,963 16,516,774 16,315,960 

Equipments 9,141,794 5,685,239 2,358,016 12,469,017 2,085,197 776,373 496,973 2,364,597 10,104,420 7,056,597 

Furniture and Fixtures 15,135,688 5,949,727 5,659,623 15,425,792 5,674,026 1,377,418 1,690,972 5,360,473 10,065,319 9,461,662 

Vehicles 6,993,243 — 644,560 6,348,683 679,904 612,615 101,044 1,191,474 5,157,209 6,313,339 

Total 130,365,121 32,764,216 15,028,348 148,100,988 83,933,471 12,807,114 6,661,300 90,079,285 58,021,703 46,431,650 

Previous Year 113,837,615 25,600,998 9,073,492 130,365,121 76,858,804 12,242,426 5,167,758 83,933,471 46,431,650 

As at 

As at 

SCHEDULE 5 - INVESTMENTS Face 31st March 31st March 

Value Numbers 2010 Numbers 2009 

Rs. 

Rs. 

LONG TERM 

(UNQUOTED, OTHER THAN 

TRADE) (AT COST) 

Equity Shares (fully paid up) 

Investment in Subsidiary Company 

Aditya Birla Money Insurance 

Advisory Services Limited 10 490,000 4,900,000 490,000 4,900,000 

Units of Mutual Fund 

Birla FTP Series AE 10 1,000,000 10,000,000 

4,900,000 14,900,000 

CURRENT 

Units of Mutual Fund 

Birla Cash Plus - IP Daily Dividend 10 — — 336,037 5,500,726 

— 5,500,726 

Total 4,900,000 20,400,726 

Aggregate repurchase price of 

Current Investments — 5,500,726 

Details of purchase / sale of investments during the year:- 

Particulars Opening Purchases Sales Closing 

Numbers Value(Rs.) Numbers Value(Rs.) Numbers Numbers Value(Rs.) 

Birla Cash Plus - 

Retail Daily Dividend 336,037 5,500,726 917,885 15,025,219 (1,253,922) — — 

Birla Cash Plus - 

IP Daily Dividend — — 27,412,599 296,119,121 (27,412,599) — — 

Birla FTP Qtr Series 

AE Dividend 1,000,000 10,000,000 — — (1,000,000) — — 

Note : Purchase of Units includes units created out of dividend reinvestment. 

As at 

As at 


Rs. 

Rs. 



Outstanding for a period exceeding six months 120,000 421,458 

Other debts 80,880,918 40,422,007 

81,000,918 40,843,465 


Cash on hand — 8,624 

Balances with Scheduled Banks 

in Current Account 4,583,554 1,275,489 

in Deposit Account 6,800,000 4,500,000 

11,383,554 5,784,113 



Advances recoverable in cash or in kind or for 

value to be received 7,311,357 15,344,609 

Advance payment of taxes 30,809,656 14,112,510 

(Net of Provision Rs.58,560,000; 

as at 31st March 09 Rs 58,560,000) 

Deposits, 23,288,898 24,166,666 

Due from a subsidiary company (Includes interest free loan 

Rs 39,800,000; as at 31st March, 2009 Rs 23,400,000) 

75,593,772 35,248,645 

137,003,683 88,872,430 

(322)

C M Y K 


SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31ST MARCH, 2010 

As at 

As at 


Rs. 

Rs. 


Sundry Creditors (Refer Note No.4 in Schedule 17) 108,066,790 44,367,799 

Overdraft in Current Account 4,049,988 3,229,741 


132,968,894 58,858,918 

SCHEDULE 10 - PROVISIONS 

Provision for Fringe Benefit Tax (Net) — 395,420 

Provision for Wealth Tax (Net) 21,372 55,675 

Provision for Retirement Benefits:- 

Provision for Leave Encashment 5,464,888 4,180,675 

5,486,260 4,631,770 

SCHEDULE 11 - MISCELLANEOUS EXPENDITURE 

(to the extent not written off or adjusted) 

Share Issue expenses 

Opening Balance — 55,007 

Less : Charged to Profit & Loss Account — (55,007) 

— — 

SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 

For the year ended For the year ended 


Rs. 

Rs. 

SCHEDULE 12 - INCOME FORM OPERATIONS 

Income from Mutual Funds 356,951,212 206,046,660 

Income from Alternate Products 75,587,104 — 

Income from Fixed Deposits and Bonds 10,571,845 4,724,000 

Business Development Fees 71,800,000 — 

Marketing / Promotion Expenses Recovery 13,292,076 12,257,652 

528,202,237 223,028,312 


Income from Newsletter 

Advertisement 2,857,474 6,155,097 

Less: Printing and Mailing Expenses (1,115,882) (2,770,946) 

1,741,592 3,384,151 

Interest Income on Deposits and Others 126,583 194,361 

(Tax deducted at source Rs.15,207; Previous year Rs.26,865) 

Income from Investments : 

Dividend Income on Current Investments 653,540 1,817,041 

Profit / (Loss) on Current Investments (Net) 1,290,800 4,022,244 

1,944,340 5,839,285 

Asset utilisation charges 647,799 — 

Provisions / Liabilities no longer required written back 544,615 834,048 

Miscellaneous Income — 11,864 

5,004,928 10,263,709 



Rs. 

Rs. 


Salaries, Bonus and Gratuity 251,935,228 116,090,906 

Contribution to Provident and Other Funds 10,203,612 5,929,519 


263,736,844 123,133,664 

SCHEDULE 15 - ADMINISTRATIVE 

AND OTHER EXPENSES 

Lease Rent 27,220,036 14,448,978 


Computers & Equipments 9,135,773 3,353,448 

Buildings 3,882,299 2,720,337 

Others 1,461,858 550,969 

Insurance 3,091,738 2,052,669 

Rates and Taxes 3,550,075 346,002 

Auditors' Remuneration: 

Statutory Audit Fees 400,000 400,000 

Tax Audit fees 100,000 100,000 

Reimbursement of Expenses 2,699 6,858 


Communication 8,174,560 5,613,394 

Travelling and Conveyance 17,049,809 10,652,831 

Printing and Stationery 1,630,275 1,554,308 

Advertisement and Sales Promotion 2,657,019 14,132,175 

Call Centre Expenses 3,848,140 3,665,779 

Water and Electricity 3,287,763 2,761,605 

Staff Training and Recruitment Expenses 2,825,191 4,985,755 

Research and Development Expenses 666,900 625,218 

Debit balances written off 57,894 344,560 

Seminar and Conference 1,639,528 102,784 

Share issue expenses written off — 55,007 

Loss on sale of Fixed Assets (Net) 1,500,261 2,926,229 

Outsourcing Expenses 57,928,990 1,974,224 


155,901,216 78,960,320 


Interest on Term Loan 9,660,959 1,455,617 

Other Interest — 624 

Bank Charges 55,374 95,754 

9,716,333 1,551,995 

(323)

C M Y K 


SCHEDULE - 17 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 

(I) 


(a) Basis of preparation : 

The financial statements have been prepared under the historical cost convention, 

on the accrual basis of accounting in accordance with generally accepted accounting 

principles (GAAP) in India and the provisions of the Companies Act, 1956. 

(b) Fixed Assets : 

Fixed Assets are stated at cost less accumulated depreciation / amortisation. Cost, 

for this purpose includes the purchase of asset and other direct costs incurred in 

getting the asset at the appropriate location and in a condition where they can be 

put to use 

(c) Depreciation / Amortisation : 

(i) Depreciation has been provided on Straight Line Method at the rates prescribed 

in Schedule XIV to the Companies Act, 1956. Depreciation on assets added/ 

disposed off during the year has been provided on prorata basis with reference 

to the month of addition / deduction. 

(ii) Assets costing Rs. 5,000 or less are written off in the year of purchase. 

(iii) Intangible assets, viz. Trade Names and other business rights and Computer 

Software are written off over a period of ten years and three years respectively. 

(iv) Leasehold improvements are amortised over the lease period or six years, 

whichever is earlier. 

(d) Investments : 

(i) Long term Investments are stated at cost after deducting provision, if any, made 

for permanent diminution in the values. 

(ii) Current Investments are stated at lower of the cost and fair value 

(e) Employee Benefits : 

(i) Contribution to Provident Fund as per the Employees’ Provident Funds and 

Miscellaneous Provisions Act, 1952, is charged to Profit and Loss Account. 

(ii) Gratuity liability is computed on the basis of actuarial valuation taken at the 

close of the year and recognized in the Profit & Loss Account. 

(iii) Compensated absence liability is provided for on the basis of actuarial valuation 

at the close of the year and recognized in the Profit & Loss Account. 

(f) Accounting for Taxes on Income : 

(i) Provision for current tax is made on the basis of the estimated taxable income 

for the current accounting period in accordance with the Income Tax Act, 

1961. 

(ii) The deferred tax for timing differences between the book profits and tax profits 

for the year / period is accounted for using the tax rates and laws that have 

been enacted or substantially enacted as of the balance sheet date. Deferred 

tax assets arising from timing differences are recognised to the extent there is 

virtual certainty that these would be realised in future and to the extent of 

Deferred tax liabilities. They are reviewed for the appropriateness of their 

respective carrying values at each balance sheet date. 

(g) Revenue Recognition : 

(i) Income from operations primarily includes brokerage and fees on mutual fund 

units, bonds, fixed deposits, IPOs, Private Equity and other alternate products 

and Services, which is recognised when due, on completion of transaction or 

service. 

(2) Estimated amount of contracts remaining to be executed on Capital Account (net of 

advances) Rs 2,48,920 (on 31st March, 2009 Rs 1,42,16,901) 

(3) (i) In the opinion of the management, current assets, loans and advances have a 

value on realisation in the ordinary course of business at least equal to the 

amount at which they are stated. 

(ii) Certain balances in Sundry Debtors, Creditors and deposits are subject to 

confirmation 

(4) Sundry Creditors do not include any amount payable to Small Scale Industrial 


and Medium Enterprises Development Act, 2006, (MSMEDA), which came into force 

from October 02, 2006, certain disclosures are required to be made relating to 

Micro, Small and Medium Enterprises. On the basis of the information and records 

available with the management, the following disclosures are made for the amounts 

due to the Micro, Small and Medium enterprises, who are registered with the competent 

authorities. 

Particulars 

Amount 

Principal amount remaining unpaid to any supplier as at the period end NIL 


NIL 

Amount of Interest paid by the company in terns of section 16 of the 

MSMEDA, along with the amount of the payment made to the supplier 

beyond the appointed day during the accounting period 

NIL 

Amount of interest due and payable for the period of delay in making 

payment (which have been paid but beyond the appointed day during 

the period) but without adding the interest specified under the MSMEDA 

NIL 

Amount of interest accrued and remaining unpaid at the end of the 

accounting period 

NIL 

(5) Managerial Remuneration 

Remuneration paid to Manager (excluding provision for gratuity and leave 

encashment and premium for life, accident and medical insurance) 



Salary, allowances and Others 2,921,556 1,982,149 

Contribution to Provident and Other Funds 234,243 213,299 

Total 3,155,799 2,195,448 

(6) Actuarial Valuation of Employee benefits – Compensated Absence liability 

(Leave encashment) 

Effective from April 1, 2006 the company has adopted the revised accounting 

standard on employee benefits. The following table set out the status of the 

leave encashment plan as required under AS 15(Revised). 

Valuation Assumptions : 

The following assumptions have been made : 

(i) Rate of Interest 8.25% 

(ii) Salary growth 6% 

(iii) Withdrawls rate 1% 

(iv) Mortality rates 

LIC (1994-96) ultimate mortality rates 

(v) Retirement age 58 years 

Changes in the present value of the Defined Leave Encashment Benefits 

Obligation representing reconciliation of opening and closing balances thereof: 

(II) 

(h) Miscellaneous Expenditure : 

Share issue expenses are written off over a period of ten years. 

(i) Impairment of Assets : 

At each balance sheet date, the Company reviews the carrying amounts of its fixed 

assets to determine whether there is any indication of impairment of assets. If any 

such indication exists, the recoverable amount of the asset is estimated in order to 

determine the extent of impairment loss. Reversal of impairment loss is recognized 

immediately as income in Profit & Loss account. 

NOTES TO ACCOUNTS 

(1) Contingent Liabilities not provided for : 

Claims against the Company not acknowledged as Debts : 



In respect of Income Tax — 1,500,000 

In respect of Service Tax 2,168,121 881,720 

Total 2,168,121 2,381,720 



Present value of defined benefit 

obligation as at the beginning of the year 4,180,675 1,725,414 

Interest cost 324,002 138,033 

Current service cost 1,197,731 2,572,647 

Benefits paid during the year (1,148,017) (1,010,229) 

Actuarial (gain) / loss on defined 

benefit obligation 910,497 754,810 


obligation as at the end of the year 5,464,888 4,180,675 

(324)

C M Y K 


Amounts to be recognised in Balance Sheet : 




obligation as at the end of the year 5,464,888 4,180,675 

Fair value of Plan Assets — — 

Liability recognised in the 

Balance Sheet 5,464,888 5,464,888 

4,180,675 4,180,675 

Amounts to be recognised in the Statement of Profit and Loss : 




Interest cost on obligation 324,002 138,033 

Expected return on Plan Assets — 

Net Actuarial (gain) / loss recognised 910,497 754,810 

Expense recognised in Statement 

of Profit and Loss Account 2,432,230 3,465,490 

(7) Actuarial Valuation of Employee benefits – Gratuity 






(iv) Mortality rates 

LIC (1994-96) ultimate mortality rates 


(vi) Expected Return on Plan Assets 8% 

Changes in the present value of the Gratuity Benefits Obligation representing 

reconciliation of opening and closing balances thereof: 



Opening defined benefit obligation 

as at the beginning of the year 2,722,774 1,837,000 


Current service cost 1,955,297 928,881 

Benefits paid during the year (124,872) (837,620) 

Actuarial (gain) / loss on defined 

benefit obligation (131,181) 653,982 

Closing defined benefit obligation 

as at the end of the year 4,633,033 2,722,774 

Changes in Fair Value of Plan Assets : 



Opening Fair Value of Plan Assets 

as at the beginning of the year 2,756,386 1,043,491 


Contributions made by Employer — 793,509 

Benefits paid (124,872) (837,620) 

Actuarial gain / (loss) on Plan Assets 294,592 (27,604) 

Closing Fair Value of Plan Assets 





Present value of Funded obligation 


Fair value of Plan Assets (3,146,617) (1,055,255) 

Liability recognised in the Balance Sheet 1,486,416 1,667,519 

Amount funded to Gratuity Trust on 

23rd March, 2010 (1,486,416) (1,667,519) 

Closing Balance — — 

Plan Assets have been invested in Insurer Managed Fund (Birla Sun Life Insurance 

Group Secure Fund) 




Current service cost 1,955,297 928,881 


Expected return on Plan Assets (220,511) (83,479) 

Net Actuarial (gain) / loss recognised (425,773) 681,586 

Expense recognised in Statement 

of Profit and Loss Account 1,520,028 1,667,519 

Difference of Rs 33,612 between gratuity expense as per Actuarial valuation and 

gratuity expense accounted in books is on account of appreciation in value of 

investment in Insurer Fund which was not required to be paid 

Actual Return on Plan Assets : 



Expected return on Plan Assets 220,511 83,479 

Actuarial gain / (loss) on Plan Assets 294,592 (27,604) 

Actual Return on Plan Assets 515,103 55,875 

The Company has recognized the following amounts as expenses and included in 

Schedule 14 in “Contribution to Provident and Other Funds” 





Contribution to ESIC — 38,865 

(8) The Company’s leasing arrangements comprise of operating leases for office 

premises, which are renewable /cancelable at the Company’s option. 

(a) Future Lease Payments : 



Less than 1 Year 35,134,231 47,890,800 

1 Year to 5 Years 142,796,667 119,305,654 

More than 5 Years 118,549,334 34,006,760 

(b) Lease Payments recognised in the Profit and Loss Account Rs 2,72,20,036 

(Previous Year Rs 1,44,48,978) 

(325)

C M Y K 


(9) Disclosure in respect of Related Parties pursuant to Accounting Standard 18 : 

(a) List of Related Parties : 

A Parties where Control exist (Holding Company / Subsidiary Companies) 

Aditya Birla Nuvo Limited (Holding Company) from 31.3.09 

Aditya Birla Money Insurance Advisory Services Ltd (Subsidiary Company) 

B(1) Other related Parties with whom the Company has entered into 

transaction during the year: 

Group Companies 

i) Birla Sun Life Asset Management Company Limited 

ii) Aditya Birla Finance Limited (Birla Global Finance Company Limited) 

iii) Birla Sun Life Insurance Company Limited 

iv) Aditya Birla Financial Services Private Limited 

v) Aditya Birla Minacs IT Services Limited 

vi) Indo Gulf Fertilisers 

vii) Indian Rayon (A Unit of Aditya Birla Nuvo Limited) 

viii) Aditya Birla Money Limited (ABML) (formerly known as Apollo Sindhoori Capital 

Investment Limited) (Subsidiary of ABFSPL w.e.f. March 6, 2009) 

xi) Aditya Birla Commodities Broking Limited (ABCBL) (formerly known as Apollo 

Sindhoori Commodities Trading Limited) (100% Subsidiary of ABML) 


x) Aditya Birla Capital Advisors Private Limited (ABCAPL) (Subsidiary of ABFSPL) 

(w.e.f. November 4, 2008) 

xi) Aditya Birla Customers Services Private Limited (ABCSPL) (Subsidiary of ABFSPL) 

(w.e.f. December 11, 2008) 

xii) Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFSPL) (w.e.f. 

November 4, 2008 and ceased to be a subsidiary w.e.f. March 13, 2009) 

xiii) Aditya Birla Trustee Company Private Limited (ABTCPL) (Subsidiary of ABFSPL) 


xiv) Aditya Birla Minacs Worldwide Limited (ABMWL) 

xv) Transworks Inc., (TW Inc.,) (100% Subsidiary of ABMWL) 

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

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

xviii) Aditya Birla Minacs Worldwide Inc., (ABMWI) (100 % Subsidiary of AVTL) 

(formerly known as Minacs Worldwide Inc.,) 

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

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

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

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

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

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

xxv) Minacs Limited (100 % Subsidiary of ABMWI) 

xxvi) Minacs Worldwide GmbH (100 % Subsidiary of Minacs Limited) 

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

xxviii) Aditya Vikram Global Trading House Limited (AVGTHL) 

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

Investment Limited) 

xxx) Madura Garments International Brand Company Limited (MGIBCL) (on 

becoming Associate, ceased to be an subsidiary w.e.f. November 27, 2009) 

xxxi) LIL Investment Limited (w.e.f. July 27, 2009 and on becoming Associate, ceased 

to be an subsidiary w.e.f. November 27, 2009) 

xxxii) Madura Garments Exports Limited (MGEL) (merged with the Company w.e.f. 


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

09, 2010) 

xxxiv) Madura Garments Lifestyle Retail Company Limited (MGLRCL) 

xxxv) MG Lifestyle Clothing Company Private Limited (MGCCPL) (merged with the 

Company w.e.f. January 1, 2010) 

xxxvi) Peter England Fashions and Retail Company Limited (PEFRL) 

xxxvii) Birla Technologies Limited (100 % Subsidiary of ABMITS) 

(2) Directors and Key Management Personnel 

Mr Lal Tahilramani 

Note : Related parties are as identified by the Company and relied upon by the Auditors. 

Year ended 31 st March, 2010 Year ended 31 st March, 2009 

Paticulars Referred to in A Referred to in B (1) Referred to in B (2) Referred to in A Referred to in B (1) Referred to in B (2) 

Purchase of Fixed Assets 

Aditya Birla Financial Services Private Limited 14,242,566 

Birla Sun Life Asset Management Company Limited — 402,205 

Sale of Assets 

Aditya Birla Financial Shared Services Limited 89,444 

Birla Sun Life Asset Management Company Limited 6,398,320 

Birla Insurance Advisory and Broking Services Limited 18,000 

Expense - Rent 

Aditya Birla Nuvo Limited (Service Tax 5200/-) 50,478 — 4,55,666 — 

Aditya Birla Finance Limited(Birla Global Finance Co Limited) — — 10,41,600 — 

Indo Gulf Fertilisers Limited 2,000 — 

Indian Rayon Limited 6,594 — 

(326)

C M Y K 


Year ended 31 st March, 2010 Year ended 31 st March, 2009 

Paticulars Referred to in A Referred to in B (1) Referred to in B (2) Referred to in A Referred to in B (1) Referred to in B (2) 

Expense-Reimbursement of Cost 

Aditya Birla Finance Limited (Birla Global Finance 

Company Limited) 691,025 — 3,90,056 — 

Birla Sun Life Asset Management Company 

(Service Tax 1,14,074) 1,239,645 — 30,06,097 — 


(Service tax 2,97,869) 2,891,922 

Aditya Birla Financial Services Private Limited 150,704 

Aditya Birla Minacs IT Services Limited (Service tax 81,252) 830,341 

Birla Sun Life Insurance Company Limited (Service Tax 7102/-) 68,952 

Expense – Interest 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd) 8,492,603 14,55,617 

Aditya Birla Nuvo Limited 1,167,945 

Income-Business Development Fees 

Aditya Birla Money Limited (Service Tax 37,32,720) 36,240,000 

Aditya Birla Commodities Broking Limited (Ser.Tax 36,62,680) 35,560,000 

Income-Reimbursement of Cost 

Aditya Birla Money Insurance Advisory Services Limited 21,408,085 1,18,48,645 — — 

Birla Sun Life Asset Management Company Limited 65,954 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd) 11,857 

Birla Sun Life Insurance Company Limited 2,647,200 

Income – Brokerage / Others 

Birla Sun Life Asset Management Company Limited 1,875,415 — — — 

Birla Sun Life Insurance Company Limited — — 50,818 — 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd) 115,834 — 74,305 — 

Income – Advertisement 

Birla Sun Life Asset Management Company Limited — 270,000 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd) 25,000 — 

Birla Sun Life Insurance Company Limited 360,000 — 3,60,000 — 

Income – Training 

Birla Sun Life Insurance Company Limited — — 1,00,00,000 — 

Asset – Deposits given 

Birla Sun Life Insurance Company Limited — — — — 

Aditya Birla Financial Services Pvt Limited — 26,80,000 

Aditya Birla Financial Shared Services Pvt Limited 130,800 

Asset - Loan given 

Aditya Birla Money Insurance Advisory Services Limited (Net) 16,400,000 34,00,000 — — 

Liability – ICD 

Received 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd) 88,000,000 91,000,000 

Repaid 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd) 99,000,000 — 

Managerial Remuneration 

Mr Lal Tahilramani 3,155,799 2,195,448 

(327)

C M Y K 


b) Outstanding balance of Related Parties : 

Particulars 

As at 31st March, 2010 As at 31st March, 2009 

Birla Sun Life Asset Management Company Limited (Service Tax 1,14,074) 2,54,375 (Dr) 9,46,896 (Cr) 

Aditya Birla Financial Services Private Limited 4,78,441 (Cr) 18,16,031 (Dr) 

Aditya Birla Finance Limited (Birla Global Finance Company Limited) (ICD taken) 8,00,00,000 (Cr) 9,10,00,000 (Cr) 

Aditya Birla Finance Limited (Birla Global Finance Company Limited) (others) 65,897 (Cr) — 

Aditya Birla Money Insurance Advisory Services Limited 35,793,772 (Dr) 1,18,48,645 (Dr) 

Aditya Birla Money Insurance Advisory Services Limited (Loan ) 3,98,00,000 (Dr) 2,34,00,000 (Dr) 

Aditya Birla Financial Shared Services Limited 7,12,230 (Dr) — 

Aditya Birla Minacs IT Services Limited (Service tax 81,252) 17,393 (Cr) — 

Indo Gulf Fertilisers 2,000 (Cr) — 

Indian Rayon (A Unit of Aditya Birla Nuvo Limited) Nil — 

Aditya Birla Nuvo Limited 44,238 (Cr) — 

Aditya Birla Money Limited (Service Tax 5,76,800) 61,76,800 (Dr) — 

Birla Sun Life Insurance Company Limited 4,26,668 (Dr) — 

(10) (a) Provision for Taxation - Current Taxes include Wealth Tax Liability of 

Rs 21,372 (Previous Year Rs 52,168) 

(b) The breakup of Net Deferred Tax Asset arising on account of following 

timing differences is as under : 




Expenses allowed on payment basis 425,717 1,421,012 

Unabsorbed Depreciation 

and Carry forward losses 30,096,722 — 


Depreciation / amortisation (683,729) (586,972) 

Net Deferred Tax Asset / Liability 29,838,710 834,040 

Note : 

Deferred tax assets have been created only to the extent of Deferred tax liability. 

Accordingly Deferred tax asset for Section 43B items to the extent of Rs 2,98,38,710 

(Previous Year Rs 8,34,040) is not recognised in the Accounts 

(11) Earnings per Share is calculated as under : 



Numerator- 

Profit/(Loss) attributable to Shareholders (102,008,629) (91,210,608) 

Denominator- 

Weighted Avearge number of 

Outstanding Equity Shares 

- Basic 15,467,328 7,174,999 

- Diluted 15,467,328 7,174,999 

Nominal value of Shares (Rs.) 10 10 

Earnings per Share (Rs) - Annualised 

- Basic (6.60) (12.71) 

- Diluted (6.60) (12.71) 

(12) The Management has carried out physical verification of assets in March 

2010 as per regular physical verification programme and no material 

discrepancies were noticed on such verification as compared to book records. 

Based on such exercise, there is no impairment of assets at any of the cash 

generating units of the Company as on 31 st March, 2010. 

(13) Previous period figures have been regrouped / rearranged to conform to the 

figures of the current period. 

Signatures to Schedule 1 to 17 


Director 

Kanwar Vivek 


Director 


Manager 

Mumbai 


Amber Gupta 


(328)

C M Y K 




REGISTRATION NO. 1 1 – 1 0 8 7 5 1 STATE CODE 1 1 



II. 



BONUS ISSUE N I L PRIVATE PLACEMENT 1 2 8 2 5 0 

III. 


TOTAL LIABILITIES 3 1 8 3 7 2 TOTAL ASSETS 3 1 8 3 7 2 


PAID-UP CAPITAL 2 0 0 0 0 0 RESERVES AND SURPLUS 3 8 3 7 2 

SECURED LOANS N I L UNSECURED LOANS 8 0 0 0 0 


NET FIXED ASSETS 5 8 2 5 0 INVESTMENTS 4 9 0 0 

NET CURRENT ASSETS 9 0 9 3 3 MISC.EXPENDITURE N I L 

ACCUMULATED LOSSES 1 6 4 2 8 9 DEFERRED TAX LIABILITY N I L 

IV. 


TURNOVER 5 3 3 2 0 7 TOTAL EXPENDITURE 6 3 5 2 1 5 

PROFIT/(LOSS) BEFORE TAX (1 0 2 0 0 8) PROFIT/(LOSS) AFTER TAX (1 0 2 0 0 8) 

EARNINGS PER SHARE IN RS. (-) 6 . 6 0 DIVIDEND RATE % N I L 


ITEM CODE NO. 8 0 4 . 9 

(ITC CODE) 

PRODUCT 

DESCRIPTION 

OTHER FINANCIAL SERVICES 

A) MUTUAL FUNDS 

B) FIXED DEPOSITS 

C) BONDS 

D) INITIAL PUBLIC OFFERS 


Director 

Director 

Kanwar Vivek 



Manager 



Amber Gupta 


(329)

C M Y K 

ADITYA BIRLA MONEY INSURANCE ADVISORY SERVICES LIMITED (Formerly: BSDL Insurance Advisory Services Ltd.) 



Your Directors have pleasure in presenting the 9th Annual Report together 

with the audited accounts of your Company for the financial year ended 


Particulars Year 2009-10 Year 2008-09 

(Rs. in millions) (Rs. in millions) 

Total Revenue 102.23 40.47 

Total Expenditure 115.45 58.50 

(Loss) Before Depreciation and Tax (13.22) (18.03) 

Less: Depreciation 0.26 0.26 

Provision for Taxation — 0.40 

(Loss) After Tax (13.48) (18.70) 

(Loss) brought forward from 

previous year (19.13) (0.43) 

Balance Carried to Balance Sheet (32.61) (19.13) 

COMPANY PERFORMANCE 

Your Company is engaged in distribution of life insurance & pension 

products as a corporate agent of Birla Sun Life Insurance Company. The 

number of policies issued during the year was 10,014 as against 4,696 

in the last financial year. During the year, new modal premium on policies 

issued was Rs. 297 million as against Rs.163 million during the last year, 

an increase of 83%. The average policy size of your Company during 

2009-10 was approximately Rs. 29,707 against the previous year average 

of Rs. 34,682. 

During the year, your company recorded a total revenue of Rs 102.23 

million as against Rs. 40.47 million, an increase of 153% over last year. 

As a result, the net loss reduced to Rs. 13.48 million against a loss of Rs. 

18.70 million last year. 

DIVIDEND 

Considering the growth plans of the Company and the loss for the year, 

the Directors do not recommend any dividend. 


During the year, the name of the Company was changed to Aditya Birla 

Money Insurance Advisory Services Limited vide fresh certificate of 

incorporation dated February 11, 2010, issued by the Registrar of 

Companies, Maharashtra, Mumbai. The new name reflects our parentage 

and the Aditya Birla Group’s commitment to the business. It will also bring 

greater synergy in the distribution segment and facilitate higher client 

acquisition under the brand “Aditya Birla Money”. 

MARKET OUTLOOK AND OPPORTUNITIES 

Insurance penetration as a percentage of GDP still continues to be low as 

compared to the developed markets. Last year on account of financial 

meltdown, the life insurance segment saw a downward trend. However, 

some buoyancy was witnessed during the current year. The weighted new 

business premiums collected by the industry during the year grew by 

around 13% over the previous year. The year also saw some more players 

entering the insurance business thus increasing competition. 

The year also witnessed some major regulatory changes. IRDA capped the 

overall charges at 3 per cent of gross yield in case of ULIPS with tenure of 

10 years or below while fund management charges were restricted at 1.5 

per cent. In case of insurance policies of above 10 years, IRDA capped 

total charges at 2.25 per cent, of which the fund management charges 

will not exceed 1.25 per cent. The cap was applicable to new policies 

sold from October 1, 2009. In case of existing policies, IRDA gave time 

to life insurers till December 31, 2009 to modify the charges. 

On the Distribution front, IRDA also notified guidelines on Licensing of 

Corporate Agents inter-alia providing that applications for Corporate Agency 

license from a person or group of persons who is/are already engaged in 

any insurance business shall require the approval of IRDA. IRDA also 

provided that persons who are regulated by RBI within the group may 

apply and obtain a corporate agency license provided they have “substantial 

client base of their own or access to data which would facilitate identification 

of prospects”. In case of Persons who are not regulated by RBI, the 

requirement of having a “substantial client base of their own or access to 

data to identify the prospective policyholders” and have a turnover, assets 

or income of at least Rs. 15 crores has been provided. 

The Committee on Investor Awareness and Protection also submitted its 

recommendations to the Government. The Committee inter-alia 

recommended a phased elimination of distributor commission embedded 

in insurance premiums by the year 2011. It also recommended that the 

commission on pure term products is to be capped at 5% from year 

2011. These recommendations are currently being examined by the High 

Level Co-ordination Committee of different regulators. 

Despite this dynamic scenario, the Indian Insurance Industry is expected to 

grow at a moderate pace in future and your Company is well placed to 

tap opportunities presented by the market potential and has plans to work 

in close co-ordination with Birla Sun Life Insurance. Your Company 

continues to service its customers efficiently through established processes 

and systems. 


Your Company firmly believes in the principles of Corporate Governance 

and is committed to conduct its business in a manner, which will ensure 

sustainable, capital-efficient and long-term growth thereby maximizing 

value for its shareholders, customers, employees and the society at large. 

Composition of the Board and External Directorships held during the 

FY 2009-10 

Name of Directors Position Other Directorships 

held as on March 31, 

2010** 

Mr. Kanwar Vivek Non-Executive 03 

Mr. Lal Tahilramani Non-Executive Nil 

Mr. K. Joseph Thomas Non-Executive Nil 

Mr. Manoj Chauhan Non-Executive Nil 

** excluding Private Limited and Section 25 Company. 

Number of Board Meetings held and attendance during the year 

2009-10 

Name of Directors No. of Board No. of Board Whether 

Meetings held Meetings attended 

during the year attended last AGM 

Mr. Lal Tahilramani 04 04 Yes 

Mr. K Joseph Thomas 04 03 Yes 

Mr. Kanwar Vivek 04 04 Yes 

Mr. Manoj Chauhan 04 04 Yes 


As stipulated under section 217 (2AA) of the Companies Act 1956, your 



standards have been followed along with proper explanation to 

material departures, if any. 

(330)

C M Y K 


b. The Directors have selected such accounting policies and applied 

them and made judgments and estimates that are reasonable and 

prudent so as to give a true and fair view of the state of affairs of the 

Company at the end of the financial year and of the profit or loss of 

the Company for that period. 

c. The Directors have taken proper and sufficient care for the 

maintenance of adequate accounting records in accordance with the 

provisions of this Act for safeguarding the assets of the Company 

and for preventing and detecting fraud and other irregularities. 


basis’. 


The particulars of the employees, as required under section 217(2A) of the 

Companies Act, 1956, read with the Companies (Particulars of Employees) 

Rules, 1975, as amended, are given as annexure to the Directors’ Report. 

DIRECTORS 

Mr. K. Joseph Thomas, Director of the Company, shall retire by rotation at 

the ensuing Annual General Meeting and, being eligible, offers himself 

for re-appointment. Your Board recommends his re-appointment. 


Pursuant to Section 383A of the Companies Act, 1956, a Secretarial 

Compliance Certificate under Companies (Compliance Certificate) Rules, 

2001 issued by M/s. Mehta & Mehta Company Secretaries is attached to 

this report. 



the ensuing Annual General Meeting. The Company has received letter 

from them to the effect that their appointment, if made, would be within 

the prescribed limits under section 224(1-B) of the Companies Act, 1956, 

and that they are not disqualified for such appointment within the meaning 

of Section 226 of the Companies Act, 1956. 

Your Directors have therefore proposed the appointment of M/s. Haribhakti 

& Co., Chartered Accountants, as Statutory Auditors of the Company. 







pertaining to manufacturing, furnishing the details on conservation of 

energy are not applicable. 

There were no transactions pertaining to foreign exchange earnings and 

outgo during the financial year 2009-10. 


Your Directors acknowledge the contribution made by each employee of the 

Company. Your Directors also acknowledge and thank Birla Sun Life Insurance 

Company Limited for their valued business support and contribution and 

also express their gratitude to the bankers, valued clients, shareholders, 

Insurance Development and Regulatory Authority and other Government 

agencies for their continuous support. 




Sd/- 


Director 

Sd/- 

Kanwar Vivek 

Director 

(331)

C M Y K 


Auditors' Report 

To, 

The Members of Aditya Birla Money Insurance Advisory Services 

Limited (Formely Known As BSDL Insurance Advisory Services Limited) 

We have audited the attached Balance Sheet of Aditya Birla Money Insurance 

Advisory Services Limited (Formely known as BSDL Insurance Advisory Services 

Limited) as at 31 st March, 2010, the related Profit and Loss Account for the 

year ended on that date annexed thereto and the Cash Flow Statement for 

the year ended on that date, which we have signed under reference to this 

report. These Financial Statements are the responsibility of the Company’s 




























(c) 

(d) 

(e) 

(f) 









On the basis of the written representations received from the 




from being appointed as a director in terms of clause (g) of subsection 

(1) of section 274 of the Companies Act, 1956; 









affairs of the Company as at 31 st March, 2010, 

(ii) in the case of the Profit and Loss Account, of the Loss of 

the Company for the year ended on that date, and 








Partner 


(332)

C M Y K 


Annexure Referred to in Paragraph I of our Report of even date to the 

members of Aditya Birla Money Insurance Advisory Services Limited 

(BSDL Insurance Advisory Services Limited) on the accounts for the 

year ended 31 st March, 2010 




































were outstanding as at 31 st March, 2010 for a year of more than six 





13. The Company has accumulated losses as at 31 st March, 2010 and 

has incurred cash losses during the year covered by our audit. 









18. The Company has not taken term loans during the year. 



on short term basis have, prima-facie, not been used during the year 







year. 





24. The clauses (ii), (iii) and (xiii) of para 4 are not reported upon as these 







Partner 

Date : 20 th April,2010 Membership No: 45228 

(333)

C M Y K 


Balance Sheet as at 31st March, 2010 





Rs. 

Rs. 

SHAREHOLDERS' FUNDS 

Share Capital 1 4,900,000 4,900,000 


From Holding Company 39,800,000 23,400,000 



FIXED ASSETS 

Gross Block 2 5,086,150 1,864,045 

Less: Accumulated Depreciation 1,768,858 1,506,062 

Net Block 3,317,292 357,982 


CURRENT ASSETS, LOANS AND ADVANCES 


Cash and Bank Balances 4 4,757,719 7,936 


61,545,550 24,778,579 

LESS: CURRENT LIABILITIES AND PROVISIONS 


Provisions 7 1,319,527 904,934 

52,968,263 15,968,866 



(DEBIT BALANCE) 32,614,234 19,132,305 



and Notes to Accounts 12 (0.36) 


integral part of the financial statements. 

Profit and Loss Account for the year ended 31st March, 2010 





Rs. 

Rs. 

INCOME 

Income from Operations 

— Commission 76,068,115 30,215,880 

— Marketing / Promotion 

Expenses Recovery 25,259,638 10,130,959 

Other Income 8 909,722 125,472 

EXPENDITURE 

102,237,475 40,472,311 

Personnel Costs 9 60,267,006 38,998,346 

Administrative and Other Expenses 10 54,797,315 19,284,039 

Finance Charges 11 392,286 225,496 

115,456,607 58,507,881 

PROFIT/ (LOSS) BEFORE 

DEPRECIATION (13,219,132) (18,035,570) 

Less: Depreciation 2 262,796 265,204 

PROFIT/ (LOSS) BEFORE TAX (13,481,928) (18,300,774) 


— Current Tax — — 

— Deferred Tax — (17,000) 

— Fringe Benefit Tax — 417,000 

PROFIT/ (LOSS) AFTER TAX (13,481,928) (18,700,774) 

Balance of Profit / (Loss) brought 

forward from last Balance Sheet (19,132,305) (431,531) 

BALANCE CARRIED TO 

BALANCE SHEET (32,614,234) (19,132,305) 

Basic and Diluted Earnings per share - (27.51) (38.16) 

Annualised (Face Value of Rs 10 each) 

Refer Note No 10 of Schedule 12 


and Notes to Accounts 12 


integral part of the financial statements. 











Rakesh Rathi Kanwar Vivek Lal Tahilramani 



Mumbai 

Dated: 20th April,2010 




Mumbai 


(334)

C M Y K 


Cash Flow Statement as on 31st March, 2010 


Year ended 

Period ended 

31-3-2010 31-3-2009 

A CASH FLOW FROM OPERATING ACTIVITIES 

Net Profit / (Loss) before tax (13,481,928) (18,300,774) 


Depreciation / Amortisation 262,796 265,204 

Loss on Sale of Assets — 55,655 

Dividend on Investments (65,102) (99,677) 

Operating Profit before Working Capital Changes (13,284,234) (18,079,592) 


(Increase) / Decrease in Debtors (10,278,962) (5,245,432) 

(Increase) / Decrease in Loans & Advances (21,652,227) (31,931,189) (6,295,391) (11,540,823) 

Increase / (Decrease) in Current Liabilites 36,584,804 9,997,217 

Increase / (Decrease) in Provisions 414,593 36,999,397 749,546 10,746,763 

Cash Generated from Operations (8,216,025) (18,873,652) 

Direct taxes paid (86,000) (417,000) 

Net Cash from Operating Activities (8,302,025) (19,290,652) 

B CASH FLOW FROM INVESTING ACTIVITIES 

Purchase of Fixed Assets (3,413,293) (429,377) 

Sale of Fixed Assets — 552,900 

Short Term Loan received 16,400,000 18,400,000 

Dividend on Investments 65,102 99,677 

Net Cash used in / raised from Investing Activities 13,051,809 18,623,200 

C CASH FLOW FROM FINANCING ACTIVITIES — — 

— — 

Net Changes in Cash & Cash Equivalent (a+b+c) 4,749,783 (667,452) 

Opening Cash and Cash Equivalent 7,936 675,388 

Closing Cash and Cash Equivalent 4,757,719 7,936 

Increase / Decrease in Cash & Cash Equivalent 4,749,783 (667,452) 








Mumbai 


(335)

C M Y K 



As at 

As at 


Rs. 

Rs. 


Authorised 

500,000 Equity Shares of Rs. 10 each 

(Previous Year 500,000 Equity Shares of Rs. 10 each) 5,000,000 5,000,000 

5,000,000 5,000,000 


490,000 Equity Shares of Rs. 10 each fully paid up 4,900,000 4,900,000 

(Previous Year 490,000 Equity Shares of Rs. 10 each 

fully paid up) (All the above shares are held by 

the holding company - Aditya Birla Money Mart 

Limited – and its nominees) 

4,900,000 4,900,000 

As at 

As at 


Rs. 

Rs. 



Debts - Outstanding for a period exceeding six months — — 

Other Debts 22,694,301 12,415,339 

22,694,301 12,415,339 


Cash on hand — — 

Balance with Scheduled Banks 

In Current Accounts 4,757,719 7,936 

4,757,719 7,936 




As at Additions Deductions/ As at As at For the Deductions/ As at As at As at 

Discription of Asset 1st April, during the Adjustments 31st March, 1st April, period Adjustments 31st March, 31st March, 31st March, 

2009 period during the 2010 2009 during the 2010 2010 2009 

period 

period 


Computer Softwares 429,377 — — 429,377 143,125 143,125 — 286,251 143,126 286,252 


Computers 1,434,668 3,222,105 — 4,656,773 1,362,937 119,671 — 1,482,608 3,174,165 71,731 

Total 1,864,045 3,222,105 — 5,086,150 1,506,062 262,796 — 1,768,858 3,317,292 357,983 

Previous Year 2,304,855 429,377 870,187 1,864,045 1,351,082 265,204 110,224 1,506,062 357,982 953,773 

As at 

As at 


Rs. 

Rs. 



Advances recoverable in cash or in kind or 

for value to be received 6,298,555 1,706,181 

Deposits 7,194,000 — 

Advance payment of Taxes (Net) 20,600,976 10,649,123 

(Net of Provision Rs. 1,897,394; 

as at 31st March 09 Rs 1,897,394) 

Total 34,093,531 12,355,304 


Sundry creditors 10,870,814 2,363,892 

(Refer Note No. 3 in Schedule 12) 

Due to Holding Company 35,793,772 11,848,645 

Overdraft in Current Account — 238,642 


51,648,736 15,063,932 


Provisions for Retirement Benefits 

Provision for Gratuity 538,968 275,743 

Provision for Leave Encashment 780,559 629,191 

1,319,527 904,934 

Schedules Forming Part of Profit and Loss Account for the year ended 31st March, 2010 



Rs. 

Rs. 


Dividend Income on Current Investments 65,102 99,677 

Provisions / Liabilities no longer required written back 843,472 25,022 

Interest Income 1,148 773 

909,722 125,472 

Schedules Forming Part of Profit and Loss Account for the year ended 31st March, 2010 



Rs. 

Rs. 


Salaries, Bonus and Gratuity 57,020,423 36,448,509 

Contribution to Provident and Other Funds 2,121,812 1,981,112 

Staff Welfare expenses 1,124,771 568,725 

60,267,006 38,998,346 

SCHEDULE 10 - ADMINISTRATIVE AND OTHER EXPENSES 

Rent 17,462,609 4,520,063 

Rates and Taxes 427,008 8,796 


Audit fees 75,000 125,000 

Tax Audit Fees 25,000 25,000 

Reimbursement of Expenses 604 5,420 

Call Centre Expenses 3,326,321 — 

Communication Expenses 4,065,653 2,150,187 


Computers & Equipments 1,553,146 — 

Buildings 6,243,378 1,902,652 

Others 40,790 9,699 

Seminar and Conference Expenses 579,077 — 

Insurance Advisors’ fees 317,386 2,672,299 

Printing and Stationery 2,224,888 958,135 

Advertisement and Business Promotion 1,653,880 223,483 

Staff Training and Recruitment 4,144,357 1,187,856 

Asset utilisation charges 647,801 — 

Debit Balance written off 1,655,424 — 

Legal & Professional Charges 2,367,559 511,161 


Postage and Courier 701,596 497,337 

Insurance 889,767 687,521 

Water & Electricity Charges 1,980,872 986,669 

Loss on Sale of Fixed Assets — 55,655 

Miscellaneous Expenses 178,745 472 

54,797,315 19,284,039 


Interest paid 34,009 3,861 

Bank Charges 358,277 221,635 

392,286 225,496 

(336)

C M Y K 



(I) 


(a) Basis of preparation : 

The financial statements have been prepared under the historical cost convention, 

on the accrual basis of accounting in accordance with generally accepted accounting 

principles (GAAP) in India and the provisions of the Companies Act, 1956. 

(b) Fixed Assets : 

Fixed Assets are stated at cost less accumulated depreciation / amortisation. Cost, 

for this purpose includes the purchase of asset and other direct costs incurred in 

getting the asset at the appropriate location and in a condition where they can be 

put to use 

(c) Depreciation / Amortisation : 

(i) Depreciation has been provided on Straight Line Method at the rates prescribed 

in Schedule XIV to the Companies Act, 1956. Depreciation on assets added/ 

disposed off during the year has been provided on prorata basis with reference 

to the month of addition / deduction. 

(ii) Assets costing Rs. 5,000 or less are written off in the year of purchase. 

(iii) Intangible assets, viz. Trade Names and other business rights and Computer 

Software are written off over a period of ten years and three years respectively. 

(iv) Leasehold improvements are amortised over the lease period or six years, 

whichever is earlier. 

(d) Investments : 

(i) Long term Investments are stated at cost after deducting provision, if any, 

made for permanent diminution in the values. 

(ii) Current Investments are stated at lower of the cost and fair value. 

(e) Employee Benefits : 

(i) Contribution to Provident Fund as per the Employees’ Provident Funds and 

Miscellaneous Provisions Act, 1952, is charged to Profit and Loss Account. 

(ii) Gratuity liability is computed on the basis of actuarial valuation taken at the 

close of the year and recognized in the Profit & Loss Account. 

(iii) Compensated absence liability is provided for on the basis of actuarial valuation 

at the close of the year and recognized in the Profit & Loss Account. 

(f) Accounting for Taxes on Income : 

(i) Provision for current tax is made on the basis of the estimated taxable income 

for the current accounting period in accordance with the Income Tax Act, 

1961. 

(ii) The deferred tax for timing differences between the book profits and tax profits 

for the year is accounted for using the tax rates and laws that have been 

enacted or substantially enacted as of the balance sheet date. Deferred tax 

assets arising from timing differences are recognised to the extent there is 

virtual certainty that these would be realised in future and to the extent of 

Deferred tax liabilities. They are reviewed for the appropriateness of their 

respective carrying values at each balance sheet date. 

(g) Revenue Recognition : 

(i) Insurance Commission income is accounted in case of first/ single premium in 

the year in which the policy is issued and thereafter, on receipt of renewal 

premium and as per the terms agreed with the Insurance Company. 

(ii) Charge back of Commission (i.e. refund of Commission) on account of lapsation 

of the issued policy or any reduction in the sum assured under the policy, 

during the stipulated initial period of the policy is accounted for in the year of 

occurrence of the aforesaid events. 

(h) Impairment of Assets : 

At each balance sheet date, the Company reviews the carrying amounts of its fixed 

assets to determine whether there is any indication of impairment of assets. If any 

such indication exists, the recoverable amount of the asset is estimated in order to 

determine the extent of impairment loss. Reversal of impairment loss is recognized 

immediately as income in Profit & Loss account. 

Micro, Small and Medium Enterprises. On the basis of the information and records 

available with the management, the following disclosures are made for the amounts 

due to the Micro, Small and Medium enterprises, who are registered with the competent 

authorities. 

Particulars 

Amount 

Principal amount remaining unpaid to any supplier as at the period end 

NIL 


NIL 

Amount of Interest paid by the company in terns of section 16 of the 

MSMEDA, along with the amount of the payment made to the supplier 

beyond the appointed day during the accounting period 

NIL 

Amount of interest due and payable for the period of delay in making 

payment (which have been paid but beyond the appointed day during 

the period) but without adding the interest specified under the MSMEDA 

NIL 

Amount of interest accrued and remaining unpaid at the end of the 

accounting period 

NIL 

(4) Details of Purchase and Sale of Investments during the year 1st April, 2009 to 

31st March, 2010 

Particulars Opening Purchases Sales Closing 

Nos Value Nos Value Nos Nos Value 

Birla Cash 

Plus - 

Retail 

Daily 

Dividend — — 3,076,784 50,365,102 (3,076,784) — — 

Note : Purchase of units includes units created out of dividend reinvestment 

(5) Actuarial Valuation of Employee benefits – Compensated Absence liability (Leave 

encashment) 

Effective from April1, 2006 the company adopted the revised accounting standard 

on employee benefits. The following table set out the status of the leave encashment 

plan as required under AS 15(Revised). 






(iv) Mortality rates LIC (1994-96) ultimate mortality rates 


Changes in the present value of the Defined Leave Encashment Benefits Obligation 

representing reconciliation of opening and closing balances thereof: 



Present value of defined benefit obligation 

as at the beginning of the year 629,191 77,377 

Interest cost 50,335 6,190 

Current service cost 241,715 585,937 

Benefits paid during the year (342,603) (513,232) 

Actuarial (gain) / loss on defined benefit 

obligation 201,921 472,919 


obligation as at the end of the year 780,559 629,191 




Present value of defined benefit obligation 

as at the end of the year 780,559 629,191 


Liability recognised in the Balance Sheet 780,559 629,191 

(II) 

NOTES TO ACCOUNTS 

(1) Estimated amount of contracts remaining to be executed on Capital Account (net of 

advances) Rs 86,24,331 (on 31st March, 2009 Rs Nil). 

(2) (i) In the opinion of the management, current assets, loans and advances have a 

value on realisation in the ordinary course of business at least equal to the 

amount at which they are stated. 

(ii) Certain balances in Sundry Debtors, Creditors and deposits are subject to 

confirmation. 

(3) Sundry Creditors do not include any amount payable to Small Scale Industrial 


and Medium Enterprises Development Act, 2006, (MSMEDA), which came into force 

from October 02, 2006, certain disclosures are required to be made relating to 






Expected return on Plan Assets — 

Net Actuarial (gain) / loss recognised 201,921 472,919 

Expense recognised in Statement of 

Profit and Loss Account 493,971 1,065,046 

(337)

C M Y K 


(6) Actuarial Valuation of Employee benefits – Gratuity 






(iv) Mortality rates LIC (1994-96) ultimate mortality rates 


Changes in the present value of the Gratuity Benefits Obligation representing reconciliation 

of opening and closing balances thereof: 



Opening defined benefit obligation as at 

the beginning of the year 275,743 78,011 



Benefits paid during the year — — 

Actuarial (gain) / loss on defined benefit 

obligation (77,680) (23,585) 

Closing defined benefit obligation as at 

the end of the year 538,968 275,743 




Present value of Funded obligation as at 

the end of the year 538,968 275,743 


Liability recognised in the Balance Sheet 

as at the end of the year 538,968 275,743 






Expected return on Plan Assets — — 

Net Actuarial (gain) / loss recognised (77,680) (23,585) 

Expense recognised in Statement of 

Profit and Loss Account 263,225 197,732 

The Company has recognized the following amounts as expenses and included in Schedule 

9 in “Contribution to Provident and Other Funds” 




Contribution to ESIC — 207,564 

(7) The Company’s leasing arrangements comprise of operating leases for office premises, 

which are renewable /cancellable at the Company’s option. 

(a) Future Lease Payments : 



Less than 1 Year 5,919,640 — 

1 Year to 5 Years 24,572,066 — 

More than 5 Years 22,526,828 — 

(b) Lease Payments recognised in the Profit and Loss Account Rs 1,74,62,609 

(Previous Year Rs 45,20,063) 

(8) (a) The breakup of Net Deferred Tax Asset arising on account of following timing 

differences is as under : 




Expenses allowed on payment basis 137,438 254,753 

Unabsorbed Depreciation and Carry 5,823,722 — 

Forward Losses 


Depreciation / Amortisation (311,676) (18,332) 

Net Deferred Tax Asset / (Liability) 5,649,484 236,421 

Note : 

Deferred tax assets have been created only to the extent of Deferred tax liability. Accordingly 

Deferred tax asset for Section 43B items to the extent of Rs 56,49,484 (Previous year 

Rs 2,36,421) is not recognised in the Accounts 

(10) Earnings per Share is calculated as under : 



Numerator - 

Profit / (Loss) attributable to Shareholders (13,481,928) (18,700,774) 

Denominator - 

Weighted Avearge number of Outstanding 

Equity Shares 

— Basic 490,000 490,000 

— Diluted 490,000 490,000 

Nominal value of Share (Rs.) 10 10 

Earnings per Share (Rs.) - Annualised 

— Basic (27.51) (38.16) 

— Diluted (27.51) (38.16) 

(11) The Management has carried out physical verification of assets in March 2010 as 

per regular physical verification programme and no material discrepancies were 

noticed on such verification as compared to book records. Based on such exercise, 

there is no impairment of assets at any of the cash generating units of the Company 

as on 31st March, 2010. 

(12) The company is operating in a single segment of distribution of Insurance Products 

(13) Previous period figures have been regrouped / rearranged to conform to the figures 

of the current period. 









Mumbai 


(338)

C M Y K 


(9) Disclosure in respect of Related Parties pursuant to Accounting Standard 18 : 

a. Transactions with related parties: 

Particulars Year ended 31 st March, 2010 Year ended 31 st March, 2009 

Reimbursement of Cost – Expense 

Aditya Birla Money Mart Limited 21,408,085 — 11,848,645 — 

Commission – Income 

Birla Sun Life Insurance Company — 76,045,427 — 30,274,845 

Reimbursement of Expenses– Income 

Birla Sun Life Insurance Company (Service Tax 25,25,088) — 24,515,420 — 10,130,959 

Loan taken 

Aditya Birla Money Mart Limited 16,400,000 — 3,400,000 — 

b. Outstanding balance of Related Party : 

Particulars As on 31.3.10 As on 31.3.09 

Aditya Birla Money Mart Limited 3,57,93,772 (Cr) 1,18,48,645 (Cr) 

Aditya Birla Money Mart Limited (Loan) 3,98,00,000 (Cr) 2,34,00,000 (Cr) 

Birla Sun Life Insurance Company Limited 2,26,94,301 (Dr) — 

Aditya Birla Finance Limited (Birla Global Finance Co Ltd 77,207 (Dr) — 

(339)

C M Y K 




REGISTRATION NO. 1 1 – 1 3 3 3 5 4 STATE CODE 1 1 



II. 



BONUS ISSUE N I L PRIVATE PLACEMENT N I L 

III. 


TOTAL LIABILITIES 4 4 7 0 0 TOTAL ASSETS 4 4 7 0 0 


PAID-UP CAPITAL 4 9 0 0 RESERVES AND SURPLUS N I L 

SECURED LOANS N I L UNSECURED LOANS 3 9 8 0 0 


NET FIXED ASSETS 3 5 0 8 INVESTMENTS N I L 

NET CURRENT ASSETS 8 5 7 7 MISC. EXPENDITURE N I L 

ACCUMULATED LOSSES 3 2 6 1 4 DEFERRED TAX LIABILITY N I L 

IV. 


TURNOVER 1 0 2 2 3 7 TOTAL EXPENDITURE 1 1 5 7 1 9 

PROFIT/(LOSS) BEFORE TAX (-) 1 3 4 8 1 PROFIT/(LOSS) AFTER TAX (-) 1 3 4 8 1 

EARNINGS PER SHARE IN RS. (-) 2 7 . 5 1 DIVIDEND RATE % 


ITEM CODE NO. 8 0 4 . 9 

(ITC CODE) 

PRODUCT 

DESCRIPTION 

OTHER FINANCIAL SERVICES 

A) LIFE INSURANCE 

For and on Behalf of the Board of Directors 

Kanwar Vivek 

Director 


Director 



(340)

C M Y K 

ABNL INVESTMENT LIMITED (Formerly : Aditya Birla Capital Limited) 

DIRECTORS' REPORT 


Your Directors are pleased to present Sixteenth Annual Report together with 

the Audited Accounts of the Company for the financial year ended 31st 

March 2010. 


(Rs. in Lacs) 


Year Year 

Ended Ended 



Less: Provision for Tax 9,200,000 10,700,000 

Net Profit after Tax 13,260,496 25,027,883 

Provision of tax for earlier written back 0 220,824 

Add: Balance brought forward 

from earlier year 73,421,808 53,673,101 

Profit available for appropriation 86,682,304 78,921,808 

Appropriations: 

Special Reserve 3,000,000 5,500,000 

Balance carried forward to next year 83,682,304 73,421,808 

86,682,304 78,921,808 

CHANGE OF NAME OF THE COMPANY 

As you are aware, your Company has been rechristened as "ABNL Investment 

Limited", to reflect group's strong parentage and the business carried on by 

the Company. 

RESULTS OF OPERATIONS 

During the year under review, your Company has achieved a turnover of 

Rs. 5,65,84,312 and earned a net profit of Rs. 13,260,496 for the year 

ended 31st March, 2010. 

DIVIDEND 

With a view to conserve resources, your Directors do not consider it 

appropriate to recommend dividend on Equity Shares for the financial year 

ended on 31st March 2010. 

DEPOSITS 

Your Company has not invited and accepted any Fixed Deposits from the 

public during the year. Hence, no information is required to be appended to 

this report in terms of Non-Banking Financial Companies (Reserve Bank) 

Directions, 1998. 

DIRECTORS' RESPONSIBILITY STATEMENT 

Pursuant to the provisions under Section 217(2AA) of the Companies Act, 

1956, your Directors confirm that: 

● In the preparation of the Annual Accounts, the applicable Accounting 

Standards have been followed along with proper explanation relating 

to material departures; 

● 

● 

● 

The Directors have selected such accounting policies and applied them 



the Company at the end of the Financial Year and of the profit or loss 

of the Company for that period; 

The Directors have taken proper and sufficient care for the maintenance 



and detecting fraud and other irregularities; 

The Directors have prepared the Annual Accounts on a going concern 

basis. 

DIRECTORS 

During the year under review, Mr. Adesh Kumar Gupta resigned w.e.f 15th 

July, 2009. The board places on record sincere appreciation of the valuable 

services rendered by him during his tenure as a Director of the Company. 

Your Board appointed Mr. Sushil Agarwal as a Director of the Company 

w.e.f 15th July, 2009. 

In accordance with the provisions of Sections 255 and 256 of the Companies 

Act, 1956, Mr. Manoj Kedia, Director of the Company, who retires by rotation 

at the ensuing Annual General Meeting and, being eligible, offers himself 

for reappointment. 

AUDITORS & AUDITORS’ REPORT 

M/s. Khimji & Kunverji, Charted Accountants, Mumbai, Statutory Auditors 

of the Company will retire at the ensuing Annual General Meeting and are 

eligible for re-appointment. They confirmed their eligibility for re-appointment 

under the provisions of Section 224(1B) of the Companies Act, 1956. The 

Directors recommend their re-appointment. 

The observations made in the Auditors' Report are self-explanatory and 

therefore, do not call for any further comments under Section 217(3) of the 


Your Directors request you to appoint Auditors for the current year and fix 

their remuneration. 

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION & 


There are no foreign exchange earnings and outgo during the year under 

review. In view of the nature of operation of the Company, we have nothing 

to report on the above matter. 

APPRECIATION 

The Board places on record its appreciation to the continued support and 

guidance of the Regulatory bodies and Company's Bankers. 

PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956 

There are no employees of the Company drawing more than Rupees Twenty 

Four Lakhs per annum or Rupees Two Lakh per month as the case may be. 

As such no particulars are required to be given under the Companies 

(Particulars of Employees) Rules, 1975. 

Place: Mumbai 

Date: 26th April, 2010 

Sushil Agarwal 

Director 

Manoj Kedia 

Director 

(341)

C M Y K 


AUDITOR’S REPORT 


Aditya Birla Capital Limited (Formerly : Laxminarayan Investment Limited) 

1. We have audited the attached Balance Sheet of Aditya Birla Capital 

Limited (Formerly: Laxminarayan Investment Limited) (hereinafter referred 

to as “the Company”) as at March 31, 2010 and also the Profit and 

Loss Account, and the Cash Flow Statement for the year ended on that 

date annexed thereto. These financial statements are the responsibility 

of the Company’s management. Our responsibility is to express an 

opinion on these financial statements based on our audit. 










our opinion. 

3. As required by the Companies (Auditor’s Report) Order, 2003 

(hereinafter referred to as the Order), issued by the Company Law 

Board in terms of section 227 (4A) of the Companies Act, 1956 

(Hereinafter referred to as the Act), we enclose in the Annexure, a 

statement on the matters specified in paragraphs 4 and 5 of the said 

order. 


that: 

(i) We have obtained all the information and explanations, which to 



(ii) In our opinion, proper books of account as required by law have 

been kept by the Company so far as it appears from our 


(iii) 

(iv) 

(v) 

(vi) 

The Balance Sheet, Profit and Loss Account, and Cash Flow 

Statement dealt with by this report are in agreement with the books 

of account. 

In our opinion, the Balance Sheet, Profit and Loss Account, and 


accounting standards referred to in section 211 (3C) of the Act. 

On the basis of written representations received from the directors 

as on 31 st March, 2010 and taken on record by the Board of 

Directors, we report that none of the directors is disqualified as on 

31 st March, 2010 from being appointed as director in terms of 

clause (g) of sub-section (1) of section 274 of the Act. 



required by the Act in the manner so required and give a true and 

fair view in conformity with the accounting principles generally 

accepted in India: 

a) in the case of the Balance Sheet, of the state of affairs of the 


b) in the case of the Profit and Loss Account, of the profit of the 

Company for the year ended on that date; and 

c) In the case of Cash Flow Statement, of the cash flows of the 

Company for the year ended on that date. 

Place : Mumbai, 

Dated: April 26 , 2010 




Firm Registration No.105146W 

R.V. Chaniyari 

Partner (F–31083) 

(342)

C M Y K 


Annexure referred to in para 3 of our Auditors’ Report of 

Aditya Birla Capital Limited (Formerly: Laxminarayan 

Investment Limited) of even date 


particulars, including quantitative details and situation of Fixed 

Assets. 

(b) Management at reasonable intervals has physically verified fixed 

asset. No material discrepancies were noticed on physical 

verification. 

(c) The Company has not disposed off substantial part of its fixed 


(ii) The Company does not hold any stock in trade, hence clauses 4(ii)(a), 

4(ii)(b) and 4(ii)(c) of the Order are not applicable to the company. 

(iii) (a) The Company has not given any loans, secured or unsecured to 

companies, firms, or other parties covered in the register 

maintained under Section 301 of the Companies Act, 1956. 

Hence clauses (iii)(b),(c) and (d) of the Order, are not applicable 


(b) The Company has not taken any loans, secured or unsecured, 

from companies, firms, and other parties covered in the register 

maintained under Section 301 of the Companies Act, 1956. 

Hence clauses (iii) (f) and (g) of the Order, are not applicable to 

the Company. 


given to us, there is an adequate internal control system commensurate 

with the size of the Company and the nature of its business, for the 

purchase of fixed assets and for the sale of services. During the course 

of our audit, no major weakness has been noticed in the internal 

control system in respect of these areas. 

(v) Based on the Audit procedure applied by us and according to 

information and explanations provided by the management, there are 

no contracts or arrangements referred to in section 301 of the Act that 

need to be entered into the register maintained under that section. In 

the view of this clause (v)(b) of the Order is not applicable. 

(vi) The Company has not accepted/renewed any deposit from the public 

in terms of the provisions of Sections 58A, 58AA or any other relevant 

provisions of the Act. No order has been passed by the Company Law 

Board or National Company Law Tribunal or Reserve Bank of India or 

any Court or any Tribunal. 

(vii) In our opinion, the Company has an internal audit system 


(viii) The Company is not required to maintain any cost records prescribed 

by the Central Government under clause (d) of sub-section (1) of 

section 209 of the Act. 

(ix) (a) The company is generally regular in depositing with appropriate 

authorities undisputed Income tax and there are no arrears 

thereof as at 31st March, 2010 for a period of more than six 

months from the date they become payable. We are informed 

that Provident Fund, Investor Education and Protection Fund, 

Employees’ State Insurance, Sales Tax, Wealth Tax, Custom Duty, 

Excise Duty, Cess, and other statutory dues are not applicable 

to the company. 

(x) 

(xi) 

(xii) 

(xiii) 

(xiv) 

(xv) 

(b) According to the information and explanations given to us there 

are no disputed Income Tax and Service Tax due which has not 

been deposited. 


year and it has not incurred any cash losses in the current year or in 

the immediately preceding financial year. 


explanations given to us, we are of the opinion that the Company has 

not defaulted in repayment of dues to any financial institution or bank. 

We are of the opinion that the Company has maintained adequate 

records where the Company has granted loans and advances on the 

basis of security by way of pledge of shares, debentures and other 

securities. 

In our opinion, the Company is not a chit fund or a nidhi/ mutual 

benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the 

Order, are not applicable to the Company. 

In our opinion, the Company is not dealing in or trading in shares, 

securities, debenture and other investments. Accordingly, the provisions 

of clause 4(xiv) of the Order, are not applicable to the Company. 

According to information and explanations given to us, the Company 

has not given any guarantee for loans taken by others from banks or 

financial institutions. Accordingly, the provision of clause 4(xv) of the 

Order is not applicable to the Company. 

(xvi) According to the information and explanations given to us, the company 

has not raised any term loans during the year. Accordingly, the provision 

of clause 4(xvi) of the Order is not applicable to the company. 

(xvii) According to the information and explanations given to us and on the 

overall examination of the balance sheet of the Company, we report 

that no funds raised on short-term basis have been used for long-term 

investment. 

(xviii) The Company has not made preferential allotment of shares to parties 

and companies covered in the register maintained under section 301 

of the Act. 

(xix) The Company has not issued secured debentures during the year. 

Hence question of creating securities in this regard does not arise. 

(xx) The company has not raised any money through a public issue during 

the year. 

(xxi) During the course of our examination of the books and records of the 

Company, carried out in accordance with the auditing standards 

generally accepted in India, we have neither come across any instance 

of fraud on or by the Company, noticed or reported during the year 

nor we have been informed of such case by the management. 


Dated: April 26, 2010 




Firm Registration No.105146W 

R.V. Chaniyari 

Partner 

Membership No.F-31083 

(343)

C M Y K 



As at 

As at 

31 March 2010 31 March 2009 

SOURCE OF FUNDS Schedules (Rupees) (Rupees) 

Share holders’ Funds 

Share Capital 1 210,000,000 210,000,000 

Reserves & Surplus 2 106,182,304 92,921,808 

Loan Funds 





Gross Block 134,861,000 134,861,000 

Less: Depreciation (26,378,808) (24,180,574) 

Net Block 108,482,192 110,680,426 

Investments 5 200,000,010 257,419,503 

Current Assets, Loans & Advances: 

Sundry Debtors 

(Unsecured, Considered Good, below Six Months) 

Cash & Bank Balances 6 96,449 75,806 


366,110,920 139,966,688 

Less: Current Liabilities & Provisions 


Security Deposit against premises 5,118,030 11,713,230 

Interest accrued but not due 4,036,434 6,506,418 


10,810,818 20,869,809 

Net Current Assets/(liabilities) 355,300,102 119,096,879 

Total Funds Utilized 663,782,304 487,196,808 


Notes forming part of Accounts 9 50,000,000.00 — 

Schedules referred to above form an integral part of the accounts 

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 


As at 

As at 


Schedule (Rupees) (Rupees) 

INCOME 

Rent 8,826,240 15,421,440 

(TDS Rs 16,59,755/-, Previous Year Rs. 36,60,479/-) 

Interest and Other Finance Income 25,165,727 66,678,458 

(TDS Rs 49,95,988./-, Previous year Rs. 1,52,78,165/-) 

Dividend on Investments: 

Long Term 1,416 13,974,831 

Current 110,363 1,846,000 

Gain/(Loss) on Sale of Investments (Net) : 

Current 17,259,579 2,102,500 

Long Term 3,391,988 

Provision for Loss Asset (Excess Provision Reversal) 1,829,000 — 

EXPENDITURE 

56,584,312 100,023,229 

General Charges 677,516 35,366 

Electricity Expenses 60,710 — 

Rates & Taxes 435,541 2,400 

Payment to Auditors 

For Audit Fees 70,000 70,000 

For Tax Audit Fees 17,500 17,500 

For Certification work 20,515 60,281 

For Reimbursement of Expenses 10,558 15,141 

Building Repair & Maintenance 1,715,439 — 

Interest and Finance expenses 7 28,917,804 57,901,262 

Provision for Loss Asset — 3,995,162 

Depreciation 2,198,234 2,198,234 

34,123,816 64,295,346 


Provision for Tax 9,200,000 10,700,000 

Profit after Tax 13,260,496 25,027,883 

Provision of tax for earlier year written back 220,824 

13,260,496 25,248,707 

Balance brought forward 73,421,808 53,673,101 

Profit available for appropriation 86,682,304 78,921,808 


Transfer to Special Reserve 3,000,000 5,500,000 

Surplus carried to Balance sheet 83,682,304 73,421,808 

86,682,304 78,921,808 

Basic & Diluted Earnings per Share 0.63 1.20 


Notes forming part of Accounts 9 

Schedules referred to above form an integral part of the accounts 





Partner (F-31083) Company Secretary Manager Directors 










(344)

C M Y K 


CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST MARCH, 2010 

A 

B 

C 

(In Rupees) 



Net Profit before tax 22,460,496 35,727,883 


Depreciation 2,198,234 2,198,234 

Provision for Loss Asset (1,829,000) 3,995,162 

(Profit)/loss on sale of investments (20,651,567) (2,102,500) 

Interest on loan 28,917,804 57,901,262 

Interest Income on loan/ICD’S (25,165,727) (66,678,458) 

Interest received on Income Tax Refund — — 

Dividend Income (111,779) (16,642,034) (15,820,831) (20,507,131) 

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 5,818,462 15,220,752 

Decrease / (Increase) in current investments 57,419,493 (132,820) 

(Increase) / Decrease in trade and other Receivables — 1,596,142 

Increase / (Decrease) in trade and other payables (7,589,007) 49,830,486 0 1,463,322 

CASH GENERATED FROM OPERATIONS 55,648,948 16,684,074 

Income Taxes Paid (6,717,274) (18,822,531) 

NET CASH FROM OPERATING ACTIVITIES 48,931,674 (2,138,457) 


Dividend on Long Term Investment 14,187,122 1,745,488 

Advance against Share application Money Received Back/(Given) — — 

Sale / Redemption / (Purchase) of investments (net) 17,259,579 179,712,443 

Investment In Equity/Pref Shares of Subsidiary 1,000,000 

Profit on sale of Investment 3,391,988 2,102,500 

NET CASH (DECREASE)/INCREASE FROM INVESTING ACTIVITIES 34,838,688 184,560,431 


Repayment of Borrowings 113,325,000 (415,725,000) 

Interest and Finance Charges paid on ICD/NCD (31,387,789) (52,533,543) 

Loan given against securities/Inter Corporate Deposits received back (193,996,000) 221,804,838 

Interest Received on Loan against shares/Inter Corporate Deposits 28,282,995 63,644,515 

Other Loans & Advances 26,076 — 

NET CASH (DECREASE)/INCREASE FROM FINANCING ACTIVITIES (83,749,718) (182,809,190) 

NET INCREASE IN CASH AND EQUIVALENTS 20,643 (387,216) 

CASH AND CASH EQUIVALENTS (OPENING BALANCE) 75,806 463,022 

CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 96,449 75,806 

Note: 

1) Cash and cash equivalents include cheques in hand and remittance in transit 

Cheque in hand 50,970 

Cash in hand 1,140 

Cash at bank 44,339 

96,449 







(345)

C M Y K 




Numbers (Rupees) (Rupees) 


Authorised: 

Equity Shares of Rs.10 each 24,990,000 249,900,000 249,900,000 

(24,990,000) 

Redeemable Preference 1,000 100,000 100,000 

Shares of Rs.100 each (1,000) 

Total 250,000,000 250,000,000 

ISSUED, SUBSCRIBED AND PAID-UP: 

Equity Shares of Rs.10 each 

Fully paid up 21,000,000 210,000,000 210,000,000 

(21,000,000) 

Total 210,000,000 210,000,000 

Note: 

1. The entire issued, subscribed and paid-up Capital of the Company is held by the Holding Company, 

Aditya Birla Nuvo Limited. 

2. Figures in Bracket represent previous year figures. 

SCHEDULE 2 - RESERVES & SURPLUS 

Balance Addition Balance 

As at 31st During As at 31st 

March,2009 The year March,2010 

(Rupees) 

Special Reserve 19,300,000 3,000,000 22,300,000 

Capital Redemption Reserve 200,000 — 200,000 

Surplus as per Profit & Loss Account 73,421,808 10,260,496 83,682,304 

Total 92,921,808 13,260,496 106,182,304 




Other Loans From 

Holding Company 297,600,000 170,200,000 

Other Company — 14,075,000 

(Repayable with in one year) 

297,600,000 184,275,000 


Balance 

Addition 

As at 31st During As at 31st 

March, 2009 The year March, 2010 

Building (Given on Lease) 

Gross Block 134,861,000 — 134,861,000 

Less: Depreciation 24,180,574 2,198,234 26,378,808 

Net Block 110,680,426 2,198,234 108,482,192 

SCHEDULE 5 - INVESTMENTS : TRADE 

As at 

As at 

31st March, 

31st March, 

Face 2010 Face 2009 

Number Value (Rupees) Number Value (Rupees) 

LONG TERM INVESTMENTS (QUOTED) 

Equity Shares: 

ABB Limited 2 — 1 2 1,190 

Aban Offshore Limited 2 — 1 2 3,669 

ACC Limited 10 — 1 10 778 

Adani Enterprise Limited 1 — 1 1 920 

AIA Engineering Limited 10 — 1 10 1,437 

Alstom Projects India Limited 10 — 1 10 796 

Ambuja Cement Limited 2 — 1 2 119 

Arvind Mills Limited 10 — 5 10 318 

Asian Paints India Limited 10 — 1 10 1,011 

Axis Bank Limited 10 — 1 10 1,017 

Bajaj Auto Limited 10 — 2 10 590 

Bajaj Finserv Limited 5 — 2 5 591 

Bajaj Holdings & Investments Limited 10 — 2 10 591 

Bank of Baroda 10 — 1 10 297 

Bank of India 10 — 1 10 337 

Bayer Corpscience Limited 10 — 1 10 309 

BEML Limited 10 — 1 10 1,412 

BF Utilities Limited 10 — 1 10 1,903 

Bharat Bijlee Limited 10 — 1 10 3,196 

Bharat Electronics Limited 10 — 1 10 1,642 

Bharat Forege Limited 2 — 1 2 298 

Bharat Heavy Electricals Limited 10 — 1 10 2,157 

Bharat Petroleum Corporation Limited 10 — 1 10 406 

Bharati AirTel Limited 10 — 1 10 845 

Biocon Limited 5 — 1 5 430 

Bombay Dyeing & Manufacturing Company Limited 10 — 1 10 780 

Bosch Limited 10 — 1 10 3,920 

Cairn India Limited 10 — 1 10 284 

Canara Bank 10 — 1 10 241 

Century Textiles Limited 10 — 5 10 611 

Chambal Fertilizers & Chemicals Ltd 10 — 10 10 587 

Cipla Limited 10 — 1 10 215 

Container Corporation of India 10 — 1 10 926 

Crompton Greaves Limited 2 — 1 2 343 

Datamatics Technologies Limited 10 — 5 10 776 

Divi’s Laboratories Limited 2 — 1 2 1,451 

DLF Limited 2 — 1 2 940 

Dr. Reddy’s Laboratories Limited 5 — 1 5 670 

Dredging Corporation of India Limited 10 — 1 10 754 

Engineers India Limited 10 — 1 10 844 

Essar Oil Limited 10 — 1 10 258 

Firstsource Solutions Limited 10 — 10 10 316 

Future Capital Holdings Limited 10 — 1 10 557 

Gail India Limited 10 — 1 10 432 

GlaxosmithKline Pharmaceuticals Limited 10 — 1 10 898 

Glenkmark Pharmaceuticals Limited 1 — 1 1 672 

Gujarat Gas Company Limited 2 — 1 2 317 

GMR Infrastructure Limited 2 — 1 2 150 

Gujarat Narmada Valley Fertilisers Company Limited 10 — 5 10 564 

Godrej Industries Limited 1 — 1 1 290 

Gokaldas Exports Limited 5 — 1 5 235 

Goldstone Infratech Limited 4 — 10 4 484 

Gujarat Mineral Development Corporation Limited 2 — 1 2 366 

Gujarat NRE Coke Limited 2 — 1 2 118 

HCL Technologies Limited 2 — 1 2 315 

HDFC Bank Limited 10 — 1 10 1,442 

Hero Honda Motors Limited 2 — 1 2 606 

Hindustan Copper Limited 5 — 1 5 315 

Hindustan Petroleum Corporation Limited 10 — 1 10 261 

HTMT Global Solutions Limited 10 — 5 10 1,226 

Hindustan Unilever Limited 1 — 1 1 192 

House of Pearl Fashions Limited 10 — 1 10 161 

Housing Development & Infrastructure Limited 10 — 1 10 1,036 

Housing Development Finance Corporation Limited 10 — 2 10 1,148 

Oracle Solutions Limited 5 — 5 5 2,815 

ICICI Bank Limited 10 — 5 10 1,303 

Indian Oil Corporation Limited 10 — 1 10 485 

Industrial Development Bank of India Limited 10 — 1 10 115 

Infosys Technologies Limited 5 — 8 5 5,333 

Infrastructure Development Finance Company Limited 10 — 1 10 194 

IL&FS Investment Limited 10 — 1 10 315 

(346)

C M Y K 


As at 

As at 

31st March, 

31st March, 



India Infoline Limited 2 — 5 2 914 

India Bulls Financial Services Limited 10 — 1 10 464 

India Bulls Real Estate Limited 10 — 1 10 570 

India Bulls Securities Limited 10 — 1 10 117 

ITC Limited 1 — 1 1 192 

IVRCL Infrastructure & Projects Limited 2 — 1 2 440 

Jai Corporation Limited 1 — 1 1 716 

Jaiprakash Associates Limited 2 — 1 2 368 

Jindal Steel & Power Limited 1 — 1 1 2,210 

JSW Steels Limited 10 — 1 10 1,027 

Kesoram Industries Limited 10 — 2 10 818 

Kewal Kiran Clothing Limited 10 — 1 10 305 

Kotak Mahindra Bank Limited 10 — 25 10 1,742 

Koutons Retail India Limited 10 — 1 10 757 

Larson & Toubro Limited 2 — 2 2 2,950 

Lanco Infotech Limited 10 — 1 10 529 

Madras Cements Limited 1 — 1 10 3,516 

Mahindra & Mahindra Limited 10 — 1 10 646 

Maruti Suzuki India Limited 5 — 1 5 840 

Max India Limited 2 — 5 2 769 

Motolal Oswal Financial Services Limited 1 — 5 1 833 

MRF Limited 10 — 1 10 4,815 

Manglore Refinery & Petrochemicals Limited 10 — 5 10 449 

Mundra Port & Special Economic Zone Limited 10 — 1 10 808 

Nagarjuna Fertilisers & Chemicals Limited 10 — 10 10 323 

National Aluminium Company Limited 10 — 1 10 410 

National Fertilizer Limited 10 — 10 10 563 

Nestle India Limited 10 — 1 10 1,330 

Neyveli Lights Corporation Limited 10 — 1 10 142 

NTPC Limited 10 — 1 10 214 

Oil & Natural Gas Corporation Limited 10 — 1 10 994 

Pantaloon Retail India Limited 2 — 30 2 2,188 

Pantaloon - EQ-DVR 2 — 3 2 — 

Pfizer Limited 10 — 1 10 653 

Phillips Carbon Black Limited 10 — 10 10 511 

Punjab National Bank 10 — 1 10 522 

Polaris Software Lab Limited 5 — 5 5 730 

Power Finance Corporation Limited 10 — 1 10 160 

Power Grid Corporation of India Limited 10 — 1 10 109 

Punj Lloyd Limited 2 — 1 2 453 

Ranbaxy Laboratories Limited 5 — 1 5 365 

Raymonds Limited 10 — 5 10 997 

Rashtriya Chemicals & Fertilisers Limited 10 — 10 10 487 

Reliance Capital Limited 10 — 1 10 1,940 

Reliance Communication Limited 5 — 2 5 1,030 

Reliance Energy Limited 10 — 1 10 1,835 

Reliance Natural Resources Limited 10 — 1 10 112 

Reliance Petroleum Limited 10 — 1 10 190 

Reliance Power Limited 10 — 1 10 419 

Reliance Industries Limited 10 — 1 10 2,574 

Religare Enterprises Limited 10 — 1 10 414 

Rural Electrification Corporation Limited 10 — 1 10 120 

Satyam Computers Limited 2 — 11 2 1,992 

Siemens Limited 2 — 2 2 1,804 

State Bank of India Limited 10 — 1 10 2,298 

Sesa Goa Limited 1 — 20 1 4,250 

Shoppers Stop Limited 10 — 1 10 416 

Steel Authority of India (SAIL) Limited 2 — 1 2 206 

Sterlite Industries (India) Limited 2 — 1 2 810 

Sun TV Network Limited 5 — 1 5 348 

Sundaram Finance Limited 10 — 2 10 623 

Sun Pharmaceutical Industries Limited 5 — 1 5 965 

Suzlon Energy Limited 2 — 1 2 340 

Tata Consultancy Services Limited 1 — 1 1 849 

Tata Communication Limited (VSNL) 10 — 1 10 510 

Tata Cheimicals Limited 10 — 5 10 1,386 

Tata Motors Limited 10 — 1 10 667 

Tata Power Company Limited 10 — 1 10 1,174 

Tata Steel Limited 10 — 1 10 702 

Tata Tea Limited 10 — 1 10 685 

Tata Teleservices (Maharashtra) Limited 10 — 10 10 237 

Tech Mahindra Limited 10 — 1 10 959 

Thermax Limited 2 — 1 2 692 

Titan Industries Limited 10 — 1 10 1,124 

Unitech Limited 2 — 1 2 287 

United Spirits Limited 10 — 1 10 1,615 

W. S. Industries Limited 10 — 5 10 250 

Wipro Limited 2 — 7 2 2,020 

Zee Entertainment 1 — 1 1 235 

Zodiac Clothing Company Limited 10 — 10 10 1,320 

As at 

As at 

31st March, 

31st March, 



UNQUOTED 

Equity Shares of Rs. 10 Each 

Birla Management Centre Services Limited — 7,000 70,000 

Aditya Birla Power Company Limited 

(Net of diminution in Value 

Rs. 1,15,000/-) 11,500 — 11,500 — 


(Formerly Known as Birla Global 1 10 1 10 

Finance Company Limited) 

Peter England Fashion & 

Retail Company Limited — 50,000 500,000 

Madura Garments Lifestyle 

Retail Company Limited — 50,000 500,000 


Private Limited — 60,000 600,000 

PSI Data Systems Limited — 26,811 1,092,093 

Investment in Subsidiary Companies: 

Equity Shares 

Madura Garments International 

Brands Company Limited — 50,000 500,000 

Aditya Birla Financial Shared Services Limited — 50,000 500,000 

7.50% Compulsory Convertible Cumulative 

Preference Share of Rs. 10 Each 


(Formerly known as Birla Global —25,000,000 250,000,000 

Finance Company Limited) 

8% Preference Share of Rs. 10 Each 

Birla Management Centre Services Limited — 200 2,000 

Zero Coupon Compulsory Convertible Debentures 

Madura Garments Lifestyle 

Retail Company Limited 1,000,000 200 200,000,000 — 

Total (A) 200,000,010 253,901,967 

CURRENT INVESTMENTS 

Units of Mutual Fund of Rs.10 Each 

Birla Cash Plus Institutional Premium 

Plan Daily Dividend Reinvestment — 351,069 3,517,536 

(Repurchase price Nil Previous year 

Rs. 35,17,536/-) 

Total (B) — 3,517,536 

Grand Total (A + B ) 200,000,010 257,419,503 

Aggregate Book Value - Quoted 137,865 

Aggregate Book Value - Un Quoted 200,000,010 257,281,638 

Aggregate Market Value - Quoted 93,841 

Numbers 

Numbers 

Note: Units of various Mutual Fund 

Schemes purchase & redeemed during the year 1,166,641,000 109,090,454 



SCHEDULE-6 - CASH & BANK BALANCES 

Cash in hand 1,140 1,142 

Balances with Schedule Bank in current account 44,339 74,312 

Cheques in hand 50,970 352 

96,449 75,806 

SCHEDULE-7 - LOANS AND ADVANCES 

Collateral Finance 

Loan against Securities (Net of Provision for loss asset 

Rs. 21,66,162/- Previous year 39,95,162) 230,000,000 109,200,000 

Inter Corporate Deposits Given 125,025,000 — 

Refer Note No. B 7 of schedule 9) 

Interest accrued on Loans and Advances 74,511 3,191,779 

Accrued Dividend — 14,075,343 

Other Receivables @ 149,022 175,097 

Advance Tax (Net of Provision) 10,765,938 13,248,664 

366,014,471 139,890,883 

@ Includes Receivable from 

Associates LIL Investment Limited — — 

Maximum Balance due during the year 308,240 — 

(347)

C M Y K 

amount involved is not material . 




SCHEDULE-8 - INTEREST AND FINANCE EXPENSES 

Interest on Debentures & Fixed Loans 28,593,867 57,617,856 

Other Interest 197 16,985 

Bank Charges 125,199 8,918 

Finance Charges 198,540 257,504 

28,917,804 57,901,262 

SCHEDULE-9 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR 

ENDED 31ST MARCH, 2010 

(A) 

(B) 

ACCOUNTING CONVENTION 

BASIS OF PREPARATION 

The financial statements are prepared under the historical cost convention, on an accrual basis and in 

accordance with the applicable accounting standards. 

The financial statements have been prepared under the historical cost convention on an accrual basis 

in compliance with all material aspect of Notified Accounting Standards Rules, 2006 (as amended) 

and relivent provisions of the Companies Act, 1956, The Accounting Policies, have been consistently 

applied by the Company and are consitent with those uned in previous year. 

The Company follows the prudential norms issued by Reserve Bank of India for asset classification, 

income recognition and provisioning for non–performing assets. Besides, additional amount is written 

off/ provided for where the management, on a review, considers it necessary. 

The Company follows the prudential norms issued by Reserve Bank of India for asset classification, 

income recognition and provisioning for non–performing assets. Besides, additional amount is written 

off/ provided for where the management, on a review, considers it necessary. 

FIXED ASSET 

Fixed Assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and 

any attribution cost of bringing the asset to its working condition for its intended use. 

DEPRECIATION 

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in manner specified 

in Schedule XIV to the Companies Act,1956. 

INVESTMENTS 

Long Term Investments are stated at cost after deducting provision, if any, made for decline, other than 

temporary, in the values. 

Current Investments are stated at lower of cost and market/fair value. 

TAXATION 

Provision for current tax is made on the basis of estimated taxable income for the current accounting 

year in accordance with the Income Tax Act, 1961. 

The deferred tax for timing differences between the book and tax profits for the year is accounted for, 

using the tax rates and laws that have been substantively enacted as of the balance sheet date. 

Deferred tax assets arising from timing differences are recognized to the extent there is reasonable 

certainty that these would be realized in future. 

Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty that such 

deferred tax asset can be realized against future taxable profits. 

INITIAL DIRECT COST OF LEASE 

Initial direct cost of lease is charged to Profit & Loss Account in the year of incurrence. 

REVENUE RECOGNITION 

Income from service is recognized as they are rendered based on agreements/arrangements with the 

concerned parties. 

Dividend income on investments is accounted for when the right to receive the payment is established. 

Interest is recognized on a time proportion basis taking into account the amount outstanding and the 

rate applicable if no significant uncertainty as to its measurability and collectability exist. 

IMPAIRMENT OF ASSETS 

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of 

impairment based on internal / external factors. An asset is treated as impaired when the carrying cost 

of assets exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the 

year in which an asset is identified as impaired. The recoverable amount is greater of the asset’s net 

selling price and value in use. In assessing value in use, the estimated future cash flows are discounted 

to the present value. A previously recognized impairment loss is further provided or reversed depending 

on changes in circumstances. 

NOTES ON ACCOUNTS 

(1) Name of company has been changed during the year from Laxminarayan Investement Limited 

to Aditya Birla Capital Limited on 17.11.2009. Further on 08.04.2010 the Name of company 

change from Aditya Birla Capital Limited to ABNL Investment Limited. 

(2) There is no other additional information pursuant to paras 3, 4C,4D,of part II of Schedule VI 

of the Companies Act,1956. 

(3) Building includes cost of Debentures and Shares of a Company which entitles the Company 

to an exclusive right of occupying and using certain office premises. 

(4) “Special Reserve” has been created in terms of section 45(IC) of Reserve Bank of India 

Act, 1934. 

(5) The Deferred Tax Asset arising due to unabsorbed Capital losses has not been recognized as 

a measure of prudence due to uncertainty of earning capital gains in future for setting off the 

same. 

(6) The leases given by the company are generally renewable and having refundable security 

deposits from lessees. 

(7) Figures of previous year have been regrouped/rearranged wherever necessary. 

(8) Loans and Advances Includes 

Amount Recoveable from Balance Balance Maximum Maximum 

as on as on Amount due Amount due 

31-Mar-10 31-Mar-09 at any time at any time 

during during 

the year the year 


(1) Fellow Subsidries 


Private Limited — — 4,040,274 — 

Aditya Birla Minacs 

Worldwide Limited — — 50,367,466 — 

Aditya Birla Money Limited — — 185,904,726 — 


Company Limited — — 335,716,986 — 


Brand Company Limited 25,000 — 25,537 — 

Aditya Birla Minacs IT 

Services Limited — — 10,189,973 90,078,904 

Madura Garments 

Exports Limited — — 31,877,534 36,601,370 

Birla Technologies Limited — — — 61,553,918 

MG Lifestyle Clothing 

Company Limited — — — 142,617,808 

Loans and advances in the 

nature of loans where there is 

(I) no repayment schedule or 

repayment beyond seven years or Nil Nil Nil Nil 

(II)no interest or interest below 

section 372A of Companies Act 

by name and amount Nil Nil Nil Nil 

(9) Disclosure in respect of Related parties pursuant to Accounting Standard 18 on Related party 

disclosures issued by Institute of Chartered Accountants of India. 

A) List of Related Parties 

I. Holding Company: 

Aditya Birla Nuvo Limited (ABNL) 

II. Subsidiaries : 

Madura Garments International Brand Company Limited (Subsidiary upto November 

26, 2009) 


LIL Investment Limited (Subsidiary upto November 26, 2009) 

III. Fellow Subsidiaries 

Aditya Birla Financial Services Private Limited (ABFSPL) (w.e.f. November 4, 2008) 

Aditya Birla Capital Advisors Private Limited (ABCAPL) (Subsidiary of ABFSPL) 


Aditya Birla Customers Services Private Limited (ABCSPL) (Subsidiary of ABFSPL) 

(w.e.f. December 11, 2008) 

Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFSPL)(w.e.f. November 

4, 2008 and ceased to be a subsidiary w.e.f. March 13, 2009) 

Aditya Birla Trustee Company Private Limited (ABTCPL) (Subsidiary of ABFSPL) 


Aditya Birla Financial Shared Services Limited (ABFSSL) (Subsidiary of ABFSPL) 

(w.e.f. June 19, 2008 ) 

Aditya Birla Money Limited (ABML) (formerly known as Apollo Sindhoori Capital 

Investment Limited) (Subsidiary of ABFSPL w.e.f. March 6, 2009) 

Aditya Birla Commodities Broking Limited (ABCBL) (formerly known as Apollo Sindhoori 

Commodities Trading Limited) (100% Subsidiary of ABML) (w.e.f. March 6, 2009) 

Aditya Birla Money Mart Limited (ABMML) (formerly known as Birla Sun Life Distribution 

Company Limited) (Subsidiary of ABFSPL) (w.e.f. March 31, 2009) 





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

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

known as Minacs Worldwide Inc.) 

(348)

C M Y K 



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

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

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


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





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

Limited (BGFCL)) 

Birla Insurance Advisory & Broking Services Limited (BIABSL) (50.01% Subsidiary of 

BGCFPL upto March 30, 2009 and of ABFL w.e.f March 31, 2009) 


Madura Garments International Brand Company Limited (MGIBCL) (on becoming 

Associate, ceased to be an subsidiary w.e.f. November 27, 2009) 

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

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

Madura Garments Exports Limited (MGEL) (merged with the Company w.e.f. 




MG Lifestyle Clothing Company Private Limited (MGCCPL) (merged with the Company 


Peter England Fashions and Retail Company Limited (PEFRL) 

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

Limited) 


IV. Key Management Persons 

Mrs. Pinky Mehta 

Related Party Transaction Holding Co. Subsidiaries/ 

Fellow 

Subsidiaries 

Sales, Service and Other Income 

Interest received 

Aditya Birla Financial Shared Services Limited 40,274 

(—) 

Madura Garments Exports Limited 276,164 

(32,82,808) 


(—) 

MG Lifestyle Clothing Co Private Limited — 

(56,38,356) 

Aditya Birla Miancs IT Services Limited 289,973 

(78904) 

Birla Technologies Limited — 

(53918) 

Madura Garments Lifestyle Retail Company Limited — 

(—) 

Aditya Birla Minacs Worldwide Limited 367,466 

(—) 

Aditya Birla Money Limited 904,726 

(—) 

Rent Income 


(2,198,400) 

Income on sale of Investment 

Aditya Birla Nuvo Limited 3,339,041 — 

* Net of Rs. Nil Previous year Rs. (1,02,740/-) 

payable to Bihar caustic (—) (*1,39,72,603) 

Interest Expenses 


(12,023,772) 

Aditya Birla Finance Limited 1,819,700 

(72,86,854) 

Loan Received 

Aditya Birla Nuvo Limited 1,654,630,000 

(743,930,000) 


(319,275,000) 


Fellow 

Subsidiaries 

Loans Granted 

Aditya Birla Financial Shared Services Limited 4,000,000 

(—) 


(—) 


(140,000,000) 


(—) 

Aditya Birla Miancs IT Services Limited 99,000,000 

(90,000,000) 


(61,500,000) 

Aditya Birla Money Limited 185,000,000 

(—) 

Aditya Birla Minacs Worldwide Limited 50,000,000 

(—) 


Company Limited 25,000 

(—) 

Madura Garments Exports Limited 30,000,000 

(35,000,000) 

Loans Granted Received back 


(140,000,000) 

Aditya Birla Miancs IT Services Limited 99,000,000 

(90,000,000) 


(61,500,000) 

Aditya Birla Financial Shared Services Limited 4,000,000 

(—) 

Aditya Birla Money Limited 185,000,000 

(—) 

Aditya Birla Minacs Worldwide Limited 50,000,000 

(—) 


(—) 

Madura Garments Exports Limited 30,000,000 

(35,000,000) 

Loan Repaid 

Aditya Birla Nuvo Limited 1,527,230,000 

(573,730,000) 


(305,200,000) 

Investment made 

Aditya Birla Financial Shared Services Limited — 

(500,000) 

Aditya Birla Financial Services Private Limited — 

(600,000) 

Aditya Birla Miancs IT Services Limited — 

(1,092,093) 

Zero coupon Compulsory Convertible 

Debentures of Madura 

Garments Lifestyle Retail Co Ltd 200,000,000 

(—) 

Aditya Birla Finance Limited — 

(250,000,000) 

Sale of Investments Long Term Investment 

Pref. Shares of Birla Global Finance 

Company Limited 250,000,000 

(250,000,000) 

Eq Shares of Aditya Birla Financial 

Shared Services Limited 500,000 

(—) 

Eq Shares of Aditya Birla Financial Services Limited 600,000 

(—) 

Peter England Fasions and Retail Limited 500,000 

(—) 

(349)

C M Y K 



Fellow 

Subsidiaries 

Madura Garments Lifestyle Retail Company Limited 500,000 

(—) 

Eq. Shares of-Madura Garements International 

Brand Co Limited 249,970 

(—) 

Eq. Shares of-Madura Garements International 

Brand Co Limited 249,970 

(Sold to LIL Investment Limited) (—) 

Eq. Shares-Birla Management Centre Services Limited 70,000 

Pref. Shares of Birla Management Centre 

Services Limited 2,000 

Eq. Shares of LIL Investment Limited 10,249,970 

(Sold to Madura Garments International 

Brand Co Limited 

Eq. Shares of LIL Investment Limited 10,249,970 

(Sold to Aditya Birla Nuvo Limited) 

Reimbursment of Expenses paid 

Aditya Birla Nuvo Limited 2,400 

(2,400) 


(2,248) 

Reimbursment of Expenses Recovered 


(343) 

Closing Balance as on 31.03.2010 

Investments 

Peter England Fashion & Retail Company Limited — 

(500,000) 


(500,000) 

Equity Shares of Birla Global Finance 

Company Limited 10 

(10) 

7.50% Perference Shares of Birla Global Finance 

Company Limited — 

(250,000,000) 


Company Limited — 

(500,000) 

Aditya Birla Financial Shared Services Limited — 

(500,000) 

Aditya Birla Financial Services Private Limited — 

(600,000) 

Aditya Birla Miancs IT Services Limited — 

(1,092,093) 

Zero Coupon Compulsory Convertible Debentures 

of Madura 200,000,000 

Garments Lifestyle Retail Co Ltd (—) 

Inter-Corporate Deposits 


(170,200,000) 


(14,075,000) 

Interest Payable on Inter-Corporate Deposit 

(Net of TDS) 


(6,498,825) 


(7,593) 

Inter corporate Deposits Receivable 


Company Limited 25,000 

(—) 

Interest Receivable on Inter-Corporate 

Deposits given (Gross) 

Madura Garments Exports Limited (Net of TDS) — — 

(1,238,500) 

Aditya Birla Minacs Worldwide Limited (Gross) — 

(—) 


Fellow 

Subsidiaries 

Payable against expenses 

Aditya Birla Nuvo Limited — 

Dividend Receivable 


(14,075,343) 

Share Capital 

Aditya Birla Nuvo Limited 210,000,000 

(210,000,000) 

Figures in brackets represent corresponding amount of pervious year. 

No amount in respect of the related parties have been written off/back are provided for 


Related Party relationship have been identified by the management and relied upon by the 

auditors. 

Segment Reporting: For information on Segmental Reporting refer Annexure-I. 

Earning per Share (EPS) is calculated as under: 

a) Numerator - Net Profit as disclosed in Profit & 

Loss Account 13,260,496 25,027,883 

b) Denominator - weighted average number 

of Equity Shares outstanding 

— Basic & Diluted 21,000,000 21,000,000 

c) Nominal value of Shares (in Rs.) 10 10 







(350)

C M Y K 


Annexure:-I 

Segment Disclosures for the year ended 31st March, 2010 


1) Primary Segment- Business Investment & Financing Rent from Prperties Total 

Current year Previous year Current year Previous year Current year Previous year 

A Segment Revenue 47,758,072 84,601,789 8,826,240 15,421,440 56,584,312 100,023,229 

B Segment Result (PBT) 18,102,360 22,558,235 4,358,135 13,169,649 22,460,496 35,727,883 

Provision for Tax — — — 0 9,200,000 10,700,000 

Profit after Tax — — — 0 13,260,496 25,027,883 

C Carrying amount of Segment Assets 555,177,741 383,886,625 108,552,994 110,855,875 663,730,735 494,742,500 

Unallocated Assets 10,862,387 13,324,117 

D Carrying amount of Segment Liabilities 302,385,535 192,826,996 5,627,873 12,165,514 308,013,408 204,992,510 

Unallocated Liabilities 397,410 152,299 

E Cost incurred to acquire segment 

Fixed assets during the year — — — — — — 

Unallocated assets — — — — — — 

F Depreciation/Amortization 2,198,234 2,198,234 2,198,234 2,198,234 

(as required in terms of Paragraph 13 of Non Banking Financial (Non-Deposit Accepting or Holding) 

Companies Prudential Norms (Reserve Bank) Direction, 2007 

(Rs.) 

Particulars 


(1) Loans and advances availed by the Non Banking Amount Amount 

Financial Company inclusive of interest accrued out-standing overdue 

hereon but not paid: 


: Unsecured — — 

(other than falling within the 

meaning of public deposits*) 



(d) Inter-corporate loans and borrowing 297,600,000 — 

(e) Commercial Paper — — 

(f) Other Loans (specify nature) — — 


Assets side : 


(2) Break-up -up of Loans and Advances including bills receivables 

other than those included in (4) below] : 

(a) Secured 180,000,000 

(b) Unsecured (Inter Corporate Deposits,Other Receivable & 

Advance Tax Net of Provision) 136,014,471 

(3) Break up of Leased Assets and stock on hire and otherr 

assets counting towards AFC activities 



(b) Operating lease 108,482,192 




(iii) Other Loans counting towards AFC activities 



(4) Break-up of Investments : 


1 Quoted : 

(i) Shares : (a) Equity 





(v) Others (please specify) — 

2 Unquoted : 

(i) Shares : (a) Equity 


(ii) Debentures and Bonds 




Assets side : 



1. Quoted : 

(i) Share : (a) Equity — 






2. Unquoted : Unquoted : 

(i) Shares : (a) Equity 10.00 


(ii) Debentures and Bonds 200,000,000 




(5) Borrower group-wise classification of all assets, financed as in (2), and (3), above: 


Category 

Amount net of provisions 



(a) Subsidiaries — — — 

(b) Companies in the same group — — — 

(c) Other related parties — — — 

2. Other than related parties 180,000,000 136,014,471 316,014,471 

Total 

180,000,000 136,014,471 316,014,471 

(6) Investor group-wise classification of all investments (current and long term) in shares and 



Category Market Value / Break up Book Value 

or fair value or NAV (Net of Provisions) 


(a) Subsidiaries 15 200,000,010.00 

(b) Companies in the same Group — — 

(c) Other related parties — — 

2. Other than related parties — — 

Total 15 200,000,010 


(7) Other information 

Particulars 

Amount 



(b) Other than related parties 182,166,162.00 



(b) Other than related parties 180,000,000.00 


Notes: 

1. As defined in Paragraph 2(1)(xii) of the Non-Banking Financial Companies Acceptance of Public 

Deposits (Reserve Bank) Directions, 1998. 

2. Provisioning norms shall be applicable as prescribed in Non-Banking Financial (Non Deposit Accepting 

or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. 

3. All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation 

of investments and other assets as also assets acquired in satisfaction of debt. However, market value 

in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments 

should be disclosed irrespective of whether they are classified as long term or current in column (4) 

above. 

(351)

C M Y K 


ANNEXURE I - Balance Sheet Abstract and Company’s General Business Profile 


Registration No. 0 4 - 2 2 6 8 5 of 1 9 9 4 - 9 5 State Code 0 4 



II. 

Capital Raised During the Year (Amount In Rs Thousands) 

Public Issue N I L Rights Issue N I L 

Bonus Issue N I L Private Placement N I L 

III. 

Position of Mobilisation And Deployment of Funds (Amount In Rs Thousands) 

Total Liabilities 6 1 3 , 7 8 2 Total Assets 6 1 3 , 7 8 2 


Paid-up Capital 2 1 0 , 0 0 0 Reserves and Surplus 1 0 6 , 1 8 2 

Secured Loans N I L Unsecured Loans 2 9 7 , 6 0 0 


Net Fixed Assets 1 0 8 , 4 8 2 Investments 2 0 0 , 0 0 0 

Net Current Assets 3 5 5 , 3 0 0 Misc.expenditure N I L 

Accumulated Losses N I L 

IV. 

Performance of Company (Amount in Rs Thousands) 

Turnover/Gross Income 5 6 , 5 8 4 Total Expenditure 3 4 , 1 2 4 

Profit/(Loss) Before Tax 2 2 , 4 6 0 Profit/(Loss) After Tax 1 3 , 2 6 0 

Earnings Per Share In Rs 0 . 6 3 Dividend Rate % N I L 

V. Generic Names of Three Principal Products/Services of Company (As Per Monetary Terms) 

Item Code No N . A . 

(ITC Code) 


Investment, Finance and Property Rental Activities 

Company Secretary Manager Directors 



(352)

C M Y K 

ADITYA BIRLA MINACS WORLDWIDE LIMITED 



On behalf of the Directors, it is my pleasure to present the Fifteenth 

Annual Report, together with the Audited Statement of Accounts of Aditya 

Birla Minacs Worldwide Limited (“the Company”) and its subsidiaries for 

the year ended 31 st March, 2010. 


The summarized consolidated results of your Company and its subsidiaries 

is given in the table below. 

Rs/Mn 

Particulars Year ended Year ended Growth 


Total Income 14,693 16,916 -13% 

Operating EBITDA 1,136 703 38% 

Profit/(Loss) before Interest, 

Depreciation & Tax (EBITDA) 901 71 1167% 

Finance Charges 469 520 -10% 

Depreciation 605 659 -8% 

Provision for Income Tax & FBT 

(including for earlier years) 58 102 -43% 

Net Profit/(Loss) After Tax (231) (1,210) 81% 

DIVIDEND 

In view of the losses no dividend is recommended. 


Industry Scenario 

The year 2009-10 has been an extremely difficult and challenging year 

across all countries and industries. The BPO industry has had to face a 

slowdown in its business growth with strong pricing pressures from existing 

customers, a significant slowdown in new deals and political pressure 

across all countries to reduce outsourcing so as to retain employment 

within the country. 

Summary of Operations 

Your Company had initiated actions in the previous year to improve 

operational excellence, increase seat utilization by site optimization and a 

relentless focus on eliminating all unnecessary expenses. These actions 

have borne fruit as the results have shown a significant improvement. 

Over the previous year, consolidated revenues decreased by 13%. This is 

mainly due to tight global recessionary conditions and consolidation of 

vendors by our customers resulting in price pressures. 

Despite the revenue drop, your Company’s operating profits (EBITDA) has 

shown an increase from Rs.703 million to Rs.1,136 million – a significant 

growth and turnaround. Your Company’s actions improved the operating 

margins from 4.2% to 7.8%. 

Your company continued its efforts on site rationalization wherever necessary. 

In order to grow its India-based business, your company has opened 

centers in Kolkata, Aurangabad, Vadodra and Chennai. The site in 

Chatham, Canada, which had been darkened in the previous year, has 

been reopened to cater to new business opportunities. 

Your company has progressed well on its 3-year roadmap to improve 

profitability, increase its share of non-voice revenues and improve business 

delivered from India and other offshore geographies. Your company has 

focused its sales team on industry verticals and that is paying dividends by 

the strong sales pipeline. 

OUTLOOK 

The current financial year 2010-11 will continue to remain challenging. 

Whilst the recession seems to be tapering off, growth in the BPO industry 

will still be slow and continue to be dogged by pricing pressures and 

delayed decisions. However, it is expected that outsourcing of non-voice 

work will grow more strongly than voice work and the company’s efforts 

in building capability in these areas will bear fruit in the years ahead. 

In 2010-11, your company expects to continue its focus on building 

operating efficiencies and optimization of costs whilst ensuring that it 

obtains its share of new BPO business globally. 

Your company is confident that its actions will enable it to work towards 

obtaining a leadership position in the BPO industry over the next few 

years and believes that it has the human resources necessary to meet this 

objective. 

HUMAN CAPITAL 

Human capital is the key resource for Information Technology Enabled 

Services Industry. At the end of the year, on a consolidated basis, your 

company had 14,724 employees and 9,916 operation seats across 27 

centers. 

COMPULSORILY CONVERTIBLE DEBENTURES (CCDS) 

During the year under review, your Company issued 2,500 Compulsorily 

Convertible INR denominated debentures with a face value of Rs.1,000,000 

each to Barclays Bank PLC, Mumbai, aggregating to INR 2,500 Million 

with the approval of the shareholders in the Extraordinary General Meeting 

held on 18 th December, 2009. 

ACQUISITION OF COMPASS BPO LTD., UK (COMPASS BPO) 

In March 2010, the your Company’s subsidiary, Aditya Birla Minacs 

Worldwide Inc., Canada, acquired Compass BPO - a leading, UK-based 

pure-play Finance and Accounting (F&A) service provider. 

Through this acquisition, your Company has taken over all the operations 

of Compass BPO across the UK, US, Middle East and India, bringing 

your Company’s F&A employee strength to 600. 

Compass BPO has appeared in the top 15 upcoming F&A BPO players in 

a recent Gartner report. It was also cited in the Top Offshore BPO 

providers by FAO Today magazine, and in the ‘Global Services 100 - 

2008 list’ by NeoIT and Global Services. 

With this acquisition, your Company’s end-to-end F&A services portfolio 

now includes transactional accounting, knowledge-based services (e.g. 

financial planning and analysis, research, budgeting/ forecasting and 

reporting), risk support services, business solutions (implementation and 

Hosting/ DBA services) and IT-based financial solutions and services. 

SHIFTING OF REGISTERED OFFICE 

With effect from October 28, 2009, your Company has shifted its registered 

office from the State of Maharashtra to Karnataka after obtaining all 

statutory approvals in this regard. The registered office of the Company is 

now situated at 3 rd Floor, Millennium Towers, ITPL Road, Brookefields, 

Bangalore – 560 037. 

SUBSIDIARY COMPANIES 

Following are the Subsidiaries of your Company:- 

• A V Transworks Limited (Canada) 

• Transworks Inc. 

• Aditya Birla Minacs Philippines Inc. 

• Aditya Birla Minacs Worldwide Inc. (Canada) and its following 

subsidiaries 

• Minacs Group (U.S.A.) Inc. 

(353)

C M Y K 


• Minacs Worldwide GmbH (Germany) 

• Minacs Limited (UK) 

• Minacs Worldwide S.A. de C.V.(Mexico) 

• Minacs Kft (Hungary) 

• Compass BPO Limited (UK) 

• Compass Business Process Outsourcing Private Limited 

• Compass BPO Inc. (USA) 

• Compass BPO FZE (UAE) 


Directors’ Report, Auditors’ Report, Balance Sheet and Profit and Loss 

Account, are required to be attached to the Balance Sheet of the Company. 

Your Company has applied for exemption under Section 212(8) of the 

Companies Act, 1956 to the Ministry of Corporate Affairs and is awaiting 

its approval for the same. Any shareholder, who wishes to obtain a copy 

of the said documents of any of the subsidiary companies, may send a 

request in writing to the Company Secretary at the Registered Office of the 

Company so that the needful can be done. The Annual Accounts of the 

subsidiary companies will also be kept available for inspection by any 

investor at the Registered Office of the Company and of the concerned 

subsidiary company. 

EMPLOYEE STOCK OPTIONS PLAN 

Your Company approved a new Employee Stock Options Plan (ESOP) in the 

Extra-Ordinary General Meeting held on Dec 18, 2009. Under the new 

ESOP Scheme, a total of 1,897,337 (One million Eight hundred ninety 

seven thousand three hundred and thirty seven) options would be available 

for being granted to eligible employees of the your Company under it. Each 

option when exercised would be converted into one Equity share of Re. 1 

each fully paid-up. 

Till March 31, 2010, your Company had granted 1,491,500 options to its 

full time employees leaving a balance of 405,837 for future grants. 

DIRECTORS 

During the year, Dr. Bharat K. Singh and Mr. Adesh Kumar Gupta resigned 

as directors with effect from July 15, 2009. The Board places on record 

its sincere appreciation for the valuable services rendered by Dr. Bharat K. 

Singh, and Mr. Adesh Kumar Gupta. 

Dr. Rakesh Jain and Mr. Sushil Agarwal were appointed as additional 

directors at the board meeting held on July 22, 2009. Resolutions seeking 

your approval for the appointment of Dr. Rakesh Jain and Mr. Sushil 

Agarwal have been incorporated in the Notice of the ensuing Annual 

General Meeting of the Company. 

In accordance with Article 100 of the Articles of Association, Mr. Arun K 

Thiagarajan and Mr. Gary Michael Comerford, Directors retire by rotation 

at the forthcoming Annual General Meeting. Both of them, being eligible, 

offer themselves for reappointment. 



Corporate Governance. Your Directors adhere to the standards set out by 

SEBI Corporate Governance practices and accordingly have implemented 

the stipulations prescribed. 

As required under Section 217(2AA) of the Companies Act, 1956, your 


i) In the preparation of the annual accounts, the applicable accounting 



ii) The Directors have selected such accounting policies and applied them 


iii) 

iv) 


the company at the end of the financial year and of the loss of the 

company for that period. 

The Directors have taken proper and sufficient care for the maintenance 




The Directors have prepared the annual accounts on a going concern 

basis. 


In accordance with the provisions of Section 217(2A) read with Companies 

(Particulars of Employees) Rules, 1975, the names and other particulars of 

employees are to be set out in the Directors’ report, as Annexure ’B’. It 

may be noted that in accordance with the notification dated March 24, 

2004 issued by the Department of Company Affairs, Government of 

India, particulars of employees posted and working in a country outside 

India, not being directors or their relatives drawing more than Rupees Two 

Million, four hundred thousand per financial year or Rupees Two hundred 

thousand per month, as the case may be, are not included in this statement, 

but such particulars shall be furnished to the Registrar of Companies. 

Such particulars shall be made available to any shareholder on specific 

request made by him / her during the course of the Annual General 

Meeting. 



The information required under the Companies (Disclosure of Particulars 

in the Report of the Board of Directors) Rules, 1988 for the year ended 

March 31, 2010 is given in Annexure ’A’ forming part of this Report. 


Your Company has not accepted any fixed deposits during the financial 

year 2009-10. There was no unclaimed deposit and interest accrued as 

on March 31, 2010. 

STATUTORY AUDITORS 

The report of the Statutory Auditors is attached to this report. All the notes to 

Schedules and Accounts are self-explanatory and do not call for any further 

comments. 

Your Directors request you to appoint Auditors for the current year as set 

out in the accompanying notice of the Annual General Meeting. 

ACKNOWLEDGEMENT 

Your Directors place on record their appreciation for employees at all levels, 

who have contributed to the growth and performance of your Company. 

Your Directors also thank the clients, vendors, bankers, shareholders and 

advisers of the Company for their continued support. 

Your Directors also thank the Central and State Governments, and other 

statutory authorities for their continued support. 

Place: Mumbai 





Director 


Director 

(354)

C M Y K 


ANNEXURE – A 

Particulars pursuant to Companies (Disclosure of particulars in the 

report of the Board of Directors) Rules, 1988 

1. Conservation of energy 

Your Company’s operations involve very low energy consumption. 

However, measures are taken to reduce energy consumption by using 

energy-efficient equipment. 

As energy costs comprise a very small part of our total expenses, the 

financial impact of these measures is not material. 

2. Research and development (R&D) 

a) R&D initiatives at institutes of national 

importance 

b) Specific areas for R&D at your Company 

c) Benefits derived as a result of R&D activity 

d) Future plan of action 

As the Company was 

mainly engaged in the 

business of call center 

activities, there are no 

matters to report on 

these aspects 

e) Expenditure on R&D for the year ended 

31 st March, 2010 Rs. Nil 

3. Technology absorption, adaptation and innovation: 

Your company continues to use latest hardware and software to improve 

the quality of its products and services. The Company will continue to 

invest in state-of–the–art technology and infrastructure to improve the 

productivity and quality of its products and services. 

4. Foreign exchange earnings and outgo 

Standalone Company 

(Rs/Mn) 

Foreign Exchange Year ended Year ended 

31 st March, 2010 31 st March, 2009 

Earnings 1,604 1,975 

Outflow (Including capital 

goods & services) 285 320 

5. Activities relating to exports, initiatives taken to increase exports, 

development of new export markets for products and services 

and export plans 

In fiscal 2009-10, 72% of revenues were derived from exports. Your 

Company established a substantial direct sales marketing network in 

its strategic markets in North America and Europe to grow its business 

in these regions. Your Company is also addressing other Asia Pacific 

countries as potential markets for growth. 



Place: Mumbai 



Director 


Director 

ANNEXURE B 

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, and forming part of the Directors’ Report for the year ended 

31st March, 2010. 

A Employees who were employed throughout the financial year and were in receipt of remuneration in aggregate of not less than Rs.24 lacs p.a. 

Sr. Name Designation & Qualification Salary Age Experience Date of Previous Employment 

No. nature of duties (Years) (Years) Joining Name of Employer, 

Designation 

Period of 

Service (Years) 

1 CHANDRA KISHORE SASMAL VICE PRESIDENT - TRAINING PG DIPLOMA 3,192,903 40 17 17 May 2004 FIRST RING INDIA PVT. 

LTD -DGM - TRAINING 

2 RANAJIT VICTOR SEN VICE PRESIDENT - OPERATIONS MBA 4,481,692 38 16 08 May 2006 HEWLETT PACKARD -AVP 

3 SAURAV DUTTA ASSOCIATE VICE PRESIDENT - OPERATIONS PG 2,680,774 34 15 20 Jun 2006 HP -ACCOUNT DELIVERY 

LEADER 

4 SURESH R CHIEF SECURITY OFFICER BE 3,447,636 40 17 14 Jul 2006 EFUNDS -HEAD 

BUSINESS OPERATIONS 

5 PANEESH RAO CHIEF PEOPLE OFFICER - IT & MBA 7,468,459 46 20 01 Oct 2007 PSI DATA 

BPO BUSINESS 

SYSTEMS LTD -CPO 

6 DEEPAK J PATEL CHIEF EXECUTIVE OFFICER BE 23,733,484 46 20 25 Aug 2008 MPHASIS LTD 

MANAGING DIRECTOR 

7 SACHIN JAIPRAKASH KARNIK VICE PRESIDENT - OPERATIONS MBA 3,746,221 42 18 24 Oct 2005 UTV. I (TSN SHOP) 

CUST. RESP.MGMT., 

8 VIKRANT SEN CHAUDHURI VICE PRESIDENT - TECHNOLOGY M.Tech. 2,800,897 39 14 15 May 2006 E-FUNDS 

INTERNATIONAL - 

HEAD NETWORK 

9 DEBARSHI NAHA ASSOCIATE VICE PRESIDENT - SALES MBA 2,595,655 36 11 01 Jun 2006 EPICENTER 

TECHNOLOGIES 

PVT.LTD. -ASST. 

VICE PRESIDENT 

10 PRITEN BHADRAKUMAR VICE PRESIDENT - BUSINESS BE 3,496,290 44 19 01 Jul 2007 SOURCE QUEST AP 

BANGDIWALA DEVELOPMENT CONSULTING PVT. LTD. 

C.O.O., 

11 RAJESH RAMDAS CHIEF DELIVERY OFFICER - B.Com. 4,143,038 42 19 06 Feb 2009 BHARTI AIRTEL - 

DOMESTIC BUSINESS 


12 MILIND GODBOLE PRESIDENT - APAC OPERATIONS ME 8,315,534 44 22 16 Feb 2009 MPHASIS -CHIEF 

DELIVERY OFFICER 

13 SRIKANTH N K HEAD - BUSINESS EXCELLENCE PG DIPLOMA, 5,484,192 42 19 16 Feb 2009 MSOURCE -HEAD 

BE 

DOMESTIC 

14 SHYAM V CHIEF LEGAL OFFICER PG DIPLOMA, 2,758,798 45 21 09 Mar 2009 HCL LTD -GENERAL 

LLB 

MANAGER LEGAL 

15 PRASHANT CHERUKURI CHIEF DELIVERY OFFICER - CRM MS 5,732,662 40 16 01 Apr 2009 ADITYA BIRLA MINACS 

REGIONAL CIO NA AND 

EUROPE 

16 MAHALINGAM R VICE PRESIDENT - F&A OPERATIONS CA 2,752,722 45 18 01 Apr 2009 MATRIX BUSINESS 

SOLUTIONS - 

HEAD SERVICE 

(355)

C M Y K 


B Employees who were employed for a part of the financial year and were in receipt of remuneration in aggregate of not less than Rs. 2 lacs p.m. 

Sr. Name Designation & Qualification Salary Age Experience Date of Previous Employment 

No. nature of duties (Years) (Years) Joining Name of Employer, 

Designation 

Period of 

Service (Years) 

1 SRINIVASAN GOWRIKANTHAN CHIEF OPERATING OFFICER - KPO CA 3,704,097 44 20 09 May 2007 GENISYS SOFTWARE - 


2 ANIL KUMAR ASSOCIATE VICE PRESIDENT - OPERATIONS PG DIPLOMA 1,945,708 33 11 17 May 2002 VITEOS -PROJECT 

CONSULTTANT 

3 SUNIL ISSAR HEAD - ADMIN & INFRA MBA 2,691,982 44 22 14 May 2007 OFFICE TIGER 

DATABASE SYSTEMS -VP 

4 SANJEEV ANGADI VICE PRESIDENT - WFM & TRANSITIONS BE 2,021,901 35 8 11 Sep 2008 DELL INTERNATIONAL 

SR AREA MANAGER 

5 RAJAGOPALAN A PRINCIPAL - F & A PRACTICE CA 2,843,867 46 21 02 Jan 2009 CAMBRIDGE 

SOLUTIONS LTD - 


6 SRI KRISHNA SASTRY B PRACTICE LEADER - INSURANCE PG DIPLOMA 2,216,994 44 18 05 Jan 2009 TRILOGY INSURANCE 

SERVICE - DIRECTOR 

DELIVERY 

7 GOPINATH S MANIAN PRINCIPAL - TELECOM PRACTICE BE 2,520,576 42 19 09 Feb 2009 BHARTI AIRTEL -VP CSD 

8 SRINIVASAN K A VICE PRESIDENT - BUSINESS DEVELOPMENT CA 1,821,264 45 13 01 Apr 2009 MATRIX BUSINESS 

SERVICES -HEAD FAO 

9 RAVI S MADHAVAN VICE PRESIDENT - RIMS BE 259,440 44 8 24 Aug 2009 MICROLAND -HEAD 

OPERATIONS 

10 RAJEEV M S PRINCIPAL ARCHITECT MBA 671,583 42 19 01 Jan 2010 PSI DATA SYSTEM -SR 

TECHNICIAL OFFICER 

11 SRIKANTH K N VICE PRESIDENT - CLIENT PROGRAMS MBA 704,279 40 21 01 Jan 2010 PSI DATA SYSTEM 

TECHNICAL ASSISTANT 

12 PREETI MISRA SHENOY SR. VICE PRESIDENT - BD APAC PG DIPLOMA 837,311 47 12 18 Jan 2010 MPHASIS -STRATEGIC 

PLANNING DIRECTOR 

13 PANKAJ RASTOGI HEAD GLOBAL PROCUREMENT PG DIPLOMA, 3,476,142 38 15 21 May 2009 WNS GLOBAL SERVICES- 

BE 

HEAD PROCUREMENT 

14 RAMESH KAMATH CHIEF FINANCIAL OFFICER CA 6,634,141 53 31 27 Apr 2009 CONSULTING -ADVISOR 

FINANCE AND 

COMMERCIAL 

NOTE: 

1. Remuneration includes salary, allowances, medical benefits, Company’s contribution to Provident Fund and Superannuation Fund wherever applicable, leave encashmenet, leave travel assistance and 

monetary value of taxable perquisites and also includes Gratuity/Retirement Benefit. 

2. None of these Executives are related to any Director or Manager of the Company. 

3. All Appointments are contractual, other terms and conditions are as per the rules of the Company. 

4. None of the above mentioned Employees hold morethan 2% of the Equity Share Capital of the Company. 



Place: Mumbai Sushil Agarwal Rakesh Jain 

Date: 23rd April, 2010 Director Director 

(356)

C M Y K 



To 

The Members of Aditya Birla Minacs Worldwide Limited 

(formerly known as Transworks Information Services Limited) 

1. We have audited the attached Balance Sheet of Aditya Birla Minacs 

Worldwide Limited as at March 31, 2010 and also the Profit and Loss 

Account, and the Cash Flow Statement for the year ended on that date 

annexed thereto. These financial statements are the responsibility of 

the Company’s management. Our responsibility is to express an opinion 

on these financial statements based on our audit. 










our opinion. 


amended) (the Order) issued by the Central Government of India in 

terms of sub-section (4A) of Section 227 of the Companies Act, 1956, 

we enclose in the Annexure a statement on the matters specified in 



that: 







iii. The balance sheet, profit and loss account and cash flow statement 







directors, as on March 31, 2009, and taken on record by the 


disqualified as on March 31, 2009 from being appointed as a 








(a) in the case of the balance sheet, of the state of affairs of the 


(b) in the case of the profit and loss account, of the loss for the 


(c) in the case of cash flow statement, of the cash flows for the 





per Vijay Maniar 

Partner 

Membership No.:36738 

Mumbai, 


Annexure referred to in paragraph [3] of our report of even date 

Re: Aditya Birla Minacs Worldwide Limited 

(formerly, known as Transworks Information Services Limited) 


particulars, including quantitative details and situation of fixed 

assets. 

(ii) 

(b) 

(c) 

Fixed assets have been physically verified by the management 

during the year and no material discrepancies were identified 

on such verification. 

There was no substantial disposal of fixed assets during the 

year. 

The Company does not have any inventory and hence this clause (ii) 


(iii) (a) As informed, the Company has not granted any loans, secured 

or unsecured to companies, firms or other parties covered in 

the register maintained under section 301 of the Companies 

Act, 1956. 

(iv) 

(v) 

(vi) 

(vii) 

(viii) 

(b) 

As informed, the Company has not taken any loans, secured 

or unsecured from companies, firms or other parties covered 

in the register maintained under section 301 of the Companies 

Act, 1956. 



with the size of the Company and the nature of its business, for the 

purchase of fixed assets and for the sale of services. During the course 

of our audit, no major weakness has been noticed in the internal 

control system in respect of these areas. The activities of the Company 

do not involve purchase of inventories and sale of goods. 

According to the information and explanations provided by the 

management, we are of the opinion that there are no contracts or 

arrangements referred to in section 301 of the Act that need to be 

entered into the register maintained under section 301 of the Act. 

The Company has not accepted any deposits from the public. 

In our opinion, the Company has an internal audit system 

commensurate with the size and nature of its business. 

To the best of our knowledge and as explained, the Central 



1956 for the products of the Company. 

(ix) (a) The Company is regular in depositing with appropriate 

authorities undisputed statutory dues including provident fund, 

income-tax, sales-tax, wealth tax, service tax, custom duty, 

excise duty, cess and other material statutory dues applicable 

to it. 

(b) 

Further, since the Central Government has till date not 

prescribed the amount of cess payable under section 441 A 

of the Companies Act, 1956, we are not in a position to 

comment upon the regularity or otherwise of the company in 

depositing the same. 

According to the information and explanations given to us, no 

undisputed amounts payable in respect of provident fund, 

investor education and protection fund, employees’ state 

insurance, income-tax, wealth tax, service tax, sales-tax, custom 

duty, excise duty, cess and other undisputed statutory dues 

were outstanding, at the year end, for a period of more than 

six months from the date they became payable. 

(357)

C M Y K 


(c) 

According to the information and explanation given to us, 

there are no dues of income tax, sales-tax, wealth tax, service 

tax, customs duty, excise duty and cess which have not been 

deposited on account of any dispute, except as follows: 

Name of Nature of Amount Period to Forum where 

the statute dues (Rs) which the dispute is 

amount pending 

relates 

Income Penalty for Tax 7,329,260 FY 2003-04 Dy. Commissioner 

Act, 1961 disallowance of Income Tax 

of expenses 

(x) 

(xi) 

(xii) 

(xiii) 

(xiv) 

(xv) 

The Company has accumulated losses at the end of the financial 

year. The Company has incurred cash loss during the year and in the 

immediately preceding financial year. 


explanations given by the management, we are of the opinion that 

the Company has not defaulted in repayment of dues to a financial 

institution, bank or debenture holders. 

According to the information and explanations given to us and based 

on the documents and records produced to us, the Company has 

not granted loans and advances on the basis of security by way of 


In our opinion, the Company is not a chit fund or a nidhi / mutual 

benefit fund / society. Therefore, the provisions of clause 4(xiii) of the 

Companies (Auditor’s Report) Order, 2003 (as amended) are not 

applicable to the Company. 

In respect of dealing in investments, in our opinion and according to 

the information and explanations given to us, proper records have 

been maintained of the transactions and contracts and timely entries 

have been made therein. The investments have been held by the 

Company, in its own name. 


Company has given guarantee for loans taken by others from bank 

(xvi) 

(xvii) 

(xviii) 

(xix) 

(xx) 

(xxi) 

or financial institutions, the terms and conditions whereof in our 

opinion are not prima-facie prejudicial to the interest of the Company. 

Based on information and explanations given to us by the 

management, term loans were applied for the purpose for which the 

loans were obtained. 

According to the information and explanations given to us and on an 

overall examination of the balance sheet and cash flow statement of 

the Company, we report that no funds raised on short-term basis 

have been used for long-term investment. 

The Company has not made any preferential allotment of shares to 

parties or companies covered in the register maintained under section 


According to the information and explanations given to us, during 

the period covered by our audit report, the Company had issued 

2,500 unsecured compulsory convertible debentures of Rs. 1,000,000 

each, on which no security or charge is required to be created. 

The Company has not raised any money by public issues during the 

year. 


reporting the true and fair view of the financial statements and as per 

the information and explanations given by the management, we report 

that no fraud on or by the Company has been noticed or reported 

during the course of our audit. 


Partner 


Mumbai, 





(358)

C M Y K 



As At 31st As At 31st 

Mar, 2010 Mar, 2009 

Schedule Rs. Lacs Rs. Lacs 

I. SOURCES OF FUNDS 

1 Shareholders’ Funds 

Share Capital 1 234.92 234.92 

Employee Stock Options 

(Refer Note 8) 126.15 — 

Reserves & Surplus 2 27,795.68 27,795.68 

2 Secured Loans 3 44,399.77 45,451.35 

3 Unsecured Loans 4 25,000.00 2,500.00 

II. 

Total 97,556.52 75,981.95 


1 Fixed Assets 5 

Gross Block 12,653.09 10,679.49 

Less : Depreciation / Amortization 8,778.26 7,770.56 

Net Block 3,874.83 2,908.93 

Capital Work-in-Progress 

(including Capital advances) 1,399.18 76.05 

2 Investments 6 76,935.66 58,338.00 

3 Current Assets, Loans and 

Advances : 

Accured Interest 75.90 4.46 

Sundry Debtors 7 3,803.84 3,690.40 

Cash and Bank Balances 8 18.15 13.65 

Loan to Subsidiaries 11,009.19 11,135.09 

Loans and Advances 9 2,533.73 2,372.26 

17,440.81 17,215.86 

Less: Current Liabilities and 

Provisions : 10 

Current Liabilities 7,392.58 4,877.43 

Provisions 133.11 159.00 

7,525.69 5,036.43 

Net Current Assets 9,915.12 12,179.43 

4 Profit and Loss Account 5,431.73 2,479.54 

Total 97,556.52 75,981.95 


The Schedules referred to above and the notes to accounts form an integral part of the 


PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 


For the For the 


31st March 31st March 


Schedule Rs. Lacs Rs. Lacs 

INCOME : 

Service Charges 22,111.06 23,149.16 

Other Income 11 522.38 635.65 

Total 22,633.44 23,784.81 

EXPENDITURE : 

Employees Remuneration & 

other benefits 12 13,002.93 11,868.40 

Other Operating Expenses 13 4,015.80 3,203.97 

Administrative Expenses 14 3,593.28 6,935.19 

Marketing / Business 

Development Expenses 15 353.77 200.94 

Financial Charges / Interest Cost 16 3,186.42 2,917.92 

Depreciation / Amortization 1,413.85 1,597.67 

Total 25,566.05 26,724.09 

Profit / (Loss) before tax for the year (2,932.61) (2,939.28) 

Provision for Tax 

Less: Fringe Benefit Tax — 50.63 

Less: Withholding tax Written Off / 

Provided for 19.55 80.82 

Profit / (Loss) for the year (2,952.16) (3,070.73) 

Profit / (Loss) brought forward 

from previous year (2,479.57) 591.19 

Accumulated balance carried 

to the Balance Sheet (5,431.73) (2,479.54) 

Basic Weighted Average number of shares 23,491,711 23,491,711 

Diluted Weighted Average number of shares 23,864,586 23,651,711 

Basic earnings per share (Rs.) (12.57) (13.07) 

Diluted earnings per share (Rs.) (12.57) (13.07) 



Profit & Loss Account. 



Firm Registration No. 301003E 



Aditya Birla Minacs Worldwide Ltd. 


Director 








Director 


Partner 


Place: Mumbai 



Director 

Ramesh Kamath 



Partner 


Place: Mumbai 



Director 

Ramesh Kamath 


(359)

C M Y K 



Rs. Lacs 

For the Year ended 31.3.2010 For the Year ended 31.3.2009 


Net Profit/(Loss) before taxation, 

and extraordinary items (2,932.61) (2,939.28) 


Depreciation / Amortization 1,413.85 1,597.67 

Loss/(Profit) on Sale of Fixed Assets 53.05 51.62 

Foreign Exchange (Gain)/Loss (Net) 63.94 3,396.29 

Interest Income (222.21) (411.80) 

Dividend Income (294.95) (216.49) 

Finance/Interest Expense 3,186.42 2,917.92 

Employee stock compensation expenses 126.15 (4.22) 

Provision for doubtful debt 2.95 — 

Operating Profit before working capital changes 1,396.59 4,391.72 

Movements in working capital : 

(Increase)/Decrease in Sundry Debtors (194.90) (528.50) 

(Increase)/Decrease in Loans & Advances (98.34) (221.10) 

Increase/(Decrease) Current Liabilities & Provisions 2,473.75 449.11 

Cash generated from operations 3,577.10 4,091.23 

Loan to subsdiaries (419.60) 5,424.69 

Add/(Less): Direct Taxes (including TDS) paid/Tax Refunds (82.68) (188.74) 

Net Cash flow from Operating Activities 3,074.82 9,327.18 

B. CASH FLOW FROM INVESTING ACTIVITIES 

Purchase of Fixed Assets (3,872.59) (641.94) 

Proceeds from sale of Fixed Assets 116.66 17.58 

Investment in Subsidaries (13,247.66) 236.16 

(Purchase)/Sale of investment (5,350.00) (4,000.00) 

Interest income received 150.77 855.95 

Dividend received 294.95 216.49 

Net Cash from/(for) Investing Activities (21,907.87) (3,315.76) 


Proceeds from/(repayment of) Bank Borrowings - Unsecured (2,500.00) — 

Proceeds from/(repayment of) Long-term borrowings - Secured (491.49) (2,559.19) 

Proceeds from/(repayment of) other borrowings — (500.00) 

ESOP payment — (79.15) 

Proceeds from Issue of Compulsorily Convertible Debentures 25,000.00 — 

Interest/financial charges paid (3,170.95) (2,945.28) 

Net Cash generated/(used) in Financing Activities 18,837.56 (6,083.62) 

D. FOREIGN EXCHANGE DIFFERENCE ON TRANSLATION OF FOREIGN 

CURRENCY CASH AND CASH EQUIVALENTS (0.01) (0.02) 

Net Increase in cash and Cash equival ants during the year 4.50 (72.22) 

Cash and cash equivalants at the beginning of the year 11.71 83.93 

Cash and cash equivalants at the end of the year 16.21 11.71 

Notes: 

Components of Cash and Cash Equivalents As at As at 


i) Cash Balance on hand 3.84 6.04 

ii) Balance with Scheduled and other Banks : 

- in Current Account 12.37 5.67 

Total 16.21 11.71 

Note: 

i) Fixed Deposit of Rs. 1.94 Lacs (P.Y. 1.94 Lacs) given as margin money has not been considered as cash and cash equivalents 






Partner 


Place: Mumbai 





Director 


Director 

Ramesh Kamath 


(360)

C M Y K 


SCHEDULES FOR THE YEAR ENDED 31ST MARCH 2010 

As At 

As At 

31st Mar, 2010 31st Mar, 2009 

Rs. Lacs Rs. Lacs 


Authorised Capital 

30,000,000 (P Y 30,000,000) Equity Shares of Rs. 1/- each 300.00 300.00 

300.00 300.00 

Issued, Subscribed & Paid up Capital 

23,491,711 (P Y 23,491,711) Equity Shares of 

Rs. 1/- each fully paid up 234.92 234.92 

(Of these 20,738,378 capital is held by Aditya Birla Nuvo Limited 

including 7 shares held by them through their nominees) 

Total 234.92 234.92 

As At 

As At 




i) Working Capital Facility from Banks — 899.42 

(Secured against receivables) 

(Repayable within one year - NIL ; P.Y Rs. 899.42 Lacs ) 

ii) Term Loan from Banks 3,000.00 2,000.00 

(Secured against the first pari passu charge on the movable assets ) 

(Repayable within one year - Rs 1,000 Lacs; P.Y Rs. 2,000 Lacs ) 

iii) ECB from Banks (Refer Note 14) 41,399.77 42,551.93 

(Secured against the first charge on the movable assets and 

second charge on Receivables) 

(Repayable within one year Rs. 592.07 Lacs, PY - Rs. 592.07 Lacs) 

Total 44,399.77 45,451.35 

SCHEDULE 2 - RESERVES & SURPLUS 

Securities Premium Account 

Opening Balance 27,795.68 27,795.68 

Addition during the year — — 

Total 27,795.68 27,795.68 


i) Long Term Loan from Banks — 2,500.00 

(Amount repayable within a year - NIL, P.Y. NIL) 

ii) Compulsorily Convertible Debentures 25,000.00 — 

(Refer note 17) 

Total 25,000.00 2,500.00 


Rs. Lacs 

GROSS ASSETS DEPRECIATION NET BLOCK 

Particulars As on Additions Deductions As on As on For the Deductions As on As on As on 

1-Apr-09 31-Mar-10 1-Apr-09 Year 31-Mar-10 31-Mar-10 31-Mar-09 

Computers & Telecommunication 

Equipments 7,023.87 1,333.18 198.45 8,158.60 5,255.23 850.31 140.50 5,965.04 2,193.56 1,768.64 

Plant & Machinery 1,452.92 405.15 181.51 1,676.56 939.96 162.27 111.22 991.01 685.55 512.96 

Office Equipments 276.21 52.32 6.47 322.06 164.48 35.96 4.74 195.70 126.36 111.73 

Furniture and Fixtures 525.43 184.58 60.81 649.20 398.75 60.96 38.96 420.75 228.45 126.68 

Leasehold Improvement 1,177.84 398.24 87.80 1,488.28 831.72 229.83 81.91 979.64 508.64 346.12 

Motor car 67.05 — 40.83 26.22 32.76 5.88 28.82 9.82 16.40 34.29 

Intangible Assets 156.17 176.00 — 332.17 147.66 68.64 — 216.30 115.87 8.51 

Total 10,679.49 2,549.47 575.87 12,653.09 7,770.56 1,413.85 406.15 8,778.26 3,874.83 2,908.93 

Previous year 10,043.79 779.56 143.86 10,679.49 6,247.54 1,597.67 74.65 7,770.56 2,908.93 3,796.25 

Note: The opening gross block of fixed assets, accumulated depreciation and net block have been re-classified as per the asset categories per se. 


As At 

As At 


Rs. Lacs 

Rs. Lacs 

Long Term Investments (At Cost) 

In Subsidiary Companies 

Trade, Unquoted, fully paid-up 

NIL (PY 200,000) shares of US $ 1 each in Transworks Inc. — 96.80 

127,000,001 (PY 127,000,001) shares of CAD 1 

each in AV Transworks Ltd 53,369.34 53,369.34 

30,000,000 (PY NIL) preference shares of CAD 1 

each in A V Transworks Ltd 13,344.46 — 

490,000 (PY 490,000) shares of Peso100 each 

in Aditya Birla Minacs Philippines Inc. 448.01 448.01 

Share application money paid to 

Aditya Birla Minacs Philippines Inc. 423.85 423.85 

Current Investments (At lower of cost and Net Assets Value) 

- In Mutual Funds - Birla Sun Life Cash Plus - Instl. Premium - Growth 850.00 4,000.00 

- Birla Sun Life Savings Fund Instl. Growth 8,500.00 — 

Total 76,935.66 58,338.00 

No. of units The following Investments were purchased & Cost Sale Value Gain 

sold during the period : (Rs. Lacs) (Rs. Lacs) (Rs. Lacs) 

364,571,417 Birla Sun Life Savings Fund - Instl. 

Premium - Growth 63,224.09 63,400.15 176.06 

193,765,846 Birla Sun Life Cash Plus - Instl. 

Premium - (Growth) - I 27,830.00 27,864.12 34.12 

465,436,804 Birla Sun Life Cash Plus - 

Instl. Premium - (Growth) - II 68,088.17 68,104.61 16.44 

Total 159,142.26 159,368.88 226.62 

As At 

As At 


Rs. Lacs 

Rs. Lacs 


i) Debts outstanding over six months 


(Includes amount due from Company under the same 

management, Aditya Birla Minacs Worldwide Inc. 

NIL Lacs, P.Y. Rs. 82.47 Lacs) 42.81 100.34 

Unsecured, considered doubtful 2.95 15.80 

Less:- Provision for doubtful Debt (2.95) (15.80) 

42.81 100.34 

ii) Other Debts 


(Includes amount due from Company under the same 

management, Aditya Birla Minacs Worldwide Inc. 

Rs. 44.65 Lacs, P.Y. Rs. 187.49 Lacs) 3,761.03 3,590.06 

Total 3,803.84 3,690.40 


i) Cash Balance on hand 3.84 6.04 

ii) Balance with Scheduled Banks : 

- On Current Account 10.70 5.46 

- On Fixed Deposits (As margin against bank guarantee) 1.94 1.94 

Balance with other Banks : 

- On Current Account 1.67 0.21 

Total 18.15 13.65 

(361)

C M Y K 


As At 

As At 


Rs. Lacs 

Rs. Lacs 

SCHEDULE 9 - LOANS & ADVANCES 

(Unsecured considered good) 

i) Advances Recoverable in cash or in kind or for 

value to be received 1,225.08 1,373.60 

ii) Tax Deducted at Source 223.93 160.80 

iii) Deposits 1,084.72 837.86 

Total 2,533.73 2,372.26 

SCHEDULE 10 - CURRENT LIABILITIES & PROVISIONS 

i) Sundry Creditors (including book overdraft of 

Rs. 476.65 Lacs; PY. Rs. 603.47 Lacs) 6,895.12 4,146.26 

ii) Interest accrued but not due 216.08 231.55 

iii) Subsidiary Companies 26.67 312.46 

iv) Other Liabilities 254.71 187.16 

7,392.58 4,877.43 

PROVISIONS 

i) Gratuity 29.91 63.32 

ii) Leave encashment 103.20 95.68 

133.11 159.00 

Total 7,525.69 5,036.43 

For the 

For the 

year ended 

year ended 


Rs. Lacs 

Rs. Lacs 


i) Gain on Mutual Fund investments 226.62 216.49 

ii) Dividend from Subsidiary 68.33 

iii) Miscellaneous Income 5.22 7.36 

iv) Interest Income 

- on balance with banks — 0.13 

- on inter-company deposits (TDS: Rs. 0.48 Lacs; 

P.Y. Rs. 4.77 Lacs) 2.13 120.39 

- on loan to subsidiary (TDS: Rs. 19.55 Lacs; 

P.Y. Rs. 80.82 Lacs) 220.08 291.28 

Total 522.38 635.65 

For the 

For the 

year ended 

year ended 


Rs. Lacs 

Rs. Lacs 

SCHEDULE 14 - ADMINISTRATIVE EXPENSES 

i) Legal & professional fees 453.26 397.55 

ii) Telephone expenses 89.25 115.87 

iii) Recruitment & relocation 188.20 436.21 

iv) Auditors’ remuneration 

- Audit fees 36.86 24.00 

- Out of pocket expenses 0.03 — 

v) Vehicle Expenses 159.71 150.79 

vi) Seminar & Outside Training Expenses 65.59 48.97 

vii) Printing & Stationery 37.13 33.54 

viii) Directors’ sitting fees 1.65 1.50 

ix) Insurance charges 35.71 34.25 

x) Travelling expenses 329.46 332.14 

xi) Loss / (Profit) on sale of Fixed Assets 53.05 51.62 

xii) Rates and Taxes 43.00 10.36 

xiii) Provision for Doubtful Debt 2.95 — 

xiv) Miscellaneous expenses 258.68 230.55 

xv) Foreign Exchange loss on Loans taken/given 1,030.98 719.46 

xvi) Foreign Exchange Fluctuation - Others 807.77 4,348.38 

Total 3,593.28 6,935.19 

SCHEDULE 15 - MARKETING / BUSINESS DEVELOPMENT EXPENSES 

i) Business promotion expenses 6.18 7.32 

ii) Advertisement and Branding expenses 3.42 5.98 

iii) Entertainment expenses 3.35 5.05 

iv) Marketing expenses 324.77 167.07 

v) Telemarketing registration & bonding expenses 16.05 15.52 

Total 353.77 200.94 

SCHEDULE 12 - EMPLOYEE REMUNERATION & OTHER BENEFITS 

i) Salaries & other employee benefits 10,724.16 9,400.27 

ii) Contribution to provident & other funds 598.38 465.85 

iii) Employee Compensation under ESOP 126.15 (4.22) 

v) Staff Welfare Expenses 1,510.37 1,896.70 

iv) Gratuity (Refer Note 15) 43.87 109.80 

Total 13,002.93 11,868.40 

SCHEDULE 16 - FINANCIAL CHARGES & INTEREST COST 

i) Amortisation of Loan Arrangement Fees 427.56 96.66 

ii) Interest on External commercial borrowings and Term Loan 2,666.73 2,699.24 

iii) Interest on Working capital and Demand Loan 73.05 109.50 

iv) US Finance charges — 0.88 

v) Other Financial Charges 19.08 11.64 

Total 3,186.42 2,917.92 

SCHEDULE 13 - OTHER OPERATING EXPENSES 

Facility Expenses 

i) Rent Charges 1,310.15 946.95 

ii) Electricity expenses 835.34 686.23 

iii) House keeping expenses 136.02 112.82 

iv) Security charges 162.85 133.32 

iv) Repairs & maintenance 

- Building 71.26 76.69 

- Others 196.21 118.10 

v) Hire Charges 41.07 15.58 

Technology Expenses 

vi) Connectivity charges 795.08 827.14 

vii) Assets Utilization Charges - 65.64 

viii) Repairs & maintenance - Machinery 375.75 192.04 

ix) Software & support expenses 92.07 29.46 

Total 4,015.80 3,203.97 

(362)

C M Y K 


SCHEDULE – 17: NOTES TO ACCOUNTS 

1. ACCOUNTING POLICIES 

a. Basis of preparation 


the Notified accounting standard by Companies Accounting Standards Rules, 2006 

and the relevant provisions of the Companies Act, 1956. The accounts have been 

prepared under the historical cost convention on accrual basis in accordance with 

the generally accepted accounting principles applicable in India. The accounting 

policies applied by the Company are consistent with those used in previous year. 

b. Use of estimates 







estimates. 

c. Revenue recognition 

i) Revenue is derived from both time-based and unit-priced contracts. Revenue is 

recognized as related services are performed based on agreements / 

arrangements with the customers. 

ii) Interest on investments is booked on a time-proportion basis taking into account 

the amounts invested and the rate of interest. 

iii) Dividend incomes on investments are accounted for when the right to receive 

the payment is established. 

d. Fixed assets 


if any. Cost comprises the purchase price and wherever applicable freight, duties 

and taxes, and expenses incidental to acquisition and installation. 

e. Leased assets 

Finance lease, which effectively transfers to the Company substantially all the risks 

and benefits incidental to ownership of the leased item, are capitalized at lower of 

fair value and present value of the minimum lease payments at the inception of the 

lease term and disclosed as leased assets. Lease payments are apportioned between 

the finance charges and reduction of the lease liability based on implicit rate of 

return. Finance charges are charged directly against income. Lease management 

fees, lease charges and other initial direct costs are capitalized. 

Leases, where the lessor effectively retains substantially all the risks and benefits of 

ownership of the lease term, are classified as operating leases. Operating lease 

payments are recognized as an expense in the profit & loss account in accordance 

with the lease agreement. 

f. Depreciation 

Depreciation on assets is provided on straight-line basis, based on the useful lives as 

estimated by the management which are greater than the corresponding rates 

prescribed in Schedule XIV of the Companies Act, 1956. The individual assets costing 

less than Rs.5,000/- are depreciated in full in the year of purchase. The management’s 

estimate of useful lives of the various fixed assets is given hereby: 

Assets 


i) Computers Equipment/Intangibles 2 - 4 years 

ii) Telecommunication Equipment 5 years 

iii) Plant & Machinery 5 years 

iv) Office Equipment 5 years 

v) Furniture & Fixtures 6 years 

vi) Motor Cars 5 years 

Leasehold improvements are depreciated over the shorter of the estimated useful life 

of the asset and the lease term of the premises. 

g. Investments 

i) Investments that are readily realizable and intended to be held for not more 

than a year are classified as current investments. All other investments are 

classified as long-term investments. 

ii) Long-term investments are valued at cost. Any decline in the value of investments 

other than temporary, is provided for and charged to the profit & loss account. 

iii) The current investments are carried at lower of cost and net asset value 

determined on an individual investment basis. 

h. Transactions in Foreign Currency 

i) Initial Recognition 


ii) 

iii) 



Conversion 


items, which are carried in terms of historical cost denominated in a 

foreign currency, are reported using the exchange rate at the date of the 

transaction. 

The financial statements of foreign branch, whose operations are integral to 

the operations of the Company, are translated using the principles and 

procedures as if the transactions of the foreign branch had been those of 

Company itself. 

Exchange Differences 


company’s monetary items at rates different from those at which they were 


are recognized as income or as expenses in the year in which they occur. 

iv) Forward Exchange Contracts not intended for trading or speculation purposes 

The premium or discount arising at the inception of forward exchange contracts 

is amortized as expense or income over the life of the contract. Exchange 

differences on such contracts are recognized in the statement of profit and loss 

in the year in which the underlying transactions occur. Any profit or loss arising 

on cancellation or renewal of forward exchange contract is recognized as 

income or as expense for the year. 

v) Accounting policy for Derivatives 

The Company uses derivative financial instruments such as forward exchange 

contracts, currency swaps and interest rate swaps to hedge its risks associated 

with foreign currency fluctuations and interest rate. Currency and interest rate 

swaps are accounted in accordance with their contract. 

i. Retirement benefits 

(i) 


Company’s contributions payable during the year to Provident Fund, 

Superannuation Schemes are recognized in the Profit and Loss Account. 

(ii) Defined Benefit Plan 

Company’s liabilities under payment of gratuity Act (funded) and compensated 

leave encashment are determined by Actuarial Valuation made at the end of 

each financial year using the projected unit credit method. Actuarial gain and 

losses are recognized immediately in the statement of Profit and Loss Account 


future cash flows using a discounted rate that is determined by reference to 

market yields at the Balance Sheet date on Government bonds where the 

currency and terms of the Government bonds are consistent with the currency 

and estimated terms of the defined benefit obligation. 

j. Provision 

A provision is recognized when an enterprise has a present obligation as a result of 

past event; it is probable that an outflow of resources will be required to settle the 


discounted to its present value and are determined based on best estimate required 

to settle the obligation at the balance sheet date. These are reviewed at each balance 

sheet date and adjusted to reflect the current best estimates. 

k. Income Tax 

Provision for current tax is made on the basis of estimated taxable income for the 

current accounting year in accordance with the Income Tax Act, 1961. 

The deferred tax for timing differences between the book and tax profits for the year 

is accounted for, using the tax rates and laws that have been substantively enacted as 

of the balance sheet date. 

Deferred tax assets arising from timing differences are recognized to the extent there 

is reasonable certainty that these would be realized in future. 

Deferred tax assets are recognized on unabsorbed losses only if there is virtual certainty 

that such deferred tax assets can be realized against future taxable profits. 

Fringe Benefit tax is provided in accordance with the provisions of the Income Tax 

Act, 1961. 

l. Employee Stock Options 

The stock options granted are accounted for as per the accounting treatment prescribed 

by Employee Stock Options Scheme and Employee Stock Purchase Guidelines, 1999, 

issued by Securities and Exchange Board of India, where by the Company being 

unlisted, the Fair Value of the company’s’ share on date of Grant has been determined 

by an independent valuer. The difference between Fair Value on date of grant and 

Grant price had been recognized as deferred employee compensation. The deferred 

employee compensation is charged to the Profit and Loss Account in a graded manner 

on straight line basis over the vesting period of the option. The employee stock 

option outstanding account, net of any unamortized is show in Balance Sheet. 

(363)

C M Y K 


m. Earnings per share 

Basic earnings per share are calculated by dividing the net profit or loss for the year 



For the purpose of calculating diluted earnings per share, the net profit or loss for the 

year attributable to equity shareholders and the weighted average number of shares 

outstanding during the year are adjusted for the effects of all dilutive potential equity 

shares. 


Particulars As at March As at March 

31, 2010 31, 2009 


i) Estimated amount of contracts remaining 

to be executed on capital account and 

not provided for. 146.03 72.36 

ii) Guarantees and counter guarantees given 

by the Company to Commissioner of Customs 

towards custom & excise duty exemption under 

STPI Scheme (Based on present export 

performance, the Company expects to meet its 

export obligation and hence this liability 

is not likely to materialize). 1,329.95 1,290.15 

iii) Guarantees and Counter guarantees given 

by the Company to its insurance company in 

USA and to Citibank, NA, on the basis of which 

the insurance company issued telemarketing 

bonds favoring Attorney generals of various 

states in USA on behalf of the Company. 

(These bonds are required to be given for 

compliance of telemarketing laws in USA. 

In case of any violations of these rules, 

the penalties are imposed. The Company 

does not expect any liabilities on the same). 451.40 507.30 

iv) Guarantee given by the Company to Banks 

for securing the loans granted by such banks 

to the subsidiaries of the Company. 11,059.30 12,428.85 

v) Guarantee and Counter given by Company to 

Department of Telecommunication (DoT) for 

getting the permission for sharing of 

international and domestic call center. 210.00 610.00 

vi) Service tax refund rejected by 

service tax department. Company is in 

appeal at various levels against rejection orders. 266.58 332.94 

vii) Amount payable under Income tax 

assessment for F.Y 2003-04 as penalty for 

disallowance of expenses. 73.29 73.29 

Rs. Lacs 




3. Earnings in foreign currency (Accrual Basis) 

a) IT enabled services 15,825.42 19,463.29 

b) Interest Income 220.08 291.28 

4. Expenditure in foreign currency (Accrual Basis) 

a) Traveling & other expenses 111.30 114.67 

b) Cost reimbursement & fees to wholly 

owned subsidiary company 437.11 354.81 

c) Interest Payment 2,283.54 2,585.93 

d) Other expenses 19.38 149.28 

e) Onsite outsource Expenses Nil Nil 

f) Remittance in Foreign Currency on 

account of dividend 

i. Net amount remitted Nil Nil 

ii. Number of shares held by 2,753,333 2,753,333 

non-resident shareholders 

iii. Year to which dividend relates Nil Nil 

iv. Number of Non-resident Shareholders 2 2 

5. CIF value of imports 

Capital goods 202.41 197.94 

6. The details of operating leases are as under. 

The Company has entered into operating lease agreements for its BPO centers ranging for 

a period of 3 to 5 years. The lease rentals charged during the year and maximum obligations 

on long-term non-cancelable operating leases payable as per the rentals stated in respective 

agreements are as follows: 

(Rs. Lacs) 

Particulars Year Ended Year Ended 



1. Lease payments recognized in the 

profit & loss account for the year 1,379.78 914.74 

2. Obligations on non-cancelable leases : 

i) Not later than one year : 919.48 1,203.40 

ii) Later than one year and not 

later than 5 years 517.00 3,362.87 

iii) Later than 5 years Nil 1,193.10 

Notes: 

i) Under certain leave and license agreements, refundable interest free deposits 

have been given. 

ii) Some of the agreements contain a provision for its renewal. 

7. Deferred Taxes 

The company has deferred tax assets in respect of unabsorbed depreciation and business 

loss. As there is no virtual certainty about the realization of the deferred tax assets against 

the future taxable profits, the same has not been recognized. 

8. Employee Stock Options Plan 

In December 2009, the Board of the Company approved the Employees Stock Options 

Plan 2009 (“the Plan”), which covers the employees of the Company including its subsidiaries. 

The plan is administered and supervised by the Compensation Committee of the board (the 

‘Committee’). 

The Scheme provides that these options would vest in tranches over a period of 

3-4years as follows: 

Period within which options will vest 

% of options 

unto the participant that will vest 

End of 15 months from the date of grant of options 20% 



Options will be granted subject to achievement of business targets as mentioned in the 

Plan. Further, the participants shall exercise the options within five years from vesting 

or within three years from the date of listing, whichever is earlier. The ESOP 2009 is 

contingent on the shares being listed in a recognized stock exchange in India on or 

before 1st July, 2015. If the Company’s shares are not listed on the stock exchange by 

30th June, 2015, the existing employees shall have to sell all options vested to the 

Company or its nominee at a price determined as per Plan. 

Particulars Mar 2010 Mar 2009 

Total Options under the Plan 1,897,337 — 

Granted during the period 1,491,500 — 

Forfeited during the period — — 

Exercised during the period — — 

Outstanding at the end of the Period — — 

Exercise price 230 — 

The employee stock option outstanding account shown in Balance Sheet is net of 

unamortized amount on account of Deferred Employee Compensation Account Rs 1037.82 

(PY – Rs Nil). 

9. The Company does not owe any amount a) to any Small Scale Undertaking b) to supplier 

as defined under The Micro, Small and Medium Enterprises Development Act, 2006 at 

year end. 

10. Related Party Transactions 

Name and nature of relationship of the Related Party where control exists: 



Wholly owned subsidiary company AV TransWorks Ltd., Canada 

or parties where control exists:- 

(Subsidiary of ABMWL) 

TransWorks Inc., USA (TW Inc) 


Aditya Birla Minacs Worldwide Inc., 

Canada (ABMWI) (Subsidiary of AV 

TransWorks) 

(364)

C M Y K 



Minacs Kft., Hungary (Subsidiary of 

Minacs GmbH) 

Minacs Limited, UK (Subsidiary of 

ABMWI) 

Minacs Worldwide S.A. de C.V., 

Mexico (Subsidiary of ABMWI) 

The Minacs GmbH, Germany 

(Subsidiary of ABMWI) 

The Minacs Group, USA 

(Subsidiary of ABMWI) 

Aditya Birla Minacs Philippines Inc., 


Compass BPO Limited, U.K. (w.e.f. 

March 9, 2010 ) 

Compass BPO, Inc., U.S.A 

(Subsidiary of Compass BPO 

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

Compass Business Process 

outsourcing Ltd., India Subsidiary of 

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


Compass BPO FZE, U.A.E (Subsidiary 

of Compass BPO Limited, U.K) (w.e.f. 


Aditya Birla Financial Services Pvt Ltd 

(ABFSPL) 

Aditya Birla Capital Advisors Private 

Limited (ABCAPL) (Subsidiary of 

ABFSPL) 

Aditya Birla Securities Private Limited 

(ABSPL) (Subsidiary of ABFSPL) 

Aditya Birla Trustee Company Private 

Limited (ABTCPL) (Subsidiary of 

ABFSPL) 

Aditya Birla Money Limited (ABML) 

(formerly known as Apollo Sindhoori 

Capital Investment Limited) 

BSDL Insurance Advisory Services 

Limited (100 % Subsidiary of ABMML) 

Aditya Vikram Global Trading House 

Ltd. (AVGTHL) 

Aditya Birla Finance Limited (ABFL) 

(formerly known as Birla Global 

Finance Company Limited (BGFCL)) 

Birla Insurance Advisory & Broking 

Services Limited (BIABSL) (50.01% 

Subsidiary of BGCFPL upto March 

30, 2009 and of ABFL) 

Birla Sun Life Insurance Company 

Limited (BSLICL) 

Aditya Birla Capital Limited (ABCL) 

(formerly known as Laxminarayan 



Brand Company Limited (MGIBCL) 

LIL Investment Limited 

Madura Garments Exports Limited 

(MGEL) (merged with the Company 


Madura Garments Exports US, Inc. 

(ceased to be a Subsidiary from 

February 09, 2010) 

Madura Garments Lifestyle Retail 

Company Limited (MGLRCL) 

MG Lifestyle Clothing Company 

Private Limited (MGCCPL) (merged 

with the Company w.e.f. January 1, 

2010) 

Peter England Fashions and Retail 

Company Limited (PEFRL) 

Aditya Birla Minacs IT Services 

Limited (ABMITS) (formerly known 

as PSI Data Systems Limited) 

Birla Technologies Limited (100 % 

Subsidiary of ABMITS) 

11. Summary of transactions with related parties during the year: 

Rs. Lacs 




ICD Given to ABNL Nil 4,100.00 

ICD repayment by ABNL Nil 4,100.00 

Interest received on ICD Nil 120.39 

Reimbursement of costs 33.34 Nil 

Wholly Owned Subsidiary Companies 

Transworks Inc. USA: 

- Repayment of Share Capital 96.80 236.16 

- Reimbursement of cost, 

financing charges & markup fee by company Nil 61.54 

- Payment of dividend to holding company 68.33 Nil 

Aditya Birla Minacs Worldwide Inc., Canada : 

- Global sales shared cost, Reimbursement 

of long distance charges and others 437.11 293.27 

- Sale of Services 669.37 270.00 

A V TransWorks Limited, Canada: 

- Investment in Preference Share Capital 13,344.46 Nil 

- Foreign Currency Loan Given 6,782.95 Nil 

- Repayment of Foreign Currency Loan 6,362.40 8,270.13 

- Interest received / Accrued on loan 202.42 256.25 

Aditya Birla Minacs Philippines Inc: 

- Foreign Currency Loan Given 117.36 299.31 

- Interest received / Accrued on loan 17.66 35.03 

Fellow Subsidiary - Aditya Birla Capital Ltd. 

- ICD Taken 500.00 Nil 

- Interest paid on ICD Taken 3.67 Nil 

- ICD Repaid 500.00 Nil 

Fellow Subsidiary - Birla Sun Life Asset Management Company Ltd. 

- Sale of Services 166.80 Nil 

- Reimbursement of cost to fellow subsidiary 4.16 Nil 

- Reimbursement of cost from fellow subsidiary 5.66 Nil 

Fellow Subsidiary – Birla Sun Life Insurance Company Ltd. 

Term Life Insurance for employees 18.15 37.80 

Sale of Services 645.55 434.01 

Fellow Subsidiary – Aditya Birla Minacs IT Services Ltd. 

(formerly PSI Data Systems Ltd.) 

Payment of expenses to Subsidiary 50.53 1.40 

Payment towards ERP implementation 102.83 

Reimbursement of Cost from Subsidiary 111.38 0.23 

ICD Given during the year 200.00 Nil 

Interest Received on ICD 2.13 Nil 

ICD Repayment 200.00 Nil 

Fellow Subsidiary – Idea Cellular Ltd. 

Sale of Services 5,102.90 2,531.17 

Fellow Subsidiary – Birla Global Finance Company Limited 

Interest on ICD Nil 9.06 

ICD Repayment Nil 500.00 

Fellow Subsidiary - Aditya Birla Financial Shared Services Pvt. Ltd. 

- Reimbursement of cost 1.92 Nil 

Remuneration to Key Management Person 

Salary & Allowance Nil 164.19 

Contribution to Provident Fund Nil 4.21 

Related Party Balances: 

Payable to Holding Company - 

Aditya Birla Nuvo Limited 21.93 Nil 

Corporate guarantees taken from Holding Company 

(Maximum outstanding at any point of time 

Rs. 9,479.40 Lacs (PY Rs. 13,175.83 Lacs) 9,479.40 13,175.83 

Payable to Wholly Owned Subsidiary Company – 

TransWorks Inc Nil 50.00 

Receivable from Wholly Owned Subsidiary Co. – 

TransWorks Inc 1.12 Nil 

Receivable from Wholly Owned Subsidiary Company - 

Aditya Birla Minacs Worldwide Inc. (Net of Payable 

Rs.27.79; P/Y – Rs.312.46) 16.86 7.50 

Receivable from Wholly Owned Subsidiary Company - 

A V TransWorks Limited 10,179.66 10,253.94 

Receivable from Wholly Owned Subsidiary 

Company - Aditya Birla Minacs Philippines Inc. 968.27 937.71 

Corporate Guarantee given by company to 

A V Transworks Limited against loan taken from Bank 11,059.30 12,428.85 

Receivable from Fellow Subsidiary - Idea Cellular Ltd. 766.68 468.11 

Receivable from Fellow Subsidiary - 

Birla Sun Life Asset Management Company Ltd. 38.68 Nil 

Payable to Fellow Subsidiary - Aditya Birla 

Minacs IT Services Ltd. 61.59 Nil 


Aditya Birla Financial Shared Services Pvt. Ltd. 1.92 Nil 


Birla Sun Life Insurance Company Ltd. 228.32 Nil 

(365)

C M Y K 


12. Derivative Instruments 

The Company uses derivative financial instruments such as forward exchange contracts, 

currency swaps and interest rate swaps to hedge its risks associated with foreign currency 

fluctuations and interest rate. 

The Company, time to time, holds financial derivatives instruments primarily for hedging 

purpose. In pursuance of the announcement dated 29 th March 2008 of ICAI, the Company 

has decided to account for losses, if any, on derivatives transactions, on net basis, after 

considering effect of underlying exposure / commitments / obligations. As there was no 

such loss at the end of the year, the above changes does not have any effect on the profit 

for the year. 

Derivative Outstanding as at March 31, 2010 

Particulars Currency Amount in Foreign Purpose 

Currency (in Lacs) 

Forward Cover USD 402.69 To hedge receivables 

(820.02) 

Forward Cover GBP Nil To hedge receivables 

(6.50) 

Forward Cover USD 754.20 To hedge Loan payable 

(754.20) 

Forward Cover CAD 9.50 To hedge Loan receivable 

(Nil) 

Forward Cover CAD 300.00 To hedge Preference 

(Nil) Capital receivable 

Forward Cover USD 10.00 To hedge Interest payable 

(Nil) 

Forward Cover USD Nil To hedge PCFC Loan payable 

(18.20) 

Cross Currency Swap JPY 2,121.22 To hedge loan payable 

(3,688.25) 

All the above contracts are for hedging and not for speculation. 

As at March 31, 2010 all the foreign currency exposure stands hedged by derivative 

instrument or otherwise. 

13. Segment Information for the year ended March 31, 2010 

(1) Primary business segment 

The company provides a variety of Business Process outsourcing services. The risks 

and rewards from each of these service agreements are similar. As the Company’s 

business activity primarily falls within a single business segment, there are no additional 

disclosures to be provided in respect of primary segment under Accounting Standard 

17 ‘Segment Reporting’, other than those already provided in the financial statements. 

(2) Secondary business segment: 

a. Geographical turnover is segregated based on the location of the customer to 

whom the services are rendered. 

b. Assets are segregated based on their location. 

c. Information about secondary business segments: 

(Rs. Lacs) 

Year ended 31st March, 2010 India Outside India Total 

a Revenue by geographical market 6,285.64 15,825.42 22,111.06 

b Carrying amount of segment assets 18,183.22 81,467.26 99,650.48 

c Capital Expenditure (included in 

(b) above) 3,872.59 Nil 3,872.59 

Year ended 31st March, 2009 India Outside India Total 

a Revenue by geographical market 3,685.37 19,463.29 23,149.16 

b Carrying amount of segment assets 10,106.61 68,474.11 78,580.72 

c Capital Expenditure (included in 

(b) above) 641.94 Nil 641.94 

14. As at the Balance Sheet date, the Company has outstanding External Commercial borrowing 

from DBS bank amounting to Rs.40,600.10 Lacs (previous year Rs. 41,160.19 Lacs) 

repayable at the end of 5 years from the date of drawdown. The Company has incurred 

one time loan arrangement fees of Rs 483.33 on this borrowing. In accordance with provision 

of Accounting Standard -16 “Borrowing cost”, the Company has decided to amortize this 

arrangement fees over the said period of 5 years and accordingly Rs 96.67 Lacs (previous 

year Rs. 96.67 Lacs) has been charged to the Profit and Loss Account and Rs 162.89 Lacs 

(previous year Rs. 259.56 Lacs) has been carried forward as unamortized loan arrangement 

fees. 

15. RETIREMENT BENEFITS: 2009-10 2008-09 

(a) Defined Benefit Plans - 

The Amounts recognized in the balance sheet 

are as follows in respect of gratuity 

(fully funded by the company): 

Present value of the funded defined benefit 

obligation at the end of the year 223.35 188.95 

Fair value of plan assets 163.82 125.96 

Benefit Paid (29.62) 0 

Net Liability 29.91 62.99 

The Amounts recognized in Salary, 

Wages and Employee Benefits in the 

Profit and Loss Account as follows in respect 

of gratuity (fully funded by the company): 


Interest on Defined Benefit Obligations 14.17 8.38 

Expected return on plan assets (9.45) (6.83) 

Net Actuarial (gain)/loss recognized during the year (88.58) 74.53 

Net Gratuity Cost 43.87 109.79 

Actual Return on Plan Assets 

Expected Return on Plan Assets 9.45 6.83 

Actuarial gain/(loss) on Plan Assets (4.95) 14.44 

Actual Return on Plan Assets 4.50 21.27 

Reconciliation of present value of the obligation 

and the fair value of the plan assets: 

Opening Defined Benefit Obligation as on 1.4.2009 188.95 104.70 


Interest Cost 14.17 8.38 

Actuarial (Gain)/Loss (77.87) 42.16 

Benefits Paid (29.62) 0 

Closing Defined Benefit Obligation as on 31.03.2010 223.35 188.95 

Change in fair value plan assets 

Opening Fair Value of the plan assets 125.96 85.34 

Expected return on plan assets 9.45 6.83 

Actuarial Gain/(Loss) (4.95) 14.44 

Contributions by the Employer 62.98 19.36 

Benefits Paid (29.62) 0 

Closing Fair value of the plan assets 163.82 125.96 

Investment details of plan assets 

Government of India Securities Nil Nil 

Corporate Bonds Nil Nil 

Special Deposit Scheme Nil Nil 

Insurer Managed Fund Nil Nil 

Fixed Deposits with Banks Nil Nil 

Others (with common fund of Holding Company) 163.82 125.96 

Total 163.82 125.96 

The overall expected rate of return on assets is determined based on the market prices 

prevailing on that date, applicable to the year over which the obligation is to be settled. 

b) The Amounts recognised in respect of unfunded obligations 

Amount recognized in the Balance Sheet 

in respect of leave liability 103.20 14.17 

Amount recognized in Salary, Wages and 

Employee Benefits in the Profit and Loss Account 

in respect of leave liability 41.70 64.45 

c) Experience Adjustment 

Liability at the end of the Period 326.55 203.12 

Fair Value of Plan Assets at the end of the Period 163.82 125.96 

Deficit / (Surplus) 162.73 77.15 

Experience adjustments on plan liabilities (Gain)/Loss (50.49) 28.47 

Experience adjustments on plan Assets Gain/(Loss) (4.95) 14.44 

d) Defined Contributions Plans: 

Contribution to Employee Provident Fund 512.18 427.74 

Contribution to ESIC 85.17 37.35 

Contribution to superannuation fund 19.84 15.27 

Principal Actuarial Assumptions At the Balance Sheet date (31.03.10) 

Discount rate 8.25% 7.50% 

Estimated rate of return on plan assets 8.25% 7.50% 

Future Salary escalation 10% for first 10% for first 

three years three years 

and 5% and 5% 

thereafter thereafter 

The Company expects to contribute Rs. 59 Lacs towards Gratuity during FY 2010-11 

(366)

C M Y K 


16. The Company has invested Rs.76,817.93 Lacs (includes loan given of Rs. 10,104.13 Lacs) 

in AV TransWorks Limited, Canada which has further invested in Aditya Birla Minacs 

Worldwide Inc., Canada. Considering the strategic and long term nature of aforesaid 

investments and asset base and business plan of the investee companies, in the opinion of 

the management there is no diminution in the value of investment other than temporary. 

17. The Company has issued Zero Coupon Compulsorily Convertible Debentures (CCD) for 

Rs 25,000 Lacs which are to be converted into Equity on the business day following expiry 

of a period of 60 months from the date of allotment of such CCD. As per the terms of the 

issue, the Conversion price will be mutually decided thirty days before the conversion date. 

Aditya Birla Nuvo Limited (ABNL), the holding company, has entered into an Option 

Agreement with the Subscribers of these CCD pursuant to which the holders of CCD have 

call option on ABNL, and ABNL has put option on the Subscribers on expiry of 24, 36, 48 

and 60 months from the date of allotment of these CCD. The holders can also exercise put 

option on happening of certain specified events. 

18. Previous year figures have been regrouped wherever necessary to correspond with current 

year figures. 






Partner 


Place: Mumbai 





Director 


Director 

Ramesh Kamath 


(367)

C M Y K 

TRANSWORKS INC. 


The Board of Directors of Aditya Birla Minacs Worldwide Limited 

(Formerly known as Transworks Information Services Limited) 

1. In terms of your letter dated March 1, 2010 requesting us to audit the 

accounts of Transworks Inc. ("the Company"), a wholly owned subsidiary 

of Aditya Birla Minacs Worldwide Limited ("the Parent"), incorporated 

in the United States of America, based on records including photocopies 

of some records, received from the said Company in Mumbai and in 

accordance with the accounting policies described in Note 1 of 

Schedule 10 to the attached financial statements ("the accounting 

policies"). We have not performed a statutory audit, the objective of 

which would be the expression of an opinion on the financial statements 

in conformity with generally accepted accounting practices and 

accordingly, we do not express such an opinion. 

2. We have audited, in accordance with the accounting policies, the 

attached Balance Sheet of the Company as at March 31, 2010 and 

also the Profit and Loss Account, and cash flow statement for the year 

ended on that date annexed thereto, which are in agreement with the 

books of account verified by us. These financial statements are the 

responsibility of the Company's management and have been prepared 

in accordance with the accounting policies, for the purpose of 

consolidation with the financial statements of the Parent. Our 



3. We conducted our audit in accordance with generally accepted auditing 

standards in India. These Standards require that we plan and perform 

the audit to obtain reasonable assurance whether the financial 

statements are free of material misstatements. An audit includes 




management, as well as evaluating the overall financial statements. 

We believe that our audit provides a reasonable basis for our opinion. 

4. In our opinion, based on our audit, and to the best of our information 

and according to the explanations given to us, the accompanying 

financial statements give a true and fair view in conformity with the 

accounting policies: 

a. in the case of the Balance Sheet expressed in Indian Repees, of 

the state of affairs of Company as at 31st March, 2010; 

b. in the case of the Profit and Loss Account expressed in Indian 

Repees, of the loss for the year ended on that date; and 

c. in the case of the Cash Flow Statement expressed in Indian 

Repees, of the cash flows for the year ended on that date. 

5. This report is furnished solely for the purpose of meeting the requirement 

if consolidation of the attached financial statements with the financial 

statement of the Parent and hence should not to be used for any other 

purpose. 





Partner 

Mumbai, April 23 , 2010 Membership No.: 36738 

(368)

C M Y K 


BALANCE SHEET 

AS AT 31ST MARCH 2010 

As At 

As At 


Schedule (US$) (INR) (US$) (INR) 

I. SOURCES OF FUNDS 

1 Shareholders' Funds 

Share Capital 1 — — 200,000 9,680,000 

2 Reserves and Surplus 

Profit and Loss Account 47,416 2,140,350 200,673 10,646,132 

3 Deferred Tax Liability — — 65,000 3,297,450 

II. 

Total 47,416 2,140,350 465,673 23,623,582 


1 Current Assets, 

Loans and Advances : 

Sundry Debtors 2 — — 98,560 4,999,950 

Cash and 

Bank Balances 3 53,762 2,426,810 368,200 18,678,805 

53,762 2,426,810 466,760 23,678,755 

Less: Current Liabilities 

and Provisions : 

Current Liabilities 4 6,346 286,460 1,087 55,173 

Net Current Assets 47,416 2,140,350 465,673 23,623,582 

Total 47,416 2,140,350 465,673 23,623,582 




PROFIT & LOSS ACCOUNT 

FOR THE YEAR ENDED 31ST MARCH 2010 

For the year For the year For the year For the year 

ended Mar, 31 ended Mar, 31 ended Mar, 31 ended Mar, 31 


Schedule (US$) (INR) (US$) (INR) 

INCOME : 

Mark up Fees — — (57) (2,629) 

Reimbursement of Expenses 

Business Development & 

Marketing 5 — — (807) (37,563) 

Utilization of Fixed Assets — — 131,268 6,107,449 

Financing Charges 6 — — 1,856 86,374 

— — 132,260 6,153,631 

Bank Interest — — 11 520 

Exchange Rate Fluctuations 

on coversion — (1,235,015) — 6,552,522 

TOTAL — (1,235,015) 132,271 12,706,673 

EXPENDITURE : 

Travelling & other Expenses 7 — — 2,087 97,109 

Rent 8 — — 7,589 353,073 

Other Expenses 9 — — 86,046 4,003,454 

Depreciation / Amortization — — 34,738 1,630,724 

TOTAL — — 130,460 6,084,360 

Profit / (Loss) before tax 

for the year — (1,235,015) 1,811 6,622,313 

Less : Provision for 

the Deferred Tax 3,257 154,517 24,894 1,158,235 

Less : Withholding Tax 

Written Off — — 13,405 623,702 

3,257 154,517 38,299 1,781,936 

Profit / (Loss) after tax 

provision for the year (3,257) (1,389,532) (36,488) 4,840,376 

Dividend paid during the year 150,000 7,116,250 — — 

Profit / (Loss) for the year (153,257) (8,505,782) (36,488) 4,840,376 


from previous year 200,673 10,646,132 237,161 5,805,756 


forward to the Balance Sheet 47,416 2,140,350 200,673 10,646,132 


The Schedules referred to above and the notes to accounts form an integral part of the Profit & Loss Account. 

As per our Report of even date 




For Transworks Inc. 







Partner 


Deepak J. Patel 


Partner 



Place: Mumbai 


Ramesh Kamath 


Place: Mumbai 


Ramesh Kamath 


(369)

C M Y K 


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010 

Year ended Year ended Year ended Year ended 

31.3.2010 31.3.2010 31.3.2009 31.3.2009 

(US$) (INR) (US$) (INR) 

A. Cash flow from Operating Activities 

Net Profit before taxation, and extraordinary items — (1,235,015) 1,811 6,622,313 


Depreciation / Amortization — — 34,738 1,630,724 

Loss/(Profit) on Sale of Fixed Assets — — 96,529 4,491,200 

Financing charges — — (1,856) (86,374) 

Reimbursement of utilisation of fixed assets — — (131,268) (6,107,449) 

Interest Income — — (11) (520) 

Difference on account of exchange rate difference in Deferred Tax (68,257) (3,451,967) — 536,179 

Operating Profit before working capital changes (68,257) (4,686,982) (57) 7,086,073 


(Increase)/Decrease in Sundry Debtors 98,560 4,999,950 685,711 26,347,329 

(Increase)/Decrease in Loans & Advances — — 52,323 2,091,324 

Increase/(Decrease) Current Liabilities & Provisions 5,259 231,288 (104,180) (4,152,382) 

Cash generated from operations 35,562 544,256 633,797 31,372,345 

Add/(Less): Direct Taxes (including TDS) paid)/Tax Refunds — — (13,405) (623,702) 

Net Cash flow from Operating Activities 35,562 544,256 620,392 30,748,643 

B. Cash Flow from Investing Activities 

Proceeds from sale of Fixed Assets — — 110,000 5,165,513 

Reimbursement of usage of fixed assets — — 131,268 6,107,449 

Interest/investment income received — — 1,867 86,894 

Net Cash from/(for) Investing Activities — — 243,135 11,359,855 

C. Cash flow from Financing Activities 

Repayment of share capital (200,000) (9,680,000) (500,000) (23,616,485) 

Payment of Dividend (150,000) (7,116,250) — — 

Net Cash used in Financing Activities (350,000) (16,796,250) (500,000) (23,616,485) 

Net Increase in cash and Cash equivalants during the year (314,438) (16,251,994) 363,527 18,492,013 

Cash and cash equivalants at the beginning of the year 368,200 18,678,805 4,673 186,792 

Cash and cash equivalants at the end of the year 53,762 2,426,810 368,200 18,678,805 

Notes: 

Components of Cash and Cash Equivalents as at 

i) Balance with Banks : 

— in Current Account 53,762 2,426,810 368,200 18,678,805 

Total 53,762 2,426,810 368,200 18,678,805 






Partner 


Place: Mumbai 




Ramesh Kamath 


(370)

C M Y K 



As At As At As At As At 

31st Mar’10 31st Mar’10 31st Mar’09 31st Mar’09 

(US$) (INR) (US$) (INR) 



1,000,000 Equity Shares of US$ 1/- each 1,000,000 45,140,000 1,000,000 50,730,000 


NIL (P Y 200,000) Equity Shares of US$ 1/- 

each fully paid up — — 200,000 9,680,000 

(All the above equity shares are held by 

the holding company Aditya Birla Minacs 

Worldwide Limited) 

TOTAL — — 200,000 9,680,000 


1 Other Debts 

Unsecured, Considered good — — 98,560 4,999,950 

TOTAL — — 98,560 4,999,950 


1 Balance with bank 

— On Current Account 53,762 2,426,810 368,200 18,678,805 

TOTAL 53,762 2,426,810 368,200 18,678,805 


1 Sundry Creditors 2,258 101,947 — — 

2 Outstanding Liabilities 1,088 49,093 1,087 55,173 

3 Provision for Tax 3,000 135,420 — — 

TOTAL 6,346 286,460 1,087 55,173 

SCHEDULE 5 - REIMBURSEMENT OF BUSINESS 

DEVELOPMENT AND MARKETING EXPENSES 

1 Reimbursement of Expenses — — 28,761 1,338,182 

2 Write-back of Sales Commission — — (27,954) (1,300,619) 

TOTAL — — 807 37,563 

SCHEDULE 6 - FINANCING CHARGES 

1 Interest recoverable on 

Fixed Assets & LDC — — 1,856 86,374 

— — 1,856 86,374 

SCHEDULE 7 - TRAVELLING & OTHER EXPENSES 

1 Travelling Expenses — — 2,087 97,109 

TOTAL — — 2,087 97,109 

SCHEDULE 8 - RENT 

1 Office Rent — — 4,058 188,804 

2 Flat Rent — — 3,531 164,269 

TOTAL — — 7,589 353,073 

SCHEDULE 9 - OTHER EXPENSES 

1 Bank Charges — — 116 5,400 

2 Miscellaneous expenses — — 46 2,139 

3 Sales Commission 

(Net of write-back) — — (27,954) (1,300,619) 

4 Legal & Professional Fees — — 3,961 184,317 

5 Insurance Charges — — 2,740 127,483 

6 Maintenance Charges 

(Net of write-back) — — (18,078) (841,113) 

7 Loss on Sale of Fixed Assets — — 96,529 4,491,200 

8 US Payroll Taxes 

(Net of write-back) — — (650) (30,249) 

9 Repairs & Maint. - Others — — 326 15,157 

10 Write-back of deposits for 

Long Distance Charges — — 29,010 1,349,739 

TOTAL — — 86,046 4,003,454 

ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010 

SCHEDULE 10 - NOTES TO ACCOUNTS 

1. Accounting Policies 

The Company is in the process of winding up its operations. Adjustments relating to the 

recoverability and the classification of recorded asset amount or to amounts that may be 

necessary on winding up of the Company have been made based on management’s assessment 

of the same. All assets and liabilities have been stated at net realizable value. Accordingly, the 

financial statements have not been prepared on the going concern assumption. 


The accounts have been prepared under the historical cost convention on accrual 

basis in accordance with the generally accepted accounting principles applicable in 

India. The accounting policies applied by the company are consistent with those 

used in the previous year. As stated above, the financial statements have not been 

prepared on the going concern assumption. 

b. Revenue recognition 

Incomes from services rendered are accounted on accrual basis based on agreements/ 

arrangements with the concerned parties. 

c. Fixed assets 


if any. Cost comprises the purchase price and wherever applicable freight, duties 

and taxes and expenses incidental to acquisition and installation. 

d. Leased assets 

Finance lease, which effectively transfers to the Company substantially all the risks 

and benefits incidental to ownership of the leased item, are capitalized at lower of 

fair value and present value of the minimum lease payments at the inception of the 

lease term and disclosed as leased assets. Lease payments are apportioned between 

the finance charges and reduction of the lease liability based on implicit rate of 

return. Finance charges are charged directly against income. Lease management 

fees, lease charges and other initial direct costs are capitalized. 

Leases where lessor effectively retains substantially all the risks and benefits of ownership 

of the lease term are classified as operating leases. Operating lease payments are 

recognized as an expense in the profit & loss account in accordance with the lease 

agreement. 

e. Depreciation 

Depreciation on assets is provided on straight-line basis, based on the useful lives as 

estimated by the management. The management estimates seven years as the useful 

lives of these fixed assets. 

f. Income Tax 

The Company utilizes the asset and liability method of accounting for Income taxes. 

Under this method, deferred income taxes are recorded to reflect the tax consequences 

of future years differences between the tax basis of assets and liabilities and there 

financial reporting amounts at each year end are based on enacted tax laws and 

statutory tax rates applicable to the periods in which the differences are expected to 

effect taxable income. A valuation allowance is provided against the future benefit of 

deferred tax asset if it is determined that it is more likely than not that the future tax 

benefits associated with the deferred tax assets will not be realized. 

g. Conversion of Financial Statements 

For the purpose of consolidation of the financials statements with that of the Parent, 

the amounts in USD are converted into INR as follows: 

Equity capital and retained earnings at historical cost, all other balance sheet items 

at closing rate of exchange, profit and loss items at average rate and resultant 

translation gain/loss is adjusted in the profit and loss account. 

2. Provision for Taxation: 

Provision for tax comprises current and deferred taxes. This includes provision for current 

tax US$ 3,000 (Rs. 1,35,420). 

a) There is no Deferred Tax Liability / Deferred Tax Assets as at Mar 31, 2010. 

(US$) 

Particulars As at Movement As at 

31/3/2009 During the year 31/3/2010 

Timing difference resulting in 

deferred Tax Liability 

Depreciation & deferment of income 

arising out of cash basis of accounting 

for tax purposes (205,803) 205,803 Nil 


deferred Tax Asset 

Net temporary difference (205,803) 205,803 Nil 

Deferred Tax liability (65,000) 65,000 Nil 

(371)

C M Y K 


(INR) 

Particulars As at Movement As at 

31/3/2009 During the year 31/3/2010 


deferred Tax Liability 

Depreciation & deferment of income 

arising out of cash basis of accounting 

for tax purposes (10,550,687) 10,550,687 Nil 


deferred Tax Asset 

Net temporary difference (10,550,687) 10,550,687 Nil 

Deferred Tax liability 

(net of deferred tax asset) (3,297,450) 3,297,450 Nil 

3. Related Party Transactions 

The Company had transactions with the following related parties: 




Summary of transactions with above related parties is as follows: 

US$ 




Reimbursement of cost, financing charges & 

markup fee NIL 132,260 

Repayment of Share Capital 200,000 500,000 

Payment of dividend 150,000 NIL 

Related Party Balances 

Receivable from Holding Company NIL 98,560 

Payable to Holding Company 2,258 NIL 




Reimbursement of cost, financing charges & 

markup fee NIL 6,153,631 

Repayment of Share Capital 9,680,000 23,616,485 

Payment of dividend 7,116,250 NIL 


Receivable from Holding Company NIL 4,999,950 

Payable to Holding Company 101,947 NIL 

INR 

4. Segment Information for the period ended 31st March , 2010 

(1) Primary business segment 

The Company is exclusively in the marketing of Business Process Outsourcing (BPO) 

services provided by its Holding Company Aditya Birla Minacs Worldwide Limited 

and hence its business activities primarily fall within a single business segment. 

Therefore, there are no additional disclosures to be provided in respect of primary 

segment under Accounting Standard 17 ‘Segment Reporting’, other than those already 

provided in the financial statements. 

(2) Secondary business segment: 

a. Geographical turnover is segregated based on the location of the customer 

who is invoiced. 

b. Assets are segregated based on their location. 

c. Information about secondary business segments. 

US$ 

Year ended 31st March 2010 India Outside India Total 

a Revenue by geographical market — — — 

b Carrying amount of segment assets — 53,762 53,762 

US$ 

Year ended 31st March 2009 India Outside India Total 

a Revenue by geographical market 132,260 — 132,260 

b Carrying amount of segment assets 98,560 368,200 466,760 

Year ended 31st March 2010 India Outside India Total 

a Revenue by geographical market — — — 

b Carrying amount of segment assets — 2,426,810 2,426,810 

Year ended 31st March 2009 India Outside India Total 

a Revenue by geographical market 6,153,631 — 6,153,631 

b Carrying amount of segment assets 4,999,950 18,678,805 23,678,755 


period figures. 

INR 

INR 





Partner 


Place: Mumbai 




Ramesh Kamath 


(372)

C M Y K 

ADITYA BIRLA MINACS PHILIPPINES, INC. 

BALANCE SHEETS 

Mar-31 

2010(PHP) 2010(INR) 2009(PHP) 2009(INR) 

ASSETS 


Cash 4,294,486 4,299,248 13,055,293 13,703,601 

Receivables (Note 4) 33,738,747 33,776,160 22,513,318 26,612,422 

Prepaid expenses and 

other current assets (Notes 5) 5,575,511 5,581,694 3,850,684 1,060,780 

Total Current Assets 43,608,744 43,657,101 39,419,295 41,376,802 

Non-current Assets 

Property and equipment 

(Notes 6 and 7) 40,140,748 40,185,260 61,624,662 64,684,856 

Other non-current assets 

(Note 14) 3,280,358 3,283,996 3,394,393 3,562,954 

Total Non-current Assets 43,421,106 43,469,255 65,019,055 68,247,810 

TOTAL ASSETS 87,029,850 87,126,357 104,438,350 109,624,612 

LIABILITIES AND 

CAPITAL DEFICIENCY 


Accounts payable and 

accrued expenses (Note 7) 36,529,566 36,570,073 39,319,089 41,271,620 

Non-current Liabilities 

Loans from parent company 

(Note 11) 96,900,408 97,007,860 89,343,650 93,780,330 

Accrued retirement benefits 

(Note 12) 200,500 200,722 261,000 273,961 

Total Non-current Liabilities 97,100,908 97,208,583 89,604,650 94,054,291 

Total Liabilities 133,630,474 133,778,656 128,923,739 135,325,911 

Capital Deficiency 

Capital stock - 100 par value 

Authorized - 1,000,000 shares 

Issued and outstanding — 

490,000 shares 49,000,000 49,054,336 49,000,000 51,433,271 

Deposits for future stock 

subscription (Note 15) 47,923,213 47,976,355 47,923,213 50,303,013 

Deficit -143,523,837 -143,682,990 -121,408,602 -127,437,583 

STATEMENTS OF INCOME 

Years Ended March 31 


SERVICE INCOME 

(Note 11) 145,577,147 147,781,703 140,439,885 141,796,611 

COST OF SERVICES 

(Note 8) 151,201,305 153,491,031 163,768,713 165,350,809 

GROSS LOSS 5,624,158 5,709,328 23,328,828 23,554,197 

General and administrative 

expenses (Note 9) 19,326,527 19,619,199 29,111,554 29,392,788 

Foreign exchange loss 

(gain) — net -3,506,651 -3,559,754 6,824,094 6,890,018 

Interest and bank charges 

(Note 11) 1,848,541 1,876,534 3,424,397 3,457,479 

Interest and other income -1,180,717 -1,198,597 -74,133 -74,849 

LOSS BEFORE INCOME TAX 22,111,858 22,446,710 62,614,740 63,219,633 

PROVISION FOR INCOME 

TAX — Current (Note 13) 3,377 3,428 4,491 4,534 

NET LOSS 22,115,235 22,450,138 62,619,231 63,224,167 

See accompanying Notes to Financial Statements. 

STATEMENTS OF CHANGES IN CAPITAL DEFICIENCY 

FOR THE YEARS ENDED MARCH 31, 2010 AND 2009 

Deposits for 

Future Stock 

Subscription 

Capital Stock (Note 15) Deficit Total 

BALANCES AT 

MARCH 31, 2008 49,000,000 47,923,213 ( 58,789,371) 38,133,842 

Net loss for the year — — (62,619,231) (62,619,231) 

BALANCES AT 

MARCH 31, 2009 49,000,000 47,923,213 (121,408,602) (24,485,389) 

Net loss for the year — — (22,115,235) (22,115,235) 

BALANCES AT 

MARCH 31, 2010 49,000,000 47,923,213 ( 143,523,837) ( 46,600,624) 


Total Capital Deficiency -46,600,624 -46,652,299 -24,485,389 -25,701,299 

TOTAL LIABILITIES AND 

CAPITAL DEFICIENCY 87,029,850 87,126,357 104,438,350 109,624,612 


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STATEMENTS OF CASH FLOWS 

Years Ended March 31 


CASH FLOW FROM 


Loss before income tax -22,111,858 -22,446,710 -62,614,740 -63,219,633 


Depreciation (Note 6) 29,581,074 29,613,876 28,304,030 10,826,830 

Unrealized foreign 

exchange loss (gain) - net -3,796,197 -3,800,407 11,527,566 28,577,462 

Interest expense (Note 11) 1,764,308 1,766,264 3,337,380 3,369,621 

Movement in accrued 

retirement benefits (Note 12) -60,500 -61,416 142,200 149,261 

Interest income -32,792 -33,289 -74,133 -74,849 

Operating income (loss) 

before working capital changes 5,344,035 5,038,319 -19,377,697 -20520568 

Decrease (increase) in: 

Receivables -13,001,452 -13,015,869 -1,697,834 -1782146 

Prepaid expenses and 

other current assets -1,724,827 -1,726,740 203,425 213527 

Increase (decrease) in 

accounts payable and 

accrued expenses -6,233,507 -6,240,419 21,624,306 22698139 

Net cash flows from (used in) 

operations -15,615,751 -15,944,709 752,200 758213 

Income taxes paid -3,377 -3,428 -4,491 -4534 

Net cash flows from (used in) 

operating activities -15,619,128 -15,948,137 747,709 753678 


INVESTING ACTIVITIES 

Additions to property and 

equipment (Notes 6 and 7) -4,599,460 -4,604,560 -18,502,797 -19421620 

Decrease (Increase) in 

other non-current assets 114,035 114,161 -796,735 -836300 

Interest received 32,792 33,289 74,133 74849 

Net cash flows used in 

investing activities -4,452,633 -4,457,110 -19,225,399 -20183071 


FINANCING ACTIVITY 

Loans from parent company 12,429,562 12,443,345 27,284,331 -20183071 

EFFECT OF EXCHANGE 

RATE CHANGES IN CASH -1,118,608 -1,135,548 -853,197 -861439 

NET INCREASE (DECREASE) 

IN CASH -8,760,807 -9,097,450 7,953,444 8348401 

CASH AT BEGINNING 

OF THE YEAR 13,055,293 13,703,601 5,101,849 5355200 

CASH AT END OF THE YEAR 4,294,486 4,606,150 13,055,293 13703601 


NOTES TO FINANCIAL STATEMENTS 

1. Corporate Information 

Aditya Birla Minacs Philippines, Inc. (the Company) was registered with the Philippine 

Securities and Exchange Commission (SEC) on November 3, 2006 with the primary 

purpose of carrying on and undertaking the business of setting up and operating a 

center for sales and customer interaction services and business process outsourcing 

services; providing system integration and software development services which are 

ancillary thereto; and carrying on the business in computer hardware and software 

related matters and fields, including the design, development, manufacture, 

production, marketing, selling, leasing and integration of computer hardware and 

software systems, the provision of customized software development consultancy 

and services, and the import and export of computer hardware technology. The 

Company started its commercial operations on March 5, 2007. 

The Company is a wholly owned subsidiary of Aditya Birla Minacs Worldwide Ltd. 

(ABMW). The ultimate parent company is Aditya Birla Nuvo Limited (ABNL). ABMW 

and ABNL are incorporated in India. 

The Company’s principal place of business is at 1800 Eastwood Ave. Bldg., 10/F 

Eastwood City Cyberpark, 188 E. Rodriguez, Jr. Ave., Bagumbayan, Quezon City. 

The Company has 378 and 185 employees as of March 31, 2010 and 2009, 

respectively. 

The financial statements were approved for issue by the Board of Directors (BOD) 

on April 21, 2010. 

2. Registration with the Philippine Economic Zone Authority (PEZA) 

The Company is registered with PEZA as an Ecozone Information Technology (IT) 

Enterprise, engaged in providing customer contact center services at Eastwood City 

Cyberpark. 

The Company is entitled to all incentives granted to pioneer projects under Republic 

Act (RA) No. 7916, as amended, and the PEZA IT Guidelines, subject to certain 

terms and conditions, including, among others, the following: 

a. The Company’s project shall be entitled to six (6) years income tax holiday 

(ITH) incentive, as amended in accordance with the 2006 Investment Priorities 

Plan. The project’s entitlement to the said incentive shall be subject to validation 

by PEZA based on the Company’s audited financial statements covering the 

first year of its operations showing the investment cost per seat for its project is 

equivalent to at least United States (US) $2,500, inclusive of the cost of 

equipment, office furniture and fixtures, building improvements and 

renovations, fixed assets, except land, building and working capital, and 

complies with the minimum US$2.5 million investment required for pioneer 

status. 

In case the Company does not attain the said investment cost per seat, the 

Company’s project shall be granted 5% gross income incentive and other 

incentives under RA 7916, as amended, instead of the ITH incentive. On the 

other hand, if the Company complies with the minimum US$2,500 investment 

cost per seat but fails to comply with the minimum US$2.5 million investment 

required for pioneer status, the Company shall instead be entitled to only four 

(4) years ITH incentive. 

Entitlement of the project to the 5th and 6th years of ITH from the date of start 

of commercial operations shall be subject to the issuance by the PEZA Director 

General of a written validation of the project cost. 

b. The Company’s operations shall be limited to its PEZA-approved projects. 

Any expansion of this project or other additional activities to be undertaken by 

the Company shall require prior PEZA clearance. 

The Company is in a tax loss position for the years ended March 31, 2010 and 

2009 and as such, it did not benefit from the ITH. 

3. Summary of Significant Accounting and Financial Reporting Policies 

The principal accounting policies adopted in preparing the financial statements of 

the Company are as follows: 

Basis of Preparation and Statement of Compliance 

The financial statements of the Company have been prepared in accordance with 

accounting principles generally accepted in the Philippines applicable for non-publicly 

accountable entities (NPAE). The Company qualifies as an NPAE under Philippine 

Accounting Standard 101, Financial Reporting Standards for Non-Publicly 

Accountable Entities, and as permitted under the standard, prepared its financial 

statements on the basis of Statements of Financial Accounting Standards/International 

Accounting Standards effective as of December 31, 2004. 

The accompanying financial statements have been prepared under the historical 

cost convention and are presented in Philippine Peso (Peso). Amounts are rounded 

to the nearest Peso unless otherwise indicated. 

Future Changes in Accounting Policy 

The Philippine Financial Reporting Standard for Small and Medium-sized entities 

(PFRS for SMEs) has been approved for adoption by the Philippine Financial Reporting 

Standards Council on October 13, 2009 and by the SEC, on December 3, 2009 

and has not been early adopted by the Company. The PFRS for SMEs is effective for 

annual periods beginning on or after January 1, 2010, and is required to be used 

by entities that meet the definition of an SME, which include, among others, an 

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entity with total assets of between 3.0 million and 350.0 million or total liabilities 

of between 3.0 million and 250.0 million. 

The PFRS for SME is a self-contained standard that is tailored for the needs and 

capabilities of smaller businesses. Many of the principles in full PFRSs for recognizing 

and measuring assets, liabilities, income and expenses have been simplified, topics 

not relevant to SMEs have been omitted, and the number of required disclosures 

has been significantly reduced. 

The Company, which currently follows the accounting principles generally accepted 

in the Philippines applicable to NPAE, will adopt the PFRS for SMEs in its fiscal year 

2011 financial statements. The Company is currently assessing the impact on its 

financial statements when the PFRS for SME is adopted in fiscal year 2011. 

Cash 

Cash includes cash on hand and in banks. 

Receivables 

Trade receivables are recognized and carried at original invoice amount, less any 

allowance for uncollectible accounts. An estimate for doubtful accounts is made when 

there is objective evidence that the Company will not be able to collect the debts. 

Other receivables are recognized at face amount, less any allowance for doubtful 

accounts. 

Prepayments 

Prepaid expenses are amounts paid in advance for goods and services that are yet 

to be delivered and from which future economic benefits are expected to flow to the 

Company with its normal operating cycle or within 12 months from the balance 

sheet date. 

Property and Equipment 

Property and equipment are carried at cost, less accumulated depreciation and any 

impairment in value. 

The initial cost of property and equipment consists of its purchase price, including 

import duties, taxes and any directly attributable cost of bringing the asset to its 

working condition and location for its intended use. Expenditures incurred after the 

property and equipment have been put into operation, such as repairs and 

maintenance, are normally charged to income in the period in which the costs are 

incurred. In situations where it can be clearly demonstrated that the expenditures 

have resulted in an increase in the future economic benefits expected to be obtained 

from the use of an item of property and equipment beyond its originally assessed 

standard of performance, the expenditures are capitalized as additional cost of 

property and equipment. 

Depreciation is computed using the straight-line method over the estimated useful 

lives of the assets as follows: 

Category 

Years 

Computer equipment 3 

Furniture and fixtures 3-5 

Office and communication equipment 5 

Leasehold improvements are amortized over the life of the assets (average of two 

years) or the term of the lease, whichever is shorter. Recognition of depreciation 

commences when the asset is ready for its intended use. 

The estimated useful lives of the assets and depreciation method used are reviewed 

periodically to ensure that these are consistent with the expected pattern of economic 

benefits from items of property and equipment. 

When assets are sold or retired, their cost, accumulated depreciation and any 

impairment in value are eliminated from the accounts. Any gain or loss resulting 

from their disposal is recognized in the statement of income. 


The carrying values of property and equipment are reviewed for impairment when 

events or changes in circumstances indicate that the carrying values may not be 

recoverable. If any such indication exists and where the carrying values exceed the 

estimated recoverable amounts, the assets or cash-generating units are written down 

to their recoverable amount. The recoverable amount of the asset is the greater of 

net selling price and value-in-use. In assessing value-in-use, the estimated future 

cash flows are discounted to their present value using a pre-tax discount rate that 

reflects current market assessments of the time value of money and the risks specific 

to the asset. For an asset that does not generate largely independent cash inflows, 

the recoverable amount is determined for the cash-generating unit to which the 

asset belongs. Any impairment loss is recognized in the statement of income. 

If, in a subsequent period, the amount of the impairment loss decreases and the 

decrease can be related objectively to an event occurring after the impairment was 

recognized, the previously recognized impairment loss is reversed. Any subsequent 

reversal of an impairment loss is recognized in the statement of income, to the 

extent that the carrying value of the asset does not exceed its amortized cost at the 

reversal date. 

Construction in progress represents assets under construction and is stated at cost, 

including cost of construction and other direct costs. Construction in progress is not 

depreciated until the relevant assets are completed and ready for their intended 

operational use. 

Liabilities 

Liabilities are recognized when the Company has a present obligation from past 

events, the settlement of which is expected to result in an outflow of economic 

benefits from the Company and the amount can be reliably measured. Liabilities 

expected to be settled in the Company’s normal operating cycle or within 12 months 

from the balance sheet date are classified as current liabilities. Otherwise, these are 

classified as non-current liabilities. 

Capital Stock 

Capital stock is carried at par value of the shares issued. When the shares are sold 

at a premium, the difference between the proceeds and the par value is credited to 

additional paid-in capital. When the shares are issued for a consideration other 

than cash, the proceeds are measured by the fair value of the consideration received. 

In case the shares are issued to extinguish or settle the liability of the Company, the 

shares shall be measured either at the fair value of the shares issued or fair value of 

the liability settled, whichever is more readily determinable. 

Deposits for Future Stock Subscription 

Contributions from stockholders that are intended as payment for future capital 

stock subscriptions are recognized as deposits for future stock subscription. The 

deposits are reduced and the corresponding shares of stock are issued when the 

regulatory requirements have been complied with. 

Retained Earnings (Deficit) 

Retained earnings (deficit) represent the cumulative balance of the net income or 

loss, net of any dividend declaration. 

Revenue 

Revenue is recognized to the extent that it is probable that the economic benefits 

will flow to the Company and the amount of revenue can be reliably measured. 

Revenue is measured at the fair value of the consideration received or receivable. 

The following specific recognition criteria must also be met before revenue is 

recognized: 

Service income 

Service income is recognized as related services are performed based on agreements 

with the customers. 


Interest income is recognized as the interest accrues. 

Leases 

Leases where the lessor retains substantially all the risks and benefits of ownership 

of the asset are classified as operating leases. Operating lease expense is recognized 

in the statement of income on a straight-line basis over the lease term. 

Retirement Benefits Cost 

The Company provides for estimated retirement benefits to be paid under Republic 

Act (RA) No. 7641 to all its permanent employees. The cost of providing benefits 

under the defined benefit retirement plan is determined using the projected unit 

credit actuarial valuation method. This method reflects services rendered by employees 

to the date of valuation and incorporates assumptions concerning employees’ 

projected salaries. Retirement benefits cost includes current service costs plus 

amortization of past service costs, experience adjustments and changes in actuarial 

assumptions over the expected remaining working lives of qualified employees, and 

effect of any curtailment or settlement. 

Actuarial gains and losses are recognized as income or expense if the cumulative 

unrecognized actuarial gains and losses at the end of the previous reporting period 

exceeded the greater of 10% of the present value of defined benefit obligation and 

10% of the fair value of the plan assets at that date. The gains and losses are 

recognized over the expected average remaining working life of the employees 

participating in the plan. 

The past service cost is recognized as an expense on a straight-line basis over the 

average period until the benefits become vested. If the benefits are already vested 

immediately following the introduction of, or changes to, a pension plan, past service 

cost is recognized immediately. 

The defined benefit liability is the aggregate of the present value of the defined 

benefit obligation and actuarial gains and losses not recognized, reduced by past 

service cost not yet recognized and the fair value of plan assets out of which the 

obligations are to be settled directly. 

Foreign Currency Transactions 

Transactions denominated in foreign currencies are recorded in peso using the 

exchange rate prevailing at the date of the transaction. Outstanding monetary assets 

and liabilities denominated in foreign currencies are translated to peso using the 

closing exchange rate at the balance sheet date. Foreign exchange gains or losses 

are credited to or charged against current operations. 

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Income Taxes 

Current income tax 

Current income tax assets and liabilities for the current and prior periods are measured 

at the amount expected to be recovered from or paid to the taxation authorities. 

The tax rates and tax laws used to compute the amount are those that have been 

enacted or substantively enacted at the balance sheet date. 

Deferred income tax 

Deferred income tax is provided, using the balance sheet liability method, on all 

temporary differences at the balance sheet date between the tax bases of assets 

and liabilities and their carrying amounts for financial reporting purposes. 

Deferred income tax liabilities are recognized for all taxable temporary differences. 

Deferred income tax assets are recognized for all deductible temporary differences 

and unused net operating loss carryover (NOLCO), to the extent that it is probable 

that sufficient future taxable profits will be available against which the deductible 

temporary differences and carry-forward benefits of unused NOLCO can be utilized. 

The carrying amount of deferred income tax assets (DTA) is reviewed at each balance 

sheet date and reduced to the extent of the sufficient future taxable profits that will 

be available to allow all or part of the deferred income tax asset to be utilized. 

Unrecognized income deferred tax assets are reassessed at each balance sheet 

date and are recognized to the extent that it has become probable that future 

taxable profits will allow the deferred income tax assets to be recognized. 

Deferred income tax assets and deferred income tax liabilities are measured at the 

tax rates that are expected to apply to the period when the asset is realized or the 

liability is settled, based on tax rates and tax laws that have been enacted or 

substantively enacted at the balance sheet date. 

Deferred income tax assets and deferred income tax liabilities are offset if a legally 

enforceable right exists to offset current tax assets against current tax liabilities and 

the deferred taxes relate to the same taxable entity and the same taxation authority. 

Borrowing Costs 

Borrowing costs are generally expensed as incurred. 

Provisions and Contingencies 

Provisions are recognized when: (1) the Company has a present obligation (legal 

or constructive) as a result of a past event; (2) it is probable that an outflow of 

resources embodying economic benefits will be required to settle the obligation; 

and (3) a reliable estimate of the amount of the obligation can be made. 

Contingent liabilities are not recognized in the financial statements. They are disclosed 

in the notes to financial statements unless the possibility of an outflow of resources 

embodying economic benefits is remote. A contingent asset is not recognized in the 

financial statements but is disclosed in the notes to the financial statements when an 

inflow of economic benefits is probable. 

Events after the Balance Sheet Date 

Post year-end events that provide additional information about the Company’s 

position at the balance sheet date (adjusting events) are reflected in the financial 

statements. Post year-end events that are not adjusting events are disclosed in the 

notes to financial statements when material. 

4. Receivables 


Trade 33,156,570 33,193,337 22,181,591 23,283,098 

Advances to employees 

and others 582,177 582,823 331,727 3,329,324 

33,738,747 33,776,160 22,513,318 3,329,324 

5. Prepaid Expenses and Other Current Assets 


Prepaid insurance 3,395,572 3,399,337 25,171 26,421 

Deposits 821,351 822,262 827,797 868,904 

Rental and other 

prepayments (Note 14) 1,358,588 1,360,095 2,997,716 3,146,578 

5,575,511 5,581,694 3,850,684 4,041,904 

6. Property and Equipment 

Computer Furniture & Office & Com- Leasehold Construction Total (PHP) Total (INR) 

Equipment Fixtures munication Improvements in Progress 2010 2010 

Equipment 

Cost 

Beginning of year 35,433,750 26,371,725 10,095,349 14,726,680 – 86,627,504 90,929,304.32 

Additions 3,179,357 234,721 5,372,855 1,077,183 10,836,115 20,700,231 21,728,175.43 

End of year 38,613,107 26,606,446 15,468,204 15,803,863 10,836,115 107,327,735 112,657,480 

Accumulated Depreciation 

Beginning of year 7,818,339 3,700,235 1,120,327 4,760,142 – 17,399,043 18,263,055.07 

Depreciation 12,775,177 5,094,475 2,993,564 7,440,814 – 28,304,030 29,709,568.42 

End of year 20,593,516 8,794,710 4,113,891 12,200,956 – 45,703,073 47,972,623 

Net Book Values 18,019,591 17,811,736 11,354,313 3,602,907 10,836,115 61,624,662 64,684,856 

Computer Furniture & Office & Com- Leasehold Construction Total (PHP) Total INR) 

Equipment Fixtures munication Improvements in Progress 2010 2010 

Equipment 

Cost 

Balance at beginning of year 35,433,750 26,371,725 10,095,349 14,726,680 0 86,627,504 90,929,304 

Acquisitions 3,179,357 234,721 5,372,855 1,077,183 10,836,115 20,700,231 21,728,175 

Balance at end of year 38,613,107 26,606,446 15,468,204 15,803,863 10,836,115 107,327,735 112,657,480 

Accumulated Depreciation 

Balance at beginning of year 7,818,339 3,700,235 1,120,327 4,760,142 – 17,399,043 18,263,055 

Depreciation 12,775,177 5,094,475 2,993,564 7,440,814 – 28,304,030 29,709,568 

Balance at end of year 20,593,516 8,794,710 4,113,891 12,200,956 0 45,703,073 47,972,623 

Net Book Values 18,019,591 17,811,736 11,354,313 3,602,907 10,836,115 61,624,662 64,684,856 

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7. Accounts Payable and Accrued Expenses 


Accounts payable 4,811,527 4,816,862 14,034,217 14,731,137 

Accrued expenses (Note 11) 28,897,211 28,929,255 24,112,021 25,309,390 

Others 2,820,828 2,823,956 1,172,851 1,231,093 

36,529,566 36,570,073 39,319,089 41,271,620 

Accounts payable as of March 31, 2010 and 2009 includes unpaid invoices for the 

acquisition of certain items of property and equipment totaling 3,497,700 and 

2,197,434, respectively. 

8. Cost of Services 


Personnel costs (Note 10) 66,946,854 67,960,668 83,636,031 84,444,001 

Depreciation (Note 6) 29,581,074 30,029,037 28,304,030 28,577,462 

Technology charges 23,349,297 23,702,889 26,113,266 26,365,534 

Rent and utilities (Note 14) 15,322,959 15,555,003 12,621,461 12,743,391 

Staff welfare 4,992,377 5,067,979 5,875,844 5,932,608 

Recruitment 3,725,398 3,781,814 2,695,311 2,721,349 

Repairs and maintenance 2,506,195 2,544,148 1,904,251 1,922,647 

Training 2,342,528 2,378,002 460,638 465,088 

Outside services and others 2,434,623 2,471,492 2,157,881 2,178,727 

9. General and Administrative Expenses 

151,201,305 153,491,031 163,768,713 165,350,809 


Personnel costs (Note 10) 8,416,819 8,544,279.617 15,842,972 15,996,024 

Shared cost (Note 11) 4,017,722 4,078,564.621 1,488,405 1,502,784 

Professional fees 1,386,705 1,407,704.653 1,272,111 1,284,400 

Accommodations 1,079,333 1,095,677.946 711,203 718,074 

Transportation and travel 1,051,985 1,067,915.8 2,274,124 2,296,093 

Utilities 849,838 862,707.5741 866,915 875,290 

Rent (Note 14) 943,046 957,327.0752 1,202,972 1,214,593 

Insurance 382,936 388,735.0149 798,547 806,261 

Others 1,198,143 1,216,287.152 4,654,305 4,699,268 

10. Personnel Costs 

19,326,527 19,619,199 29,111,554 29,392,788 


Salaries, wages and bonuses 74,526,731 75,655,331 97,656,319 98,599,733 

Retirement benefits cost (income) (Note 12)-60,500 -61,416 142,200 143,574 

Other short-term employee benefits 897,442 911,032 1,680,484 1,696,718 

75,363,673 76,504,947 99,479,003 100,440,025 


a. The Company availed of various loans from ABMW to finance its working 

capital requirements. The loans bear interest at LIBOR + 1% and are payable 

in 60 months (including the interest and other related charges). As of March 

31, 2010 and 2009, the outstanding principal amounted to 90.57 million 

(US$2.01 million) and 84.33 million (US$1.76 million), respectively. Interest 

expense charged to the Company amounted to 1.76 million (US$39.13 

thousand) and 3.34 million (US$69.0 thousand) for the years ended March 

31, 2010 and 2009, respectively. Accrued interest expense (included under 

“Due to affiliates” in the balance sheets) as of the said dates amounted to 

6.33 million and 5.01 million, respectively. 

b. The Company has various service agreements which are carried out together 

with its affiliates based in Bangalore, India and Toronto, Canada. These 

agreements are effective for three years, subject to renewal terms, and primarily 

cover after-sale support/call center services. Rates are determined based on 

the statement of work agreed with client and are normally expressed per 

minute or per hour. Revenue recognized for these agreements amounted to 

145.58 million and 140.44 million for the years ended March 31, 2010 

and 2009, respectively. 

c. Shared costs charged by ABMW amounted to 4.02 million and 

1.5 million in 2010 and 2009, respectively, and are included under general 

and administrative expenses. The amount outstanding as of March 31, 2010 

and 2009 amounting to 5.86 million and 1.49 million, respectively, are 

included in “Accounts payable and accrued expenses.” 

12. Retirement Benefits Cost 

The Company provides retirement benefits to all its regular, full time employees in 

accordance with RA No. 7641. 

Retirement benefits cost (income) charged to operations in 2010 and 2009 consisted 

of the following: 


Current service cost 1,800 1,827 164,100 172,248.98 

Interest cost 15,400 15,417 11,400 11,966.11 

Amortization of actuarial gain -43,200 -43,248 – - 

Curtailment gain -34,500 -34,538 -33,300 (34,953.63) 

-60,500 -60,542 142,200 149,261 

The amounts recognized in the balance sheets comprise the following: 


Defined benefit obligation 394,500 400,474 41,100 41,497 

Unrecognized actuarial gains (losses)-194,000 -196,938 219,900 222,024 

Accrued retirement benefits 200,500 203,536 261,000 263,521 

Changes in the present value of defined benefit obligation are as follows: 


Beginning balances 41,100 41,146 118,800 124,699 

Current service cost 1,800 1,827 164,100 165,685 

Interest cost 15,400 15,633 11,400 11,510 

Actuarial loss: — — — — 

Experience adjustments 13,400 13,603 45,100 45,536 

Change in assumptions 390,700 396,617 -298,000 -300,879 

Curtailment gain -67,900 -68,928 -300 -303 

Ending balances 394,500 399,897 41,100 46,249 

The latest actuarial valuation of the plan is as of March 31, 2010. The principal 

actuarial assumptions used to determine retirement benefit cost were as follows: 


Discount rate 9.6% 37.5% 

Average annual salary increase 8.0% 8.0% 

13. Income Taxes 

a. The provision for current income tax represents final tax on interest income. 

b. The Company did not recognize deferred income tax assets on the following 

temporary differences and NOLCO since these were incurred and will expire/ 

reverse within the period when the Company is under ITH (see Note 2). 


NOLCO 135,665,715 142,838,947 111,292,223 114,795,815 

Deferred lease 118,158 118,289 504,703 529,787 

Accrued retirement benefits 849,539 850,481 261,000 273,961 

Unrealized foreign exchange loss - net8,687,707 8,697,341 8,687,707 9,119,126 

The Company’s NOLCO as of March 31, 2010 will expire as follows: 

Incurred in Year PHP INR Expiring in 

2008 51,755,698 54,325,678 2011 

2009 50,574,668 51,340,549 2012 

2010 37,131,546 37,172,721 2013 

139,461,912 142,838,947 

NOLCO incurred in 2007 amounting to 8,961,857 expired in 2010. 

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c. Deferred income tax liability of 1,138,859 was recognized as of March 31, 

2010 on the Company’s net unrealized foreign exchange gain of 3,796,197 

in 2010. Deferred income tax asset on NOLCO was recognized up to the 

amount of the deferred income tax liability. 

d. The reconciliation between the provision for income tax at statutory rates and 

the provision for income tax as shown in the statement of income is as follows: 


Income tax at statutory rate -6,633,557 -6,734,013 -21,132,474 (21,336,625) 

Additions to (reduction in) 

income tax resulting from 

the tax effects of: 

Net increase in unrecognized 

deferred income tax assets 6,640,148 6,740,703 21,140,111 21,344,336 

Interest income subject to final tax -6,460 -6,558 -7,185 (7,254) 

Non-deductible portion of 

interest expense 3,246 3,295 4039 4,078 

3,377 3,428 4,491 4,534 

e. RA No. 9337 or the Expanded Value-Added Tax Act of 2005, which took 

effect on November 1, 2005, provides for, among others, the corporate income 

tax rate to be 35% for three years effective on November 1, 2005, and 30% 

starting on January 1, 2009 and thereafter; and the unallowable deduction 

for interest expense to be 42% of the interest income subject to final tax effective 

November 1, 2005, and 33% effective January 1, 2009. 

14. Lease Commitments 

The Company has various lease agreements for its office space and condominium 

units with terms ranging from three months to five years. These leases are renewable 

on terms mutually agreed by the parties. Certain lease agreements require the 

Company to pay security deposits. These are included under “Prepaid expenses 

and other current assets” and “Other non-current assets” in the balance sheets. 

The Company has three-year lease agreements covering two of its office/facilities 

spaces that are subject to annual escalation of 8% and 10%, with one month and 

three months rent-free period, respectively. 

Future minimum rentals payable under these non-cancelable operating lease 

arrangements are as follows: 


Within one year 12,514,170 12,528,047 8,499,988 8,922,085 

After one year but not 

more than five years 18,131,585 18,151,691 3,859,776 4,051,447 

30,645,755 30,679,738 12,359,764 12,973,533 

15. Equity 

On January 19, 2009, the Company’s BOD authorized the issuance of 479,232 

additional shares from the remaining un-issued shares at 100 per share in favor 

of ABMW, to be applied against the deposits for future stock subscription. 

As of March 31, 2010, the Company has yet to submit the application with the 

SEC. 

16. Other Matter 

The Company is a defendant in a number of labor cases filed with the National 

Labor Regulatory Commission pertaining to non-payment of salaries and other 

benefits to its employees. Management believes that the outcome of these cases 

will not have a material effect on the Company’s financial statements. 

(378)

C M Y K 

A V TRANSWORKS LIMITED 


To 

The Board of Directors of Aditya Birla Minacs Worldwide Limited 

(Formerly known as Transworks Information Services Limited) 

1. We refer to your letter dated March 1, 2010 requesting us to audit the 

accounts of A V Transworks Limited ("the Company"), a wholly owned 

subsidiary of Transworks Information Services Limited ("the Parent"), 

incorporated in the Canada, based on records, received from the said 

Company in Mumbai and in accordance with the accounting policies 

described in Note 1 of Schedule 9 to the attached financial statements 

("the accounting policies"). We have not performed a statutory audit, 

the objective of which would be the expression of an opinion on the 

financial statements in conformity with generally accepted accounting 

practices and accordingly, we do not express such an opinion. 

2. We have audited, in accordance with the accounting policies, the 

attached Balance Sheet of the Company as at March 31, 2010 and 

also the Profit and Loss Account, and cash flow statement for the year 

ended on that date annexed thereto, which are in agreement with the 

books of account verified by us. These financial statements are the 

responsibility of the Company's management and have been prepared 

in accordance with the accounting policies, for the purpose of 

consolidation with the financial statements of the Parent. Our 



3. We conducted our audit in accordance with generally accepted auditing 

standards in India. These Standards require that we plan and perform 

the audit to obtain reasonable assurance whether the financial 





management, as well as evaluating the overall financial statements. 

We believe that our audit provides a reasonable basis for our opinion. 

5. In our opinion, based on our audit, and to the best of our information 

and according to the explanations given to us, the accompanying 

financial statements give a true and fair view in conformity with the 

accounting policies: 

a. in the case of the Balance Sheet, of the state of affairs of Company 

as at 31st March, 2010; 

b. in the case of the Profit and Loss Account, of the loss for the year 

ended on that date; and 

c. in the case of the Cash Flow Statement, of the cash flows for the 


6. This report is furnished solely for the purpose of meeting the requirement 

if consolidation of the attached financial statements with the financial 

statement of the Parent and hence should not to be used for any other 

purpose. 


Partner 


Mumbai, 





(379)

C M Y K 



As at 

As at 

31stMar, 2010 31st Mar, 2009 

I SOURCES OF FUNDS Schedule CAD Rs. Lacs CAD Rs. Lacs 

1 Shareholders’ Funds 

Share Capital 1 127,000,001 56,083.20 127,000,001 51,132.61 

Preference Share Capital 1 30,000,000 13,248.00 — — 

Foreign exchange on translation — (23.68) — 6.48 

2 Unsecured Loan from Bank 30,901,850 13,646.26 30,901,850 12,441.67 

3 Loan from Holding Company 21,424,531 9,461.07 20,526,184 8,264.23 

Total 209,326,382 92,414.85 178,428,035 71,844.99 

II APPLICATION OF FUNDS 

1 Investments 2 207,892,852 91,805.48 177,892,852 71,623.03 

2 Current Assets, Loans & 

Advances 

Accured Interest 106,963 47.23 399,501 160.85 

Cash and Bank Balances 3 67,073 29.62 3,506 1.41 

174,036 76.85 403,007 162.26 


Provisions 4 

Current Liabilities 629,334 277.92 448,821 180.70 

Provisions 2,607 1.15 2,607 1.05 

631,941 279.07 451,428 181.75 

Net Current Assets (457,905) (202.22) (48,421) (19.49) 

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 


For the 

For the 

Year Ended 

Year Ended 

31st Mar, 

31st Mar, 


Schedule CAD Rs. Lacs CAD Rs. Lacs 

INCOME : 

Other Income 5 157,375 68.61 1,632,336 676.04 

Total 157,375 68.61 1,632,336 676.04 

EXPENDITURE : 

Administrative Expenses 6 (39,723) (17.31) 615,746 255.02 

Financial Charges 7 1,504,930 656.06 1,589,341 658.24 

Total 1,465,208 638.75 2,205,087 913.26 

Profit / (Loss) before tax 

for the year (1,307,833) (570.14) (572,751) (237.21) 

Less: Provision for Tax — — — — 

Profit / (Loss) for the year (1,307,833) (570.14) (572,751) (237.21) 

Profit / (Loss) brought 

forward from previous year (583,602) (241.45) (10,853) (4.24) 


forward to the Balance Sheet (1,891,435) (811.59) (583,604) (241.45) 



Profit & Loss Account. 

3 Profit and Loss Account 1,891,435 811.59 583,604 241.45 

Total 209,326,382 92,414.85 178,428,035 71,844.99 


The Schedules referred to above and the notes to accounts form an integral part of the Balance 

Sheet. 






Partner 


Place: Mumbai 



A V Transworks Limited 


Ramesh Kamath 







Partner 


Place: Mumbai 





Ramesh Kamath 


(380)

C M Y K 



For the Year ended For the Year ended For the Year ended For the Year ended 

March 31, 2010 March 31, 2010 March 31, 2009 March 31, 2009 

CAD Rs. Lacs CAD Rs. Lacs 

A. Cash flow from Operating Activities 

Net Profit/(Loss) before taxation, and extraordinary items (1,307,833) (570.14) (572,751) (237.21) 


Interest Income (157,375) (68.61) (1,631,908) (675.87) 

Interest Expense 1,497,734 652.92 1,585,191 656.52 

Foreign Exchange (Gain)/Loss (Net) 0 6,125.02 5,752,600 4,911.96 

Operating Profit before working capital changes 32,526 6,139.19 5,133,132 4,655.40 


(Increase)/Decrease in payable to subsidiary 267,093 121.24 31,222 13.47 

(Increase)/Decrease in Loans & Advances — — 819 0.32 

Increase/(Decrease) Current Liabilities & Provisions (12,534) (4.04) 31,618 12.84 

Cash generated from operations 287,085 6,256.39 5,196,790 4,682.03 

Loan to subsdiaries — — 65,470,971 25,245.61 

Cash flow before extraordinary items 287,085 6,256.39 70,667,761 29,927.64 

Add/(Less): Extraordinary items — — — — 

Net Cash flow from Operating Activities 287,085 6,256.39 70,667,761 29,927.64 

B. Cash Flow from Investing Activities 

Investment in Subsidaries (30,000,000) (20,182.45) (50,638,021) (22,553.57) 

Interest income received 449,913 182.23 2,852,136 1,139.59 

Net Cash from/(for) Investing Activities (29,550,087) (20,000.22) (47,785,886) (21,413.98) 

C. Cash flow from Financing Activities 

Loan from Holding Company 898,346 1,196.84 (20,038,641) (7,377.56) 

Preference Capital from Holding Company 30,000,000 13,248.00 — — 

Interest Payment (1,571,778) (672.80) (2,843,693) (1,136.20) 

Net Cash used in Financing Activities 29,326,569 13,772.04 (22,882,334) (8,513.76) 

Net Decrease in cash and Cash equivalants during the year 63,567 28.21 (458) (0.10) 

Cash and cash equivalants at the beginning of the year 3,506 1.41 3,964 1.51 

Cash and cash equivalants at the end of the year 67,073 29.62 3,506 1.41 

Notes: 

Components of Cash and Cash Equivalents As At As At As At As At 

31st Mar, 2010 31st Mar, 2010 31st Mar, 2009 31st Mar, 2009 

i) Cash Balance on hand — — — — 

ii) Balance with Scheduled and other Banks : 

- in Current Account 67,073 29.62 3,506 1.41 

Total 67,073 29.62 3,506 1.41 






Partner 


Place: Mumbai 





Ramesh Kamath 


(381)

C M Y K 



As at 

As at 





127,000,001 Equity Shares of CAD$ 1 each 127,000,001 56,083.20 127,000,001 51,132.61 


127,000,001 Equity Shares of 

CAD$ 1 each fully paid up 127,000,001 56,083.20 127,000,001 51,132.61 

30,000,000 Preference shares 

(P.Y. Nil) of CAD$ 1 each 30,000,000 13,248.00 — — 

(All the above equity and Preference 

shares are held by Holding Company 

- Aditya Birla Minacs Worldwide Limited) 

Total 157,000,001 69,331.20 127,000,001 51,132.61 

For the For the For the For the 

Year Ended Year Ended Year Ended Year Ended 

31st Mar, 31st Mar, 31st Mar, 31st Mar, 



SCHEDULE 6 - ADMINISTRATIVE EXPENSES 

i) Foreign Exchange Loss /(Income) (43,050) (18.76) 585,551 242.51 

ii) Legal & Professional Charges — — 6,257 2.59 

iii) Telephone Expenses — — 2,929 1.21 

iv) Rates & Taxes 3,327 1.45 7,389 3.06 

v) Miscellaneous Expenses — — 13,620 5.65 

Total (39,723) (17.31) 615,746 255.02 

SCHEDULE 7 - FINANCIAL CHARGES 

i) Bank charges 7,196 3.14 4,150 1.72 

ii) Interest on DBS loan 1,040,947 453.79 971,607 402.40 

iii) Interest on Intercompany Loan 456,787 199.13 613,584 254.12 

Total 1,504,930 656.06 1,589,341 658.24 


Long Term Investments (At Cost) 

In Subsidiary Companies 

27,945,822 shares (P.Y. 27,945,822 

shares) of CAD$ 1 each in Aditya 

Birla Minacs Worldwide Inc. 157,571,131 69,583.41 157,571,131 63,441.12 


(P.Y. 20,321,721 shares) of CAD$ 

1 each in Aditya Birla Minacs 

Worldwide Inc. 20,321,721 8,974.07 20,321,721 8,181.91 


(P.Y. Nil) of CAD$ 1 each in Aditya 

Birla Minacs Worldwide Inc. 30,000,000 13,248.00 — — 

Total 207,892,852 91,805.48 177,892,852 71,623.03 


Balance with other Banks : 

— On Current Account 67,073 29.62 3,506 1.41 

Total 67,073 29.62 3,506 1.41 

SCHEDULE 4 - CURRENT LIABILITIES & PROVISIONS 

i) Sundry Creditors 3,864 1.71 3,864 1.56 

ii) Acrrued Interest on Secured 

Loan from Bank 83,926 37.06 318,856 128.38 

iii) Acrrued Interest on Loan from 

Holding Company 171,041 75.53 10,155 4.09 

iv) Payable to Subsidiary Company 351,422 155.19 84,329 33.95 

v) TDS Payable 19,081 8.43 31,617 12.73 

629,334 277.92 448,821 180.71 

PROVISIONS 

i) Provision for Taxation / 

Minimum Alternative Tax 2,607 1.15 2,607 1.05 

Total 631,941 279.07 451,428 181.76 

For the For the For the For the 

Year Ended Year Ended Year Ended Year Ended 

31st Mar, 31st Mar, 31st Mar, 31st Mar, 



HEDULE 5 - OTHER INCOME 

Interest received 

i) Bank interest — — 416 0.17 

ii) DBS Loan — — 971,607 402.40 

iii) Intercompany Loan 157,375 68.61 660,301 273.47 

iv) Others — — 12 0.01 

Total 157,375 68.61 1,632,336 676.05 

ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 

SCHEDULE – 8: NOTES TO ACCOUNTS 



The accounts have been prepared under the historical cost convention on accrual basis 

in accordance with the generally accepted accounting principles applicable in India. 

b. Interest 

Interest on Loan given/ taken is booked on a time proportion basis taking into account 

the amounts of loan given and taken and the rate of interest. 

c. Transactions in Foreign Currency 

i) Initial Recognition 




ii) Conversion 


items, which are carried in terms of historical cost denominated in a 

foreign currency, are reported using the exchange rate at the date of the 

transaction. 

iii) Exchange Differences 


company's monetary items at rates different from those at which they were 


are recognized as income or as expenses in the year in which they occur. 

d. Provision 


past event; it is probable that an outflow of resources will be required to settle the 


discounted to its present value and are determined based on best estimate required 

to settle the obligation at the balance sheet date. These are reviewed at each balance 

sheet date and adjusted to reflect the current best estimates. 

e. Investments 

i) Investments that are readily realizable and intended to be held for not more 

than a year are classified as current investments. All other investments are 

classified as long-term investments. 

ii) Long-term investments are valued at cost. Any decline in the value of investments 

other than temporary, is provided for and charged to the profit & loss account. 

f. Conversion of Financial Statements 

For the purpose of consolidation of the financials statements with that of the Parent, 

the amounts in Canadian Dollar (CAD) are converted into INR as follows: 

Equity capital and all other balance sheet items at closing rate of exchange, profit 

and loss items at average rate and resultant translation gain/loss is shown separately 

in Balance Sheet. 

(382)

C M Y K 



(a) Name and nature of relationship of the Related Party where control exists: 




Fellow Subsdiaries 

TransWorks Inc., USA 

Aditya Birla Minacs Philippines Inc. (formerly TransWorks 

BPO Philippines Inc.,) (ABMPI) (Subsidiary of ABMWL) 

(w.e.f November 03, 2006) 

Subsidiaries 

Aditya Birla Minacs Worldwide Inc. Canada (ABMWI) 

(Subsidiary of AV TransWorks) (w.e.f August 18, 2006) 

Minacs Kft., Hungary (Subsidiary of Minacs GmbH) 

(w.e.f August 18, 2006) 

Minacs Limited, U.K. (Subsidiary of MWI) 

(w.e.f August 18, 2006) 

Minacs Worldwide S.A. de C.V., Mexico 

(Subsidiary of MWI) (w.e.f August 18, 2006) 

The Minacs GmbH, Germany 

(Subsidiary of Minacs Ltd) (w.e.f August 18, 2006) 

The Minacs Group, USA (Subsidiary of MWI) 

(w.e.f August 18, 2006) 

Compass BPO Limited, U.K. 

(w.e.f. March 9, 2010 ) 

Compass BPO, Inc., U.S.A (Subsidiary of Compass 

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

Compass Business Process outsourcing Ltd, India 

Subsidiary of Compass BPO Limited, U.K.) 

(w.e.f. March 9, 2010 ) 

Compass BPO FZE, U.A.E (Subsidiary of 

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

(b) Summary of transactions with related parties: 

(In CAD) 




Loan Repayment 7,500,000 20,038,641 

Loan Taken 8,450,000 Nil 

Interest on loan from ABMWL 456,787 613,584 

Subsidiary (ABMWI) 

Investment 30,000,000 50,638,021 

Loan repayment from subsidiary 7,500,000 65,470,971 

Loan given to subsidiary 7,500,000 Nil 

Interest on loan given 157,375 660,301 


Holding 

Equity Contribution from holding Co 127,000,001 127,000,001 

Preference Contribution from holding Co 30,000,000 Nil 

Loan from Holding Co. 21,424,531 20,526,184 

Interest Payable to Holding Co 171,041 10,155 

Corporate guarantee given by Holding Co 30,901,850 30,901,850 


Investment in Subsidiary 207,892,852 177,892,852 

Loan to subsidiary Nil Nil 

Interest received from Subsidiary 157,375 1,631,908 

Balance as at the year end 

Payable to Holding Co 21,595,571 20,536,339 

Receivable from Subsidiary Co (ABMWI) Nil 399,502 

Payable to Subsidiary Co (ABMWI) 244,461 Nil 

(In Rs. Lacs) 




Loan Repayment 3,269.51 7,377.56 

Loan Taken 3,683.65 Nil 

Interest on loan from ABMWL 199.13 254.12 


Investment 20,182.44 22,553.58 

Loan repayment from subsidiary 3,269.51 25,245.61 

Loan given to subsidiary 3,269.51 Nil 

Interest on loan given 68.61 273.47 


Holding 

Equity Contribution from holding Co 56,083.20 51,132.61 

Preference Contribution from holding Co 13,248.00 Nil 

Loan from Holding Co 9,461.07 8,264.23 

Interest Payable to holding Co 75.53 4.09 

Corporate guarantee given by holding Co 13,646.26 12,441.67 


Investment in Subsidiary 91,805.48 71,623.04 

Loan to subsidiary Nil Nil 

Interest received from Subsidiary 68.61 675.87 

Balance as at the year end 

Payable to Holding Co 9,536.60 8,268.32 

Receivable from Subsidiary Co. (ABMWI) Nil 160.85 

Payable to Subsidiary Co (ABMWI) 107.96 Nil 

3. Derivative Instruments 

The Company uses derivative financial instruments such as forward exchange contracts, 

currency swaps and interest rate swaps to hedge its risks associated with foreign currency 

fluctuations and interest rate. 

Derivative Outstanding as at March 31, 2010 

Particulars Currency Amount in Foreign Purpose 

Currency (in lacs) 

Cross Currency Swap CAD 203.21 To hedge Loan Payable 

(203.21) 

All the above contracts are for hedging and not for speculation. 

As at March 31, 2010 all the foreign currency exposure stands hedged by derivative 

instrument or otherwise. 

The Company, time to time, holds financial derivatives instruments primarily for hedging 

purpose. In pursuance of the announcement dated 29th March 2008 of ICAI, the Company 

has decided to account for losses, if any, on derivatives transactions, on net basis, after 

considering effect of underlying exposure / commitments / obligations. As there was no 

such loss at the end of the year, the above changes does not have any effect on the profit 

for the year. 


period figures. 






Partner 


Place: Mumbai 





Ramesh Kamath 


(383)

C M Y K 

ADITYA BIRLA MINACS WORLDWIDE INC., CANADA 


To the Board of Directors of 

Aditya Birla Minacs Worldwide Inc. 

We have audited the consolidated balance sheet of Aditya Birla Minacs 

Worldwide Inc. as at March 31, 2010 and the consolidated statements of 

operations and deficit, comprehensive income (loss), changes in shareholders’ 

equity (deficiency) and cash flows for the year then ended. These financial 


responsibility is to express an opinion on these financial statements based 

on our audit. 

We conducted our audit in accordance with Canadian generally accepted 

auditing standards. Those standards require that we plan and perform an 

audit to obtain reasonable assurance whether the financial statements are 

free of material misstatement. An audit includes examining, on a test basis, 

evidence supporting the amounts and disclosures in the financial statements. 

An audit also includes assessing the accounting principles used and significant 

estimates made by management, as well as evaluating the overall financial 

statement presentation. 

In our opinion, these consolidated financial statements present fairly, in all 

material respects, the financial position of the Company as at March 31, 

2010 and the results of its operations and its cash flows for the year then 

ended in accordance with Canadian generally accepted accounting 

principles. 

Toronto, Canada, 

April 23, 2010. 


Licensed Public Accountants 

(384)

C M Y K 


Consolidated Balance Sheet as at 31st March 2010 

As at 31-Mar-10 31-Mar-10 31-Mar-09 31-Mar-09 

CAD$’000 INR/Cr CAD$’000 INR/Cr 

ASSETS 

Current assets 

Cash $4,230 18.68 $3,087 12.43 

Accounts receivable and unbilled 

revenue (Notes 10 and 17) 47,870 211.39 60,121 242.05 

Other receivables (Notes 4, 9(a) and (b)) 18,522 81.79 1,656 6.67 

Prepaid expenses 3,002 13.26 2,657 10.70 

Income taxes recoverable 80 0.35 413 1.66 

Future income taxes (Note 15) 273 1.21 14 0.06 

73,977 326.68 67,948 273.56 

Long-term receivables — — 146 0.59 

Future income taxes (Note 15) 401 1.77 576 2.32 

Property, plant and equipment, net 

(Notes 5, 10 and 14) 24,424 107.86 30,507 122.82 

Deferred development costs (Note 6) 2,463 10.88 546 2.20 

Intangible assets (Note 7) 8,048 35.54 4,223 17.00 

Goodwill (Note 8) 10,070 44.47 6,818 27.45 

Total assets $119,383 527.20 $110,764 445.94 

LIABILITIES 

Current liabilities 

Accounts payable and accrued liabilities 

(Notes 4, 11, 14 and 17) $27,403 121.01 $36,621 147.44 

Long-term debt (Note 10) 33,914 149.76 56,697 228.26 

Income and other taxes payable 233 1.03 — 0.00 

Obligations under capital leases (Note 13) 1,643 7.26 4,459 17.95 

63,193 279.06 97,777 393.65 

Accrued liabilities relating to 

operating leases (Note 14) 4,351 19.21 5,720 23.03 

Obligations under capital leases (Note 13) — — 1,722 6.93 

Deferred grant and government 

assistance (Note 9(c)) 858 3.79 771 3.10 

Future tax liabilities (Note 15) 2,509 11.08 969 3.90 

70,911 34.08 106,959 36.97 

Commitments and contingencies (Note 13) 

SHAREHOLDERS’ EQUITY 

Share capital (Note 12) 120,393 531.66 90,393 363.92 

Accumulated other comprehensive loss (3,087) (13.63) (14,291) (57.54) 

Deficit (68,834) (278.25) (72,297) (293.34) 

Exchange Fluctuation on Translation (25.72) (2.34) 

48,472 214.06 3,805 15.33 

Total liabilities and 

shareholders’ equity $119,383 $527.20 $110,764 445.94 

See accompanying notes to the financial statements 

FE Conversion Rate for Cdn $ to INR 

as at end of year 44.16 40.26 

Consolidated Statement of Operations and Deficit 

Year ended March 31 



Revenues (Note 17) $282,615 1,232.02 $348,850 1,444.94 

Direct expenses (Notes 9(a) and (b)) 208,598 909.35 281,002 1,163.91 

Gross profit 74,017 322.67 67,848 281.03 

Selling, general and administrative 

expenses (Notes 9(a) and (b)) 52,851 230.40 55,894 231.51 

Earnings before depreciation and 

amortization, restructuring charges, 

interest, financing expenses 

and income taxes 21,166 92.27 11,954 49.51 

Depreciation and amortization 

(Notes 5 and 7) 9,974 43.48 11,319 46.88 

Restructuring charges (Note 14) 3,828 16.69 8,277 34.28 

Interest and financing expenses (Note 10) 2,629 11.46 10,058 41.66 

Income (loss) before income taxes 4,735 20.64 (17,700) (73.31) 

Provision for income taxes 

Current 1,093 4.76 1,666 6.90 

Future 179 0.78 449 1.86 

1,272 5.55 2,115 8.76 

Net income (loss) for the year 3,463 15.10 (19,815) (82.07) 

Deficit, beginning of year (72,297) (293.34) (52,482) (211.27) 

Deficit, end of year ($68,834) (278.25) ($72,297) (293.34) 

See accompanying notes to 

the consolidated financial statements 

FE Conversion Rate for Cdn $ to INR 43.59 41.42 

Place: Toronto 

Consolidated Statement of Comprehensive income (Loss) 






Net income (loss) for the year $3,463 15.10 ($19,815) (82.07) 

Unrecognized gain (loss) on foreign currency 

contracts and options 18,774 82.91 (10,207) (42.28) 

Change in foreign currency translation 

on self foreign operations (7,570) (33.43) 2,018 8.36 




Exchange Fluctuation on Translation (5.57) 0.00 

Comprehensive income (loss) 

for the year $14,667 $59.00 ($28,004) ($115.99) 

(385)

C M Y K 


Consolidated Statement of Changes in Shareholders’ Equity (Deficiency) 

CAD Table Accumulated Total 

Other 

Shareholders’s 

(thousands of dollars, except Common Share Redeemable Preference Redeemable Preference Comprehensive Equity 

number of shares) Shares Capital Shares – Series A Shares – Series B Loss Deficit (Deficiency) 

Balance, March 31, 2008 22,893,105 $39,755 — — — — ($5,009) ($52,482) ($17,736) 

Cumulative effect of adopting new 

accounting standards — — — — — — ($11,300) — ($11,300) 

Issued during the year 5,052,717 30,316 20,321,721 20,322 — — — — $50,638 


on self-sustaining foreign operations — — — — — — $2,018 — $2,018 

Net loss for the year — — — — — — — ($19,815) ($19,815) 

Balance, March 31, 2009 27,945,822 $70,071 20,321,721 $20,322 — — ($14,291) ($72,297) $3,805 

Issued during the year — — — — 30,000,000 30,000 — — $30,000 

Unrecognized gain on foreign currency 

forward contracts and options — — — — — — $18,774 — $18,774 


on self-sustaining foreign operations — — — — — — ($7,570) — ($7,570) 

Net income for the year — — — — — — — $3,463 $3,463 

Balance, March 31, 2010 27,945,822 $70,071 20,321,721 $20,322 30,000,000 $30,000 ($3,087) ($68,834) $48,472 

Audited Consolidated Statements of Changes in Shareholders’ Deficiency 

INR Table Accumulated Total 

Other 

Shareholders’s 

(INR/Cr, except for number Common Share Redeemable Preference Redeemable Preference Comprehensive Equity 

of shares) Shares Capital Shares – Series A Shares – Series B Loss Deficit (Deficiency) 

Balance, March 31, 2008 22,893,105 160.05 — — — — (20.17) (212.94) (73.06) 

Cumulative effect of adopting new 

accounting standards — — — — — — (45.49) — (45.49) 

Issued during the year 5,052,717 122.05 20,321,721 81.82 — — — — 203.87 


on self-sustaining foreign operations — — — — — — 8.12 — 8.12 

Net loss for the year — — — — — — — (80.40) (80.40) 

Balance, March 31, 2009 27,945,822 282.10 20,321,721 81.82 — — (57.54) (293.34) 13.04 

Issued during the year — — — — 30,000,000 132.48 — — 132.48 

Unrecognized gain on foreign currency 

forward contracts and options — — — — — — 82.91 — 82.91 


on self-sustaining foreign operations — — — — — — (33.43) — (33.43) 

Net income for the year — — — — — — — 15.10 15.10 

Exchange fluctuation on Translation 27.33 7.93 (5.57) 0.00 3.96 

Balance, March 31, 2010 27,945,822 309.43 20,321,721 89.74 30,000,000 132.48 (13.63) (278.25) 214.06 

(386)

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Consolidated Statement of Cash Flow 





Net income (loss) for the year $3,463 15.29 ($19,815) (79.78) 

Adjustments to reconcile net income (loss) to cash provided by operating activities (Note 16) 10,620 46.90 16,830 67.76 

Net change in non-cash working capital balances related to operations (Note 16) 162 0.72 11,256 45.32 

Cash flow provided by operating activities 14,245 62.91 8,271 33.30 

INVESTING ACTIVITIES 

Purchase of property, plant and equipment (5,012) (22.13) (3,032) (12.21) 

Proceeds on disposal of property, plant and equipment 108 0.48 3,195 12.86 

Deferred development costs (2,693) (11.89) (546) (2.20) 

Investment in Compass (Note 3) (7,853) (34.68) 0.00 0.00 

Cash on acquisition of Compass (Note 3) 257 1.13 0.00 0.00 

Cash flow used in investing activities (15,193) (67.09) (383) (1.54) 

FINANCING ACTIVITIES 

Repayment of long-term debt (Note 10) (31,774) (140.31) (9,816) (39.52) 

Issuance of long-term debt (Note 10) 8,909 39.34 17,071 68.73 

Repayment of parent company loans 0 0.00 (70,982) (285.77) 

Repayment of obligations under capital leases (4,342) (19.17) (7,286) (29.33) 

Issuance of share capital (Note 12) 30,000 132.48 50,638 203.87 

Cash flow provided by (used in) financing activities 2,793 12.33 (20,375) (82.03) 

Effect of foreign currency translation on cash (702) (3.10) (9,810) (39.50) 

Net increase (decrease) in cash 1,143 5.05 (22,297) (89.77) 

Cash beginning of year 3,087 13.63 25,384 102.20 

Cash end of year $4,230 18.68 $3,087 12.43 

FE Conversion Rate for Cdn $ to INR as at end of year 44.16 40.26 

See accompanying notes to the consolidated financial statements. 

(387)

C M Y K 


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

1 NATURE OF BUSINESS 

Aditya Birla Minacs Worldwide Inc. (the “Company” or “Minacs”) is incorporated under the 

Ontario Business Corporations Act. The Company is wholly-owned by AV TransWorks Limited 

Canada, a wholly-owned subsidiary of Aditya Birla Minacs Worldwide Limited, India, which 

in turn is a subsidiary of Aditya Birla Nuvo Limited. The Company operates in one segment 

as a provider of business process outsourcing (“BPO”) solutions. These incorporate contact 

centre solutions, integrated marketing services and back office administration. Operating 

in multiple languages, the Company serves customers throughout North America, Europe, 

Latin America and the Pacific Rim from its operating locations in North America and Europe. 

2 SIGNIFICANT ACCOUNTING POLICIES 

Basis of Presentation 

These consolidated financial statements have been prepared in accordance with Canadian 

generally accepted accounting principles (“GAAP”) and include the accounts of the Company 

and its subsidiaries. All significant inter-company balances and transactions among these 

entities have been eliminated on consolidation. 

Changes in Accounting Policies 

Effective April 1, 2009, the Company adopted the following new Canadian Institute of 

Chartered Accountants (“CICA”) accounting standards and Emerging Issues Committee 

(“EIC”) abstract. 

Section 3064, Goodwill and Intangible Assets, which replaced Section 3062, Goodwill and 

Other Intangible Assets. The standard establishes guidelines for the recognition, measurement, 

presentation and disclosure of goodwill and intangible assets subsequent to initial recognition. 

As a result of the adoption of this standard, the Company has reclassified computer software 

from property, plant and equipment to intangible assets and has separately disclosed deferred 

development costs on the consolidated balance sheet. 

The following table summarizes the adjustment that was recorded in the consolidated financial 

statements. 

Increase 

(decrease) 

31-Mar-10 31-Mar-10 31-Mar-09 31-Mar-09 


Property, plant and equipment (net) ($3,841) (16.96) (4,559) (18.35) 

Deferred development costs $0 0.00 $546 2.20 

Intangible assets $3,841 16.96 $4,013 16.16 

Section 1000, Financial Statement Concepts. The objectives of this Section are to reinforce 

a principle-based approach to the recognition of costs as assets and to clarify the application 

of the concept of matching revenue and expenses in Section 1000. Collectively, this change 

brings the Canadian practice closer to International Financial Reporting Standards (“IFRS”) 

and U.S. generally accepted accounting principles by eliminating the practice of recognizing 

as assets a variety of start-up, pre-production and similar costs that do not meet the definition 

and recognition criteria of an asset. Adoption of this guidance had no impact on the 

Company’s consolidated financial statements. 

EIC 173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities. This 

guidance clarifies that an entity’s own credit risk and the credit risk of the counterparty 

should be taken into account in determining the fair value of financial assets and financial 

liabilities including derivative instruments. Adoption of this guidance had no impact on the 

Company’s consolidated financial statements. 

The adoption of the above pronouncements had no impact on opening deficit. 

Future Accounting Changes 

In 2006, the CICA announced that accounting standards in Canada will converge with 

IFRS. The Company will have the option of reporting under IFRS beginning January 1, 

2011, with comparative data for the prior year. IFRS uses a conceptual framework similar 

to Canadian GAAP, but there could be significant differences on recognition, measurement 

and disclosures that will need to be addressed. 

In September 2009, the CICA approved the final accounting standards for private enterprises 

in Canada. The new standards (GAAP for private enterprises) are available for early adoption. 

Under the new standards, private enterprises will have a choice of reporting in accordance 

with Canadian GAAP by adopting either the same set of accounting standards as publicly 

accountable enterprises (i.e. IFRS) or the new GAAP for private enterprises. The existing 

accounting standards in the CICA Handbook will be available until 2011, at which time 

they will be withdrawn. As such, enterprises will be able to adopt GAAP for private enterprises 

in 2009, 2010 or 2011. The Company is considering the impact of these new standards 

and assessing whether it will adopt IFRS or GAAP for private enterprises. 

Use of Estimates 

The preparation of these consolidated financial statements in conformity with Canadian 

GAAP requires management to make estimates and assumptions. These estimates and 

assumptions affect the reported amounts of assets and liabilities and disclosure of contingent 

assets and liabilities at the date of the consolidated financial statements and the reported 

amounts of revenues and expenses during the year. Actual results could differ from those 

estimates. 

Revenue Recognition 

The Company derives revenues by providing BPO solutions and consulting arrangements. 

Payment terms may vary by contract. The Company recognizes revenues at the time services 

are performed and when the price is fixed or determinable and collection is reasonably 

assured. 

The majority of revenues are recognized based on the billable hours or minutes rendered 

as defined in the client contract. The rate per billable hour or minute charged is based on 

a predetermined contractual rate as agreed in the underlying contract. This contractual 

rate fluctuates based on the Company’s performance against certain predetermined criteria 

related to quality and performance. Some clients are entitled to service credits when the 

Company is not in compliance with certain obligations as defined in the client contract. 

Such service credits are recorded as a reduction of revenues as incurred based on a 

measurement of the Company’s obligation under the terms of the client contract. 

For some contracts, the Company is paid by its customer based on achievement of clientdetermined 

criteria specified in the client contract such as full-time equivalents, units processed 

or completed contacts. The Company recognizes this performance-based revenue by 

measuring its actual results against the performance criteria specified in the contracts. 

Amounts collected from customers prior to the performance of services are recorded as 

deferred revenue. These advances are amortized to revenues in accordance with the 

Company’s policy on revenue recognition. 

The Company classifies reimbursements received from customers for out-of-pocket 

expenditures as revenues. The Company incurs out-of-pocket expenditures such as expenses 

related to travel, postage and telecommunications costs for which customers have agreed 

to reimburse Minacs. The corresponding cost associated with this revenue is recorded 

within direct expenses. Some customers agree to reimburse the Company for initial training 

and recruiting costs over a specified period of time. The revenue for these costs is recorded 

over the period of time stipulated within the contract with a corresponding cost recorded 

within direct expenses. 

Property, Plant and Equipment 

Property, plant and equipment are stated at cost less accumulated amortization. Amortization 

is provided on a straight-line basis over the estimated useful lives of the assets. Computer 

equipment is amortized over a four-year life. Communications equipment is amortized over 

five to seven-year lives. Furniture and fixtures are amortized over seven to ten-year lives. 

Leasehold improvements are amortized over the term of the lease. 

Leases 

Leases are classified as either capital or operating leases. Leases that substantially transfer 

all of the benefits and risks of ownership of property to the Company are accounted for as 

capital leases. At the time a capital lease is entered into, an asset is recorded together with 

its related long-term obligation to reflect the acquisition and financing. Equipment recorded 

under capital leases is amortized on the same basis as property, plant and equipment. 

Rental payments under operating leases are expensed as incurred. 

Business Combinations, Goodwill and Intangible Assets 

The Company follows the guidance in the CICA Handbook Section 1581, Business 

Combinations, which requires all business combinations to be accounted for using the 

purchase method. In addition, any goodwill and intangible assets acquired in a business 

combination are accounted for under CICA Handbook Section 3064, Goodwill and Intangible 

Assets. This section requires that goodwill not be amortized, while identified intangible 

assets with finite useful lives be amortized over their useful lives. 

Goodwill represents the excess of the purchase price over the fair value of the net identifiable 

assets acquired. Goodwill and indefinite life intangible assets are tested for impairment 

annually or more frequently if events or changes in circumstances indicate that those assets 

might be impaired. The impairment test is carried out in two steps. In the first step, the 

identification of a potential impairment is determined by comparing the fair value of the 

reporting unit to its carrying value. Fair value is based on estimates of discounted future 

cash flows. When the fair value of the reporting unit is less than its carrying value, the fair 

value is allocated to all its assets and liabilities based on their fair values. The amount that 

the fair value of the reporting unit exceeds the amounts assigned to its assets and liabilities 

is the fair value of the goodwill. In the second step, impairment is determined by comparing 

the fair value of goodwill to its carrying value. Any shortfall is charged to income. 

Intangible assets with finite useful lives acquired through business combinations are recorded 

at their fair value at the date of acquisition. An impairment loss on an intangible asset with 

a finite useful life is recognized when its carrying value exceeds the total undiscounted cash 

flows expected from its use and disposition. The amount of loss is determined by deducting 

its fair value based on undiscounted cash flows expected from its use and disposition from 

its carrying value. The Company reviews definite life intangible assets for impairment whenever 

events or changes in circumstances indicate that the carrying value may not be recoverable. 

Amortization of intangible assets, other than computer software, is provided on a straightline 

basis over ten years. Computer software is amortized over four to five-year lives. 

Asset Impairment 

The Company follows the guidance in CICA Handbook Section 3063, Impairment of Long- 

Lived Assets, and CICA Handbook Section 3855, Financial Instruments - Recognition and 

Measurement. The Company evaluates the carrying value of long-lived assets for potential 

(388)

C M Y K 


impairment annually or more frequently if events or circumstances warrant a review. The 

carrying value of such assets is considered impaired when the anticipated net recoverable 

amount of the asset is less than its carrying value or when the change in value is other than 

temporary. In that event, the carrying value of the asset is adjusted to fair value and an 

impairment loss is charged to income. The Company reviews long-lived assets for impairment 

whenever events or changes in circumstances indicate that the carrying value may not be 

recoverable. 

Income Taxes 

The Company follows the liability method of accounting for income taxes. Under this method, 

future tax assets and liabilities are determined based on differences between the financial 

reporting and tax bases of assets and liabilities, and are measured using substantively 

enacted tax rates and laws that are expected to be in effect when the differences are 

expected to reverse. Valuation allowances are established when necessary to reduce future 

tax assets to the estimated amount that is more likely than not to be realized. 

Government Assistance 

Government assistance towards current expenses is included in the determination of income 

for the year as a reduction of the expenses to which it relates. The Company has made a 

number of estimates and assumptions in determining the amount eligible for government 

assistance. It is possible that the allowed amount of assistance could be materially different 

from the recorded amount upon assessment by the respective government agency. 

Equity and Comprehensive Income 

Comprehensive income is the change in equity from transactions and other events from 

non-owner sources. Other comprehensive income refers to items recognized in 

comprehensive income that are excluded from net income calculated in accordance with 

Canadian GAAP. 

Financial Instruments 

All financial instruments, including derivatives, are measured on the consolidated balance 

sheet at fair value except for loans and receivables, held-to-maturity investments and other 

financial liabilities, which are measured at amortized cost. Subsequent measurement and 

changes in fair value will depend on their initial classification, as follows: held-for-trading 

financial assets are measured at fair value and changes in fair value are recognized in net 

income; available-for-sale financial instruments are measured at fair value with changes in 

fair value recorded in other comprehensive income until the investment is derecognized or 

impaired, at which time the amounts would be recorded in net income. The Company’s 

financial assets and liabilities are generally classified and measured as follows: 

Asset/Liability Category Measurement 

Cash Held-for-trading Fair value 

Receivables Loans and receivables Amortized cost 

Payables and accrued liabilities Other financial liabilities Amortized cost 

Long-term debt Other financial liabilities Amortized cost 

Obligations under capital leases Other financial liabilities Amortized cost 

Deferred grant and government assistance Other financial liabilities Amortized cost 

The Company had no financial instruments classified as available-for-sale during the year 


Financing costs and credit facility arrangement fees associated with the issuance of longterm 

debt are netted against the carrying value of the related debt and are amortized using 

the effective interest rate method to interest expense over the period to maturity of the 

related debt. 

Hedges 

The Company applies hedge accounting to forward rate contracts, options and crosscurrency 

swap agreements. These contracts have been designated as cash flow hedges, 

and are measured at fair value at the end of each period. The resulting gain/loss on 

recognition of the forward rate contracts, options and cross-currency swap agreements is 

recognized in other comprehensive income. 

Foreign Exchange Translation 

Foreign operations are considered to be self-sustaining and are translated into Canadian 

dollars using the current rate method. Assets and liabilities are translated using the exchange 

rate in effect at the consolidated balance sheet date and revenues and expenses are translated 

at the average rate for the month in which the transaction is recorded. Exchange gains or 

losses on translation of the Company’s investments in these subsidiaries are recorded in 

accumulated other comprehensive income. 

Research and Development 

Research costs are expensed as incurred. Development costs that meet specific criteria 

related to technical, market and financial feasibility are capitalized and amortized over the 

useful life of the technology when put into use. 

3 ACQUISITION 

On March 9, 2010, the Company acquired Compass BPO Limited (“Compass”) for cash 

consideration of $7,853,000 (INR 34.68 Cr) including acquisition costs of $39,000 (INR 

0.17 Cr). The purchase has been accounted for under the purchase method and, accordingly, 

the results of operations are included in the consolidated financial statements from the date 

of acquisition. The consideration and allocation of the purchase price are as follows: 

CAD$ INR/Cr 

Net working capital 903,000 3.99 

Property, plant and equipment 476,000 2.10 

Customer relationships (Note 7) 4,138,000 18.27 

Goodwill (Note 8) 3,718,000 16.42 

Future income tax liability (1,382,000) (6.10) 

7,853,000 34.68 

The customer relationships will be amortized on a straight-line basis over ten years. Included 

in the net working capital is $257,000 (INR 1.13 Cr) of cash. 

4 OTHER RECEIVABLES 

Other receivables are comprised of: 


Tax credits recoverable and 

other assets (Note 9(a)) $10,818 47.77 $1,014 4.08 

Payroll rebates receivable (Note 9(b)) 230 1.02 642 2.58 

Derivative asset (Notes 11 and 17) 7,474 33.01 0 0.00 

Balance, end of year $18,522 81.79 $1,656 6.67 

As at March 31, 2009, a derivative liability of $11,300,000 (INR 49.90 Cr) was included 

in accounts payable and accrued liabilities. 

5 PROPERTY, PLANT AND EQUIPMENT 

CAD$’000 CAD$’000 INR/Cr INR/Cr CAD$’000 CAD$’000 INR/Cr INR/Cr 


Accumulated Accumulated Accumulated Accumulated 

Cost Depreciation Cost Depreciation Cost Depreciation Cost Depreciation 

Computer 

equipment $28,339 ($23,762) 125.15 (104.93) 28,584 (22,578) 115.08 (90.90) 

Communications 

equipment 14,218 ($12,103) 62.79 (53.45) 15,150 (11,826) 60.99 (47.61) 

Furniture and 

fixtures 16,785 ($9,251) 74.12 (40.85) 17,707 (8,449) 71.29 (34.02) 

Vehicles 58 ($45) 0.26 (0.20) 0 0 0.00 0.00 

Leasehold 

improvements 21,088 ($10,903) 93.12 (48.15) 20,971 (9,052) 84.43 (36.44) 

$80,488 ($56,064) 355.44 (247.58) 82,412 (51,905) 331.79 (208.97) 

Less: accumulated 

depreciation ($56,064) (247.58) (51,905) (208.97) 

$24,424 107.86 30,507 122.82 

Included in these figures are assets under capital leases as follows 



Cost 15,193 67.09 19,466 78.37 

Less: accumulated depreciation (9,915) (43.78) (10,533) (42.41) 

Net book value 5,278 23.31 8,933 35.96 

The assets under capital leases are held as collateral for the capital lease obligations. For 

the year ended March 31, 2010, included within amortization expense is $1,732,000 (INR 

7.65 Cr) (2009: $3,112,000) (INR 13.74 Cr) relating to assets under capital leases. 

Included in restructuring charges for 2010 is an impairment loss of $933,000 

(INR 4.33 Cr) relating to the write-down in value of leasehold improvements and lease exit 

costs relating to the Saskatoon and Port Hawkesbury site closures (Note 14). Included in 

restructuring charges for 2009 is an impairment loss of $4,606,000 (INR 20.08 Cr) relating 

to the write-down in value of leasehold improvements and lease exit costs relating to the 

Saskatoon, Pickering and Chatham site closures (Note 14). 

(389)

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6 DEFERRED DEVELOPMENT COSTS 

Deferred development costs are comprised of: 



Balance, beginning of year $546 2.41 0 0.00 

Additions 2,693 11.89 546 2.20 

Capitalized to computer software (576) (2.54) 0 0.00 

Foreign currency translation adjustment (200) (0.88) 0 0.00 

Balance, end of year $2,463 10.88 $546 2.20 

7 INTANGIBLE ASSETS 

Intangible assets consist of: 

CAD$’000 CAD$’000 INR/Cr INR/Cr CAD$’000 CAD$’000 INR/Cr INR/Cr 


Accumulated Accumulated Accumulated Accumulated 


Co Computer 

software 34,119 (30,278) 150.67 (133.71) 33,497 (29,484) 134.86 (118.70) 

Communications 

relationship Note 3) 4,138 (34) 18.27 (0.15) 0 0 0.00 0.00 

Other 654 (551) 2.89 (2.43) 812 (602) 3.27 (2.42) 

38,911 (30,863) 171.83 (136.29) 34,309 (30,086) 138.13 (121.13) 

Less: accumulated 

depreciation (30,863) (136.29) (30,086) (121.13) 

8,048 35.54 4,223 17.00 

Included in these figures are intangible assets under capital leases as follows: 



Cost 2,691 11.88 3,064 12.34 

Less: accumulated depreciation (2,475) (10.93) (2,586) (10.41) 

Net book value 216 0.95 478 1.92 

The intangible assets under capital leases are held as collateral for the capital lease 

obligations. For the year ended March 31, 2010, included within amortization expense is 

$165,000 (INR 0.72 Cr) (2009: $268,000) (INR 1.17 Cr) relating to intangible assets 

under capital leases. 

8 GOODWILL 

Goodwill consists of: 



Balance, beginning of year 6,818 30.11 6,372 25.65 

Acquisition of Compass (Note 3) 3,718 16.42 0 0.00 

Foreign currency translation adjustment (466) (2.06) 446 1.80 

Balance, end of year 10,070 44.47 6,818 27.45 

9 DEFERRED GRANT AND GOVERNMENT ASSISTANCE 

(a) In fiscal 2009, the Company became eligible to receive funding from the Ontario 

Apprenticeship Program. For the year ended March 31, 2010, the Company recorded 

$10,775,000 (INR 47.58 Cr) (2009: $1,014,000) (INR 4.42 Cr) as a reduction of 

direct expenses and selling, general and administrative expenses for these grants. As 

at March 31, 2010, the Company has recorded $10,818,000 (INR 47.77 Cr) (2009: 

$1,014,000) (INR 4.48 Cr) as part of other receivables. 

(b) The Company also receives payroll rebates from Nova Scotia Business Inc. if certain 

incremental wage growth is achieved within the Province of Nova Scotia. As at March 

31, 2010, the Company has recorded $230,000 (INR 1.02 Cr) (2009: $642,000) 

(INR 2.83 Cr) as a payroll rebate receivable which is included in other receivables. 

During the year ended March 31, 2010, the Company recorded $231,000 (INR 

1.01 Cr) (2009: $257,000) (INR 1.12 Cr) as a reduction of direct expenses and 

selling, general and administrative expenses for this grant. 

(c) In fiscal 2008, Minacs finalized an agreement with the Province of New Brunswick to 

receive a forgivable loan in the amount of $2,260,000 (INR 9.98 Cr). The loan 

provides for forgiveness subject to terms being met in respect of employment to be 

created at a contact centre in that province. To date, Minacs has received $900,000 

(INR 3.97 Cr); no amounts were received in fiscal 2010. As at March 31, 2010, the 

Company has recorded $858,000 (INR 3.79 Cr) (2009: $771,000) (INR 3.4 Cr) as 

deferred grant and government assistance. If the terms of the loan are not met by 

August 31, 2014, then the amount remaining as deferred grant and government 

assistance will need to be repaid. 

10 LONG-TERM DEBT 



Senior revolving facility – 

Bank of America 33,914 149.76 35,779 144.05 

Non-revolving term facility – 

BNP Paribas (Canada) 0 0.00 20,918 84.22 

33,914 149.76 56,697 228.26 

Less: current portion (33,914) (149.76) (56,697) (228.26) 

0 0 0 0 

Senior Revolving Facility – Bank of America 

This facility bears interest at 0.65% margin over bank prime, banker’s acceptance or LIBOR 

rates. The total commitment available under the senior revolving facility is $40,000,000 

(INR 176.64 Cr), subject to certain borrowing base calculations and certain other restrictive 

covenants. The facility is a 365-day facility and, as collateral, the Company has given a 

first charge on accounts receivable. In addition, this facility is guaranteed by Aditya Birla 

Nuvo Limited. As at March 31, 2010, the Company is in compliance with applicable bank 

covenants. 

Non-Revolving Term Facility – BNP Paribas (Canada) 

As at March 31, 2010, this facility was fully repaid. Subsequent to the year end, BNP 

Paribas (Canada) has released the corporate guarantee on the debt and is proceeding with 

releasing their charge on the Company’s property, plant and equipment in North America 

held as collateral against said facility. 

Interest Rate 

The weighted average interest rate on borrowings at March 31, 2010 was 1.05% (2009: 

4.62%). 

Interest and financing expenses are comprised of the following amounts: 



Interest expense on loans from 

Parent Company (Note 11) $157 0.68 $1,213 5.02 

Interest expense on long-term debt 1,311 5.72 3,832 15.87 

Interest expense on obligations 

under capital leases 313 1.36 790 3.27 

Other interest expense (income) 19 0.08 (532.00) (2.20) 

Net interest expense 1,800 7.85 5,303 21.97 

Amortization of deferred financing expenses 83 0.36 454 1.88 

Bank charges 675 2.94 187 0.77 

Foreign exchange loss 71 0.31 4,114 17.04 

Total interest and financing expenses $2,629 11.46 $10,058 41.66 

11 RELATED PARTY TRANSACTIONS 

Transactions with the Aditya Birla Nuvo Limited group of companies are as follows: 



Interest charged on long debt (Note 10) $157 0.68 $1,213 5.02 

Reimbursable expenses in statement 

of operations and deficit $6,934 30.23 $1,167 4.83 

Net amount due to related parties in 

respect of accrued interest and 

reimbursable expenses $1,067 4.71 $1,377 5.54 

These transactions are measured at the exchange amounts of consideration established 

and agreed to by the related parties. 

In fiscal 2010, the Company entered into a forward contract agreement with AV TransWorks 

Limited Canada to provide foreign exchange protection to AV TransWorks Limited Canada 

on their foreign exchange liability in the amount of U.S. $24,500,000 (INR 108.19 Cr). For 

the year ended March 31, 2010, Minacs has recorded a $5,699,000 (INR 25.17 Cr) 

(2009 – nil) gain in other comprehensive income. The derivative asset of $7,474,000 (INR 

33.01 Cr) recorded by the Company as at March 31, 2010 includes this gain. 

(390)

C M Y K 


12 SHARE CAPITAL 

The Company is authorized to issue an unlimited number of common shares and an unlimited 

number of preferred shares issuable in series: 



Number 

Number 

of Shares Amount Amount of Shares Amount Amount 

Common Shares 27,945,822 70,071 309.43 27,945,822 70,071 282.11 

Redeemable Series A 

Preference Shares 20,321,721 20,322 89.74 20,321,721 20,322 81.82 

Redeemable Series B 

Preference Shares 30,000,000 30,000 132.48 0 0 0.00 

120,393 531.66 90,393 363.92 

The Company received $20,000,000 (INR 88.32 Cr) on February 24, 2010 and a further 

$10,000,000 (INR 44.16 Cr) on March 26, 2010 in cash from its parent company AV 

Transworks Limited Canada as subscription for Redeemable Series B Preference Shares that 

were issued during the year. 

The Series A Preference Shares are redeemable at face value at the option of the Company, 

at any time after December 31, 2012. The Series B Preference Shares are redeemable at 

face value at the option of the Company, at any time after December 31, 2014. However, 

there is no redemption obligation on the Company. The preference shareholders are entitled 

to a cumulative dividend of 4.50% for Series A and 5% for Series B on the outstanding 

preference shares. The payment of dividends is at the discretion of the Company and 

subject to availability of profits of the Company. The undeclared dividend as of March 31, 

2010 is $1,029,312 (INR 4,55 Cr) (2009 - $2,505) (INR 0.01 Cr). 

13 COMMITMENTS AND CONTINGENCIES 

Capital Leases 

Interest on obligations under capital leases accrues at various rates ranging from 6.5% to 

9.2%. The following is a schedule of future minimum annual lease payments for these 

capital leases: 

CAD$’000 INR/Cr 

31-Mar-10 31-Mar-10 

Total minimum lease payments 1,682 7.43 

Less: amount representing interest (39) (0) 

Present value of net minimum lease payments, all current 1,643 7.26 

Commitments 

The Company has operating leases for its premises, furniture and fixtures and certain 

computer and communications equipment, as well as minimum purchase commitments for 

telephone services. The minimum annual payments for the next five years and thereafter 

are as follows: 


2011 $8,630 38.11 

2012 7,280 32.15 

2013 6,333 27.97 

2014 6,343 28.01 

2015 4,845 21.40 

Thereafter 8,515 37.60 

Total commitments $41,946 185.23 

Contingent Liabilities 

On May 17, 2006, the former major shareholder and founder of the Company, Elaine 

Minacs, died. The major shareholder of the Company then became the Estate of Elaine 

Minacs (the “Estate”) together with certain entities controlled by it (the “EM Shareholders”) 

until August 18, 2006, when AV TransWorks Limited Canada acquired the shares of the 

Estate and the EM Shareholders. 

The Company is the owner of a $350,000 (INR 1.55 Cr) whole life insurance policy and a 

$2,000,000 (INR 8.83 Cr) term life insurance policy insuring the life of Elaine Minacs. The 

term life policy is a key-man policy, originally required by the Company’s previous lenders. 

The beneficiary of the policies when they were originally acquired was the Company. During 

2005, the beneficiary of the whole life insurance policy was changed at the direction of 

Elaine Minacs. Also during 2005, the beneficiary of the term life insurance policy was 

changed to family members related to Elaine Minacs at the direction of Elaine Minacs. In 

fiscal 2007, management changed the beneficiary back to the Company. A legal proceeding 

has been commenced by the Estate against the Company claiming $5,000,000 (INR 22.08 

Cr) in damages stating that the change in beneficiary was in breach of Elaine Minacs’ 

employment agreement. Proceeds of $350,000 (INR 1.55 Cr) were paid into escrow pursuant 

to an escrow agreement with the Estate. The proceeds of $2,000,000 (INR 8.83 Cr) were 

paid by the underwriter to the court to be held in trust. The Company has filed a defense 

and counterclaim to the initial Estate claim in August 2007 for the proceeds of the life 

insurance policies and damages of $500,000 (INR 1.55 Cr). A second claim for damages 

of $500,000 (INR 1.55 Cr) and for punitive damages of $100,000 (INR 0.44 Cr) was 

commenced by the Estate in December 2007 stating the Company was in breach of contract 

related to an employment agreement. Management has not accrued a contingent liability 

for the claims made by the Estate because they believe that the claims have no merit and 

the outcome of the proceeding is not determinable. 

During the ordinary course of business activities, in addition to the above, the Company 

may be a party to claims and may be contingently liable for litigation. Management believes 

that adequate provisions have been made in the accounts where required. Although it is 

not possible to estimate the extent of potential costs and losses, if any, management believes 

that the ultimate resolution of such contingencies will not have a material adverse effect on 

the consolidated financial position of the Company. 

Guarantees 

At March 31, 2010, the Company had $75,000 (INR 0.33 Cr) (2009: $75,000) (INR 0.33 

Cr) of outstanding letters of credit to secure customer performance guarantees. 

14 RESTRUCTURING AND OTHER CHARGES 

In fiscal 2010, the Company terminated a number of employees. Total severance payments 

and other charges of $1,343,000 (INR 5.85 Cr) (2009: $1,825,000) (INR 7.96 Cr) have 

been charged to restructuring costs. 

In fiscal 2009, the Company closed its Saskatoon and Pickering sites and suspended 

operations at its Chatham site. 

In fiscal 2010, the Company approved a plan to close its Port Hawkesbury site and restart 

the operations at the Chatham site. 

The costs recorded in restructuring relating to lease exit costs and asset impairment in fiscal 

2010 are $2,485,000 and include a recovery of $687,000 (INR 2.99 Cr) of the prior year 

provision (2009: $6,452,000) (INR 28.13 Cr). 

The details of severance expenses, impaired assets, lease exist costs for the balance of the 

remaining lease periods and the credits against lease exit liabilities are given below: 



Lease exit costs 2,239 9.76 2,348 9.73 

Other lease exit credits (687) (2.99) (502) (2.08) 

Write down of property, plant and equipment 933 4.07 4,606 19.08 

Severance and other items 1,343 5.85 1,825 7.56 

Restructuring and other charges 3,828 16.69 8,277 34.28 

A reconciliation of beginning and ending accounts payable and accrued liabilities with 

respect to the restructuring and other charges is as follows: 

CAD$’000 CAD$’000 CAD$’000 CAD$’000 INR/Cr INR/Cr INR/Cr INR/Cr 

31-Mar-09 Charges 31-Mar-10 31-Mar-09 Charges 31-Mar-10 

Incurred Paid Incurred Paid 

Lease exit costs 3,681 1,552 (1,998) 3,235 14.82 6.77 (8.71) 14.29 

Severance 208 1,343 (1,495) 56 0.84 5.85 (6.52) 0.25 

Accounts payable 

and accrued liabilities 

relating to restructuring 

and other charges 3,889 2,895 (3,493) 3,291 15.66 12.62 (15.23) 14.53 

Long-term accrued liabilities relating to operating leases relate to tenant inducements and freerent 

liabilities. 

15 INCOME TAX 

Future tax assets consist of the following temporary differences: 



Operating losses carried forward 19,608 86.59 21,846 87.95 

Accounts payable and accrued liabilities 2,269 10.02 2,663 10.72 

Property, plant and equipment 77 0.34 1,190 4.79 

Deferred grant and government assistance 218 0.96 224 0.90 

Other 382 1.69 657 2.65 

22,554 99.60 26,580 107.01 

Valuation allowance (21,880) (96.62) (25,990) (104.64) 

Less: current portion (273) (1.21) (14) (0.06) 

Future tax liabilities consist of the following temporary differences: 

401 1.77 576 2.32 



Property, plant and equipment $304 1.34 $763 3.07 

Other receivables 823 3.63 206 0.83 

Intangible assets 1,382 6.10 0 — 

$2,509 11.08 $969 3.90 

(391)

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Expiry of Losses 

As at March 31, 2010, the Company has non-capital losses of approximately $77,316,000 

(INR 341.43 Cr) available to reduce future years’ income for tax purposes. If not utilized, 

these losses will expire as follows: 


2011 $1,847 8.16 

2026 21,754 96.07 

2027 14,188 62.65 

2028 17,595 77.70 

2029 19,445 85.87 

2030 2,486 10.98 

$77,315 341.42 

16 SUPPLEMENTAL CASH FLOW INFORMATION 

Adjustments to reconcile net income (loss) to cash flows provided by operating activities 

include: 


Year ended March 31 Year ended March 31 


Depreciation and amortization 9,870 43.59 11,247 45.28 

Write down of property, plant 

and equipment 934 4.12 0 0.00 

Restructuring charges (recovery) (687) (3.03) 4,605 18.54 

Amortization of deferred financing 

expenses 83 0.37 454 1.83 

Future income taxes 179 0.79 449 1.81 

Amortization of deferred grant and 

government assistance 125 0.55 5 0.02 

Amortization of intangible assets 105 0.46 72 0.29 

Loss (gain) on sale of property, 

plant and equipment 11 0.05 (2) (0.01) 

Total adjustments to reconcile net 

income (loss) to cash provided by 

operating activities 10,620 46.90 16,830 67.76 

The net change in non-cash working capital balances related to operations include: 




Accounts receivable and unbilled revenues (399) (1.76) 5,588 22.50 

Prepaid expenses 124 0.55 1,037 4.17 

Income taxes recoverable (payable) 570 2.52 (1,555) (6.26) 

Accounts payable and accrued liabilities (133) (0.59) 6,186 24.90 

Total net change in non-cash working 

capital balances related to operations 162 0.72 11,256 45.32 

Cash interest and income taxes paid are as follows: 



2010 2009 2009 

Interest $3,009 13.29 $10,854 43.70 

Income taxes $549 2.42 $2,953 11.89 

17 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT 

Fair Value of Financial Instruments 

The fair value of financial instruments, which include cash, accounts receivable and unbilled 

revenue, other receivables, income taxes recoverable, accounts payable and accrued 

liabilities, long-term debt, income and other taxes payable, and obligations under capital 

leases, approximates their carrying value due to their short-term nature and/or variable 

interest rates. 

Other financial instruments are long-term in nature, which include long-term receivables, 

accrued liabilities relating to operating leases and deferred grant and government assistance, 

and due to their nature are measured at amortized cost, which approximates their fair 

value. 

Risk Management 

The Company’s activities expose it to a variety of financial risks, including market risk 

(comprised of foreign currency risk and interest rate risk), credit risk and liquidity risk. The 

Company’s overall risk management program focuses on the unpredictability of financial 

markets and seeks to minimize potential adverse effects on the Company’s financial 

performance. The Company does not purchase any derivative financial instruments for 

speculative purposes. 

Risk management is the responsibility of the corporate finance function. Material risks are 

monitored and are regularly discussed with the Audit Committee of the Board of Directors. 

Foreign Currency Risk 

The Company has significant operations in Canada and the United States. The Company’s 

activities result in exposure to fluctuations in foreign currency exchange rates due to sale 

and purchase transactions in a foreign currency. Increases or decreases in these rates 

could impact the Company’s net income. 

As at March 31, 2010, the Company purchased financial instruments to hedge its foreign 

currency exposure as follows: 

INR/Cr 

(Dollars in thousands) 31-Mar-10 31-Mar-10 

Notional Amount Average Fair Market Fair Market 

in USD Rate to CAD Term Value Gain Value Gain 

Financial Instrument 

USD forward foreign April 2010 – 

exchange rate contracts 76,500 1.1203 March 2012 $7,474 CAD 33.01 

Included in revenues are losses from foreign exchange hedging contracts amounting to 

$1,302,000 (INR 5.68 Cr) for the year ended March 31, 2010 (2009: $7,375,000) (INR 

32.15 Cr. Included in selling, general and administrative expenses are gains from foreign 

exchange hedging contracts amounting to $183,000 (INR 0.80 Cr) for the year ended 

March 31, 2010 (2009: loss of $718,000 (INR 3.13 Cr)). At March 31, 2010, all contracts 

were designated as hedges for accounting purposes. 

During the year ended March 31, 2010, a substantial portion of the Company’s income 

was earned outside of Canada in currencies other than the Canadian dollar. Increases in 

the value of the Canadian dollar can reduce net income and declines can result in increased 

net income. Based on the income, a +/- 1% change in the United States dollar would, 

everything else being equal, have had the following effect on the Company’s reported net 

income for the year ended March 31, 2010: 

CAD INR/Cr 

Average Increase / Increase / 

exchange decrease decrease 

rate of 1% of 1% 

United States dollar 1.10542 $698,000 3.04 

The table below presents the percentages of the Company’s accounts receivable, accounts 

payable and accrued liabilities that are denominated in US dollars: 



Accounts receivable 43% 57% 

Accounts payable 57% 41% 

Accrued liabilities 86% 32% 

During the years ended March 31, 2010 and 2009 the following percentage of revenues 

and expenses were earned or incurred in US dollars: 



Revenues 58% 71% 

Expenses 36% 39% 

Interest Rate Risk 

The objective of the Company’s interest rate management activities is to minimize the 

volatility of the Company’s income. The Company’s interest rate risk primarily arises from 

its floating rate debt. 

At March 31, 2010, the total long-term debt outstanding was $33,914,000 (INR 149.76 

Cr) which is subject to movements in floating interest rates. A +/-1% change in interest 

rates would, everything else being equal, have an effect on the Company’s net income for 

the year ended March 31, 2010 of approximately +/- $412,000 (INR 3.10 Cr). 

Credit Risk 

Credit risk arises from cash held with banks and financial institutions, as well as credit 

exposure to clients, including outstanding accounts receivable. The maximum exposure to 

credit risk is equal to the carrying value of the financial assets. The objective of managing 

counterparty credit risk is to prevent losses in financial assets. The Company assesses the 

credit quality of the counterparties, taking into account their financial position, past experience 

and other factors. 

The Company derived 50.2% or $148,000,000 (INR 645.18 Cr) of its revenues from 

multiple contracts with two groups of clients in the automotive and technology sectors for 

the year ended March 31, 2010 (2009: 51.9% or $180,590,000) (INR 787.26 Cr). 

As at March 31, 2010, multiple contracts with two clients represented 35.9% (2009: 55.8%) 

of the accounts receivable balance. 

The following table sets out details of the aging of accounts receivable that are outstanding 

and related allowance for doubtful accounts: 

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Current 32,460 143.34 

31-60 days 15,434 68.16 

61-90 days (7) (0.03) 

Over 90 days 55 0.24 

Less: allowance for doubtful accounts (72) (0.32) 

Total accounts receivable and unbilled revenues, net 47,870 211.39 

Included in accounts receivable and unbilled revenue are unbilled revenues of $14,652,000 

(INR 64.7 Cr) (2009: $3,340,000) (INR 14.75 Cr). 

The carrying amount of accounts receivable is reduced through the use of an allowance 

account and the amount of the loss is recognized in the consolidated statement of operations 

and deficit within operating expenses. When a receivable balance is considered uncollectible, 

it is written off against the allowance for accounts receivable. Subsequent recoveries of 

amounts previously written off are credited against operating expenses in the consolidated 

statement of operations and deficit. 



Allowance for doubtful accounts – March 31, 2009 214 0.95 

Provisions 8 0.04 

Write-offs (120) (0.53) 

Foreign currency translation adjustment (30) (0.13) 

Allowance for doubtful accounts – March 31, 2010 72 0.32 

Liquidity Risk 

Liquidity risk arises through the excess of financial obligations over available financial assets 

due at any point in time. The Company’s objective in managing liquidity risk is to maintain 

sufficient readily available reserves in order to meet its liquidity requirements at any point in 

time. The Company achieves this by maintaining sufficient cash and through the availability 

of funding from committed credit facilities. As at March 31, 2010, the Company was 

holding cash of $4,230,000 (INR 18.68 Cr). 

18 MANAGEMENT OF CAPITAL 

The Company defines capital that it manages as the aggregate of its shareholders’ equity, 

cash on the balance sheet and interest-bearing debt. The Company’s objective when 

managing capital is to ensure that it can provide services to its customers and returns to its 

shareholders. 

As at March 31, 2010, managed capital comprised of shareholders’ equity of $48,472,000 

(INR 214.05 Cr) (2009: $3,805,000) (INR 16.8 Cr), cash of $4,230,000 (INR 18.68 Cr) 

(2009: $3,087,000) (INR 13.63 Cr) and interest-bearing debt of $35,557,000 (INR 157.02 

Cr) (2009: $62,878,000) (INR 277.67 Cr). 

The Company manages its capital structure in a manner that ensures operating cash flow 

together with cash on its balance sheet is greater than interest expense and current principal 

debt repayments required to be paid. 

19 EMPLOYEE BENEFIT PLANS 

The Company has defined contribution pension plans. The Company’s expenditures with 

respect to these plans were $673,000 (INR 2.93 Cr) during the year ended March 31, 

2010 (2009: $1,224,000) (INR 5.34 Cr). 

20 COMPARATIVE FIGURES 

Certain of the comparative figures have been reclassified to conform to the current year’s 

presentation. 

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MINACS GROUP (USA) Inc. 

Consolidated Balance Sheet (Unaudited in US$) 

As At 

As At 


US$ INR/Cr US$ INR/Cr 


I Shareholders’ fund 

1. Share capital $302,040 1.36 $302,040 1.58 

2. Retained earnings $8,102,244 37.61 $6,711,455 31.19 

3. Exchange Fluctuation 

on Transaltion — (1.13) — 3.83 

II 

$8,404,284 37.84 $7,013,495 36.59 

Debt 

1. Long-term debt from 

holding company $20,768,591 93.52 $20,768,591 108.36 

$29,172,875 131.36 $27,782,086 144.95 


I Fixed Assets 

1. Property, plant and 

equipment, net $5,410,781 24.36 $6,245,114 32.58 

2. Deferred Development costs $1,480,070 6.66 — — 

3. Intangibles $101,961 0.46 $166,357 0.87 

4. Goodwill $1,900,000 8.56 $1,900,000 9.91 

$8,892,812 40.04 $8,311,471 43.36 

II Investments — — — — 

III Current assets 

1. Cash and cash equivalents $1,038,954 4.68 $1,203,632 6.28 

2. Accounts receivable $12,759,501 57.46 $15,377,669 80.23 

3. Due from parent company $14,550,822 65.52 $10,368,103 54.09 

4. Prepaid expenses $867,898 3.91 $580,327 3.03 

5. Future income taxes - 

Long term $361,234 1.63 $456,493 2.38 

6. Future income taxes - 

Short term $256,472 1.15 $1,434 0.01 

$29,834,881 134.35 $27,987,659 146.02 

Less liabilities 

I Short term 

1. Accounts payable and 

accrued liabilities $7,625,908 34.34 $6,277,087 32.75 

2. Income and other 

taxes payable (29,082) (0.13) (246,779) (1.29) 

3. Obligations under 

capital leases $321,213 1.45 $693,037 3.62 

$7,918,039 35.66 $6,723,345 35.08 

II Long term 

1. Accounts payable and 

accrued liabilities $527,081 2.37 $704,779 3.68 

2. Obligations under 

capital leases — — $321,213 1.68 

3. Future income taxes $1,109,698 5.00 $767,707 4.01 

Total liabilities $9,554,818 43.03 $8,517,044 44.44 

Net Assets $20,280,063 91.32 $19,470,615 101.59 

Total $29,172,875 131.37 $27,782,086 144.95 

Statement of Operations and Deficit 

Unaudited in US $ 

31/3/2010 31/3/2010 31/3/2009 31/3/2009 

US$ INR/Cr US$ INR/Cr 

Revenues $97,017,763 448.13 $118,834,456 552.20 

Expenditures 

Direct expenses $72,406,782 334.45 $92,167,048 428.28 

Selling, general and 

administrative expenses $12,268,172 56.67 $12,188,117 56.64 

$84,674,953 391.12 $104,355,165 484.92 

Earnings before interest, income 

taxes, depreciation, amortization 

and restructuring and 

other charges $12,342,810 57.01 $14,479,290 67.28 

Management fee $6,857,000 31.67 $7,792,900 36.21 

Restructuring and other charges $113,188 0.52 273,179 1.27 

Interest and financing expenses $944,475 4.36 $987,779 4.59 

Depreciation and amortization $2,177,429 10.06 $2,291,937 10.65 

Provision for (recovery of) income taxes 

Current $677,717 3.13 $1,239,612 5.76 

Future $182,212 0.84 387,021 1.80 

Net income (loss) for the period $1,390,789 6.42 $1,506,863 7.00 

Earnings/(Deficit), beginning of period $6,711,455 31.19 $5,204,593 24.18 

Retained earnings, end of period $8,102,244 37.61 $6,711,455 31.19 

Notes: 

See accompanying notes to the financial statements. 

Average FE Conversion Rate for US$ to INR 

for the Financial year 46.19 46.47 

Notes : 


FE Conversion Rate for US$ to INR as at end of year 45.03 52.17 









(394)

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NOTES TO FINANCIAL STATEMENTS MARCH 31, 2010 

1. NATURE OF BUSINESS 

Minacs Group (USA) Inc. (the “Company” or “Minacs USA”) is a provider of business 

process outsourcing (“BPO”) solutions. These incorporate contact centre solutions, integrated 

marketing services and back office administration. Minacs USA is a subsidiary of Minacs 

Worldwide Inc. (“Minacs”). 



The preparation of these financial statements in conformity with Canadian generally accepted 

accounting principles requires management to make estimates and assumptions. These 

estimates and assumptions affect the reported amounts of assets and liabilities and disclosure 

of contingent assets and liabilities at the date of the financial statements and the reported 

amounts of revenues and expenses during the year. Actual results could differ from those 

estimates. 


The Company derives revenues through the provision of direct resources to its customers 

and consulting arrangements. Payment terms may vary by contract. The Company recognizes 

revenues at the time services are performed and when the price is fixed or determinable 

and collection is reasonably assured. 

The majority of revenues are recognized based on the billable hours or minutes rendered 

as defined in the client contract. The rate per billable hour or minute charged is based on 

a predetermined contractual rate as agreed in the underlying contract. This contractual 

rate fluctuates based on the Company’s performance against certain predetermined criteria 

related to quality and performance. Some clients are entitled to penalties when the Company 

is not in compliance with certain obligations as defined in the client contract. Such penalties 

are recorded as a reduction of revenues as incurred based on a measurement of the 

Company’s obligation under the terms of the client contract. 

For some contracts the Company is paid by its customer based on achievement of certain 

level of revenues or other client-determined criteria specified in the client contract such as 

full time equivalents, units processed or completed contacts. The Company recognizes this 

performance-based revenue by measuring its actual results against the performance criteria 

specified in the contracts. 

Amounts collected from customers prior to the performance of services are recorded as 

deferred revenue. 

These advances are amortized to revenues in accordance with the Company’s policy on 

revenue recognition. 


expenditures as revenues. The Company incurs out-of-pocket expenditures such as expenses 

related to travel, postage and telecommunications costs for which customers have agreed 

to reimburse Minacs USA. The corresponding cost associated with this revenue is recorded 

within direct expenses. Some customers agree to reimburse the Company for initial training 

and recruiting costs over a specified period of time. The revenue for these costs is recorded 

over the period of time stipulated within the contract with a corresponding cost recorded 

within direct expenses. 

Property, Plant and Equipment 

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation 

is provided from the first day of the month following the date the assets are placed into 

service, on a straight-line basis. Computer software is depreciated over four to five-year 

lives. Computer equipment is depreciated over a four-year life. Communications equipment 

is depreciated over five to seven-year lives. Furniture and fixtures are depreciated over 

seven to ten-year lives. Leasehold improvements are depreciated over the term of the lease. 

Goodwill 

Goodwill is not amortized and is tested for impairment on an annual basis. Such evaluation 

determines any impairment in value, taking into account the ability to recover the carrying 

amount of goodwill from discounted cash flows. The Company also considers projected 

future operating results, trends, and other circumstances in making such evaluations. 

In addition to the annual impairment test, the Company will perform an impairment test if 

an event occurs or circumstances change that would more likely than not reduce the fair 

value of the reporting unit below its carrying amount. 

Intangibles 

The Company allocates value to intangible assets acquired relating to customer and supplier 

contracts, proprietary processes, and certain business relationships. Amortization of 

intangibles is provided on a straight-line basis over 10 years. 

Impairment of Long-lived Assets 

The Company reviews its long-lived assets such as property, plant and equipment and 

intangibles for impairment whenever events or changes in circumstances indicate that the 

carrying amount may not be recoverable. When indicators of impairment of the carrying 

value of the asset exist, and the carrying value is greater than the net recoverable value (as 

determined on an undiscounted basis), an impairment loss is recognized to the extent that 

the fair value (measured as the discounted cash flows over the remaining life of the asset 

when quoted market values are not readily available) is below the carrying value. 

Income Taxes 

The Company follows the liability method of accounting for income taxes. Under this method, 

future tax assets and liabilities are determined based on differences between the financial 

reporting and tax bases of assets and liabilities, and are measured using substantively 

enacted tax rates and laws that are expected to be in effect when the differences are 

expected to reverse. Valuation allowances are established when necessary to reduce future 

income tax assets to the estimated amount that is more likely than not to be realized. 


Assets and liabilities are translated using the exchange rate in effect at the balance sheet 

date and revenues and expenses are translated at the average rate of the month the 

transaction is recorded. 

Cash and Cash Equivalents 

Cash and cash equivalents consist of unrestricted cash and short-term deposits having an 

initial maturity of three months or less. 

As At March 31, 2010 As At March 31, 2009 

US$ INR (Cr) US$ INR (Cr) 

3. SHARE CAPITAL 

Common shares 100 0.00 $100 0.00 

Contributed surplus 301,940 1.36 $301,940 1.58 

302,040 1.36 $302,040 1.58 

The Company is authorized to issue an unlimited number of common shares. 

4. LONG-TERM DEBT 

Loan from Parent Company 20,768,591 93.52 20,768,591 108.36 

The loan from parent company bears interest at specified margins over bank prime and is 

payable to the Parent Company over a 25 year period. 

5 PROPERTY, PLANT AND EQUIPMENT 

As At 31st March, 2010 As At 31st March, 2009 

Gross Accumulated Gross Accumulated Gross Accumulated Gross Accumulated 


In US$ In US$ In INR/Cr In INR/Cr In US$ In US$ In INR/Cr In INR/Cr 

Computer software 6,367,256 (4,581,077.4) 28.67 (20.63) 5,664,187 (3,752,908) 29.55 (19.58) 

Computer equipment 7,601,383 (6,107,934.4) 34.23 (27.50) 7,179,106 (5,282,777) 37.46 (27.56) 

Communications equipment 934,194 (905,702.3) 4.21 (4.08) 934,194 (891,613) 4.87 (4.65) 

Furniture and fixtures 2,388,900 (1,458,331.9) 10.76 (6.57) 2,269,690 (1,291,276) 11.84 (6.74) 

Leasehold improvements 2,494,614 (1,322,518.9) 11.23 (5.96) 2,460,469 (1,043,958) 12.84 (5.45) 

19,786,346 (14,375,564.9) 89.10 (64.73) 18,507,646 (12,262,531.8) 96.56 (63.98) 

Less: accumulated depreciation (14,375,565) (64.73) (12,262,532) (63.98) 

5,410,781 24.36 6,245,114 32.58 

Included in these figures are assets under capital leases as follows 

In US$ INR (Cr) In US$ INR (Cr) 

Cost 5,034,046 22.67 5,216,260 27.22 

Less: accumulated depreciation (4,289,108) (19.31) (3,880,866) (20.25) 

Net book value $744,938 3.35 $1,335,394 6.97 

Conversion rates for US$ to INR 45.03 52.17 

The assets under capital leases are held as security for the capital lease obligations. Included within depreciation and amortization is $513,877 relating to assets under capital leases. 

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6. INTANGIBLES 

Cost 643,962 2.90 $643,962 3.36 

Less: accumulated depreciation (542,001) (2.44) (477,605) (2.49) 

Net book value 101,961 0.46 $166,357 0.87 

7. GOODWILL 

Balance, beginning of period 1,900,000 8.56 $1,900,000 9.91 

Foreign currency translation 

adjustment — — — — 

Balance, end of period 1,900,000 8.56 $1,900,000 9.91 

8. FUTURE INCOME TAXES 

Accounts payable and accrued 

liabilities 512,340 2.31 $352,347 1.84 

Other 105,366 0.47 $105,580 0.55 

617,706 2.78 $457,927 2.39 

Valuation allowance — — — — 

Less: current portion (256,472) (1.15) ($1,434) (0.01) 

361,234 1.63 $456,493 2.38 

Future tax liabilities consist of the following temporary differences 

Property, plant and equipment (299,690) (1.35) $699,913 3.65 

Other assets (810,008) (3.65) $67,795 0.35 

(1,109,698) (5.00) $767,708 4.01 

9. COMMITMENTS AND CONTINGENCIES 

Capital Leases 

Interest on obligations under capital leases accrues at various rates ranging from 8.3% to 

9.1%. 

The following is a schedule of future minimum lease payments for these capital leases: 


Capital Leases US$ INR (Cr) US$ INR (Cr) 

2008 — — — — 

2009 — — — — 

2010 — — $753,410 3.93 

2011 329,278 1.48 $329,278 1.72 

Total minimum lease payments 329,278 1.48 $1,082,688 5.65 

Less: amount representing interest (8,066) (0.04) ($68,439) (0.36) 

Present value of net minimum lease 

payments 321,212 1.45 $1,014,249 5.29 

Less: current portion 321,212 1.45 $693,037 3.62 

Total capital lease obligations — — $321,212 1.68 

Commitments 

The Company has operating leases for its premises, furniture and fixtures and certain computer 

and communications equipment as well as minimum purchase commitments for telephone 

services. The minimum annual payments for the next five years and thereafter are as follows: 



2010 — — $1,632,250 8.52 

2011 1,457,358 6.56 $1,451,958 7.58 

2012 1,402,668 6.32 $1,402,668 7.32 

2013 1,402,668 6.32 $1,402,668 7.32 

2014 1,402,668 6.32 $1,402,668 6.32 

2015 467,556 2.11 — — 

Thereafter — — $467,554 2.11 

Total commitments 6,132,918 27.62 $7,759,766 39.15 

Contingent Liabilities 

During the ordinary course of business activities, the Company may be a party to claims and 

may be contingently liable for litigation. Management believes that adequate provisions 

have been made in the accounts where required. Although it is not possible to estimate the 

extent of potential costs and losses, if any, management believes that the ultimate resolution 

of such contingencies will not have a material adverse effect on the financial position of the 

Company. 

10. RELATED PARTY TRANSACTIONS 

Transactions with Related Parties are as follows: 



Management fees charged by 

Minacs Worldwide Inc 6,857,000 31.67 $7,792,900 36.21 

Interest charged by Minacs 

Worldwide Inc 712,666 3.29 $952,921 4.43 

Interest charged to IT Services (794,836) (3.67) — — 

Reimbursable expenses - 

Aditya Birla Minacs Worldwide Ltd 149,428 0.69 $215,615 1.00 

These transactions are measured at the exchange amounts of consideration established and 

agreed to by the related parties. 

11. EMPLOYEE BENEFIT PLANS 

The Company has defined contribution pension plans. The Company's pension 

plan expenditures were $4,160 (Previous Year $430,563) (INR .02 Cr) (Previous Year 

INR 1.94 Cr) during 2010. 

12 INTEREST AND FINANCING EXPENSES 

Interest and financing expenses are comprised of the following amounts: 



Interest expense on long-term debt 712,666 3.29 $952,921 4.43 

Interest expense on obligations 

under capital leases 60,373 0.28 $127,287 0.59 

Other interest expense (income) 21,850 0.10 $15,882 0.07 

Interest expense 794,888 3.67 $1,096,090 5.09 

Amortization of deferred finance charges — — — 

Bank charges 42,868 0.20 $53,578 0.25 

Foreign exchange loss (gain) 106,718 0.49 (161,889) (0.75) 

Total 944,475 4.36 $987,779 4.59 

(396)

C M Y K 

MINACS WORLDWIDE SA de CV 

Balance Sheet 

Statements of Operations and Deficit 

I 

II 

As at March 31, 2010 As at March 31, 2009 

Pesos INR/ Cr Pesos INR/Cr 


Shareholders’ funds 

Share capital 

Shares issued 50,000 0.02 50,000 0.02 

Cumulative translation 

adjustment — — 

Deficit (50,000) (0.02) (50,000) (0.02) 

— — — — 

Debt — — — — 

Total — — — — 


Fixed Assets — — — — 


Cash and cash equivalents — — — — 

Accounts receivable — — — — 

Prepaid expenses — — — — 

— — — — 

Less Current liabilities — — — — 

Bank Indebtedness — — — — 

Other liabilities — — — — 

Net current Assets — — — — 

Total — — — — 

Year ended 

Year ended 



Revenues — — — — 

Direct expenses — — — — 

Selling, general and 

administrative expenses — — — — 

Earnings before interest 

expense, income taxes, 

depreciation and amortization — — — — 

Depreciation and amortization — — — — 

Interest and financing expenses — — — — 

Provision for (recovery of) 

income taxes — — — — 

Net income (loss) 

for the period — — — — 

Deficit, beginning of period (50,000) (0.02) (50,000) (0.02) 

Deficit, end of period (50,000) (0.02) (50,000) (0.02) 

Note 

Conversion rate for Pesos to 

INR at 31 March, 2010 3.619 3.620 


Note 

Conversion rate for Pesos to INR 3.62 3.62 

(397)

C M Y K 

MINACS WORLDWIDE SA de CV 

Notes to Financial Statements March 31, 2010 

1 NATURE OF BUSINESS 

Minacs Worldwide SA de CV (the “Company” or “Minacs Mexico”) is a provider of 

business process outsourcing (“BPO”) solutions. The Company is a subsidiary of 

Minacs Worldwide Inc. (“Minacs”). Minacs Mexico is an inactive subsidiary. 

2 SIGNIFICANT ACCOUNTING POLICIES 


The preparation of these financial statements in conformity with Canadian generally 

accepted accounting principles requires management to make estimates and 

assumptions. These estimates and assumptions affect the reported amounts of assets 

and liabilities and disclosure of contingent assets and liabilities at the date of the 

financial statements and the reported amounts of revenues and expenses during 

the year. Actual results could differ from those estimates. 


The Company derives revenues through the provision of direct resources to its 

customers and consulting arrangements. Payment terms may vary by contract. The 

Company recognizes revenues at the time services are performed and when the 

price is fixed or determinable and collection is reasonably assured. 

The majority of revenues are recognized based on the billable hours or minutes 

rendered as defined in the client contract. The rate per billable hour or minute 

charged is based on a predetermined contractual rate as agreed in the underlying 

contract. This contractual rate fluctuates based on the Company’s performance 

against certain predetermined criteria related to quality and performance. Some 

clients are entitled to penalties when the Company is not in compliance with certain 

obligations as defined in the client contract. Such penalties are recorded as a 

reduction of revenues as incurred based on a measurement of the Company’s 

obligation under the terms of the client contract. 

For some contracts the Company is paid by its customer based on achievement of 

certain level of revenues or other client-determined criteria specified in the client 

contract such as full time equivalents, units processed or completed contacts. The 

Company recognizes this performance-based revenue by measuring its actual results 

against the performance criteria specified in the contracts. 


expenditures as revenues. The Company incurs out-of-pocket expenditures such as 

expenses related to travel, postage and telecommunications costs for which 

customers have agreed to reimburse Minacs. The corresponding cost associated 

with this revenue is recorded within direct expenses. Some customers agree to 

reimburse the Company for initial training and recruiting costs over a specified 

period of time. The revenue for these costs are recorded over the period of time 

stipulated within the contract with a corresponding cost recorded within direct 

expenses. 

Income Taxes 

The Company follows the liability method of accounting for income taxes. Under 

this method, future tax assets and liabilities are determined based on differences 

between the financial reporting and tax bases of assets and liabilities, and are 

measured using substantively enacted tax rates and laws that are expected to be in 

effect when the differences are expected to reverse. Valuation allowances are 

established when necessary to reduce future income tax assets to the estimated 

amount that is more likely than not to be realized. 


Assets and liabilities are translated using the exchange rate in effect at the balance 

sheet date and revenues and expenses are translated at the average rate of the 

month the transaction is recorded. 

Cash and Cash Equivalents 

Cash and cash equivalents consist of unrestricted cash and short-term deposits 

having an initial maturity of three months or less. 

3 SHARE CAPITAL 



Common shares 50,000 0.02 50,000 0.02 

50,000 0.02 50,000 0.02 

Authorized Share Capital 

The Company is authorized to issue an unlimited number of common shares. 

(398)

C M Y K 

MINACS LIMITED, UK 

BALANCE SHEET AS AT 31ST MARCH 2010 

I 

II 

Notes As At As At 


£ INR/Cr £ INR/Cr 



Called up share capital 4 1,000 0.01 1,000 0.01 

Profit and loss account 267,698 2.04 183,796 1.45 

Exchange fluctuation on 

Translation (0.23) (0.09) 

268,698 1.82 184,796 1.37 

Loan Funds — — — — 

Total 268,698 1.82 184,796 1.37 


Fixed assets — — — — 

Investments 5 15,277 0.10 15,277 0.11 


Debtors 6 707,809 4.80 942,614 6.99 

Cash at bank and in hand 146,936 1.00 141,644 1.05 

854,745 5.80 1,084,258 8.04 

Less Current liabilities 7 (601,324) (4.08) (914,739) (6.78) 

Net Current Assets 253,421 1.72 169,519 1.26 

Total 268,698 1.82 184,796 1.37 

Notes: 

See accompanying notes to the financials statements 

FE Conversion Rate for GBP to INR as at year end 67.87 74.16 

Profit and Loss Account for the year ended 31st March, 2010 




Sales 2,392,193 18.23 2,355,259 18.64 

Total 2,392,193 18.23 2,355,259 18.64 

Direct costs 

Wages and salaries 1,574,508 12.00 1,584,086 12.54 

Employer’s NI contributions 152,017 1.16 162,570 1.29 

Staff pension scheme costs 10,127 0.08 10,998 0.09 

Placement & interview expenses 3,800 0.03 8,839 0.07 

Staff training 1,168 0.01 5,622 0.04 

Travel expenses 27,035 0.21 55,924 0.44 

Health & safety costs 1,676 0.01 1,938 0.02 

Total 1,770,332 13.49 1,829,976 14.48 

Gross profit 621,862 4.74 525,283 4.16 

Administration 

Wages and salaries 244,300 1.86 270,268 2.14 

Rent payable 29,100 0.22 10,150 0.08 

Printing, postage and stationery 4,539 0.03 2,586 0.02 

Telephone 3,602 0.03 7,193 0.06 

Motor vehicle leasing — — 1,774 0.01 

Entertaining 2,443 0.02 1,144 0.01 

Legal and professional 5,430 0.04 9,475 0.07 

Accountancy 38,210 0.29 44,390 0.35 

Audit 6,000 0.05 6,000 0.05 

Bank charges 9 0.00 262 0.00 

Exchange rate (gain)/loss 639 0.00 (59,276) (0.47) 

Payroll services 6,000 0.05 6,500 0.05 

General expenses (240,918) (1.84) (238,219) (1.89) 

Recruitment costs — — 603 0.00 

Subscriptions 4,681 0.04 1,044 0.01 

Management Charges 401,500 3.06 375,000 2.97 

505,534 3.85 438,894 3.47 

Financial 

Other operating income (142) (0.00) (6,514) (0.05) 

(142) (0.00) (6,514) (0.05) 

Total expenses 505,392 3.85 432,380 3.42 

Net profit/(loss) before taxation 116,470 0.89 92,903 0.74 

Less : Corporation tax based on 

profits for the period (32,567) (0.25) (26,106) (0.21) 

Net Profits/(Loss) for the year 83,902 0.64 66,798 0.53 

Balance brought forward 183,796 1.40 116,998 0.93 

Balance carried forward 267,698 2.04 183,796 1.45 

Notes 

Please see accompanying notes to the financials 

FE Conversion Rate for GBP to INR for the Financial Year 76.1983 79.1328 



Deepak Patel 

CEO 



Deepak Patel 

CEO 

(399)

C M Y K 

MINACS LIMITED, UK 


1.1. Accounting convention 

The financial statements are prepared under the historical cost convention and in 

accordance with applicable accounting standards, and in accordance with the 

Financial Reporting Standard for Smaller Entities (effective April 2008). 

1.2. Turnover 

Turnover represents the total invoice value of sales made during the year stated net of 

value added tax. 

1.3. Leasing 

Rentals payable under operating leases are charged against income on a straight 

line basis over the lease term. 

1.4. Investments 

Fixed asset investments are stated at cost less provision for permanent diminution in 

value. 

1.5. Pensions 

The pension costs charged in the financial statements represent the contribution 

payable by the company during the period. 

The regular cost of providing retirement pensions and related benefits is charged to 

the profit and loss account over the employees’ service lives on the basis of a constant 

percentage of earnings. 

1.6. Foreign currencies 

Monetary assets and liabilities denominated in foreign currencies are translated into 

sterling at the rates of exchange prevailing at the accounting date. Transactions in 

foreign currencies are recorded at the date of the transactions. All differences are 

taken to the Profit and Loss Account. 

1.7. Group accounts 

The company is entitled to the exemption under Section 398 of the Companies Act 

2006 from the obligation to prepare group accounts. 

2. TURNOVER 

The total turnover of the company for the year has been derived from its principal activity 

wholly undertaken in the UK and Ireland. 

3. PENSION COSTS 

The company operates a defined contribution pension scheme in respect of the employees. 

The Scheme and its assets are held by independent managers. The pension charge represents 

contributions due from the company and amounted to £10,127; INR 0.8 mn (Previous Year 

£10,998 ; INR 0.9 Mn ) 

4 SHARE CAPITAL As At As At 



Authorised 

1000 Ordinary shares of £1 each 1,000 0.01 1,000 0.01 

Allotted, called up and fully paid 


Equity Shares 


5 INVESTMENTS IN SUBSIDIARY UNDERTAKINGS 

Cost of Shares 

Opening balance 15,277 0.10 15,277 0.11 

Additions/(deletions during the year) — — — — 

Closing Balance 15,277 0.10 15,277 0.11 

Net book Values 

Opening balance 15,277 0.10 15,277 0.11 

Additions/(deletions during the year) — — — — 

Closing Balance 15,277 0.10 15,277 0.11 

Holdings of 20% or more 

The company holds 20% or more of the share capital of the following companies: 

Subsidiary undertaking Minacs Worldwide GmbH Minacs Worldwide GmbH 

Country of Registration Germany Germany 

Nature of Business Provider of Outsouced Provider of Outsouced 

solutions 

solutions 

Class of Shares held Euro Share Euro Share 

Proportion of shares held 100% 100% 

6 DEBTORS 

Trade Debtors 700,210 4.75 697,316 5.17 

Amounts owed by group undertakings 5,104 0.03 148,182 1.10 

Other debtors 1,126 0.01 82,355 0.61 

Prepayments and accrued income 1,369 0.01 14,761 0.11 

707,809 4.80 942,614 6.99 

7 CURRENT LILABILITES 

Amount falling due within one year 

Trade Creditors 5,923 0.04 12,188 0.09 

Amounts owed by group undertakings 359,437 2.44 705,009 5.23 

Corporation Tax 32,651 0.22 26,080 0.19 

Other taxes and social security costs 153,452 1.04 151,022 1.12 

Accruals and deferred income 49,861 0.34 20,440 0.15 

601,324 4.08 914,739 6.78 

Year ended 

Year ended 



8 OPERATING PROFIT / (LOSS) 

Operating profit/(loss) is stated 

after charging: 

Auditors’ remuneration 6,000 0.05 6,000 0.05 

Pension Costs 10,127 0.08 10,998 0.09 

9 TAX ON PROFIT/ (LOSS) ON 

ORDINARY ACTIVITIES 

Analysis of charge in period 

Current Tax 

UK corporation tax 32,567 0.25 26,106 0.21 

10 RELATED PARTY TRANSACTIONS 

Sales to 

Minacs Kft, Hungary 61,887 0.47 50,662 0.40 

Minacs GmbH, Germany 3,155 0.02 46,993 0.37 

Reimbursement of Expenses/Fees 

Minacs GmbH, Germany 70,031 0.53 51,906 0.41 

Miancs Worldwide Inc, Canada 160,582 1.22 245,888 1.95 

Receivables from 

Minacs Kft, Hungary 5,104 0.03 76,659 0.57 

Minacs GmbH, Germany (8,846) (0.06) 71,523 0.53 

(3,742) (0.03) 148,182 1.10 

Payable to 

Minacs Worldwide Inc, Canada 359,437 2.44 705,009 5.23 

12 ULTIMATE PARENT UNDERTAKING 

The Company is wholly owned subsidiary of Minacs Worldwide Inc, a company incorporated 

in Canada. The ultimate parent Company is Aditya Birla Nuvo Limited, a Company 

incorporated in India. 

(400)

C M Y K 

MINACS WORLDWIDE GmbH, GERMANY 

Unaudited Balance Sheet As at 31st March, 2010 


31.03.2010 31.03.2010 31.03.2009 31.03.2009 

INR/Cr INR/Cr 

I Shareholders’ funds 

1. Share capital authorized 

and fully paid in 25,000 0.15 25,000 0.17 

2. Profit carried forward 1,783,414 11.85 1,445,595 9.66 

3. Profit current year 310,833 2.04 337,819 2.19 

4. Exchange fluctuations 

on conversion — (0.96) — 0.07 

Total equity 2,119,247 13.08 1,808,414 12.08 

II Loan Funds — — — — 

2,119,247 13.08 1,808,414 12.08 


I Fixed assets 

1. EDP software 998 0.01 569 0.00 

2. Leasehold improvements 12,553 0.08 12,553 0.08 

3. Furniture and equipment 27,422 0.17 20,297 0.14 

4. Office equipment 37,980 0.23 36,181 0.24 

5. Deferred Development Costs 2,442 0.02 — — 

Gross block 81,395 0.50 69,600 0.46 

6. Accumulated depreciation (61,114) (0.38) (53,738) (0.36) 

Total Net Block 20,281 0.13 15,863 0.11 

II Investments 

1. Investments in Subsidiary 

Company - Hungary 11,050 0.07 11,050 0.07 

III Current assets 

1. Cash at bank and on hand 166,461 1.03 102,409 0.68 

2. Accounts receivable 1,752,586 10.82 1,997,877 13.35 

3. Intercompany receivables 499,957 3.09 143,340 0.96 

4. Prepaid expenses 42,249 0.26 45,519 0.30 

5. Other assets 2,500 0.02 400 0.00 

Total current assets 2,463,753 15.21 2,289,546 15.29 

Less Liabilities 

1. Accounts payable 3,219 0.02 10,494 0.07 

2. Intercompany payables — — 77,243 0.52 

3. Accrued expenses 368,169 2.27 458,080 3.06 

4. Other liabilities 4,449 0.03 (37,772) (0.25) 

Total liabilities 375,837 2.32 508,045 3.39 

Net Current Assets 2,087,916 12.89 1,781,501 11.90 

Total 2,119,247 13.08 1,808,414 12.08 

Unaudited Profit and Loss Account for the year ended 


April 1 2009 April 1 2009 April 1 2008 April 1 2008 to 

March 31 2010 March 31 2010 March 31 2009 March 31 2009 

INR/Cr INR/Cr 

INCOME 

1. Revenues 7,363,240 48.31 8,441,642 54.72 

2. Interest income 59 0.00 1,701 0.01 

EXPENDITURE 

7,363,299 48.31 8,443,343 54.73 

3. Staff cost 5,213,485 34.20 6,169,127 39.99 

4. Selling, general and 

administrative expenses 444,458 2.92 513,931 3.33 

5. Management fees 1,267,897 8.32 1,298,049 8.41 

Total 6,925,840 45.44 7,981,107 51.74 

6. Earnings before interest, 

income taxes and depreciation 437,459 2.87 462,236 3.00 

7. Depreciation on fixed assets 7,377 0.05 6,576 0.04 

8. Interest expenses — — — — 

9. Earnings before income taxes 430,082 2.82 455,660 2.95 

10. Income taxes 119,249 0.78 117,841 0.76 

11. Net income 310,833 2.04 337,819 2.19 

The accompanying notes to the 

Financial Statements are an integral 

part of this statement of income 

The average conversion rates for 

Euro to INR for the financial year 65.60 64.83 

The accompanying notes to the 

Financial Statements are an 

intergral part of this balance sheet 

Conversion Rate for Euro to INR 

as at year end rates 61.74 66.80 

(401)

C M Y K 


Unaudited Cash Flow Statement for the year ended 




INR/Cr INR/Cr 

Net earnings (Incl FE Rate difference) 310,833 2.04 337,819 2.26 

Depreciation of fixed assets 7,377 0.05 6,576 0.04 

Changes in operating assets 

and liabilities 

– Accounts receivables and 

intercompany receivables (111,326) (0.69) (436,879) (2.92) 

– Prepaid expenses and other assets 1,170 0.01 61,274 0.41 

– Accounts payables and inter 

company payables (84,519) (0.52) (781,662) (5.22) 

– Accrued expenses and 

other liabilities (47,689) (0.29) 13,122 0.09 

Cash flow used in operating activities 75,847 0.59 (799,750) (5.34) 

Purchase of fixed assets / 

deferred expenses (11,795) (0.07) (6,339) (0.04) 

Correction profit carried forward — — — — 

Decrease/increase in cash 

during the year 64,052 0.52 (806,089) (5.38) 

Cash at the beginning of the year 102,409 0.69 908,498 6.07 

Cash at the end of the year 166,461 1.03 102,409 0.69 

Notes to Financial Statements as of March 31, 2010 

I. General information 

The company was set up on May 17, 2000 through notarized contract under the former firm 

Insartor Holding SECHZEHNTE GmbH and was registered on July 04, 2000 with the 

commercial register at the district court in Munich (HRB 131937). 

The firm Insartor Holding SECHZEHNTE GmbH was changed in Minacs Worldwide GmbH 

with the shareholders resolution dated August 04, 2000. AT the same time it was concluded 

to transfer the company’s residence from Munich to Russelsheim. The change of the former 

firm Insartor Holding SECHZEHNTE GmbH in Minacs Worldwide GmbH as well as the 

residence transfer were registered on March 07, 2001 under HRB 3872 with the commercial 

register at the district court in Russelsheim. 

Within the course of concentration of keeping the commercial-, cooperative associationand 

partnership register and the step by step establishment of an electronic register Minacs 

Worldwide GmbH is registered from January 01, 2002 with the commercial register at the 

district court in Darmstadt under HRB 83872. 

The subscribed capital of the company amounts to EUR 25.000,00 and is paid in totally. 

The solely shareholder is Minacs Ltd., London. 

The purpose of the company is to act as a provider of outsourced solutions incorporating 

customer contact center management and other professional services. The company designs 

and delivers solutions that enable the customer relationship management of its clients. 

During the period 01.04.2009 to 31.03.2010 most of the company’s revenue has been 

generated by one major customer. 

II. Financial information 

1. General accounting policy 

The financial statements had been prepared in accordance with German Generally 

Accepted Accounting Principles which are laid down in the Commercial Code. 

Fixed assets were carried at historical acquisition costs less accumulated depreciation 

according to the straight-line method. 

The accrued expenses consider all recognized risks and uncertain commitments, based 

on reasonable commercial judgment. 

Liabilities were valued with their anticipated future settlement amounts. 

The provision for income taxes was calculated on the basis of the German taxable 

income. 

2. Other information 

a) Contingent liabilities 

There were no contingent liabilities on the balance-sheet date. 

b) Subsequent events 

There have been no events occurred since March 31, 2010 which require 

adjustments to the figures submitted in this report. 

III. Notes to Balance Sheet as at March 31 st , 2010 



INR/Cr INR/Cr 

Assets 

I Fixed Assets (WDV) 20,281 0.13 15,863 0.11 

II Investment 11,050 0.07 11,050 0.07 

III 


1. Cash at Bank and on hand 

a) Cash at Bank 

Commerz bank AG 

EUR-Account 00 47,783 0.29 95,298 0.64 

Deutschebank 114,968 0.71 — — 

UniCredit Banca Italy 3,512 0.02 1,534 0.01 

Rent Deposit — — 5,448 0.04 

b) Cash on Hand 

Petty Cash in Germany 198 0.00 130 0.00 

166,461 1.03 102,409 0.68 

2. Accounts Receivables 1,752,586 10.82 1,997,877 13.35 

3. Intercompany Receivables 

a) Minacs Worldwide Inc., 

Ontario, Canada 489,813 3.02 56,714 0.38 

b) Minacs Ltd., London, 

England 10,023 0.06 (77,243) (0.52) 

c) Minacs Hungary 122 0.00 86,626 0.58 

499,957 3.09 66,097 0.44 

4. Prepaid Expenses 42,249 0.26 45,519 0.30 

5. Other Assets 

Accounts receivables against 

employees 2,500 0.02 400 0.00 

2,500 0.02 400 0.00 

(402)

C M Y K 


IV 



INR/Cr INR/Cr 

Liabilities 

6. Accounts Payable 3,219 0.02 10,494 0.07 

7. Accrued Expenses 

Audit and Legal Expenses 36,650 0.23 66,000 0.44 

Disability 4,500 0.03 5,200 0.03 

Personnel Expenses 6,000 0.04 144,000 0.96 

Workmen’s compensation 25,000 0.15 25,000 0.17 

Outstanding holiday pay 190,000 1.17 145,000 0.97 

Other Personnel Liabilities 46,060 0.28 51,280 0.34 

Other Accruals 59,959 0.37 21,600 0.14 

Total 368,169 2.27 458,080 3.06 

8. Other Liability 

Sales Tax Payable (2,652) (0.02) (4,545) (0.03) 

Income and Other Taxes Payable 7,101 0.04 (33,228) (0.22) 

4,449 0.03 (37,772) (0.25) 

Total 375,837 2.32 430,801 2.88 

9. Staff Cost 

Wages and salaries (4,245,153) (27.85) (4,994,769) (32.38) 

Social security, pensions 

and other personnel expenses (941,884) (6.18) (1,089,929) (7.07) 

Subcontractors staff and 

minor services (26,448) (0.17) (84,429) (0.55) 

(5,213,485) (34.20) (6,169,127) (39.99) 

Wages and Salaries (4,245,153) (27.85) (4,994,769) (32.38) 

Social Security, pensions 

and other personnel expenses (941,884) (6.18) (1,089,929) (7.07) 

Subcontractor staff and 

minor services (26,448) (0.17) (84,429) (0.55) 

Total (5,213,485) (34.20) (6,169,127) (39.99) 



10. Selling, General & 

Administration Expenses 

Rent (34,384) 

INR/Cr 

(0.23) (36,734) 

INR/Cr 

(0.24) 

Gas, Electricity & Water (2,939) (0.02) (2,553) (0.02) 

Cleaning (3,315) (0.02) (2,692) (0.02) 

Insurances (583) (0.00) (583) (0.00) 

Other Personnel Expenses (229,574) (1.51) (274,825) (1.78) 

Representation & 

Entertainment Expenses (5,505) (0.04) (1,675) (0.01) 

Travel Expenses (8,652) (0.06) (2,979) (0.02) 

Freight - out (905) (0.01) (873) (0.01) 

Other Repair & 

Maintenance Costs (1,013) (0.01) (273) (0.00) 

Mailing Expenses (710) (0.00) (539) (0.00) 

Telephone, Internet (10,384) (0.07) (10,798) (0.07) 

Office Supplies (3,313) (0.02) (5,193) (0.03) 

Magazines, Books, 

Contributions (3,132) (0.02) (2,111) (0.01) 

Training Expenses (18,861) (0.12) (6,443) (0.04) 

Legal, Consulting & 

Accounting Expenses (90,481) (0.59) (140,707) (0.91) 

Rent of Equipment (4,424) (0.03) (4,390) (0.03) 

Bank Charges (13,658) (0.09) (13,113) (0.09) 

Exchange Losses (2,076) (0.01) (2,816) (0.02) 

Other Supplies (10,549) (0.07) (4,633) (0.03) 

Total (444,458) (2.92) (513,931) (3.33) 

(403)

C M Y K 

MINACS WORLDWIDE KFT., HUNGARY 

Unaudited Balance Sheet As at 31st March, 2010 


HUF INR/Cr HUF INR/Cr 


I Shareholders’ funds 

Share capital 3,000,000 0.07 3,000,000 0.07 

Retained earnings 69,544,015 1.63 54,892,850 1.27 

Exchange fluctuation 

on FX translation — (0.05) — (0.05) 

72,544,015 1.65 57,892,850 1.29 

II Loan Funds — — — — 

Total 72,544,015 1.65 57,892,850 1.29 


I 

II 

Fixed Assets 

Property, plant and 

equipment, net 166,354 0.00 — —- 

Deferred development costs 134,936 0.00 — — 

301,290 0.01 — — 


Cash and cash equivalents 84,120,524 1.92 18,446,838 0.41 

Accounts receivable 97,421,621 2.22 101,797,475 2.27 

Prepaid expenses 1,425,968 0.03 1,143,245 0.03 

Other Receivables 13,759,783 0.31 16,683,599 0.37 

196,727,895 4.48 138,071,157 3.07 

Less Liabilities 

Accounts payable and 

accrued liabilities 10,742,265 0.24 11,949,196 0.27 

Due to Inter-Companies 113,742,906 2.59 68,229,111 1.52 

Total 124,485,170 2.84 80,178,307 1.78 

72,242,725 1.65 57,892,850 1.29 

Total 72,544,015 1.65 57,892,850 1.29 

Notes 

FE Conversion Rate for HUF to INR as at the end of the year 0.2279 0.2226 

Unaudited Profit and Loss Account for the year ended 31st March, 2010 




Revenues 401,959,291 9.91 402,552,405 10.27 

Expenditure 

Labour & Employee Related 

Remuneration 173,385,630 4.28 193,368,826 4.93 

Payroll Related 61,359,280 1.51 71,893,567 1.83 

Group Insurance 780,006 0.02 943,500 0.02 

Telecommunications 500,990 0.01 668,133 0.02 

Training and seminars 2,568,498 0.06 3,488,418 0.09 

Other dierct costs 32,373,811 0.80 15,937,937 0.41 

Total 270,968,215 6.68 286,300,381 7.30 

Gross profit 130,991,076 3.23 116,252,024 2.97 

Selling, general and administrative expenses 

Professional Services 7,300,170 0.18 12,615,539 0.32 

Recruiting 225,294 0.01 931,408 0.02 

Office Cost 537,987 0.01 480,841 0.01 

Other General and Admin 6,331,476 0.16 4,212,918 0.11 

Total 14,394,927 0.35 18,240,706 0.47 

Earnings before interest expense, income 

taxes, depreciation and amortization 116,596,149 2.88 98,011,318 2.50 

Depreciation and amortization — — 7,746 0.00 

Interest and financing expenses 1,781,984 0.04 14,518,411 0.37 

Management fee 90,072,000 2.22 63,550,000 1.62 

Income (loss) before income taxes 24,742,165 0.61 19,935,161 0.51 

Provision for (recovery of) income taxes 

Current 10,091,000 0.25 9,398,000 0.24 

Future — — — -— 

10,091,000 0.25 9,398,000 0.23 

Net income (loss) for the period 14,651,165 0.36 10,537,161 0.28 

Earnings/(‘Deficit), beginning of period 54,892,850 1.27 44,355,689 0.99 

Retained earnings, end of period 69,544,015 1.63 54,892,850 1.27 

Notes 

Average FE Conversion Rate for HUF to INR for the Financial Year 0.2466 0.2552 

(404)

C M Y K 


Notes to Financial Statements as of March 31, 2010 

I. General information 

1. Business name: 

The name of the Company 

In Hungarian: 

MINACS Telefoninformációs Szolgáltatások Kft 

In English: 

MINACS Call Center Services Limited 

Tax registration number: 1311764974-2-41 

The abbreviated name of the 

Company in Hungarian: MINACS Kft. 

The abbreviated name of the 

Company in English: 

MINACS Ltd. 

Seat: Hungary 1114 Budapest, Ulaszlo street 27. 

The registered headquarter of 

the company: Hungary 1138 Budapest, Váci út 169. 

2. The FORM OF THE COMPANY: Limited liability company 

The company was established in 2003 

by the following owners: 

MINACS Worldwide GmbH 96,66 % 

Julius Minacs 3,33 % 

The Company’s share capital is THUF 3.000, 

which exclusively consists cash deposits. The 

amount of it hasn’t changed compared to the 

last year. 

The managing director of Paul Lonford Niewoehner 

the Company: 

US-6115 Waterford, 

Grace K. DR. MI 48329-1328 

The Company’s representation, The executives are entitled to register and 

registration: 

represent the Company independently; 

the managers appointed by the General 

Meeting are jointly entitled. 

The Company’s present owners: 

Member 

Nominal Value THUF 

MINACS Worldwide GmbH 2.900.000 HUF 

Julius Minacs 

100.000 HUF 

The MINACS Ltd. is going to consolidate by the Minacs Worldwide GmbH. The 

consolidated report can be seen at the seat of the Company. 

THE COMPANY’S ACTIVITIES INCLUDE: 

82.2 Call center activities – main activity 

62.02 Computer consultancy activities 

63.11 Data processing hosting and related activities 

58.12 Publishing of directories and mailing lists 

62.09 Other information tec and service activities 

73.20 Market research and public opinion polling 

70.22 Business and management consulting 

82.99 Other business support services 

The Company is only pursuing authorised activities owning the administrative license. 

Other: 

The financial year of the Company differs from the calendar year. The statement date is 

March 31, 2010. The date of the preparation of the annual report is April 10, 2010. 

Under the principle of completeness, the annual report includes those business activities 

which happened between the year end and the date of report preparation, and could 

affect the financial figures in the balance sheet and the profit & loss. 

The form of the financial statement 

The Company prepares a simplified annual report, accordingly it keeps double entry. The 

Company prepares an ‘A’ type annual financial statement, with the so called balance-like 

arrangement. The company prepares its profit and loss statement by the ‘A’ method, the 

cost summary method. It has formed its inner registrations, sub ledger and chart of accounts, 

and their joining points in accordance with it. 

The data of the annual report are expressed in thousand HUF, if not indicated otherwise. 

II. MAJOR ELEMENTS OF THE ACCOUNTING POLICY 

The Company performs its activity in compliance with the regulations of the accounting 

law. The Company has established its policy for cash treatment, inventory taking, and 

asset and liability valuation in accordance with the accounting law. 

The Company’s Accounting Policy has set out that under the principle of going concern 

the enforcement of (the principle of integrity, authenticity, transparency, comparison, 

continuity, consistence, prudence, gross accounting, individual valuation, accrual and 

deferral, priority of content over form, materiality and comparison of cost and profit) 

should be ensured. 

It is considered to be a significant error if in the year of revealing the error during different 

checks considering a given business year (separately each year), the value of the revealed 

errors and margins of error (independent of indication), increasing – decreasing profit 

and equity, the joint amount is above the 1% of the gross sum. 

It is considered an error influencing true and fair picture to a great extent if the contracted 

value of the errors and margins significantly alters the equity. It is considered to be such 

an error in all cases when following the settling out there is more than 20% change in the 

equity reported in the balance sheet of the previous financial year. 

In the case of the year-end assets and liabilities incurred in foreign currency or exchange 

are going to be revaluated irrespective of the amount according to published exchange 

rates of the HNB. 

Evaluation of the assets in the financial statement 

1/ Intangible assets 

Intangible assets are disclosed at purchase or production value, reduced by accumulated 

depreciation, and at a value not exceeding their known market value. The calculation of 

depreciation is to be performed on a straight-line basis, by the application of the 

depreciation rates required for writing-off the intangible assets over a period equal to the 

expected useful life of the assets. The expected useful life of the intangible assets by 

categories: 

Rights representing value 

7 years 

Software 

3 years 

2/ Tangible assets 

Tangible assets are disclosed in the balance sheet at purchase or production value, reduced 

by accumulated deprecation. The calculation of deprecation is performed on a straight 

line basis, by the application of the deprecation rates required for the writing off of the 

tangible assets over a period equal to the expected useful life of the assets: 

Land and buildings 

20 years 

Technical equipment, machinery 3-7 years 

Other equipment 

5-7 years 

3/ Financial investments 

Investments representing ownership share in economic associations are disclosed at 

purchased price in the case of acquisition, while in the case of establishment at the value 

set out in the Articles of Association, until their market value does not permanently decrease 

below book value. In this case they are valued at the market value known as the date of 

preparation of the balance sheet. 

4/ Recognition of transactions in foreign currency 

Transactions in foreign currency are accounted at the exchange rate of MNB as the date 

of the transaction. The exchange gain or loss arising from the difference between the 

exchange rate as at the date of the financial fulfilment and the transaction are disclosed 

in the profit and loss statement. 

5/ Sales revenue 

Net sales revenues are accounted as at the date of fulfillment, and are exclusively of VAT. 

6/ Corporate tax 

The corporate tax liability of the Company is accounted in the profit and loss statement 

on the basis of the regulations in the reported year. 

7/ Changes in the Company’s accounting policy 

The Company’s accounting policy did not change during the year. 

III. FINANCIAL POSITION AND LIQUIDITY 

There has been no such event since the date of the balance sheet, which would have a 

material impact on the Company’s financial statement as at 31 March, 2010. The liquidity 

of the Company was during the financial year insured. 

(405)

C M Y K 


IV. Notes to Balance Sheet as at March 31, 2010 




1 Equity 

Share capital 3,000,000 0.07 3,000,000 0.07 

2 Accumulated profit reserve 

Balance at beginning of the year 54,892,850 1.27 44,355,689 0.99 

Profits during the year from P&L 14,651,165 0.36 10,537,161 0.28 

Balance at the end of the year 69,544,015 1.63 54,892,850 1.27 

3 Liquid assets 

Commerzbank Hungary 83,147,371 1.89 18,377,616 0.41 

Petty cash 973,153 0.02 69,222 0.00 

Total: 84,120,524 1.92 18,446,838 0.41 

4 Receivables 

Trade Receivables 97,421,621 2.22 101,752,475 2.27 

Employee Advances Receivables — — 45,000 0.00 

Total: 97,421,621 2.22 101,797,475 2.27 

5 Other Receivable 

Value added tax 12,267,783 0.28 16,003,513 0.36 

Income & Other Taxes Payable 1,492,000 0.03 680,086 0.02 

Total: 13,759,783 0.31 16,683,599 0.37 

6 Liabilities 


Trade Creditors 371,861 0.01 (696,215) (0.02) 

Accruals - General 1,000,370 0.02 2,551,950 0.06 

Accruals - Payroll 9,370,034 0.21 10,093,461 0.22 

Total: 10,742,265 0.24 11,949,196 0.27 

7 Due to Inter Company 

Due to GmbH Germany 32,345 0.00 26,646,254 0.59 

Due to MXW Canada 112,123,337 2.56 15,732,057 0.35 

Due to Minacs UK 1,587,223 0.04 25,850,800 0.58 

Total: 113,742,906 2.59 68,229,111 1.52 

V. Notes to Profit & Loss Account year ending March 31, 2010 




1 Labour & Employee Related Remuneration 

Regular Wages Paid 169,865,267 4.19 188,885,390 4.82 

Sick Pay 3,520,363 0.09 4,483,436 0.11 

173,385,630 4.28 193,368,826 4.93 

2 Payroll Related 

Payroll Taxes Direct 13,149,007 0.32 15,677,128 0.40 

Medicare (US) 48,210,273 1.19 56,216,439 1.43 

61,359,280 1.51 71,893,567 1.83 

3 Other Costs 

Travel - Direct Cost 8,053,014 0.20 11,444,930 0.29 

Project Disbursements 24,320,797 0.60 4,493,007 0.11 

32,373,811 0.80 15,937,937 0.41 

4 Professional Services 

Accounting Fees 6,922,255 0.17 11,009,953 0.28 

Corporate Legal Fees 377,915 0.01 1,605,586 0.04 

7,300,170 0.18 12,615,539 0.32 

5 Office Cost 

Office Supplies & Minor Equipment 319,801 0.01 409,224 0.01 

Other Supplies 202,476 0.00 44,680 0.00 

Postage 15,710 0.00 26,937 0.00 

537,987 0.01 480,841 0.01 

6 Other General and Admin Cost 

Non-Cash Incentives - Indirect — — 8,130 0.00 

Other SG&A 6,319,280 0.16 4,186,785 0.10 

Penalty and Fine Charges 12,196 0.00 18,003 0.00 

6,331,476 0.16 4,212,918 0.10 

7 Interest and financing expenses 

Bank Service Charges 785,504 0.02 1,737,862 0.04 

Foreign Currency Unrealised Gain 2,867 0.00 12,771,715 0.33 

Foreign Currency realised Gain 1,229,518 0.03 153,096 0.00 

Other Interest Expenses (235,905) (0.01) (144,262) (0.00) 

1,781,984 0.04 14,518,411 0.37 

8 Provision for (recovery of) income taxes 

Current Income Tax 2,056,000 0.05 1,057,000 0.03 

State Tax 8,035,000 0.20 8,341,000 0.21 

10,091,000 0.25 9,398,000 0.24 

(406)

C M Y K 

COMPASS BPO LIMITED 

REPORT OF THE DIRECTORS 

FOR THE YEAR ENDED 31 MARCH 2010 

The directors have pleasure in submitting their annual report with the audited 

accounts of the group for the year. 

PRINCIPAL ACTIVITY 

The principal activity of the group during the year under review was the 

provision of personnel and related consultancy services from Asia. 

REVIEW OF BUSINESS 

Despite the global economic slowdown, the group, through alignment, focus 

and relentless execution, has been able to generate revenue of £4.37m for 

the current year (2009 :£5.06m). 

Earnings before interest, tax, depreciation and gain/losses on foreign 

exchange was £93,837 (2009 : £ 426,028). Cash on the balance sheet at 

the year end was £197,484 (2009 : £461,155). 

On 9 March 2010 the entire issued share capital of the group was acquired 

by Aditya Birla Minacs Worldwide Inc. (a Canadian company), a part of the 

US$29.2 billion Aditya Birla Group that today employs 130,000 people of 

30 different nationalities. 

Minacs has a history that goes back three decades. Today, they serve clients 

across 3 continents, 8 countries, in 41 languages - several of them Fortune 

500 corporations. Minacs has 12,500 people across 29 centres to serve 

clients in the verticals of BFSI (banking, financial services and insurance), 

TIME (telecom, technology infrastructure, media, and entertainment), 

manufacturing and the public sector. 

On 9 March 2010, the 10% convertible loan notes of £350,000 were 

converted into ordinary shares at 1 ordinary share per £53.75 of nominal 

loan value. 

DIVIDEND 

The directors do not recommend the payment of a dividend. (2009: £Nil). 

DIRECTORS 

The directors who served during the year were: - 

R Tice (Chairman) (resigned 9 March 2010) 

M Atkins (resigned 9 March 2010) 

D McCullough (resigned 9 March 2010) 

N Godrej (resigned 9 March 2010) 

C T Newberry (resigned 9 March 2010) 

D Patel (appointed 9 March 2010) 

M Kedia (appointed 9 March 2010) 

STATEMENT OF DIRECTORS’ RESPONSIBILITIES 

The directors are responsible for preparing the Directors’ Report and the 

financial statements in accordance with applicable law and regulations. 

Company law requires the directors to prepare financial statements for 

each financial year. Under that law the directors have elected to prepare 

the financial statements in accordance with United Kingdom Generally 

Accepted Accounting Practice (United Kingdom Accounting Standards and 

applicable law). Under company law the directors must not approve the 

financial statements unless they are satisfied that they give a true and fair 

view of the state of affairs of the company and of the profit or loss of the 

company for that period. In preparing these financial statements, the 

directors are required to: 

• select suitable accounting policies and then apply them consistently; 

• make judgments and accounting estimates that are reasonable and 

prudent; 

• state whether applicable UK Accounting Standards have been followed, 

subject to any material departures disclosed and explained in the 

financial statements; 

• prepare the financial statements on the going concern basis unless it is 

inappropriate to presume that the company will continue in business. 

The directors are responsible for keeping adequate accounting records that 

are sufficient to show and explain the company’s transactions and disclose 

with reasonable accuracy at any time the financial position of the company 

and enable them to ensure that the financial statements comply with the 

Companies Act 2006. They are also responsible for safeguarding the assets 

of the company and hence for taking reasonable steps for the prevention 

and detection of fraud and other irregularities. 

So far as each of the directors is aware at the time the report is approved: 

• there is no relevant audit information of which the company’s auditors 

are unaware; and 

• the directors have taken all steps that they ought to have taken to make 

themselves aware of any relevant audit information and to establish 

that the auditors are aware of that information. 

AUDITORS 

The auditors, haysmacintyre, will be proposed for re-appointment in 

accordance with S485 of the Companies Act 2006. 

The Directors report has been prepared in accordance with the special 

provisions of Part 15 sections 416 and 417 of the Companies Act 2006 

relating to small entities. 

Registered Office 

Fairfax House 

15 Fulwood Place 

London 

WC1V 6AY 

By order of the Board 

D Patel 

Director 

(407)

C M Y K 


INDEPENDENT REPORT OF THE AUDITORS TO THE 

SHAREHOLDERS OF COMPASS BPO LIMITED 

We have audited the financial statements of Compass BPO Limited for the 

year ended 31 March 2010 which comprise the Profit and Loss Account, the 

Consolidated and Company Balance Sheets, the Consolidated Statement 

of Total Recognised Gains and Losses and the related notes. The financial 

reporting framework that has been applied in their preparation is applicable 

law and United Kingdom Accounting Standards (United Kingdom Generally 

Accepted Accounting Practice). 

This report is made solely to the company’s members, as a body, in 

accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our 

audit work has been undertaken so that we might state to the company’s 

members those matters we are required to state to them in an Auditor’s 

report and for no other purpose. To the fullest extent permitted by law, we 

do not accept or assume responsibility to anyone other the company’s 

members as a body, for our audit work, for this report, or for the opinions 

we have formed. 

Respective responsibilities of directors and auditors 

As explained more fully in the Directors’ Responsibilities Statement set out 

on page 3, the directors are responsible for the preparation of the financial 

statements and for being satisfied that they give a true and fair view. Our 

responsibility is to audit the financial statements in accordance with applicable 

law and International Standards on Auditing (UK and Ireland). Those 

standards require us to comply with the Auditing Practices Board’s Ethical 

Standards for Auditors. 

Scope of the audit of the financial statements 

An audit involves obtaining evidence about the amounts and disclosures in 

the financial statements sufficient to give reasonable assurance that the 

financial statements are free from material misstatement, whether caused by 

fraud or error. This includes an assessment of: whether the accounting policies 

are appropriate to the company’s circumstances and have been consistently 

applied and adequately disclosed; the reasonableness of significant 

accounting estimates made by the directors; and the overall presentation of 

the financial statements. 

Opinion on financial statements 

In our opinion the financial statements: 

• give a true and fair view of the state of the company’s affairs as at 31 

March 2010 and of its loss for the year then ended; 

• have been properly prepared in accordance with United Kingdom 

Generally Accepted Accounting Practice; and 

• have been prepared in accordance with the requirements of the 

Companies Act 2006. 

Opinion on other matter prescribed by the Companies Act 2006 

In our opinion the information given in the Directors’ Report for the financial 

year for which the financial statements are prepared is consistent with the 


Matters on which we are required to report by exception 

• We have nothing to report in respect of the following matters where the 

Companies Act 2006 requires us to report to you if, in our opinion: 

• adequate accounting records have not been kept, or returns adequate 

for our audit have not been received from branches not visited by us; 

or 

• the financial statements are not in agreement with the accounting records 

and returns; or 

• certain disclosures of directors’ remuneration specified by law are not 

made; or 

• we have not received all the information and explanations we require 

for our audit. 

Anastasia Frangos (Senior statutory auditor) 

for and on behalf of haysmacintyre, Statutory Auditor 

Fairfax House 

15 Fulwood Place 

London 

WC1V 6AY 

(408)

C M Y K 


CONSOLIDATED PROFIT AND LOSS ACCOUNT 


Notes 2010 2009 

£ £ 

TURNOVER 1 4,370,362 5,057,531 

COST OF SALES (2,156,475) (2,370,049) 

GROSS PROFIT 2,213,887 2,687,482 

Administrative expenses (2,327,243) (2,216,816) 

OPERATING (LOSS)/PROFIT 2 (113,356) 470,666 

(Loss)/profit on sale of assets (4,457) 545 

Interest receivable 4,290 2,069 

Interest payable 3 (56,400) (54,251) 

(LOSS)/PROFIT ON ORDINARY 

ACTIVITIES BEFORE TAXATION (169,923) 419,029 

Taxation 5 (1,525) (53,767) 

(LOSS)/PROFIT FOR THE FINANCIAL 

YEAR AFTER TAXATION 12 £(171,448) £365,262 

All results relate to continuing activities. 

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 


£ £ 

(Loss)/profit for the financial year (171,448) 365,262 

Exchange translation differences 11,505 66 

Total recognised gains and losses 

relating to the year £(159,943) £365,328 

The attached notes form an integral 

part of these accounts. 

COMPANY PROFIT AND LOSS ACCOUNT 



£ £ £ £ 

SALES 2,049,167 2,487,680 

LESS: COST OF SALES (1,803,959) (2,137,613) 

GROSS PROFIT 245,208 350,067 

LOSS ON SALE OF ASSETS (60) — 

INTEREST RECEIVABLE 41 571 

INTEREST PAYABLE (55,858) (52,609) 

EXCHANGE (LOSS)/GAIN (35,818) 82,077 

153,513 380,106 

LESS: OVERHEADS 

Telephone 31,323 34,472 

Insurance 33,348 31,938 

Printing, postage and stationery 2,580 815 

Entertaining and staff welfare 133 733 

Rent and electricity for premises 34,282 36,956 

Rent for Data Center 4,680 3,900 

Accountancy fees 15,050 7,900 

Bank charges 10,699 9,920 

Legal and professional fees 121,086 58,612 

Marketing costs 35,844 18,652 

Commission Charges 21,819 20,492 

Sales Support 24,000 31,133 

Salaries 23,535 27,312 

Social security 2,227 2,822 

Meetings and conferences 1,657 1,880 

Office expenses 2,185 6,997 

Depreciation 1,749 2,212 

Travel expenses 1,647 4,993 

Computer maintenance and support 7,448 9,777 

Bad debts — 5,018 

Per Diems — 23,749 

(375,292) (340,283) 

(LOSS)/PROFIT ON ORDINARY 

ACTIVITIES BEFORE TAXATION £(221,779) £39,823 

(409)

C M Y K 


CONSOLIDATED BALANCE SHEET 

AS AT 31 MARCH 2010 


Notes £ £ £ £ 

FIXED ASSETS 

Tangible assets 6 299,210 174,187 


Debtors 8 946,096 1,037,990 

Cash at bank and in hand 197,483 461,155 

1,143,579 1,499,145 

CREDITORS: amounts falling 

due within one year 9a (556,705) (570,771) 

NET CURRENT ASSETS 586,874 928,374 

TOTAL ASSETS LESS CURRENT 

LIABILITIES 886,084 1,102,561 


due after one year 9b — (407,313) 

NET ASSETS £886,084 £695,248 

CAPITAL AND RESERVES 

Called up share capital 10 18,967 16,560 

Share premium 11 1,145,206 765,173 

Other reserve 13 — 31,661 

Profit and loss account 12 (278,089) (118,146) 

TOTAL SHAREHOLDERS’ FUNDS 14 £886,084 £695,248 

These accounts are prepared in accordance with the special provisions of Part 15 of the Companies 

Act 2006 relating to small entities. 

The financial statements were approved and authorised for issue by the Board on and were 

signed below on its behalf by:- 

The attached notes form an integral part of these accounts. 

D Patel 

Director 

M Kedia 

Director 

COMPANY BALANCE SHEET 

AS AT 31 MARCH 2010 


Notes £ £ £ £ 

FIXED ASSETS 

Tangible assets 6 1,507 1,573 

Investments 7 268,548 268,548 


270,055 270,121 

Debtors 8 698,620 717,945 

Cash at bank and in hand 144,669 313,396 

843,289 1,031,341 


due within one year 9a (185,960) (119,960) 

NET CURRENT ASSETS 657,329 911,381 

TOTAL ASSETS LESS CURRENT 

LIABILITIES 927,384 1,181,502 


due greater than one year 9b — (407,313) 

NET ASSETS £927,384 £774,189 

CAPITAL AND RESERVES 

Called up share capital 10 18,967 16,560 

Share premium 11 1,145,206 765,173 

Other reserve 13 — 31,661 

Profit and loss account 12 (236,789) (39,205) 

TOTAL SHAREHOLDERS’ FUNDS 14 £927,384 £774,189 

These accounts are prepared in accordance with the special provisions of Part 15 of the Companies 

Act 2006 relating to small entities. 

The financial statements were approved and authorised for issue by the Board on and were 

signed below on its behalf by:- 

D Patel 

M Kedia 

Director 

Director 

The attached notes form an integral part of these accounts. 


C M Y K 


STATEMENT OF ACCOUNTING POLICIES 


The financial statements have been prepared in accordance with applicable accounting standards. 

The particular accounting policies adopted are described below: 

(a) Basis of accounting 

The accounts have been prepared under the historical cost convention and in accordance 

with the Financial Reporting Standard for Smaller Entities (effective April 2008). 

(b) Basis of consolidation 

The group financial statements consolidate the accounts of Compass BPO Limited and its 

subsidiary undertaking made up to 31 March each year; the group profit and loss account 

includes the results of the subsidiary undertaking for the period from the date of their 

incorporation or acquisition and up to the date of disposal. 

No profit and loss account is presented for Compass BPO Limited as provided by S408 of 

the Companies Act 2006. The holding company’s loss for the year was £197,584 (2009: 

profit £21,981). 

(c) Turnover 

Turnover arises from the principal activity of the company. 

(d) Foreign Currency 

Company 

Assets and liabilities on foreign currencies are translated at the rates of exchange ruling at 

the balance sheet date. Transactions on foreign currencies are recorded at the rate of 

exchange ruling at the date of the transaction. All differences are taken to the profit and 

loss account. 

Group 

The balance sheets of overseas subsidiary undertakings are translated at the rate of exchange 

ruling at the balance sheet date and the profit and loss accounts are translated at the 

average rates for the year. The exchange differences arising on the re-translation of opening 

net assets is taken directly to reserves. 

(e) Deferred Taxation 

Deferred taxation is provided on the full provision method to take account of timing differences 

between the treatment of certain items for accounts purposes and their treatment for tax 

purposes. Tax deferred or accelerated is accounted for in respect of all timing differences, 

where material. 

(f) Hire Purchase Agreements 

Assets acquired under hire purchase contracts are capitalised in the balance sheet and are 

depreciated over their expected useful lives. The interest element of the instalments is charged 

to the profit and loss account over the period of the contract. 

(g) Operating Lease Agreements 

Rentals applicable to operating leases where substantially all of the benefits and risks of 

ownership remain with the lessor are charged against profit as incurred. 

(h) Pension Costs 

Contributions to defined contribution pension schemes are charged to the profit and loss 

account in the period in which they become payable. Compass Business Process Outsourcing 

Pvt Limited operates a defined benefit pension scheme, known as Compass Development 

(India) Pvt Ltd. Employees Group Gratuity Assurance Scheme, covering all eligible employees. 

The deficit on the pension scheme has been provided for in the financial statements. 

(i) Tangible Fixed Assets and Depreciation 

Depreciation is calculated to write off the cost of the assets, net of disposal proceeds, over 

their anticipated useful lives at the following rates:- 

Computer Equipment — 33 1 / 3 

% straight line 

Equipment — 33 1 / 3 


Motor Vehicles — 33 1 / 3 


(j) Investments 

Fixed asset investments are shown at the lower of cost or directors’ valuation. 

(k) Taxation 

Corporation tax is provided for at the current rates. 

(l) Cash Flow Statement 

The directors have taken advantage of the exemptions available in Financial Reporting 

Standard No.1 and have chosen not to prepare a cash flow statement on the grounds that 

the group is small. 

(m) Compound Financial Instruments 

Compound financial instruments comprise of both liability and equity components. At issue 

date, the fair value of the liability component is estimated by discounting its future cash 

flows at an interest rate that would have been payable on a similar debt instrument without 

any equity conversion option. The liability component is accounted for as a financial liability. 

The difference between the net issue proceeds and the liability component, at the time of 

issue, is the residual of equity component, which is accounted for as an equity instrument. 

The interest expense on the liability component is calculated by applying the effective interest 

rate for the liability component of the instrument. The difference between any repayments 

and the interest expense is deducted from the carrying amount of the liability. 

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2010 

1. TURNOVER 

Turnover is attributable to the principal activity of the group, net of Value Added Tax. 

A geographical analysis of turnover is as follows: 


Group Group 

£ £ 

United Kingdom 2,098,751 2,487,680 

Rest of the world 2,271,611 2,569,851 

£4,370,362 £5,057,531 

2. OPERATING LOSS 


Group Group 

£ £ 

Operating loss is stated after charging: 


Auditors remuneration – audit 8,500 7,900 

– other services 12,476 — 

3. INTEREST PAYABLE 


Group Group 

£ £ 

10% convertible loan stock interest 47,725 45,257 

Guarantee Commission 4,896 5,500 

Bank loan interest 3,779 3,478 

Hire purchase interest — 16 

£56,400 £54,251 

Interest on the 10% convertible loan stock has been charged at a rate of 12.5%, the 

estimated rate of interest that would have applied on a pure loan in the absence of the 

convertibility feature. 

4. EMPLOYEES 


Group Group 

£ £ 

Staff costs (including directors) during the year amounted to: 

Wages and salaries 2,214,508 2,343,897 

Social security costs 2,227 2,822 

£2,216,735 £2,346,719 

No. 

No. 

The average weekly number of Employees 

during the year was: 363 402 

Directors’ Remuneration 2010 2009 

Group Group 

£ £ 

Directors’ fees (paid through subsidiary undertakings) £411,009 £482,250 

Pension contributions are made to a defined contribution scheme. All assets therein are 

independent of the group. 

5. TAX ON ORDINARY ACTIVITIES 

(a) Analysis of tax charge for the year: 2010 2009 

£ £ 

UK corporation tax at current rates (23,896) 13,596 

Overseas taxation 28,986 33,776 

Under/(over) provision of UK corporation tax 

in previous year (300) 4,246 

Total current tax (note b) 4,790 51,618 

Overseas deferred taxation (3,265) (6,393) 

Overseas fringe benefit tax — 8,542 

Total tax charge for the year £1,525 £53,767 

(b) 

Factors affecting tax charge for year: 

The corporation tax assessed for the year is different from the small companies’ rate of 

corporation tax in the UK of 28% (2009: 21%). The differences are explained below: 


£ £ 

Profit on ordinary activities before tax £(169,923) £419,029 

Profit on ordinary activities before tax multiplied 

by the small rate of corporation tax in the UK 

of 28% (2009: 21%) (47,578) 87,996 

(411)

C M Y K 


NOTES TO THE ACCOUNTS (continued) 

5. TAX ON ORDINARY ACTIVITIES (continued) 2010 2009 

£ £ 

Effects of: 

Amounts not subject to UK corporation tax (14,520) (79,634) 

Expenses not deducible for tax purposes 21,531 5,049 

Capital allowances for the year in excess of depreciation (327) 206 

Effect of change in tax rates 8,232 (21) 

Losses carried forward 17,134 — 

Other timing differences (8,368) — 

Current tax charge for the year £(23,896) £13,596 

The company is carrying forward tax losses of £61,193 to offset against future profits. 

6. TANGIBLE FIXED ASSETS 

Group 

Company 

Fixtures 

Fittings 

Computer and Office Motor Group 

Equipment Equipment Vehicles Total Equipment Total 

£ £ £ £ £ £ 

COST 

1 April 2009 687,555 223,395 70,707 981,657 58,099 58,099 

Additions 13,317 243,094 — 256,411 2,051 2,051 

Forex adjustment 51,393 29,992 1,580 82,965 — — 

Disposals (267,150) (175,544) (34,679) (477,373) (57,914) (57,914) 

At 31 March 2010 485,115 320,937 37,608 843,660 2,236 2,236 

DEPRECIATION 

1 April 2009 573,017 191,728 42,725 807,470 56,526 56,526 

Charge for Year 65,838 54,626 15,983 136,447 1,749 1,749 

Forex adjustment 48,886 7,013 2,339 58,238 — — 

Disposals (256,669) (169,427) (31,609) (457,705) (57,546) (57,546) 

At 31 March 2010 431,072 83,940 29,438 544,450 729 729 

NET BOOK VALUE 

31 March 2010 54,043 236,997 8,170 299,210 1,507 1,507 

31 March 2009 114,538 31,667 27,982 174,187 1,573 1,573 

7. INVESTMENT IN SUBSIDIARY UNDERTAKINGS 

Company 

COST £ 

As at 1 April 2009 and 31 March 2010 £268,548 

The company’s investments are comprised of the following: 

Company Class of % Cost of 

of shares held Investment 

incorporation Held 


Outsourcing 

Private Limited India Ordinary 100% 101,188 


Outsourcing 

Private Limited India 10% 100% 153,640 

Preference 

Compass BPO Inc US Ordinary 100% 65 

Compass BPO FZE UAE Ordinary 100% 13,665 

The 10% Preference Shares are redeemable at par any time between 5 and 10 years from 

27 March 2000, the date of allotment. However there is a put and call option anytime after 

36 months from the date of allotment. 

The principal activities of Compass Business Process Outsourcing Pvt. Ltd and Compass 

BPO Inc. are the provision of personnel and related consultancy services from Asia. 

The company holds 100% of the issued share capital of Compass BPO FZE, consisting of 

1 share acquired for AED100,000. 

8. DEBTORS 


Group Company Group Company 

£ £ £ £ 

Trade debtors 471,776 160,165 623,732 165,743 

Other debtors 321,934 15,818 275,273 15,232 

Due from subsidiary undertakings — 488,611 — 524,374 

Prepayments and accrued income 128,490 10,130 138,985 12,596 

Corporation tax recoverable 23,896 23,896 — — 

£946,096 £698,620 £1,037,990 £717,945 

9a. CREDITORS: Amounts falling due within one year: 



£ £ £ £ 

Trade creditors 214,450 97,831 180,458 12,957 

Due to subsidiary undertakings — 19,665 — 14,437 

Other taxation and social security 60,110 41,038 87,031 59,702 

Other creditors 83,206 — 137,855 — 

Bank loan — — 1,016 — 

Corporation tax 54,230 — 67,608 13,596 

Accruals 144,709 27,426 96,803 19,268 

£556,705 £185,960 £570,771 £119,960 

9b. CREDITORS: Amounts falling due after one year: 



£ £ £ £ 

10% Convertible Loan Stock — — 407,313 407,313 

— — £407,313 £407,313 

Repayable as follows: 

Between one and two years — — 407,313 407,313 

Between two and five years — — — — 

— — £407,313 £407,313 

On 27 February 2007 the Group issued convertible loan notes, redeemable by 1 April 

2010, carrying a coupon rate of 10% interest payable on redemption or conversion of the 

relevant note. At any time after 1 April 2009, the holders have the option to convert the 

face value of their holdings to shares at a price of £53.75 for one ordinary £0.25 share. 

On 9 March 2010, the convertible loan notes were converted into 6,511 ordinary shares 

at a price of £53.75 for each £0.25 share. 

10. SHARE CAPITAL 

Group and Company 2010 2009 

£ £ 

Allotted, issued and fully paid: 

75,866 (2009: 66,238) Ordinary shares of £0.25 each £18,967 £16,560 

On 9 March 2010, the 10% convertible loan notes of £350,000 were converted into 

ordinary shares at 1 Ordinary share per £53.75 of nominal loan value. This resulted in the 

issue of 6,511 new ordinary shares. 

Also on the same date share options were exercised resulting in the issue of 3,117 ordinary 

shares of £65.91 per £0.25 share. 

During the year the company had the following share options in issue: 

At 1 April Number Exercise 

2009 of shares Date of At 31 March price 

£ exercised/ Grant 2010 £ Exercise dates 

cancelled 

7,750 (7,750) 27/2/07 — 48.73 27/2/07 – 27/2/2011 

3,531 (3,531) 15/1/07 — 45.44 15/1/07 – 15/1/2011 

The share options were granted to 7 employees and one consultant of the group. There are 

no performance conditions attached to any of the options. 

On 9 March 2010, share options were exercised resulting in the issue of 3,117 ordinary 

£0.25 shares at £65.91 per share. 

11. SHARE PREMIUM 


Group and Company Group Group 

£ £ 

Share premium brought forward at 1 April 2009 765,173 760,157 

Premium on issue of shares 348,372 5,016 

Transfer from other reserves on conversion of loan notes 31,661 — 

Share premium at 31 March 2010 £1,145,206 £765,173 

12. PROFIT AND LOSS ACCOUNT 



Balance brought forward at 1 April 2009 (118,146) (39,205) (483,474) (61,186) 

(Loss)/profit for the financial year (171,448) (197,584) 365,262 21,981 

Exchange gain on currency translation 11,505 — 66 — 

Carried forward at 31 March 2010 £(278,089) £(236,789) £(118,146) £(39,205) 

(412)

C M Y K 


NOTES TO THE ACCOUNTS (continued) 

13. OTHER RESERVES 

Group and Company 

£ 

Equity component of 10% convertible loan notes 

At 1 April 2009 31,661 

Transferred to share premium on conversion of the loan notes (31,661) 

At 31 March 2010 £ - 

The loan notes are more fully described in note 9b. 

14. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS 



£ £ £ £ 

New share capital (including share premium) 350,779 350,779 5,044 5,044 

(Loss)/Profit for the financial year (171,448) (197,584) 365,262 21,981 

Exchange gain on currency translation 11,505 — 66 — 

Opening shareholders’ funds 695,248 774,189 324,876 747,164 

Closing shareholders’ funds £886,084 £927,384 £695,248 £774,189 

15. PENSION COMMITMENTS 

Compass Business Process Outsourcing Pvt Ltd, operates a defined benefit pension scheme, 

for eligible staff. It is funded by the payment of contributions to a separately administered 

trust fund. The assets of the scheme are held separately from those of the group. 

The Group adopts the valuation and disclosure requirements of FRS 17 “Retirement Benefits”, 

as amended by the FRSSE 2007. The Group includes the assets and liabilities of the pension 

fund in the Group’s balance sheet, with a subsequent effect on reserves. 

The pension contributions are determined with the advice of a qualified actuary on the 

basis of annual valuations using the method. The most recent valuation was conducted as 

at 31March 2010. The principal assumptions used by the actuaries were that the return on 

assets would be 9% per annum and salaries would increase by 4% per annum. The market 

value of the assets at 31 March 2010 was £33,639. 

The pension charge for the year was £17,017 (2009: £16,219). Contributions to the 

scheme are expected to remain at this level in the future. 

The key assumptions were as follows: 

Main assumptions 

% per annum 


Rate of return on investments 9% 9% 

Increase in earnings 4% 4% 

Discount rate 8% 8% 

Value at Value at 


£’000s 

£’000s 

Market value of assets 34 25 

Present value of scheme liabilities (53) (42) 

Net pension scheme liability (19) (17) 

The movement in the deficit during the year arose as follows: 2010 

£’000s 

Deficit as at 1 April 2009 (17) 

Movement in present value of scheme liabilities (17) 

Interest earned 2 

Settlements (12) 

Employer contributions 17 

Exchange gains 8 

Deficit as at 31 March 2010 (19) 

16. OPERATING LEASE COMMITMENTS 

At 31 March 2010 the company had the following annual commitments under noncancellable 

operating leases. 


Group 

Group 

Land and Land and 

Buildings Buildings 

£ £ 

Operating leases which expire: 

– within one year 64,652 — 

– within one to two years — 267,771 

– within two to five years 12,600 — 

17. RELATED PARTY TRANSACTIONS 

The company has taken advantage of the exemption available not to disclose transactions 

with its 100% owned subsidiary undertakings. 

18. CONTINGENT LIABILITIES 

The company is a joint guarantor in respect of loan and overdraft facilities granted to 

Compass Business Process Outsourcing Pvt. Limited, the company’s wholly owned subsidiary. 

The loan and overdraft facilities provided by The IDBI Bank (formerly known as The United 

Western Bank Limited) amounted to £36,836. At the year end, £9,388 was drawn. 

(413)

C M Y K 

COMPASS BPO INC. 

Profit & Loss Account for the period ended 31 March 2010 

Particulars Amt($) Amt($) Particulars Amt($) Amt($) 


Salary 468,850 527,428 Revenue 1,135,919 1,416,001 

Consultant Charges 320,832 474,056 

Travel 107,389 104,610 

Office Costs 89,062 92,008 

Marketing 35,990 28,511 

Audit Fees 9,270 — 

Legal & Professional Fees 2,020 7,205 

Insurance 9,432 10,060 

Bad Debts — 34,664 

Taxes & Fees 3,786 5,017 


Bank Charges 710 1,609 

Tax for the Year 24,200 43,536 

Profit transferred to Balance Sheet 56,040 80,149 

1,135,919 1,416,001 1,135,919 1,416,001 

Balance Sheet as at 31 March 2010 

Liabilities Amt($) Amt($) Assets Amt($) Amt($) Amt($) 


Capital Stock 100 100 Computer Equipment 6,482 

Less: Depreciation 1,822 4,659 6,624 

Amount owed to holding company 249,696 419,185 

Accounts Payable 36,085 40,530 Office Equipments 1,480 

Other Liabilities 10,629 54,998 Less: Depreciation 194 1,287 1,174 

Provision for taxation 24,200 48,408 

Furnitures & Fixtures 6,208 

Retained Earning 165,302 109,261 Less: Depreciation 1,956 4,252 6,066 

Bank 10,648 147,629 

Debtors 448,010 465,088 

Prepaid 17,156 45,901 

486,012 672,482 486,012 672,482 

(414)

COMPASS BPO INC. 

Schedule for Profit & Loss Account 

Account Code Account Name Amount 

$ 

1 Salaries : Gross Salary (DM) 328,166 

Gross Salary (JP) 164,111 

Bonus (JP) 5,000 

Bonus provn - 28,427 

468,850 

2 Office Cost : 

400-150 Staff Welfare Exps 5,445 

410-080 Computer Exps-Others 4,064 

410-090 Courier Charges 4,882 

410-200 Membership & Subscription 5,583 

410-220 R & M - Office Equipment 1,358 

410-230 R & M - Computers 5,193 

410-240 R & M - Others 204 

410-260 Rent 4,500 

410-250 Rates & Taxes 2,592 

410-290 Software Exp. 6,942 

410-310 Tel Line Ongoing Cost 1,536 

410-370 Tel Cost - Mobile 12,830 

410-400 Tel. Cost Internet 8,287 

410-410 Others 19,256 

410-440 Meetings & Conferences 2,160 

600-150 Staff Welfare Exps 266 

610-200 Membership & Subscription 853 

610-290 Software Exp - Direct 480 

3 Audit Fees : 

610-310 Tel Line Cost - Direct 2,630 

89,062 

410-020 Audit Fees 9,270 

4 Legal & Professional Fees : 

410-160 Legal & Professional Fees 2,020 

5 Travel Etc. : 

400-090 Flights Charges 25,735 

400-110 Conveyance Local 13,056 

400-130 Hotel Accommodation 15,721 

400-190 Trl & Liv Travel 49,131 

600-090 Flights Charges - Direct 654 

600-110 Conveyance Local - Direct 181 

600-130 Hotel Accom - Direct 1,459 

600-190 Trl & Liv Travel 1,452 

107,389 

7 Revenue 

300-010 Staff Charges 1,745,770 

320-010 Consulting - IND 581,341 

320-025 Consulting Fixed Price 123,066 

320-040 Software Revenue 10,450 2,460,628 

320-020 Consulting-US 

Consulting (DM) 52,035 

Consulting (MEL) 79,624 

Consulting (TERRI) 76,210 

Consulting (VICKY) 119,910 

Consulting (JOEL) 46,230 

Consulting (CHERYL) 35,760 409,769 

310-010 Other Income 213,180 

310-020 P/L on FA - 3,288 

310-030 Interest rec 1,340 211,233 

3,081,629 

Less: 

400-020 CDIPL Charges-UK/US 1,871,861 

Recharge 73,849 1,945,710 

8 Schedule for David’s & Joel’s Gross Salary 

Month Gross Salary (DM) Gross Salary (JP) 

April 26,304 17,581 

May 26,314 17,629 

June 26,304 17,581 

July 27,314 18,996 

Aug 27,314 20,042 

Sept 27,304 18,055 

Oct 27,343 18,125 

Nov 27,298 18,051 

Dec 27,476 18,051 

Jan 28,646 — 

Feb 28,259 — 

March 14,140 — 

314,016 164,111 

478,127 

1,135,919 

6 Marketing : 

400-140 Marketing Cost 27,764 

410-040 Business Prom/Ent 7,834 

410-420 Entertain - B’ness Dev 347 

610-040 Business Prom/Ent 45 

35,990 

Schedule for Balance Sheet 

Account Code Account Name Amount 

$ 

1 Debtors : 

120-010 Debtors 448,010 

448,010 

2 Prepaid : 

150-070 Prepaid Expenses 17,156 

17,156 

3 Other Liabilities : 

150-040 Advance Account 7,320 

150-105 Melinda Phillips Loan A/c (400) 

240-060 Out.Liabilities for Exps 3,709 

10,629 

(415)

C M Y K 

COMPASS BUSINESS PROCESS OUTSOURCING PRIVATE LIMITED 

DIRECTORS’ REPORT TO THE MEMBERS 

Your Directors have pleasure in presenting the 12 th Annual Report and the 

Audited Accounts for the year ended 31 st March 2010. 

FINANCIAL RESULTS: 

(Rupees In Lacs) 


Sales and Other Income 2409.23 2558.57 

Profit/(Loss) before Depreciation 231.09 191.48 

Depreciation (88.64) (74.59) 

Profit/(Loss) before Taxation 142.45 116.89 

Provision for Taxation (8.85) (2.06) 

Profit/(Loss) after Taxation 133.60 114.83 

Loss Brought Forward (146.85) (261.68) 

Accumulated Profit/(Loss) Carried to 

Balance Sheet (13.25) (146.85) 

DIVIDEND 

The Company has made profits during the year. However it has been decided 

to retain the profits and hence the directors do not recommend any dividend 

for the year. 


Pursuant to the requirement under Section 217(2AA) of the Companies Act, 

1956 with respect to Directors’ Responsibility Statement, it is hereby 

confirmed: 

(i) 

(ii) 

(iii) 

(iv) 

That in the preparation of the annual accounts for the financial year 

ended 31.03.2010 the applicable accounting standards have been 

followed along with proper explanation relating to material departures; 

The Directors had selected such accounting policies and applied them 


and prudent so as to give a true and fair view of the state of the affairs 

of the Company at the end of the financial year and of the profit or loss 

of the Company for that period; 

The Directors had taken proper and sufficient care for the maintenance 




That the Directors have prepared the accounts for the financial year 

ended 31.03.2010 on a ‘on going concern’ basis. 

PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY 

ABSORPTION: 

Since your Company is a 100% export oriented unit and only operates in 

data processing and development, the information as required under Section 

217(1)(e) of the Companies Act, 1956 read with The Companies (Disclosure 

of Particular in the Report of the Board of Directors) Rules, 1988 are reported 

below to the extent applicable. The company has not deployed and imported 

Technology to carry out its process. The consumption of energy is minimal. 

The Company will take suitable steps, if required, in future for reduction of 

consumption of energy. 

FOREIGN EXCHANGE 

Your company remains to be net foreign exchange earner for India 

(Rupees in Lacs) 


Export Earnings for Service 2406.34 2551.54 

Less: Expenses 

- Capital 8.54 23.49 

- Others 24.74 29.07 

Net Foreign Exchange Earning 2373.06 2498.98 


There were no employees covered by the provisions of Section 217 (2A) of 

the Companies Act, 1956 read with companies (Particulars of Employees) 

Rules, 1975, whose particulars are required to be given. 

AUDITOTRS 

The Auditors of the Company M/s. KDS & Co., Chartered Accountants, 

Mumbai retire at the conclusion of ensuing Annual General Meeting and 

Ernst & Young be appointed as Auditor for FY 2010-11. 

DEPOSITS 

The Company has not accepted any deposit during the financial year. 


Your Directors thank Compass BPO Ltd., UK for their continuous support 

and guidance given to the Company. 

Your Directors are also thankful to the various Governments Agencies and 

Banks for their valuable support. The Directors also express their appreciation 

to all Employees, Staff and Shareholders of the Company. 

Place: Mumbai 

Date : 22/04/2010 

For and on behalf of the Board of 

Compass Business Process Outsourcing Pvt. Ltd. 

(Mr. Deepak Patel) 

Chairman 

(416)

C M Y K 



To 

The Members of 

Compass Business Process Outsourcing Private Limited 

1. We have audited the attached Balance Sheet of Compass Business 

Process Outsourcing Private Limited (The Company), as at 31 st March 

2010 and also the Profit and Loss Account for the year ended on that 

date annexed thereto. These Financial Statements are the responsibility 

of the Company’s Management. Our responsibility is to express an 

opinion on these Financial Statements based on our audit. 

2. We have conducted our audit in accordance with Auditing Standards 

Generally Accepted in India. Those Standards require that we plan 


the financial statements are free of material misstatement(s). An audit 

includes examining, on a test check basis, evidence supporting the 

amounts and disclosures in the Financial Statements. An audit also 

includes assessing the accounting principles used and significant 

estimates made by management, as well as evaluating the overall 

financial statement presentation. We believe that our audit provides a 


3. We report that: 


the best of our knowledge and belief were necessary for our audit; 

ii. 

iii. 

iv. 

In our opinion, proper books of account have been kept as required 

by law so far as it appears from our examination of the books; 

The Balance sheet and Profit & Loss Account dealt with by this 

report are in agreement with the books of accounts; 

In our opinion and to the best of our information, the Balance 

Sheet and the Profit and Loss Account comply with the Accounting 

Standards referred to in section 211(3C) of the Companies Act, 

1956; 

v. On the basis of written representation received from the directors 

of the company for the year ended March 31 st , 2010 and taken 

on record by the Board of Directors, we report that no director is 

disqualified from being appointed as director of the company under 

clause (g) of sub-section (1) of Section 274 of the Companies Act, 

1956; 

vi. 





Accounting Principles generally accepted in India: 

(a) 

(b) 

In the case of Balance Sheet, of the state of affairs of the 

Company as at 31 st March, 2010;and 

In the case of the Profit & Loss Account, of the Profit for the 


4. As required by the Companies (Auditor’s Report) Order, 2003, as 

amended by the Companies (Auditor’s Report) (Amendment) Order, 

2004, issued by the Central Government of India in terms of subsection 

(4A) of section 227 of the Companies Act, 1956 we report 

hereunder on the matters specified in paragraphs 4 and 5 of the said 

Order to the extent applicable to the company. 

i a) The Company has maintained proper records to show full 

particulars, including quantitative details and situation of its 

fixed assets. 

b) All the fixed assets of the Company have been physically 

verified during the year by the Management and no material 

ii. 

iii. 

iv. 

discrepancies have been noticed on the physical verification 

as confirmed by the management. 

c) Fixed Assets disposed off during the year were not substantial 

and therefore, do not effect the going concern assumption. 

The company is a service company primarily rendering back office 

data processing services. Accordingly it does not hold any physical 

inventories. Thus clause 4(ii) of the companies (Auditor’s Report) 

Order, 2003 (‘the Order’) is not applicable. 

The Company has not taken any loan except interest free unsecured 

loan taken from its share holder, which is outstanding at the Balance 

Sheet date. The company has not granted any loans, secured or 

unsecured to or from companies, firms or other parties covered in 

the register maintained under Section 301 of the Companies Act, 

1956. 

In our opinion and according to information and explanation given 

to us, there are adequate internal control procedures 

commensurate with the size of the Company and the nature of its 

business for purchase of fixed assets and rendering of services. 

The activities of the company do not involve purchase of inventory 

and the sale of goods. We have not observed any continuing 

failure to correct major weakness in the internal controls during 

the course of the audit. 

v. In our opinion and according to information and explanation given 

to us, the transactions that need to be entered in the register in 

pursuance of Section 301 of the Companies Act 1956 have been 

entered. 

vi. 

vii. 

In our opinion and according to the explanation given to us, the 

transactions made in pursuance of contract or arrangement entered 

in the register maintained under Section 301 of the Companies 

Act, 1956 and exceeding value of Rupees Five Lakhs in respect of 

any parties during the year have been made at prices which are 

reasonable, having regard to the prevailing market price at relevant 

time. The company is providing services to its holding company, 

as explained to us, the transaction are made at the contracted 

price. The prevailing market price is not freely ascertainable, 

considering the terms of contract and specialized nature of activities; 

however in our opinion contracted rates are reasonable having 

regard to the terms of contract and nature of the services provided. 

The Company has not accepted any deposits from the public and 

consequently, the directives issued by the Reserve Bank of India, 

the provision of the Sections 58A and 58AA of the Companies 

Act, 1956 and the rules framed there under are not applicable. 

In our opinion, the Company has an Internal Audit system however 

the same needs to be strengthened and coverage needs to be 

extended to make it commensurate with the size & nature of its 

business. 

viii. According to information and explanation given to us, the Central 

Government has not prescribed the maintenance of cost records 

under section 209(1) (d) of the Companies Act, 1956. 

ix. 

According to the information & explanations given to us, and on 

the basis of our examination of the books of accounts and other 

documents, the Company is generally regular in depositing with 

appropriate authorities undisputed statutory dues including 

Provident Fund dues, Income Tax, Sales Tax, Customs Duty, Investor 

Education and Protection Fund, Wealth Tax and any other material 

statutory dues applicable to it. 

According to the information & explanation given to us, no 

undisputed dues payable in respect of Provident Fund, Income 

tax, Sales tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty 

(417)

C M Y K 


and Cess were in arrears, as at 31 st March 2010 for a period of 

more than six months from the date they became payable. 

According to the information & explanations given to us, there are 

no dues in respect of Income Tax, Sales Tax, Wealth Tax, Service 

Tax, Customs Duty and Excise Duty & Cess that have not been 

deposited with the appropriated authorities on account of any 

dispute with the Company. 

x. In our opinion, in the current financial year, the accumulated losses 

are not more than fifty percent of its net worth. The company has 

neither incurred any cash losses in the current financial year nor in 

the immediately proceeding financial year. 

xi. 

xii. 

In our opinion and explanation given to us the Company has not 

defaulted in repayment of dues to a bank. 

The Company has not any granted loans & advances on the basis 

of security by way of pledge of shares, debentures & other securities. 

Accordingly, clause 4(xii) of the order is not applicable. 

xiii. The Company is not a Chit Fund, Nidhi Mutual Benefit Fund or a 

Society. Accordingly, clause 4(xiii) of the order is not applicable. 

xiv. According to the information & explanations given to us, the 

Company is not dealing or trading in shares, securities, debentures 

& other investments. Accordingly, clause 4(xiv) of the order is not 

applicable. 

xv. 

According to the information & explanations given to us, the 


from banks or financial institutions. Accordingly, clause 4(xv) of 

the order is not applicable. 

xvi. There is no term loan outstanding during the current financial 

year. 

xviii. According to the information & explanations given to us and the 

overall examination of the Balance Sheet of the Company, we 

report that no funds raised on the short-term basis have been 

used for long-term investments. No long-term funds have been 

used to finance short-term assets except the permanent working 

capital. 

xviii. The Company has not made any preferential allotment of the shares 

to parties & companies covered in the register maintained under 

section 301 of the Companies Act 1956. Accordingly, clause 4 

(xviii) of the order is not applicable. 

xix. The Company has not issued any debentures. Accordingly, clause 

4(xix) of the order is not applicable. 

xx. 

The Company has not raised any money by public issue during 

the financial year. According, clause 4(xx) of the order is not 

applicable. 

xxi. According to the information & explanations to us, no fraud on or 

by the Company has been noticed or reported during the year. 

xxii. The other clauses of the Companies (Auditor’s Report) Order, 2003 

are not applicable to the Company for the financial year under 

audit. 

Ketan D. Saiya 

Partner 


Firm Regn. No. – 117073W 


Dated: 22nd April, 2010 


KDS & Co. 


(418)

C M Y K 



Schedule 31.03.2010 31.03.2009 

(Rs.) (Rs.) 



Share Capital 1 17,431,000 17,431,000 

Loan Funds 

Secured Loans 2 637,140 75,324 


Total 19,920,423 19,358,607 



Gross Block 56,331,620 63,732,756 

Less : Depreciation 36,675,776 53,065,478 

Net Block 19,655,844 10,667,278 

Deffered Tax Asset 1,478,000 1,251,983 



Cash and Bank Balance 6 3,508,934 3,208,695 


30,712,859 32,887,987 

Less : Current Liabilities and Provisions 


Provisions 9 4,309,510 3,211,900 

33,250,751 40,133,569 

Net Current Assets (2,537,892) (7,245,582) 

Profit and Loss Account 1,324,471 14,684,928 

Total 19,920,423 19,358,607 


and Notes on Accounts 13 

Schedules referred to herein form an integral part of the Balance Sheet 

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 

MARCH 31, 2010 

INCOME 

2009-10 2008-2009 

Schedule (Rs.) (Rs.) 

Income from Services 240,634,675 255,153,974 

Other Income 10 288,847 703,269 

Total Income 240,923,522 255,857,243 

EXPENDITURE 

Personnel Costs 11 140,669,881 154,343,417 

Operating, Administration and 

other expenses 12 77,104,319 82,233,511 

Interest 39,334 132,320 

Depreciation 8,864,548 7,458,717 

226,678,082 244,167,965 

Profit /(Loss) before Taxation 14,245,440 11,689,278 

Taxation Current 1,111,000 — 

Deferred (226,017) (474,054) 


Profit /(Loss) After Taxation 13,360,457 11,483,532 

Profit / (Loss) Brought Forward (14,684,928) (26,168,460) 

Balance carried forward to 

the Balance Sheet (1,324,471) (14,684,928) 


(Basic and Diluted) 17.83 15.12 


and Notes on Accounts 13 

Schedules referred to herein form an integral part of the Profit and Loss Account 

This is the Balance Sheet referred 

to in our report of even date 

This is the Profit and Loss Account referred 

to in our report of even date 


Partner 


Mr Deepak Patel 

Director 

Mr Manoj Kedia 

Director 


Partner 


Mr Deepak Patel 

Director 

Mr Manoj Kedia 

Director 


KDS & Co 


Firm Registration : 117073W 

Place: Mumbai 

Date : 22nd April 2010 


KDS & Co 


Firm Registration : 117073W 

Place: Mumbai 


Place: Mumbai 


Place: Mumbai 


(419)

C M Y K 


SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT MARCH 31, 2010 


(Rs.) 

(Rs.) 


Authorised 

7,00,000 Equity Shares of Rs.10/- each 7,000,000 7,000,000 

1,05,000 Preference Shares of Rs 100/- each 10,500,000 10,500,000 

17,500,000 17,500,000 

Issued,Subscribed and Paid-up 

6,93,100 Equity Shares of Rs. 10/- each fully paid 6,931,000 6,931,000 

1,05,000 Preference Shares of Rs 100/- each fully paid 10,500,000 10,500,000 

17,431,000 17,431,000 


(a) 

Notes: 

Loans from Bank 


(Rs.) 

(Rs.) 

Cash Credit from IDBI Bank Limited (Note 1 & 2) 637,140 75,324 

Total Secured Loans 637,140 75,324 

1. The Cash Credit facility is secured by hypothecation of Fixed Assets, Book Debts, Claims and other 

receivables. 

2. The Cash Credit is also guaranteed by Mr. Hitesh Dixit and the holding company Compass BPO 

Limited, UK. 

Notes: 

1. Out of 6,93,100 paid-up equity shares 6,93,080 equity shares are held by the holding company 

Compass BPO Limited, UK 

2. Out of above 93,100 equity shares are allotted as fully paid-up pursuant to a contract for consideration 

other than cash. 

3. Preference Shares carry dividend of 10% and are redeemable at par in one installment at any time 

before 10 years from 27th March 2000, the date of allotment. 

4. The entire 1,05,000 fully paid-up preference shares are held by the holding company Compass BPO 

Limited, UK. 


Interest free loan from Shareholder 1,852,283 1,852,283 


GROSS BLOCK DEPRECIATION NET BLOCK 

Particulars As on Additions / Disposals As on As on Disposals For the As on As on As on 

1-Apr-09 Adj.during during the 31-Mar-10 1-Apr-09 during Year 31-Mar-10 31-Mar-10 31-Mar-09 

the Year Year the Year 

Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees 

Computers 47,403,947 553,898 15,477,416 32,480,429 39,505,268 15,046,734 4,666,133 29,124,667 3,355,762 7,898,679 

Office Equipment 6,597,690 8,637,418 4,200,312 11,034,796 5,886,726 4,167,262 1,571,430 3,290,894 7,743,902 710,964 

Vehicles 3,046,005 — 493,584 2,552,421 1,886,487 493,586 604,967 1,997,868 554,553 1,159,518 

Furniture and Fixtures 6,685,114 6,847,922 5,893,052 7,639,984 5,786,997 5,546,669 1,803,353 2,043,681 5,596,303 898,117 

Electrical Fittings — 2,623,990 — 2,623,990 — — 218,666 218,666 2,405,324 — 

TOTAL 63,732,756 18,663,228 26,064,364 56,331,620 53,065,478 25,254,252 8,864,548 36,675,776 19,655,844 10,667,278 

Previous Year 59,417,895 4,636,958 322,097 63,732,756 45,928,858 322,097 7,458,717 53,065,478 10,667,278 — 


(Rs.) 

(Rs.) 


Debts outstanding for less than six months 

Note : The entire outstanding of Rs. 13,34,632 (Last year Rs.39,08,736/-) 

was due from holding company Compass BPO Limited, UK 

(Unsecured Considered Good) 

1,334,632 3,908,736 


(Rs.) 

(Rs.) 



Advances recoverable in Cash or in kind or 

for Value to be Received 15,587,598 15,338,859 

Deposits 9,794,648 9,944,650 

Due from fellow subsidiary Compass BPO FZE, UAE. 487,047 487,047 

25,869,293 25,770,555 


Cash on hand (including Foreign currency on hand) 154,152 132,186 

Balance with Scheduled Banks 

On Current Account 21,574 37,884 

Fixed Deposits 2,849,000 2,609,000 

Interest Accrued on Fixed Deposits 49,413 74,243 

Balance with Non-Scheduled Bank 

HSBC Bank - on Current Account 332,557 240,112 

- on Fixed Deposit 100,000 100,000 

- Interest Accrued on Fixed Deposit 2,238 15,271 

3,508,934 3,208,695 

Note 1: Maximum balance in Current Account was Rs. 1,19,23,269 (Prevoius year Rs. 1,37,21,961) 

Note 2 : The fixed deposit of Rs. 5,35,000/- is under lien to Bank for issuing bank guarantee in favour of 

customs authorities. 


Creditors for Expenses 6,167,244 10,256,258 

Creditors for Capital Goods* 9,418,710 9,408,537 

Due To Holding Company, Compass BPO Ltd, UK 1,687,594 5,219,749 


28,941,241 36,921,669 

* Includes due to holding company of Rs 94,18,710/- 

(Last Year Rs. 93,57,913/-) 

SCHEDULE 9- PROVISIONS 

Provision for Taxation 2,590,800 1,479,800 

Provision for Provident Fund Contribution 442,409 480,490 

Provision for Gratuity 1,276,301 1,251,610 

4,309,510 3,211,900 

(420)

C M Y K 


SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR 

THE YEAR ENDING MARCH 31, 2010 

2009-2010 2008-2009 

(Rs.) 

(Rs.) 

SCHEDULE 10 - OTHER INCOME 

Interest Received on Fixed Deposit with Bank 202,583 44,090 

(Tax deducted 34640/- (Last Year 6074) 

Interest accrued, but not due, on Fixed deposit 

with Bank 51,651 68,480 

Profit on sale of assets (Net) 29,502 40,420 

Interest on Income Tax refund — 439 

Miscelleaneous Income 5,111 — 

Foreign Exchange Gain (Loss) - Net — 549,840 

Total 288,847 703,269 

SCHEDULE 11 - PERSONNEL COSTS 

Salaries, Wages and Bonus etc. 129,655,511 141,102,421 

Contribution to Provident and Other Funds 5,576,148 5,960,440 

Staff Welfare 2,489,446 3,613,409 

Staff Training Expenses 972,625 1,734,774 

Administration Charges for Provident Fund 699,850 680,763 

Gratuity 1,276,301 1,251,610 

Total 140,669,881 154,343,417 

2009-2010 2008-2009 

(Rs.) 

(Rs.) 

SCHEDULE 12 - OPERATING, ADMINISTRATION AND OTHER EXPENSES 

Rent 22,147,603 23,931,133 

Rates & Taxes 46,012 58,524 

Office Expenses 217,694 113,986 

Electricity & Water Charges 10,971,011 11,317,575 

Travelling Expenses 3,369,738 5,248,163 

Conveyance Expenses 4,474,930 5,204,182 

Printing and Stationery 924,696 1,104,005 

Telephone Charges 1,175,959 1,596,930 

Communication Cost 7,002,939 7,278,518 

Payment to Auditors 

Statutory Audit Fees 275,000 225,000 

Management Audit Fees 150,000 — 

Tax Audit Fees 50,000 25,000 

Taxation Matters 25,000 69,738 

Other Services 219,323 73,033 

Computer & Software Expenses 9,862,351 7,992,269 


Car Expenses 523,636 507,014 

Business Promotion/Entertainment 112,107 258,779 

Repairs & Maintenance 7,725,519 8,416,857 

ROC and Stamp Duty Charges 2,500 9,920 

Insurance Expenses 821,854 727,746 

STPI Annual Charges 585,000 200,000 

Bank Charges 235,974 224,613 

Foreign Exchange Gain (Loss) - Net 2,545,077 — 

Total 77,104,319 82,233,511 

(421)

C M Y K 

COMPASS BPO FZE 

INDEPENDENT AUDIT 

UDITORS’ REPORT 

To The Manager of, 

Compass BPO FZE 

Ras Al Khaimah - U.A.E. 

Report on the financial statements 

We have audited the accompanying financial statements of Compass BPO 

FZE which comprise the statement of financial position as at 31 March 

2010 and the statements of comprehensive income, changes in equity and 

cash flows for the year then ended, a summary of significant accounting 

policies and other explanatory related notes to financial statements set out 

on pages 3 to 14. 

Management’s responsibility for the financial statements 

Management is responsible for the preparation and fair presentation of 

these financial statements in accordance with International Financial Reporting 

Standards (IFRS). This responsibility includes: designing, implementing and 

maintaining internal control relevant to the preparation and fair presentation 

of financial statements that are free from material misstatements, whether 

due to fraud or error, selecting and applying appropriate accounting policies; 

and making accounting estimates that are reasonable in the circumstances. 

Auditor’s responsibility 


based on our audit. We conducted our audit in accordance with International 

Standards on Auditing. Those standards require that we comply with relevant 

ethical requirements and plan and perform the audit to obtain reasonable 

assurance whether the financial statements are free from material 

misstatement. 

An audit involves performing procedures to obtain audit evidence about the 

amounts and disclosures in the financial statements. The procedures selected 

depend on our judgment, including the assessment of the risks of material 

misstatement of the financial statements, whether due to fraud or error. In 

making those risk assessments, we consider internal control relevant to the 

entity’s preparation and fair presentation of the financial statements in order 

to design audit procedures that are appropriate in the circumstances, but 

not for the purpose of expressing an opinion on the effectiveness of the 

entity’s internal control. An audit also includes evaluating the appropriateness 

of accounting principles used and the reasonableness of accounting estimates 

made by management, as well as evaluating the overall presentation of the 


We believe that the audit evidence we have obtained is sufficient and 

appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the accompanying financial statements give a true and fair 

view of the financial position of Compass BPO FZE as at 31 March 2010, 

and of its financial performance and it’s cash flows for the year then ended 

in accordance with International Financial Reporting Standards (IFRS). 

Report on other legal and regulatory requirements 

The accompanying financial statements comply with the U.A.E. Commercial 

Companies Law No. 8 of 1984 (as amended by Law No. 13 of 1988). 

Name of the Auditor 

Ravi Kannampillil 

Registration Number (80) 

Dated : 12 April 2010 

(422)

C M Y K 


STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2010 

31-03-10 31-03-09 

Note Dirhams Dirhams 

ASSETS: 

NON-CURRENT ASSET 

Property, Plant and Equipment 6 7,317 99,295 

Total non-current assets 7,317 99,295 

CURRENT ASSET 

Trade and Other Receivables 7 167,602 697,899 

Prepayments 8 22,332 63,260 

Cash and Cash Equivalents 9 56,092 36,707 

Total current assets 246,026 797,866 

Total assets 253,343 897,161 

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR 

ENDED 31 MARCH 2010 

31-03-10 31-03-09 

Note Dirhams Dirhams 

Revenue 2,553,233 4,660,751 

Manpower Cost (2,844,853) (3,425,892) 

Gross Profit (291,620) 1,234,859 

Other Income 12 Nil 413,356 

Administrative Expenses 13 (696,713) (750,247) 

Depreciation & Amortisation Expenses (70,069) (73,346) 

Net (Loss) / Profit for the period (1,058,402) 824,622 

EQUITY 

Share Capital 100,000 100,000 

Head Office Current Account 670,135 171,689 

Retained Earnings (loss) (763,419) 294,983 

Total equity 6,716 566,672 

LIABILITIES: 


Trade and Other Payables, 

including Derivatives 10 126,631 206,612 

Provisions 11 119,996 123,877 

Total current liabilities 246,627 330,489 

For Compass BPO FZE 

Manager 

Total liabilities 246,627 330,489 

Total equity and liabilities 253,343 897,161 

The notes on pages 7 to 14 are an integral part of these financial statements 


Manager 

The notes on pages 7 to 14 are an integral part of these financial statements 

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 

31 MARCH 2010 

PREVIOUS YEAR 

(Amount in Dirhams) 

Heac Office 

Share Current Retained 

Capital Account Earnings Total Equity 

Balance as at 01 April 2008 100,000 Nil (529,639) (429,639) 

Net movement during the year Nil 171,689 Nil 171,689 

Total comprehensive income 

for the year Nil Nil 824,622 824,622 

Balance as at 31 March 2009 100,000 171,689 294,983 566,672 

CURRENT YEAR 

Balance as at 01 April 2009 100,000 171,689 294,983 566,672 

Net movement during the year Nil 498,446 Nil 498,446 

Total comprehensive loss 

for the year Nil Nil (1,058,402) (1,058,402) 

Balance as at 31 March 2010 100,000 670,135 (763,419) 6,716 

(423)

C M Y K 


STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 MARCH 2010 

31-03-10 31-03-09 

Dirhams 

Dirhams 

Cash flow from Operating Activities 

(Loss)/ Profit for the period (1,058,402) 824,622 

Adjustment for : 

Depreciation of property, plant and equipment 70,069 73,346 

Interest expense 5,483 5,734 

Loss on sale of Property, Plant & Equipments 13,447 Nil 

Operating Profit Before Working Capital Changes (969,403) 903,702 

Decrease / (Increase) in trade and other receivables 530,297 (312,456) 

Decrease / (Increase) in prepayments 40,928 (7,932) 

Increase / (Decrease) in trade and other payables (79,981) (838,171) 

(Decrease) / Increase in provisions (3,881) 72,247 

Net Cash from / (used in) Operating Activities (482,040) (182,610) 

Cash flow from Investing Activities 

Purchase of property, plant & equipments (12,849) (9,535) 

Proceeds from Sale of Property, Plant & Equipment 21,311 Nil 

Net cash from / (used in) Investing Activities 8,462 (9,535) 

Cash flow from Financing Activities 

Interest paid (5,483) (5,734) 

Net movement during the year 498,446 171,689 

Net Cash (used in) Financing Activities 492,963 165,955 

Net Increase / (Decrease) in cash and cash equivalents 19,385 (26,190) 

Cash and cash equivalents at the beginning of the period 36,707 62,897 

Cash and cash equivalents at the end of the period 56,092 36,707 

(424)

C M Y K 


NOTES TO FINANCIAL STATEMENTS AS AT 31 MARCH 2010 

1. REPORTING ENTITY 

‘Compass BPO FZE’, here-in-after called ‘the Establishment’ is incorporated in the RAK 

Free Trade Zone, Ras Al Khaimah, as a Free Zone Establishment in accordance with the 

laws and regulations of the Free Zone Authority. 

The shareholder of the establishment is M/s. Compass BPO Limited, United Kingdom, who 

is the registered holder of One Share of AED 100,000/-. 

During the year the name of the holding company was changed from “Compass Connections 

Limited” to “Compass BPO Limited”. 

The establishment is engaged in the business of Management Consultancy. 

2. REPORTING PERIOD 

These financial statements cover the year from 01 April 2009 to 31 March 2010. The 

previous year figures are for the year 01 April 2008 to 31 March 2009. 

3. BASIS OF PREPARATION 

a) Statement of Compliance 

The financial statements of the establishment have been prepared in accordance 

with International Financial Reporting Standards (IFRS), which includes International 

Accounting Standards (IAS) and its Interpretations. 

b) Basis of Measurement 

The financial statements have been prepared on the historical cost basis. 

c) Functional and Presentation Currency 

These financial statements are expressed in U.A.E. Dirhams, rounded to the nearest 

Dirham. 

4. CHANGES IN ACCOUNTING POLICIES 

The accounting policies adopted are consistent with those of the previous financial year, 

except that the establishment has adopted the following new and amended IFRS and IFRIC 

interpretations as on 01 January 2009: 

• IAS 1 Presentation of Financial Statements (Revised) 


a) Associated Companies 

Associated Companies are defined as those companies in which the establishment 

holds a long term equity interest, has representation on the board of directors and is 

in a position to exercise significant influence in their management, but not control, 

over the financial & operating policies. 

b) Financial Instruments 

(i) Non-derivative financial assets 

The establishment initially recognizes loans and receivables and deposits on 

the date that they are originated. All other financial assets (including assets 

designated at fair value through profit or loss) are recognized initially on the 

trade date at which the company becomes a party to the contractual provisions 

of the instrument. 

(ii) 

• Loans and Receivables 

Loans and receivables are financial assets with fixed or determinable 

payments that are not quoted in an active market. They are recognized 

initially at fair value plus any directly attributable transaction costs. They 

are measured at amortised cost using the effective interest method, less 

any impairment losses. 

Trade receivables are recognised initially at the transaction price. They 

are subsequently measured at amortised cost using the effective interest 

method, less provision for impairment. A provision for impairment of 

trade receivables is established when there is objective evidence that the 

establishment will not be able to collect all amounts due according to 

the original terms of the receivables. 

Non-derivative financial liabilities 

The establishment initially recognizes debt securities issued and subordinated 

liabilities on the date they are originated. All other financial liabilities are 

recognized on the trade date. It includes loans and borrowings, bank overdrafts 

and trade and other payables. These financial liabilities (except trade and 

other payables) are recognized at fair value plus any directly attributable 

transaction costs. Subsequently they are measured at amortized cost using 

effective interest method. 

Trade payables are recognised initially at the transaction price and subsequently 

measured at amortised cost using the effective interest method. 

c) Property, Plant & Equipment 

(i) Measurement Basis 

Property, plant & equipment are measured at cost less accumulated depreciation 

and any impairment in value. 

(ii) 

(iii) 

Subsequent costs 

The cost for replacing part of an item of property, plant & equipment is 

recognised in the carrying amount of the item if it is probable that the future 

economic benefits embodied within the part will flow to the establishment and 

its cost can be measured reliably. The carrying amount of the part so replaced 

is derecognised. The cost of day-to-day servicing of property, plant & equipment 

are recognised in profit or loss as incurred. 

Depreciation 

Depreciation is calculated to write-off the cost of property, plant & equipment 

on the straight line basis over their estimated useful lives as follows: 

Motor Vehicle 

Furniture & Fixtures 

Office Equipments 

Number of years 

3 years 

3 years 

3 years 

d) Provisions 

Provisions are recognized when the establishment has a present legal or constructive 

obligation as a result of past events, and when it is probable that an outflow of 

resources will be required to settle the obligation, and when a reliable estimate of the 

amount can be made. Provisions are reviewed at each balance sheet date and adjusted 

to reflect the current best estimate. 

e) Impairment of assets 

(i) Financial assets 

(ii) 

The establishment assesses at each balance sheet date whether there is any 

objective evidence that a financial asset or a group of financial asset is impaired. 

A financial asset or a group of financial assets is deemed to be impaired if, 

and only if, there is objective evidence of impairment as a result of one or 

more events that has occurred after the initial recognition of the asset (an 

incurred ‘loss event’) and that loss event has an impact on the estimated future 

cash flows of the financial asset or the group of financial assets that can be 

reliably estimated. Evidence of impairment may include indications that the 

debtors or a group of debtors is experiencing significant financial difficulty, 

default or delinquency in interest or principal payments, the probability that 

they will enter bankruptcy or other financial reorganization and where observable 

data indicate that there is a measurable decrease in the estimated future cash 

flows, such as changes in arrears or economic conditions that correlate with 

defaults. 

Non financial assets 

Assets that have an indefinite useful life, for example goodwill, are not subject 

to amortisation and are tested annually for impairment. Assets that are subject 

to amortisation are reviewed for impairment whenever events or changes in 

circumstances indicate that the carrying amount may not be recoverable. An 

impairment loss is recognised for the amount by which the asset’s carrying 

amount exceeds its recoverable amount. The recoverable amount is the higher 

of an asset’s fair value less costs to sell and value in use. For the purposes of 

assessing impairment, assets are grouped at the lowest levels for which there 

are separately identifiable cash flows (cash-generating units). Non-financial 

assets other than goodwill that suffered an impairment are reviewed for possible 

reversal of the impairment at each reporting date. 

f) Foreign Currency Transactions 

Transactions in foreign currencies are translated to UAE Dirhams at the foreign 

exchange rate ruling at the date of the transaction. Monetary assets and liabilities 

denominated in foreign currencies at the balance sheet date are translated to UAE 

Dirhams at the foreign exchange rate ruling at that date. Non-monetary assets and 

liabilities denominated in foreign currencies that are stated at fair value are translated 

(425)

C M Y K 


to UAE Dirhams at the foreign exchange rates ruling at the dates the values were 

determined. All differences are taken to profit or loss. 

g) Revenue Recognition 

Revenue is recognized when it is probable that the economic benefits will flow to the 

establishment and when the revenue can be measured reliably, on the following basis : 

(i) 

(ii) 

Service Income 

Service income is recognized in profit or loss in proportion to the stage of 

completion of the transaction at the reporting date. The stage of completion is 

assessed by reference to surveys of work performed. 

Management Fee 

Management fee is recognised on an accrual basis when service is rendered. 

h) Cash and cash equivalents 

Cash and cash equivalents for the purpose of cash flow statement consist of cash in 

hand and cash at bank. 

6. PROPERTY, PLANT & EQUIPMENTS 

Current Year 


Motor Furniture Office 

Vehicle & Fixture Equipment Total 

Cost or Deemed Cost : 

As at 01 April 2009 154,740 36,874 31,564 223,178 

Additions during the year Nil Nil 12,849 12,849 

Deletion during the year (154,740) (36,874) (33,273) (224,887) 

As at 31 March 2010 Nil Nil 11,140 11,140 

Depreciation & Impairment Losses : 

As at 01 April 2009 90,265 21,510 12,108 123,883 

Depreciation during the year 47,282 11,267 11,520 70,069 

Deletion during the year (137,547) (32,777) (19,805) (190,129) 


Carrying Amounts : 


As at 31 March 2009 64,475 15,364 19,456 99,295 

Previous Year 


Motor Furniture Office 

Vehicle & Fixture Equipment Total 

Cost or Deemed Cost : 

As at 01 April 2008 154,740 36,874 22,029 213,643 

Additions during the year Nil Nil 9,535 9,535 


Depreciation & Impairment Losses : 

As at 01 April 2008 38,685 9,219 2,633 50,537 

Depreciation during the year 51,580 12,291 9,475 73,346 

As at 31 March 2009 90,265 21,510 12,108 123,883 

Carrying Amounts : 


As at 31 March 2008 116,055 27,655 19,396 163,106 

31-03-10 31-03-09 

Dirhams Dirhams 

7. TRADE AND OTHER RECEIVABLES 

Trade Debtors 149,602 682,899 

Deposits 18,000 15,000 

167,602 697,899 

8. PREPAYMENTS 

Rent 21,576 61,493 

Trade Licence fees 756 1,134 

Others Nil 633 

22,332 63,260 

31-03-10 31-03-09 

Dirhams Dirhams 

9. CASH AND CASH EQUIVALENTS 

Cash 15,523 24,109 

HSBC Bank Middle East 40,569 12,598 

56,092 36,707 

10. TRADE AND OTHER PAYABLES, INCLUDING DERIVATIVES 

Loan from Directors 60,795 69,421 

Advance from Customers 26,120 102,911 

* Due to Associates 39,716 34,280 

126,631 206,612 

* Due to Associates 

Compass BPO Pvt. Ltd. - India 39,716 34,280 

39,716 34,280 

The parent company - Compass BPO Ltd U.K’s account 

is reclassified from Due to Associates to Head Office 

Current Account in the equity. 

11. PROVISIONS 

Bonus payable Nil 104,440 

Professional charges 10,000 10,000 

Maintenance Charges 43,168 9,437 

Additional License Fee 66,828 Nil 

119,996 123,877 

12. OTHER INCOME 

Foreign exchange gain (net) Nil 413,356 

13. ADMINISTRATIVE EXPENSES 

Travelling expense 201,470 247,364 

Rent 172,418 276,335 

Communication Expenses 111,735 42,183 

Office costs 84,221 17,030 

Marketing expenses 39,173 77,355 

Foreign exchange difference 17,735 Nil 

Loss on sale of asset 13,447 Nil 

Audit Fee 17,500 Nil 

Repairs and Maintenance 11,088 49,565 

Electricity and Water 10,065 14,633 

Legal & professional charges 6,000 10,000 

Licence fee 6,378 10,048 

Interest and Bank charges 5,483 5,734 

696,713 750,247 

14. FINANCIAL RISK MANAGEMENT OBJECTIVES & POLICIES 

a) Credit Risk 

Financial assets, which potentially subject the establishment to credit risk, comprises 

mainly of bank balances and receivables. Bank balances are with regulated financial 

institutions. The receivables are fully recoverable as per management representation. 

b) Interest Rate Risk 

The establishment does not utilise any type of facilities from banks or financial 

institutions. 

c) Exchange Rate Risk 

There were no significant exchange rate risks as most of the financial assets and 

liabilities are denominated in UAE Dirhams & US Dollars except the due to associates’ 

balances. The U.K. associate Company’s account is denominated in U.K. Pounds 

and the Indian associate Company’s account is denominated in Rupees. 

(426)

C M Y K 


d) Liquidity Risk 

The table below summarized the maturity profile of the establishments’ financial 

liabilities based on contractual payment basis. 

Financial liabilities as at 31-03-2010 < 3 mths 3 - 12 mths 1 - 5 yrs Total 

Due to Associates Nil 39,716 Nil 39,716 

Loan from Directors Nil 60,795 Nil 60,795 

Advance from Customers 26,120 Nil Nil 26,120 

Provisions 119,996 Nil Nil 119,996 

Total 146,116 100,511 Nil 246,627 

15. FAIR VALUES OF FINANCIAL INSTRUMENTS 

Financial instruments comprise financial assets and financial liabilities. Financial assets of 

the establishment include bank balances and cash and trade receivables. Financial liabilities 

of the establishment include loans from Directors, accounts payable and due to associates. 

The fair values of the financial assets and liabilities are not materially different from their 

carrying values unless stated otherwise. 


The establishment enters into trade transactions with another firm or persons that fall within 

the definition of related party as contained in International Financial Reporting Standards 

(IFRS). 

Salary paid to Directors Dhs. 975,514/- 

17. RECLASSIFICATION OF FIGURES OF THE PRECEDING YEAR’S FINANCIAL 

STATEMENTS 

Certain figures of the financial statements for the year-ended 31 March 2009 have been 

reclassified to be consistent with the current year’s classification. 


Manager 

(427)

C M Y K 

ADITYA BIRLA MINACS IT SERVICES LIMITED (Formerly : PSI Data Systems Limited) 



On behalf of the Directors, it is our pleasure to present the Thirty Third 

Annual Report, together with the Audited Statement of Accounts of Aditya 

Birla Minacs IT Services Limited (“the Company”) for the year ended 

31 st March, 2010. 


Your Company and its wholly owned subsidiary, Birla Technologies Limited 

(BTL) work as an integrated unit. Their summarised standalone and 

consolidated results are given in the table below. 

Amount in Crs 

Particulars Standalone Consolidated 


Total Revenue 92.31 91.73 94.2 95.37 

Other Income 1.04 0.01 1.99 0.04 

Interest 1.94 2.64 2.62 3.85 

Depreciation 1.80 2.16 1.81 2.17 

Profit / Loss before Tax 8.90 -5.52 10.25 -6.45 

Provision for Tax 0.15 0.36 0.16 0.39 

Profit after Tax 8.75 -5.88 10.09 -6.84 

Profit/(Loss) brought 

forward from 

previous year -21.61 -15.72 -40.78 -33.93 

Profit/(Loss) carried 

to Balance Sheet -12.85 -21.61 -30.69 -40.78 

Basic and Diluted 

Earnings per Share 

(in Rs.) 9.97 -9.42 11.73 -10.69 

Paid-up equity 

share capital 7.55 7.55 7.55 7.55 

No dividend is provided for the period April 1, 2009 to March 31, 2010 

since the Company has carried forward losses during this period. 


Overview 

Financial year 2009-10 continued to be a challenging one for the corporate 

world. Despite the continuing adverse impact from the global economic 

slowdown in North America and Europe, our key markets, your Company 

reports a profit during the financial year. While the dollar depreciated during 

the year, the Company follows a policy of covering the exposure in foreign 

currency with forward covers and hence was not impacted. 

Your Company continued to invest in its Centers of Insight, albeit in line with 

market conditions and pipeline dynamics, to further grow and sustain its 

capabilities and solutions, so as to make its offerings more value-added to 

clients. 

On August 12, 2009, your Company has changed its name from PSI Data 

Systems Limited to Aditya Birla Minacs IT Services Limited. The new name 

will enable your Company to leverage on the Aditya Birla and the Minacs 

brand names. 

Summary of Operations 

Your Company’s results above, show a positive growth year on year in 

terms of profitability. Overall, revenue decreased by 1% while the Company 

reported a net Profit after Tax at Rs. 10.09 crores during the year against a 

Loss after Tax of Rs. 6.84 crores in FY 2008-09. 

Your Company continued to pursue its domain-centered strategy focused as 

a best-in-class provider of IT solutions and services to Banking and Financial 

Services, and the High Tech industry. This enables it to differentiate in the 

competitive market and meet the cost management and superior value 

demands from clients. Your Company added 12 new clients in its focused 

verticals with several of them carrying the potential to grow further in the 

near future. 

While overall, your Company’s revenues saw a drop in the recessionary 

market conditions, it is heartening to see that the very favorable offshoreonsite 

mix of revenues (56:44) was retained - continuing the trend from the 

previous Financial Year. 

Your Company’s investments in developing its software solutions and other 

re-usable assets - in areas such as Business Assurance, Business Process 

Management (BPM), Service Oriented Architecture (SOA), ERP and the 

Financial Supply Chain – saw some success with 3 notable wins in Asian 

banks with the TradeFree solution. 

With the multi-pronged strategy adopted by your Company’s management 

to address the unprecedented challenges of the present downturn, your 

Directors are optimistic about the financial performance of your Company 

in the coming year and believe that it will continue to show improvement. 

PREFERENCE SHARES 


since the Company has accumulated losses as of this period. However as 

per Accounting Standard 20, Earning Per Share (EPS) has been calculated 

after adjusting for preference share dividend. 

EMPLOYEES’ STOCK OPTIONS PLAN (ESOP) 

The ESOP Scheme was instituted in the year 1998, prior to the date the 

Securities and Exchange Board of India’s (SEBI) Guidelines on Stock Options 

came into force. This Scheme enables the Company to attract and retain 

talent at the Senior Management level. 

As at March 31 2010, the PSI Employees Welfare Trust held 182,662 shares, 

representing unallocated shares. 

None of the Directors have been granted stock options under the ESOP 

Scheme. 

QUALITY 

You Company strives to maintain the highest quality of services/ products in 

line with its best-in-class business model. Your Company’s quality 

management system is assessed to Software Engineering Institute, Carnegie 

Mellon University CMMI Level 5 by KPMG and ISO 9001 by DNV. 

Your Company is also certified with ISO 27001 (Information Security 

Management). 

EQUITY SHARES 

On December 2, 2008, in accordance with the Securities and Exchange 

Board of India (Delisting of Securities) Guidelines 2003, (“SEBI Delisting 

Guidelines”) the shareholders had approved the delisting of the equity shares 

of the Company through Postal Ballot. Thereafter, Aditya Birla Nuvo Limited 

(ABNL), through an open offer, acquired 4,63,240 shares (6.14%) and 

reached the equity holding of 76.89 % post open-offer and the equity shares 

of your Company were delisted w.e.f. April 6, 2009. 

Further, ABNL provided a final exit offer, pursuant to clause 8.5 of the SEBI 

Delisting Guidelines, to the remaining shareholders of the Company to sell 

their shares to ABNL at the discovered price viz. Rs. 60/- per share originally 

for six months from delisting i.e. upto October 5, 2009, which was thereafter 

extended by another 3 months to January 5, 2010. As on March 31, 2010, 

ABNL holds 62,61,035 shares (82.92%) in the equity share capital of the 

Company. 

HUMAN CAPITAL 

Human capital is the key resource for the Information Technology Industry. 

The total number of employees as on March 31, 2010 was 502 as against 

486 employees in the previous year. The attrition rate at 19.64% is in line 

with the industry average. 

DIRECTORS 

Dr. Bharat K. Singh, Girish M. Dave resigned as directors with effect from 

July 15, 2009 and Mr. Adesh Gupta resigned as director with effect from 

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C M Y K 


July 22, 2009. The Board places on record its sincere appreciation for the 

valuable services rendered by Dr. Bharat K. Singh, Girish M. Dave and Mr. 

Adesh Gupta. 


directors at the board meeting held on July 22, 2009. Resolutions seeking 

your approval for the appointment of Dr. Rakesh Jain and Mr. Sushil Agarwal 

have been incorporated in the Notice of the ensuing Annual General Meeting 


In accordance with Article 100 of the Articles of Association, Mr. Arun 

Thiagarajan and Mr. Devajyoti Bhattacharya, Directors retire by rotation at 

the forthcoming Annual General Meeting. Both of them, being eligible, 

offer themselves for reappointment. 

AUDIT COMMITTEE 

Pursuant to Section 292A (4) of the Companies Act, 1956, your Company 

has an Audit Committee at the Board level with the powers and role as 

given by the Board of Directors. The Committee acts as a link between the 

management, the statutory and internal auditors and the Board of Directors 

and oversees the financial reporting process. The Audit Committee comprises 

of three Directors as members as mentioned below: 

Mr. Arun Thiagarajan - Member- Independent - Chairman 

Mr. Damodar Ratha - Member – Independent 

Mr. Sushil Agarwal - Member 

During the year under review, the Audit Committee of the Board met four 

times to deliberate on various matters and the details of attendance by the 

Committee Members are as follows: 

No. of Meetings 

Name of Director Brief Details Held Attended 

Mr. Adesh Gupta* 

Whole time Director 

& CFO of Aditya Birla 

Nuvo Limited 1 1 

Mr. Arun Thiagarajan Ex-President of Hewlett- 

Packard Private Limited 4 3 

Mr. Damodar Ratha Chairman of Peerless 

Fabrikkerne (India) Limited 4 4 

Mr. Girish Dave* Advocate and Senior 

Partner in Dave Girish 

& Associates 1 1 

Mr. Sushil Agarwal Chief Financial Officer, 

Aditya Birla Nuvo Limited 2 2 

Mr. Dev Bhattacharya, Dr. Rakesh Jain, Directors and the Chief Financial 

Officer of your Company are permanent invitees, and both the Internal as 

well as Statutory Auditors of the Company are also invited to the Audit 

Committee Meetings. 

*Mr. Adesh Gupta and Mr. Girish Dave have resigned as Directors of the 

Company w.e.f. July 22, 2009 and July 15, 2009 respectively. 

Mr. T Ajay Joseph, Company Secretary acts as a Secretary to the Committee. 

REPORT OF SUBSIDIARY COMPANY 

Birla Technologies Limited (BTL) 


Directors’ Report, Auditors’ Report, Balance Sheet, and Profit and Loss 

Account, are required to be attached to the Balance Sheet of the Company. 

The Company has applied for exemption under Section 212(8) of the 

Companies Act, 1956 to the Ministry of Corporate Affairs and is awaiting its 

approval for the same. However, your Company will make available the 

audited financials and other related information, upon request by any investor. 

These documents will be made available for inspection during business hours 

at the Registered Office of the Company. 



Corporate Governance. Your Directors adhere to the standards set out by 

SEBI Corporate Governance practices and accordingly have implemented 

the stipulations prescribed. 

As required in Section 217(2AA) of the Companies Act, 1956 (the Act), 

your Directors confirm that: 




2. The Directors have selected such accounting policies and applied them 



the Company at the end of the financial year and of the profit or loss of 


3. The Directors have taken proper and sufficient care of the maintenance 


the Act for safeguarding the assets of the Company and for preventing 


4. The Directors had prepared the annual accounts on a going concern 

basis. 


The report of the Statutory Auditors, M/s S. R. Batliboi & Co., are attached 

to this report. The observations made in the Auditors’ Report are self 

explanatory and therefore do not call for any further comments under Section 

217 (3) of the Companies Act, 1956. 





The information for the year ended March 31, 2010 required under the 

Companies (Disclosure of Particulars in the Report of the Board of Directors) 

Rules, 1988 is given in Annexure 1, forming part of this Report. 


The particulars of employees, as required under Section 217(2A) of the 

Companies Act, 1956 are given in a separate Annexure (Annexure 2) to this 

Report. It may be noted that in accordance with the notification dated March 

24, 2004 issued by the Department of Company Affairs, Government of 


India, not being directors or their relatives drawing more than Rupees Twentyfour 

Lakhs per financial year or Rupees Two Lakhs per month, as the case 

may be, are not included in this statement but such particulars shall be 

furnished to the Registrar of Companies. Such particulars shall be made 

available to any shareholder on specific request made by him / her during 

the course of the Annual General Meeting. 


During the financial year 2009-10, the Company has not accepted any 

deposits from the public. 


Your Directors warmly appreciate the dedication and commitment of all 

employees. 

Your Directors acknowledge the assistance, co-operation and encouragement 

given to your Company by various authorities including your Company’s 

Bankers. 

for and on behalf of the Board 


Place : Mumbai Sushil Agarwal Dr. Rakesh Jain 

Date : April 23, 2010 Director Director 

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C M Y K 


Annexure – 1 (Forming part of Directors’ Report) 

Information required under the Companies (Disclosure of Particulars 

in the Report of the Board of Directors) Rules, 1988 







2. Research and Development (R&D) 

a. Specific areas in which R & D carried out by the Company: 

Your Company invests in innovation, technology leadership and 

differentiation through its specialized Centers of Insight (CoIs). These 

CoIs focus on the following domains: 

• Corporate Banking 

• Platform-based Managed Testing Services framework 

• Enterprise Mobility 

With dedicated people, technology investments and training 

resources attached to them, the CoIs support ABMIT’s strategy to 

be a best-in-class company focused on the financial services 

ecosystem offering end-to-end solutions, product engineering, 

quality assurance and IT services. CoIs develop best practices, 

methods, software frameworks, tools and components. 

b. Benefits derived as a result of the above R & D: 

• Your Company further enriched the AssetTest software test 

automation framework solution adding new Test Assets for 

validating processes in various domains of Banking and 

Insurance. 

• Your company enhanced its offerings in the Corporate Banking 

space making it more comprehensive to deliver more value 

for money. This offering is trade mark registered as “TradeFree” 

suite. 

• Your company has acquired skills in building the intelligent 

mobile enterprise. Key components of this service offering 

include Mobilizing Enterprise Business Applications, providing 

mobile workers & technicians with bi-directional access to 

real-time customer, inventory, and job-related information on 

a mobile device and Managed Services for Mobile Device 

Management. 

• Enhanced ability to win new deals, delivery capability, 

reusability, reference frameworks, productivity and reduction 

in rework. 

c. Future plan of action: 

Your Company will continue to exert itself in creating further assets 

and implementing best practices and processes for use in its core 

markets. It will improve the following capabilities and skills, on an 

ongoing basis: 

• Domain-based Quality Assurance and Testing frameworks 

• Corporate Banking Offerings 

• IT services for focused areas within Insurance sector 

• Implementation and support of package-based applications 

in Banking Financial Services and Insurance space 

• Mobilizing enterprise applications. 

d. Expenditure on R & D: 

Particulars FY 2009-10 FY 2008-09 

Rs. in crores Rs. in crores 

a) Capital Nil 0.6032 

b) Recurring 0.4896 0.0356 

c) Total 0.4896 0.6388 

d) Total R & D expenditure 

as a percentage of total 

turnover 0.52% 0.67% 


Your Company continues to use the latest hardware and software to 

improve the quality of its products and services. It will continue to invest 

in state-of-the-art technology and infrastructure to improve the 

productivity and quality of its products and services are made on an 

ongoing basis, as required. 

4. Foreign exchange earnings and outgo: 

(Rs. in crores) 


Foreign exchange earnings 65.61 57.42 

Foreign exchange outgo 28.46 31.04 



and export plans: 

In fiscal 2009, 88% of revenues were derived from exports. Your 

Company operates a direct sales marketing network in its strategic 

markets in North America, Europe and the Asia Pacific to grow its 

business. 

ANNEXURE – 2 

REPORT UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956 

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming 

part of the Report of the Directors for the year ended March 31, 2010. 

Employees located in India - Employed throughout the year 

Name Age Designation & Date of Remuneration Qualification Experience Previous Employment 

Nature of Duties Joining (Rs.) in years 

Amit Krishna 34 Technical Manager 26-July-06 2,972,198 BE 11 Kodak 

Employees located in India - Employed for part of the year 

Name Age Designation & Date of Remuneration Qualification Experience Previous Employment 

Nature of Duties Joining (Rs.) in years 

Srikanth K N 40 VP-Client Programs 10-Apr-89 2,168,256 MBA 21 NA 

Rajeev Magadi S 42 Principal Architect 27-Jan-05 1,968,988 BE, MBA 19 Core Objects Pvt Ltd 

Rajesh Gupta 44 Chief Delivery Officer 2-Jan-09 1,358,670 B E 21 Bearing Point 

Bala Nadella 34 Practice Head - ERP 31-Aug-09 1,489,663 B E 11 Satyam 

Notes: 

1. Remuneration includes salary, allowances, medical benefits, company’s contribution to Provident Fund and Superannuation Fund wherever applicable, 

leave encashment, leave travel assistance and monetary value of taxable perquisites and also includes Gratuity/Retirement benefit. 

2. None of these Executives is related to any Director or Manager of the Company. 

3. All appointments are contractual, other terms and conditions are as per the rules of the Company. 

4. None of the above mentioned employees hold more than 2% of the Equity Share Capital of the Company. 

(430)

C M Y K 



To 

The Members of Aditya Birla Minacs IT Services Limited (formerly PSI Data 

Systems Limited) 

1. We have audited the attached Balance Sheet of Aditya Birla Minacs 

IT Services Limited (formerly PSI Data Systems Limited) ("the Company") 

as at March 31, 2010 and also the Profit and Loss Account, and the 

Cash Flow Statement for the year ended on that date, annexed thereto. 

These financial statements are the responsibility of the Company's 

management. Our responsibility is to express an opinion on these 

financial statements based on our audit. 










our opinion. 

3. As required by the Companies (Auditor's Report) Order, 2003 

(as amended) issued by the Central Government of India in terms of 

sub-section (4A) of section 227 of the Companies Act, 1956, we enclose 

in the Annexure a statement on the matters specified in paragraphs 4 

and 5 of the said Order. 


that: 















Board of Directors, we report that, none of the directors are 











b) in the case of the profit and loss account, of the profit for the 








Partner 


Place: Mumbai 


(431)

C M Y K 


Annexure referred to in paragraph 3 of our report of even date 

Re: Aditya Birla Minacs IT Services Limited (formerly PSI Data Systems Limited) 

('the Company') 



assets. 

(b) Fixed assets have been physically verified by the management 

during the year and no discrepancies were identified on such 

verification. 

(c) There was no substantial disposal of fixed assets during the year. 

(ii) The Company is engaged in the business of rendering software services 

and hence does not hold any stock of inventory. Accordingly, the 

provisions of clause 4 (ii) of the Companies (Auditor's Report) Order, 



or unsecured to companies, firms or other parties covered in the 

register maintained under section 301 of the Companies Act, 

1956. 

(b) As informed, the Company has not taken any loans, secured or 

unsecured from companies, firms or other parties covered in the 


1956. 


given to us, as well as taking into consideration the management 

representation that certain items of sale of software are of special 

nature for which alternative quotations are not available, there is an 

adequate internal control system commensurate with the size of the 

Company and the nature of its business, for the purchase of fixed 

assets and for the sale of goods and services. During the course of 

our audit, no major weakness has been noticed in the internal control 

system in respect of these areas. 

(v) According to the information and explanations provided by the 


arrangements, the particulars of which need to be entered in the 

register maintained under section 301 of the Companies Act, 1956. 

(vi) The Company has not accepted any deposits from the public. 

(vii) The Company is covered by the internal audit system of the ultimate 

parent company, the scope and coverage of which is commensurate 

with the size and nature of the business of the Company. 

(viii) To the best of our knowledge and as explained, the Central 



1956, for the products of the Company. 

(ix) (a) The Company is regular in depositing with appropriate authorities 

undisputed statutory dues including provident fund, investor 

education and protection fund, employees' state insurance, 

income-tax, sales-tax, wealth-tax, service tax, customs duty, excise 

duty, cess and other material statutory dues applicable to it. 

Further, since the Central Government has till date not prescribed 

the amount of cess payable under section 441 A of the 

Companies Act,1956, we are not in a position to comment upon 

the regularity or otherwise of the Company in depositing the 

same. 

(b) According to the information and explanations given to us, no 

undisputed amounts payable in respect of provident fund, investor 

education and protection fund, employees' state insurance, 

income-tax, wealth-tax, service tax, sales-tax, customs duty, excise 

duty, cess and other undisputed statutory dues were outstanding, 

(x) 

(xi) 

(xii) 

(xiii) 

(xiv) 

(xv) 

(xvi) 

(xvii) 

(xviii) 

(xix) 

(xx) 

(xxi) 

at the year end, for a period of more than six months from the 

date they became payable. 

(c) According to the information and explanations given to us, there 

are no dues of income tax, sales-tax, wealth tax, service tax, 

customs duty, excise duty and cess which have not been deposited 

on account of any dispute. 

The Company's accumulated losses at the end of the financial year 

are more than fifty percent of its net worth. The Company has not 

incurred cash losses during the current year. The Company had 

incurred cash losses in the immediately preceding financial year. 









In our opinion, the Company is not a chit fund or a nidhi/mutual 

benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the 

Companies (Auditor's Report) Order, 2003 (as amended) are not 



securities, debentures and other investments. Accordingly, the 

provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 

2003 (as amended) are not applicable to the Company. 




The Company did not have any term loans outstanding during the 

year. 



that no funds raised on short-term basis have been used for longterm 

investment. 




The Company did not have any outstanding debentures during the 

year. 

The Company has not raised any money through a public issue during 

the year. 










Partner 


Place: Mumbai 


(432)

C M Y K 



As at 

As at 


31-Mar-09 

SOURCES OF FUNDS Schedule Rs. Rs. Rs. Rs. 


Share Capital 1 225,503,340 225,503,340 


239,832,757 239,832,757 

Loan Funds 

Secured Loans 3 2,536,320 260,537,167 


77,536,320 285,537,167 

Total 317,369,077 525,369,924 



Gross Block 122,225,513 114,660,674 

Less: Accumulated depreciation 93,254,459 88,495,246 

Net Block 28,971,054 26,165,428 

Investments 6 112,704,035 112,704,035 

141,675,089 138,869,463 




Other Current Assets 9 27,951,101 12,929,290 

Loans and Advances 10 45,422,733 83,749,418 

205,555,730 310,787,280 


Current Liabilities 11 108,236,111 113,369,840 

Provisions 12 50,145,284 26,997,981 

158,381,395 140,367,821 


Profit & Loss Account (Debit balance) 128,519,653 216,081,002 

Total 317,369,077 525,369,924 


MARCH 31, 2010 




INCOME 

Revenues 13 923,079,814 917,362,324 

Other Income 14 10,576,037 235,517 

Total 933,655,851 917,597,841 

EXPENDITURE 

Personnel Expenses 15 542,551,743 553,452,902 

Operating Expenses 16 264,557,688 371,302,362 

Financial Expenses, net 17 19,427,981 26,468,776 

Depreciation/amortisation 5 18,057,090 21,639,127 

Total 844,594,502 972,863,167 

Profit / (Loss) before Tax 89,061,349 (55,265,326) 

Provision for taxes: 

– Current Tax 1,500,000 1,100,000 


Profit / (Loss) after Tax 87,561,349 (58,865,326) 

Net profit/(loss), at the beginning of the year (216,081,002) (157,215,676) 

Amount available for appropriation (128,519,653) (216,081,002) 

(Deficit)/Surplus carried to Balance Sheet (128,519,653) (216,081,002) 

Earnings per share [Equity shares, par value Rs. 10 each] 

– Basic and diluted 9.97 (9.42) 

Weighted average number of shares used in 

computing earnings per share 

– Basic and diluted 7,550,334 7,550,334 


The schedules referred to above and notes to accounts form an integral part of the profit and loss account 


The schedules referred to above and notes to accounts form an integral part of the balance sheet 



Deepak J Patel 

Firm Registration no.: 301003E Chief Executive Officer & Manager 


Sushil Agarwal Ramesh Kamath 

per Vijay Maniar Director Chief Financial Officer 

Partner 

Membership No.: 36738 Arun Thiagarajan Ajay Joseph 

Director 








Firm Registration no.: 301003E Chief Executive Officer & Manager 


Sushil Agarwal Ramesh Kamath 


Partner 


Director 





(433)

C M Y K 


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2010 

Year ended 

Year ended 


31-Mar-09 

Rs. 

Rs. 


Net Profit/(Loss) before Taxes and Extraordinary Items 89,061,349 (55,265,326) 


Depreciation / Amortisation 18,057,090 21,639,127 

Provision for doubtful debts 12,600,000 29,016,447 

(Gain)/Loss on sale of fixed assets, net 378,576 (69,050) 

Income from Dividends — (649) 

Unrealised Foreign exchange loss/ (gain), net 835,920 23,885,323 

Interest Income (130,675) (123,148) 

Interest Expense 18,831,977 25,562,983 

Operating Profit before changes in working capital 139,634,237 44,645,707 

Movements in working capital: 

(Increase) / Decrease in other current assets (15,131,882) (7,075,232) 

(Increase) / Decrease in sundry debtors 65,314,764 (5,338,362) 

(Increase) / Decrease in Loans & advances 45,604,688 71,353,992 

Increase / (Decrease) in current liabilities and provisions 18,485,852 (33,235,074) 

Cash generated from /(used in) operations 114,273,422 25,705,324 

Direct Taxes Paid (8,778,003) (9,900,428) 

Net Cash generated from operations (A) 245,129,656 60,450,603 


Purchase of fixed assets / intangible assets (27,106,259) (5,888,709) 

Proceeds from sale of fixed assets 5,864,967 726,005 

Redemption of investments — 52,674 

Dividend Received — 649 

Interest Received 130,675 123,148 

Net Cash used in Investing activities (B) (21,110,617) (4,986,233) 


Proceeds from short-term borrowings 365,500,000 — 

Repayment of short-term borrowings (573,500,847) (31,105,461) 

Interest Paid (19,304,255) (25,562,983) 

Net Cash used in Financing activities (C) (227,305,102) (56,668,444) 

NET DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C) (3,286,063) (1,204,074) 

Cash and cash equivalents at the beginning of the year 11,646,347 12,850,421 

Cash and cash equivalents at the end of the year 8,360,284 11,646,347 

Components of Cash and cash equivalents 

Cash on Hand 53,896 32,196 

Balances with Scheduled Banks: 

– In Current Accounts 6,645,121 7,665,079 

– In Deposit Accounts — 1,076,614 

Balances with other Banks: 

– In Current Accounts 1,661,267 2,872,458 

8,360,284 11,646,347 




Firm Registration no.: 301003E 

Chief Executive Officer & Manager 



Ramesh Kamath 


Partner 


Director 





(434)

C M Y K 


Schedule forming part of the Balance Sheet 

As At 

As At 


Rs. 

Rs. 


Authorised 

15,000,000 (PY 15,000,000) Equity Shares of Rs.10/-each 150,000,000 150,000,000 

3,000,000 - (PY 3,000,000) Preference Shares of Rs.100/-each 300,000,000 300,000,000 

450,000,000 450,000,000 


7,550,334 (PY 7,550,334) Equity Shares of Rs. 10/- each 75,503,340 75,503,340 

1,500,000 - (PY 1,500,000) 7% Cumulative Redeemable 

Preference Shares of Rs.100/-each 150,000,000 150,000,000 

Total 225,503,340 225,503,340 

Of the above - 

a) 600 (PY 600) Equity Shares of Rs.10/- each have been issued in pursuance of an agreement for 

consideration other than cash. 

b) 6,261,035 (PY 5,778,349) shares are held by the holding company Aditya Birla Nuvo Ltd (ABNL). 

c) All the above Preference Shares are held by the holding Company ABNL and are due for redemption on 

October 16, 2013. 

No dividend shall be payable for initial four years i.e. upto March 31, 2007. The shareholders will be 

eligible for dividend at the rate of 7% from 5th year onwards i.e. April 1, 2007 until redemption. 

The dividend rate will increase by 1% on every 5% increase in equity dividend beyond 15%. Premium 

on redemption will be 25% of the face value of the Preference Share. 


As At 

As At 


Rs. 

Rs. 


Capital Redemption Reserve 10,000,000 10,000,000 

Securities Premium Account 2,076,344 2,076,344 

Investment Allowance Reserve 2,253,073 2,253,073 

Total 14,329,417 14,329,417 

SCHEDULE 3 - SECURED LOANS FROM BANKS : 

1) Cash Credit 2,536,320 15,068,767 

(Secured by Pari Passu first charge on all existing / 

future and current assets) 

2) Working Capital Demand Loan — 90,000,000 

(Secured by Pari Passu first charge on all existing/ 

future current and fixed assets and guaranteed by ABNL) 

[Repayable within one year Rs.Nil (PY Rs.90,000,000)] 

3) General Purpose Corporate Loan — 62,000,000 




4) Packing Credit Foreign Currency Loan — 93,468,400 




Total 2,536,320 260,537,167 


From Banks : 

Short term unsecured loan — 25,000,000 


Inter corporate loan from holding company 75,000,000 — 

[Repayable within one year Rs.Nil (PY Rs.Nil)] 

Total 75,000,000 25,000,000 

GROSS BLOCK AT COST ACCUMULATED DEPRECIATION / AMORTISATION NET BLOCK 

As at Additions Deletions As at As at Depreciation/ Deletions As At As At As At 

Description 1-Apr-09 During the During the 31-Mar-10 1-Apr-09 Amortization During the 31-Mar-10 31-Mar-10 31-Mar-09 

Year Year for the Year Year 

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 


Computer and Computer software* 101,343,712 13,492,507 17,032,225 97,803,994 86,575,800 11,263,100 12,609,629 85,229,271 12,574,723 14,767,912 

Electrical Fittings 20,888 — 18,741 2,147 20,888 — 18,741 2,147 — — 

Office Equipment 2,987,775 1,331,557 1,983,540 2,335,792 865,283 725,996 460,916 1,130,363 1,205,429 2,122,492 

Furniture, & Fixtures 1,363,310 3,310,160 506,914 4,166,556 1,033,275 476,571 208,591 1,301,255 2,865,301 330,035 

Leasehold Improvements — 8,972,035 — 8,972,035 — 2,607,036 — 2,607,036 6,364,999 — 

Total - Tangible Assets 105,715,685 27,106,259 19,541,420 113,280,524 88,495,246 15,072,703 13,297,877 90,270,072 23,010,452 17,220,439 


Product Development Expenses 8,944,989 — — 8,944,989 — 2,984,387 — 2,984,387 5,960,602 8,944,989 

Total - Intangible Assets 8,944,989 — — 8,944,989 — 2,984,387 — 2,984,387 5,960,602 8,944,989 

GRAND TOTAL 114,660,674 27,106,259 19,541,420 122,225,513 88,495,246 18,057,090 13,297,877 93,254,459 28,971,054 26,165,428 

Previous Year 112,547,520 9,584,548 7,471,394 114,660,674 73,670,558 21,639,127 6,814,439 88,495,246 26,165,428 

* Includes Computer software Gross book value Rs. 21,079,221/- (PY Rs. 18,335,107/-) Net book value Rs. 2,674,693/- (PY Rs. 425,504/-) 

As at 

As at 


31-Mar-09 

SCHEDULE 6 - INVESTMENTS Rs. Rs. 

(Unquoted, at cost, unless otherwise 

stated, fully paid-up) 

Non Trade (Long Term): 

Accelerex Ltd., U.K. 

1,125,000 "B" category Ordinary Shares 

of USD 0.02 each 958,333 958,333 

10,375,000 "C" category Deferred Equity 

shares of USD 0.02 each 8,837,963 8,837,963 

9,796,296 9,796,296 

Less : Provision for diminution in 

value of investment 9,796,296 — 9,796,296 — 

Advisor Technologies Ltd. U.K. 

1,520,000 ordinary Equity Shares of 

GBP 0.01 each 1,023,720 1,023,720 

Less : Provision for diminution in 

value of investment 1,023,720 — 1,023,720 — 

Software Services Support and 

Education Centre Ltd. 

As at 

As at 


31-Mar-09 

Rs. 

Rs. 

One equity share of Rs. 10/- 10 10 

In Subsidiary Companies (Long term): 

Birla Technologies Limited 

9,800,350 (PY 9,800,350) Equity 

Shares of Rs. 10 each 112,704,025 112,704,025 

(Refer Note 8 of Schedule 18) 

Total 112,704,035 112,704,035 


(Unsecured) 

Debts outstanding for a period exceeding six months 

Considered Good 139,298 8,157,658 

Considered Doubtful 29,679,471 20,639,848 

Other Debts 

Considered Good * 123,682,314 194,304,567 

Considered Doubtful 11,431,974 8,175,357 

164,933,057 231,277,430 

Less Provision for doubtful debts (41,111,445) (28,815,205) 

Total 123,821,612 202,462,225 

(435)

C M Y K 



As At 

As At 


31-Mar-09 

SCHEDULE 7 - SUNDRY DEBTORS (contd.) Rs. Rs. 

* Includes amounts due from companies 

under the same management 

- Birla Technologies Limited 5,093,793 68,795,183 

- Birla Sun Life Insurance Company Limited 4,623,589 191,068 

- Minacs Worldwide Inc. USA 35,891,066 25,105,390 

- Minacs Ltd - UK 44,075 — 

- Minacs Worldwide Kft., Hungary 37,352 — 

- Minacs Worldwide GmbH 80,670 — 

- Aditya Birla Minacs Worldwide Inc. Canada 14,897,594 2,589,572 

- Aditya Birla Finance Limited - (BGFCL) 15,681 2,623,050 

- Aditya Birla Money Mart Limited - (BSDL) 17,393 — 

- Aditya Birla Minacs Philippines Inc 299,039 — 

- Aditya Birla Minacs Worldwide Limited 12,527,245 — 

- Aditya Birla Financial Shared Services Limited 17,393 — 

- Birla Insurance Advisory and Broking Services Limited 10,743 — 


Cash on Hand 53,896 32,196 


- In Current Accounts 6,645,121 7,665,079 

- In Fixed Deposits — 1,076,614 

6,699,017 8,773,889 

Balances with other Banks: 

- In Current Accounts 1,661,267 2,872,458 

1,661,267 2,872,458 

Total 8,360,284 11,646,347 

Balances with other Banks: Maximum Maximum 

- In Current Accounts Balance Balance 

a) Natwest Bank, U.K. 12,433,616 1,604,585 31,438,352 2,808,240 

b) Deer Valley Federal Credit Union, U.S.A. 56,682 56,682 64,218 64,218 

e) Fibanque - CIC - France — — 105,459 — 

1,661,267 2,872,458 

SCHEDULE 9 - OTHER CURRENT ASSETS 

Unbilled Revenue 27,951,101 12,929,290 

Total 27,951,101 12,929,290 

SCHEDULE 10 - LOANS & ADVANCES 


Advances recoverable in cash or in kind or 

for value to be received 10,623,035 7,205,186 

Service Tax - Receivable 4,978,575 5,159,354 

VAT - Receivable 479,154 470,225 

Advances to PSI Employees' Welfare Trust 538,123 460,123 

Deposits 3,642,714 52,571,401 

Advance Tax (Net of Provisions) 25,161,132 17,883,129 

Total 45,422,733 83,749,418 



Due to subsidiary — 929,359 

Advance from Customers 2,306,446 3,576,284 

Unearned Revenue 6,595,053 1,619,402 

Interest accrued and not due — 472,278 


Total 108,236,111 113,369,840 


Provision for Gratuity — 5,291,386 

Provision for Compensated absences 19,774,543 19,706,595 

Provision Others (Also refer Note 9 in Schedule 18) 30,370,741 2,000,000 

Total 50,145,284 26,997,981 

Schedule Forming part of the Profit and Loss Account 



31-Mar-09 

Rs. 

Rs. 

SCHEDULE 13 - REVENUES 

Service Revenue 

– Software services and licence fees 892,622,816 908,090,185 

– Annual maintenance contracts 12,310,555 9,272,139 

Product Revenue (Trading) 

– Software Licences 18,146,443 — 

923,079,814 917,362,324 


Interest Income 130,675 123,148 

[Gross of Tax deducted at source of Rs. Nil (2009 - Rs. Nil.)] 

Income from Dividends / Investment — 649 

Profit on Sale of Assets, net — 69,050 

Foreign exchange gain, net 10,067,406 — 

Miscellaneous Receipts 377,956 42,670 

SCHEDULE 15 - PERSONNEL EXPENSES 

10,576,037 235,517 

Salaries, allowances and bonus 500,290,406 511,758,561 

Contribution to provident and other funds 11,609,494 13,672,570 

Gratuity and compensated absences 9,644,134 6,718,104 

Staff Welfare 7,317,278 10,230,210 

Expatriation Expenses 13,690,431 11,073,457 

SCHEDULE 16 - OPERATING EXPENSES 

542,551,743 553,452,902 

Cost of traded software license 17,080,260 — 

Subcontracting Expenses 127,703,689 81,285,244 

Recruitment Expenses 7,322,555 5,893,668 

Rent 16,162,641 49,859,472 

Rates & Taxes 7,921,321 14,447,850 

Hire / Lease Charges 1,286,804 1,954,211 

Establishment Expenses 7,512,780 14,468,693 

Electricity and Water Charges 6,516,181 8,209,836 

Communication Charges 7,792,454 12,509,241 

Printing & Stationery 1,025,366 1,247,865 

Traveling and Conveyance 22,706,110 49,041,719 

Commission - Sales 2,751,061 2,560,346 

Advertisement & Publicity 765,636 1,331,201 

Repairs & Maintenance 

- Plant & Machinery — 202,770 

- Building 2,130,737 30,126 

- Others 59,952 24,863 

Insurance 7,557,096 13,322,118 

Professional & Consultancy Charges 13,098,257 15,891,768 

Payment to Auditors 1,137,842 1,564,055 

Provision for Doubtful debts 12,600,000 29,016,447 

Foreign Exchange Loss, net — 64,387,713 

Loss on Sale of assets, net 378,576 — 

Miscellaneous expenses 1,048,370 4,053,156 

264,557,688 371,302,362 

SCHEDULE 17- FINANCE EXPENSES 

Interest Charges 18,831,977 25,562,983 

Bank Charges 596,004 905,793 

19,427,981 26,468,776 

(436)

C M Y K 


SCHEDULE 18: NOTES TO ACCOUNTS (ALL AMOUNTS IN RUPEES, EXCEPT AS OTHERWISE 

STATED) 

1. Nature of operations 

Aditya Birla Minacs IT Services Limited (formerly PSI Data Systems Limited) ("the Company") 

is engaged in development and sale of software, implementation and rendering information 

technology support and maintenance services. The Company has operations in United 

States of America, United Kingdom, Canada and Japan. The Company is a subsidiary of 

Aditya Birla Nuvo Limited (ABNL). 

On August 12, 2009, the Company changed its name from PSI Data Systems Limited to 

Aditya Birla Minacs IT Services Limited. 


a. Basis of Preparation 


the accounting standards notified by Companies Accounting Standards Rules, 2006 

and the relevant provisions of the Companies Act, 1956. The financial statements 

have been prepared under the historical cost convention on an accrual basis except 

in case of assets for which provision for impairment is made and revaluation is 

carried out. The accounting policies have been consistently applied by the Company 

and are consistent with those used in the previous year. 

b. Use of Estimates 





the reporting year end. Although these estimates are based upon management's best 

knowledge of current events and actions, actual results could differ from these 

estimates. 

c. Fixed Assets 


if any. Cost comprises the purchase price and any directly attributable cost of bringing 

the asset to its present condition for its intended use. 

d. Depreciation 

Depreciation is provided using the Straight Line Method ("SLM") as per the useful lives 

of the assets estimated by the management, or at the rates prescribed under schedule 

XIV of the Companies Act, 1956 whichever is higher. 

Block of Assets 

Useful Life (Years) 

Computers and computer software 3 

Office equipment 5 

Electrical fittings 21 

Furniture and fixtures 6 

Computer Software Products 3 

Assets individually costing less than or equal to Rs.10,000 are depreciated fully in 

the year of purchase. 

Leasehold improvements are amortised over the period of the lease or estimated 

useful life of assets, whichever is shorter. 

e. Capitalisation and amortization of software products 

Cost incurred during the research phase are expensed off as period costs. Costs 

incurred towards development of computer software products meant for sale, lease 

or otherwise marketed, are capitalized subsequent to establishing the technological 

feasibility. The costs are expensed as period costs, if the technological feasibility is 

not established. Capitalised software product cost are amortised on a straight-line 

method over the remaining estimated economic life of the product estimated at 

3 years. The unamortized cost of capitalized software products is carried at cost, less 

accumulated amortization less impairment, if any. 

f. Impairment of Assets 

i. The carrying amounts of assets are reviewed at each balance sheet date if 

there is any indication of impairment based on internal/external factors. An 

impairment loss is recognized wherever the carrying amount of an asset exceeds 

its recoverable amount. 

ii. After impairment, depreciation is provided on the revised carrying amount of 

the asset over its remaining useful life. 

g. Research and Development 

Research costs are expensed as incurred. Development expenditure incurred on an 

individual project is carried forward when its future recoverability can reasonably be 

regarded as assured. Equipment or facilities that are acquired or constructed for 

research and development activities, which have alternative future uses are capitalized 

as tangible assets. Depreciation on such assets is charged to expense as research 

and development costs. 

h. Investments 







i. Leases — Operating Leases 


ownership of the leased term, are classified as operating leases. Operating lease 


basis over the lease term. 

j. Revenue Recognition 



The Company derives its revenues primarily from software development and 

maintenance services. 

Revenue pertaining to time & material contracts is recognised based on the contract 

terms and time billed/billable, as the services are provided. 

Revenues from fixed price contracts where there is no uncertainty as to measurement, 

delivery, enforceability or realization of consideration is recognized on percentage of 

completion method, under which contract performance is determined by the actual 

cost and efforts incurred to date to the estimated total cost and efforts for each 

contract and are reviewed for any escalation / decline due to change in contract 

terms and conditions or contract performance. Loss anticipated for completing the 

contracts are recognised immediately. 

Revenue with respect to sale of license is recognized upon delivery and transfer of 

right to use. Revenue pertaining to implementation services is recognized on a 

percentage of completion method, under which contract performance is determined 

by the actual cost and efforts incurred to date to the estimated total cost and efforts 

for each contract. 

Revenue from maintenance contracts are recognized ratably over the term of the 

maintenance contract on a straight-line basis. 

Unbilled revenue represents revenues recognised in excess of the amounts billed as 

at the balance sheet date. Unearned revenue represents amounts billed in excess of 

the revenues recognised as at the balance sheet date. 

Interest income is recognized on a time proportion basis taking into account the 

amount outstanding and the rate applicable. 

k. Foreign Currency Transactions 

Transactions in foreign currencies are translated at the exchange rates prevailing on 

the date of the transaction. Realised gains/(losses) on such transactions are recognised 

in the Profit and Loss Account. Unrealised transactions in foreign currencies relating 

to monetary assets and monetary liabilities are translated into rupees at the exchange 

rates prevailing at the year-end. The exchange gains/(losses) arising out of such 

translations are dealt with in the Profit and Loss Account. 

Foreign Exchange Contracts are not intended for trading or speculation purposes. 

The Premium or discount arising at inception of forward exchange contracts is 

amortised as expense or income over the life of the contract. Exchange differences 

on such contracts are recognised in the statement of profit and loss in the year in 

which the exchange rates change. Any profit or loss arising on cancellation or renewal 

of forward exchange contract is recognised as income or as expense for the year. 

Translation gain/(loss) arising out of the above transactions is charged / credited to 

the profit and loss account. 

Translation of Integral foreign operation 

The financial statements of an integral foreign operation are translated as if the 

transactions of the foreign operation have been those of the company itself. 

l. Retirement and other Employee benefits 

i. The Company contributes the employer's share of the Provident Fund and the 

Employees' Pension Scheme with the Regional Provident Fund Commissioner 

and to other similar plans in United States of America, United Kingdom, Japan 

and Canada and charges all such amounts to the Profit and Loss Account on 

an accrual basis. The Company does not have any other obligation towards 

such employee benefits. 

(437)

C M Y K 


ii. Gratuity liability is a defined benefit obligation and is provided based on an 

actuarial valuation done as per Projected Unit Credit method, performed as at 

the balance sheet date and is funded as at March 31, 2010. The fund is 

administered and managed by Aditya Birla Nuvo - Employee Gratuity Fund. 

iii. Long term compensated absences are provided for based on actuarial valuation. 

iv. Short term compensated absences are provided for on an estimate basis. 

v. Actuarial gains/losses are immediately taken to profit and loss and are not 

deferred. 

vi. The Company has obtained legal opinions that the guidelines of Securities & 

Exchange Board of India (SEBI) dated June 19, 1999 and Guidance note on 

Accounting for Employees' share based payments are not applicable to PSI's 

ESOP scheme. 

m. Segment reporting 

The Company's operating businesses are organized and managed separately 

according to the nature of services rendered. The analysis of geographical segments 

is based on the areas in which the major operating divisions of the Company operate. 

n. Provision for Taxation 

Tax expense comprises of current and deferred tax. Current income tax is measured 

at the amount expected to be paid to the tax authorities in accordance with the 

Income Tax Act, 1961 enacted in India and taxes on income from overseas branches. 

Certain items of income and expenses are not reported in tax returns and financial 

statements in the same year. The tax effect of this timing difference is reported as 

deferred income tax assets/liabilities. The tax effect is calculated on the accumulated 

timing differences at the end of the accounting period at the current enacted tax 

rates. At each balance sheet date, deferred tax assets relating to unabsorbed carry 

forward losses and depreciation are re-assessed and recognised only to the extent 

there is virtual certainty supported by convincing evidence that the same can be 

realised in future and in respect of other items where there is reasonable certainty as 

to realisation. 

Minimum Alternate Tax ('MAT ') credit is recognised as an asset only when and to the 

extent there is convincing evidence that the Company will pay normal income tax 

during the specified period. In the year in which the MAT credit becomes eligible to 

be recognized as an asset in accordance with the recommendations contained in 

'Guidance Note on Accounting in respect of Minimum Alternative Tax' issued by the 

Institute of Chartered Accountants of India, the said asset is created by way of a 

credit to the profit and loss account and shown as MAT Credit Entitlement. The 

Company reviews the same at each balance sheet date and writes down the carrying 

amount of MAT Credit Entitlement to the extent there is no longer convincing evidence 

to the effect that Company will pay normal Income Tax during the specified period. 

o. Earnings Per Share 


period attributable to equity shareholders (after deducting preference dividends and 

attributable taxes) by the weighted average number of equity shares outstanding 

during the year. For the purpose of calculating diluted earnings per share, the net 

profit for the year, attributable to equity shareholders and the weighted average 

number of shares outstanding during the year are adjusted for the effects of all 

dilutive potential equity shares, if any. 

p. Provisions and Contingencies 




discounted to its present value and are determined based on management estimate 



A disclosure for a contingent liability is made when there is a possible obligation or 

a present obligation that may, but probably will not, require an outflow of resources. 

When there is a possible obligation or a present obligation, in respect of which the 

likelihood of outflow of resources is remote, no provision or disclosure is made. 

q. Cash and Cash Equivalents 

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand 

and short-term investments with an original maturity of three months or less. 

r. Derivative Instruments 

Consistent with the Institute of Chartered Accountants of India Announcement, 

accounting for derivative contracts other than those covered under AS-11- 

The Effects of Changes in Foreign Exchange Rates, are marked to market on a 

portfolio basis, and the net loss is charged to the income statement. Net gains 

are ignored. 


The Company's operations relate to software development and maintenance and 

support services which the management views as a single business segment. The 

Management reviews the performance of the Company based on the services it 

performs. Hence, business segment is the primary segment for the Company. 

The accounting policies consistently used in the preparation of the financial statements 

are also applied to record revenue and expenditure in individual segments. 

Secondary segment is identified by geography. 

Revenue March 31, 2010 March 31, 2009 

United States of America 388,170,909 271,505,910 

Europe 71,097,016 145,130,983 

India 266,988,253 343,174,017 

Rest of the World 196,823,636 157,551,414 

923,079,814 917,362,324 

Assets : Debtors and unbilled revenue 

Debtors and unbilled revenue March 31, 2010 March 31, 2009 

United States of America 90,284,111 74,648,623 

Europe 11,679,414 24,763,522 

India 54,300,274 96,807,285 

Rest of the World 36,620,359 47,987,290 

192,884,158 244,206,720 

Note: Most of the tangible and intangible assets relate to India. Assets for other 

geographical segments are not significant and hence details are not furnished. 

Other segment Assets, segment liabilities & fixed assets used in the Company's business 

have not been identified to any reportable segment, as these are used interchangeably 

between segments. 

4. Related party disclosures 

(i) Names of related parties 

(a) Controlling Company (Holding company) 

• Aditya Birla Nuvo Limited 

(b) Name of subsidiary: 

• Birla Technologies Limited 

(c) Manager : Mr. Deepak J Patel (w.e.f 21st October, 2008) 

Mr. Sampath Iyengar (Upto June 4, 2008) 

(d) Fellow subsidiaries 

• Aditya Birla Financial Shared Services Limited (ABFSSL) 

(Subsidiary of ABFSPL) (w.e.f. June 19, 2008) 

• Aditya Birla Money Mart Limited (ABMML) (formerly known as Birla Sun 

Life DistributionCompany Limited) (Subsidiary of ABFSPL) 


• Aditya Birla Minacs Worldwide Ltd. (ABMWL) 

• Aditya Birla Minacs Worldwide Inc. Canada (ABMWI) (100% Subsidiary 

of AVTL) (formerly known as Minacs Worldwide Inc.) 

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

• Minacs Worldwide GmbH 

• Minacs Worldwide Kft., Hungary 

• Aditya Birla Minacs Philippines Inc. 

• Minacs Limited, UK (100% Subsidiary of ABMWI) 

• Aditya Birla Finance Limited (ABFL) (formerly known as Birla Global 

Finance Company Limited (BGFCL) 

• Birla Insurance Advisory & Broking Services Limited (BIABSL) 

(50.01% Subsidiary of BGCFPL up to March 30, 2009 and of ABFL 

w.e.f March 31, 2009) 

• Birla Sun Life Insurance Company Limited (BSLICL) 

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


• Minacs Limited - UK (100 % Subsidiary of ABMWI) 

ii) During the year, the Company has entered into transactions with related parties. 

Those transactions along with related balances as at March 31, 2010 and March 

31, 2009 and for the years then ended are presented in the following table: 

(438)

C M Y K 


I. Transactions during the year 

S.No Particulars March 31, March 31, 


Transactions with related parties 

1 Revenues 

Minacs Group (USA) Inc. 217,164,991 41,965,369 


Worldwide Inc.- Canada 85,000,196 11,777,843 

Minacs Worldwide GmbH 81,852 — 

Minacs Worldwide Kft., Hungary 37,899 — 

Minacs Limited - UK 44,720 — 

Aditya Birla Minacs Philippines Inc. 299,039 — 

Aditya Birla Minacs Worldwide 

Limited [Net of Service tax (2010 - 

Rs 1,396,124) (2009 - Rs.Nil)] 13,940,572 — 

Birla Sun Life Insurance Company 


Rs 4,578,211) (2009 - Rs.177,797)] 46,561,200 1,504,735 

Aditya Birla Nuvo Limited — 11,157 

Aditya Birla Finance Limited - 

(BGFCL) [Net of Service tax (2010 - 

Rs 215,732) (2009 - Rs.257,993)] 2,131,835 2,211,682 

Birla Technologies Limited [Net of 

Service tax (2010 - Rs 11,054,620) 

(2009 - Rs.23,402,854)] 107,326,410 224,099,382 

Aditya Birla Money Mart Limited - 

(BSDL) [Net of Service tax (2010 - 

Rs 81,252) (2009 - Rs.Nil)] 830,340 — 

Aditya Birla Financial Shared Services 


Rs 124,995) (2009 - Rs.Nil)] 1,255,040 — 

Birla Insurance Advisory & Broking 

Services Limited [Net of Service tax 

(2010 - Rs 48,751) (2009 - Rs.Nil)] 498,222 — 

2 Subcontracting expenses 

Birla Technologies Limited 2,454,650 8,581,957 


Company Limited — 194,629 

3 Expenses paid on behalf of the 

Company by the related party 



Worldwide Limited 11,487,273 117,151 

Aditya Birla Nuvo Ltd 198,540 2,839,891 


Worldwide Inc. Canada 11,301,116 12,647,560 


Minacs Group (USA) Inc. 36,361,298 — 

4 Interest Expense 

Aditya Birla Nuvo Ltd 10,956,575 — 

Aditya Birla Capital Limited (LIL) 289,973 78,904 


Worldwide Limited 212,877 

5 Managerial Remuneration 

Sampath Iyenger — 2,155,814 

6 Unsecured loans taken 


Aditya Birla Capital Limited (LIL) 99,000,000 99,000,000 


Worldwide Limited 20,000,000 — 

7 Unsecured Loans repaid 


Aditya Birla Capital Limited (LIL) 99,000,000 99,000,000 


Worldwide Limited 20,000,000 — 

II. Balances Receivable or Payable 

S.No Particulars March 31, March 31, 


8 Unsecured Loans 

Aditya Birla Nuvo Ltd 75,000,000 — 

9 Amounts Receivable 



Limited, India 12,527,245 — 


Inc.- Canada 14,897,594 2,589,572 

Minacs Worldwide GmbH 80,670 — 

Minacs Worldwide Kft. , Hungary 37,352 — 


Aditya Birla Minacs Philippines Inc. 299,039 — 


Company Limited 4,623,589 191,068 

Minacs Group (USA) Inc. 35,891,066 25,105,390 

Aditya Birla Finance Limited-(BGFCL) 15,681 2,623,050 

Aditya Birla Money Mart Limited-(BSDL) 17,393 — 

Aditya Birla Financial Shared 

Services Limited 17,393 — 


Broking Services Limited 10,743 — 

10 Amounts Payable 

Birla Technologies Limited — 929,359 

Aditya Birla Nuvo Limited — 33,708 


Inc.- Canada 478,389 865,645 

Aditya Birla Minacs Worldwide Limited 6,367,874 117,151 

Minacs Group (USA) Inc. 3,109,487 — 


11 Guarantees from 

Aditya Birla Nuvo Limited 330,000,000 380,000,000 

12 7% Cumulative Redeemable 

Preference Shares 


5. Leases 

i. Operating leases 

The Company is obligated under cancellable operating lease arrangements for office 

space which have been entered for a period of three years. 

Total rental expense and future minimum lease payments under cancellable operating 

lease for office space are as follows: 


Rs. 

Rs. 

Total Rental expense recognized in the 

Profit and Loss account 17,623,078 45,653,167 

Future Minimum Lease payments 

Not later than one year 6,702,900 45,653,167 

Later than one year but not later than five years 11,730,075 106,691,075 

Total 18,432,975 152,344,242 


6. Estimated amount of contracts remaining to be executed 

on capital account and not provided for Nil Nil 


a. Claims against the Company not acknowledged 

as debts not provided for including disputed taxes 14,835,128 14,170,954 

b. Bank Guarantees 1,250,000 1,463,675 

c. Dividend on 7% Cumulative Preference Shares 

excluding dividend distribution tax not provided 

for (Relates to the period from April 01, 2007 to 

March 31, 2010 since the profits for the year is 

inadequate for distribution/declaration for dividend 

after setting off the lower of the amount of losses 

in earlier years or the amount of depreciation 

in those years. 31,500,000 21,000,000 

(439)

C M Y K 


8. Investments in & Receivables from / Advances made to Subsidiary: 

a) The Company acquired Birla Technologies Limited ("BTL"), a wholly owned subsidiary, 

for strategic and long term purpose. Considering, the nature of the said investments, 

asset base, business plan and having regard to the independent valuation of BTL, in 

the opinion of the management, the decline in the market/book value of the 

investments is of temporary nature and accordingly carried at cost. 

b) The Company has trade receivables from Birla Technologies Limited, a wholly owned 

subsidiary, aggregating to Rs. 5,093,793 (2009 -- Rs. 68,795,183), which in the 

opinion of the Management is realizable in full. 

9. Provision others 

Sl. Nature of Probable Provision Provision Provision Provision Provision 

No. Expense Outflow as on April made utilized reversed as on 

estimated 1, 2009 during the during during March 

within year the year the year 31, 2010 

1 Provision 

others One Year 2,000,000 32,159,000 2,847,476 940,783 30,370,741 

Incentive/ 

Commission (21,720,853) (1,631,953) (21,352,806) (-) (2,000,000) 

Note: Figures in brackets relate to the previous year. 

10. Employee Benefits 

a) Defined Contribution Plan: 

Expenses towards defined contribution plan charged to profit & loss account 

Particulars 2010 2009 

Contribution to Provident Fund and 

Pension Fund 11,609,494 13,672,570 

Contribution to Overseas Pension Plans 13,690,431 11,073,458 

Total 25,299,925 24,746,028 

The Company has a defined benefit gratuity plan. Every employee who has completed 

five years or more of service gets a gratuity on departure at 15 days' salary (last 

drawn salary) for each completed year of service. The fund is administered and 

managed by Aditya Birla Nuvo - Employee Gratuity Fund. 

The Company also provides compensated absences to its employees based on the 

Company's policy. 

The following tables summaries the components of net benefit expense recognised in 

the profit and loss account and amounts recognised in the balance sheet in respect 

of gratuity benefit. 

Net employee benefit expense (recognised in profit and loss account) 

Gratuity 



Interest Cost 1,145,569 971,965 

Expected return on Plan assets (363,592) (1,782,422) 

Actuarial Losses/(Gains) (47,490) 424,876 

Total Expense to be recognized in the 

Profit and Loss Account 5,240,740 1,650,836 

Details of Provision for gratuity (Balance sheet) 

Gratuity 


Defined benefit obligation 18,760,492 15,483,063 

Fair Value of Plan Assets 18,760,492 10,191,677 

Funded Status [Surplus/ (Deficit)] — 5,291,386 

Less: Unrecognised past service cost — — 

Plan asset / (liability) — 5,291,386 

Changes in the present value of the defined benefit obligation are as follows: 

Gratuity 


Opening defined benefit obligation 15,483,063 15,720,635 

Interest cost 1,145,569 971,965 


Benefits paid (2,326,903) (3,670,830) 

Actuarial (gains) / losses on obligation (47,490) 424,876 

Closing defined benefit obligation 18,760,492 15,483,063 

Changes in the plan assets of the defined benefit obligation are as follows: 

Gratuity 


Opening fair value of plan assets 10,191,677 8,409,255 

Expected return 363,592 1,782,422 

Contributions by employer 8,205,223 — 

Benefits paid — — 

Closing fair value of plan assets 18,760,492 10,216,795 

The principal assumptions used in determining gratuity are shown below: 


% % 

Discount rate 8 7 

Increase in compensation cost 8 6 

Attrition Rate 16 5 

The estimates of future salary increases, considered in actuarial valuation, take account of 

inflation, seniority, promotion and other relevant factors, such as supply and demand in the 

employment market. 

The major categories of plan assets as a percentage of the fair value of total plan assets are 

as follows: 

Particulars 2010 (%) 2009 (%) 

Government of India Securities 14% 14.77% 

Corporate Bonds 1% 7.98% 

Insurer Managed Funds 84% 73.82% 

Others 0% 3.42% 

Details for Provision for gratuity for the current and previous year are as follows: 

Gratuity 


Defined benefit obligation 18,760,492 15,483,063 

Plan assets 18,760,492 10,191,677 

Surplus / (deficit) — 5,291,386 

Experience adjustments on plan liabilities — — 

Experience adjustments on plan assets — — 

b) Leave Encashment 

Leave encashment benefit expensed in the Profit & Loss Account for the year is 

Rs. 4,403,394 (2009: Rs. 5,067,268). 

11. Earnings/(Losses) per share (EPS) 


Net Profit/(Loss) as per profit and loss account 87,561,349 (58,865,326) 

Less: Dividend on 7% redeemable preference 

shares and tax thereon (12,284,475) (12,284,475) 

Net Profit/(Loss) for calculation of EPS 75,276,874 (71,149,801) 

Weighted average number of Equity 

shares Outstanding 7,550,334 7,550,334 

Basic and diluted EPS 9.97 (9.42) 

12. Quantitative Details 

Particulars Quantity Value Quantity Value 

(Nos.) (Nos.) 


Software licenses 

Purchases 560 17,080,260 Nil — 

Sales 560 18,146,443 Nil — 

13. Supplementary Statutory Information 


(i) Earnings in foreign currency (on accrual basis) 

Software services/License fees 656,091,561 574,188,307 

656,091,561 574,188,307 

(ii) Payment to Auditors include the following amounts 

paid/payable to auditors (excluding service tax): 

– Statutory Audit Fee 975,000 1,337,500 

– Tax Audit fees 75,000 50,000 

– Others — 50,000 

– Out of pocket expense 47,100 126,555 

– Out of pocket expense(to erstwhile auditor) 40,742* — 

* paid to erstwhile auditor. 

1,137,842 1,564,055* 

(440)

C M Y K 


(iii) 


Expenditure in Foreign currency 

Personnel expenses 189,044,449 189,141,946 

Subcontracting Expenses 61,257,448 64,726,660 



Others 11,859,835 19,566,723 

284,600,386 310,361,731 

(iv) Value of Imports calculated on CIF basis. 

Fixed Assets 11,498,393 — 

11,498,393 — 

(v) Managerial remuneration 

Salaries, Allowance and Bonus* — 2,155,814 

Contribution to provident and other funds — — 

— 2,155,814 

Note : As the future liability for gratuity and leave encashment is provided on an actuarial 

basis for the Company as a whole, the amount pertaining to the directors is not 

ascertainable and, therefore, not included above. 

*Remuneration represents for the period on appointment from 26th April 2007 to 

4th June, 2008 and is within the limits approved by the Central Government vide 

letter # 12/583/2007- CL.VII dated 31st Oct 2007. 

14. Derivative Instruments and Unhedged Foreign Currency Exposure 

The Company has taken foreign exchange forward contracts to mitigate its risks associated 

with foreign currency fluctuations in respect of highly probable forecast transactions. The 

Company does not enter into any forward contracts which are intended for trading or 


The details of forward contracts outstanding at March 31, 2010 and March 31, 2009 

(indicated within brackets) are as follows: 

Currency Number of Amount in Indian Rupees 

contracts foreign currency equivalent 

US Dollar (USD) 21 4,950,000 233,972,500 

(24) (3,765,000) 173,559,275 

Great Britain Pound (GBP) — — — 

(1) (100,000) (8,100,000) 

Particulars of Unhedged foreign currency exposure as at Balance Sheet date 


Foreign Equivalent Foreign Equivalent 

Currency (Rs.) Currency (Rs.) 

Payables - USD 262,983 12,055,144 2,033,008 104,984,548 

Payables - GBP 327,640 22,626,828 237,798 17,597,056 

Payables - JPY 7,868,690 3,912,313 7,543,830 3,968,809 

Payables - CAD 52,507 2,378,548 86,010 3,550,512 

Receivables - USD 7,457 331,986 16,826 846,166 

Receivables - JPY 14,547,201 6,864,824 11,369,890 5,802,055 

Receivables - CAD 204,708 8,859,771 412,902 16,441,741 

Receivables - GBP 171,801 11,486,589 195,224 14,056,102 

Receivables - MYR 71,145 872,951 71,145 894,295 

Receivables - AUD 189,929 7,705,407 189,929 6,577,231 

Receivables - CHF 15,503 644,460 — — 

15. Based on the information available with the Company, there are no suppliers who are 

registered as micro, small or medium enterprises under The Micro, Small and Medium 

Enterprises Development Act, 2006 as at March 31, 2010 and 2009. 

16. The financial statements of the previous year ended March 31, 2009 were audited by a 

firm of Chartered Accountants other than M/s S.R. Batliboi & Co. The figures of previous 

year have been regrouped/reclassified, where necessary, to conform with the current year's 








(formerly PSI Data Systems Limited) 

per Vijay Maniar Deepak J Patel Sushil Agarwal 

Partner Chief Executive Officer & Director 


Manager 

Ramesh Kamath 


Ajay Joseph 



Place: Mumbai 

Date : April 23, 2010 Date April 23, 2010 

Arun Thiagarajan 

Director 

(441)

C M Y K 


PART IV - Balance Sheet Abstract and Company's General Business Profile 

I. Registeration Details 

Registeration No. 27564 

State Code 08 

Balance Sheet Date 31.03.2010 

II. 

Capital raised during the year (Rs. in '000) 

Public Issue 

NIL 

Rights Issue 

NIL 

Bonus Issue 

NIL 

Private Placement - Pref.Capital 150,000 

III. Position of Mobilisation and Deployment of Funds (Rs. in '000) 

Total Liabilities 317,369 

Total Assets 317,369 


Paid-up Capital 225,503 

Reserves & Surplus 14,329 

Secured Loans 2,536 

Unsecured Loans 75,000 


Net Fixed Assets 28,971 

Investments 112,704 

Net Current Assets 47,174 

Misc.expenditure 

NIL 

Accumulated Losses 128,520 

IV. 

Performance of Company 

Turnover 933,656 

Total Expenditure 844,595 

Profit before taxes 89,061 

Profit after Taxes 87,561 

Earnings Per Share in Rs 9.97 

Dividend Rate % 

NIL 

V. Generic Names of three Principal Products/Services of company (as per monetary terms) 

Item Code No. (ITC Code) 84712009 


Computers Hardware 

Item Code No. (ITC Code) 85249002 


Computers Software 



Chief Executive Officer & Manager 

Ramesh Kamath 



Director 

Arun Thiagarajan 

Director 

Ajay Joseph 


Place: Mumbai 

Date April 23, 2010 

(442)

C M Y K 

ADITYA BIRLA MINACS TECHNOLOGIES LIMITED (Formerly: Birla Technologies Ltd.) 


DEAR SHAREHOLDERS, 

On behalf of the Directors, it is my pleasure to present the Tenth Annual 

Report, together with the Audited Statement of Accounts of Birla Technologies 

Limited (“the Company”) for the year ended 31 st March, 2010. 


Your Company and its Holding Company Aditya Birla Minacs IT Services 

Company Limited, works as an integrated unit. An overview of the Standalone 

results of your Company is given below. 

(Amount in Rs. Crores except for per share data) 


Total Revenue 13.82 26.95 

Total Expenditure including Depreciation 12.48 27.87 

Profit / Loss before Tax 1.34 (0.92) 

Provision for Tax 0.0075 0.03 

Profit after Tax 1.33 (0.96) 

Basic and Diluted Earnings per 

Share (in Rs.) 0.136 (0.098) 

Paid-up Equity Share Capital 9.8 9.8 


since the Company has carried forward losses during this period. 

SUMMARY OF OPERATIONS 

Your Company’s results as stated above show a positive growth year on 

year in terms of profitability. Overall, revenue decreased by 48.5% while 

the Company reported a net Profit after Tax at Rs. 1.33 crores during the 

year against a Loss after Tax of Rs. 0.96 crores in FY 2008-09. 

DIRECTORS 

Dr. Bharat K. Singh and Mr. Adesh Kumar Gupta resigned as directors with 

effect from July 15, 2009. The Board places on record its sincere appreciation 

for the valuable services rendered by Dr. Bharat K. Singh and Mr. Adesh 

Kumar Gupta. 


directors of the Company with effect from July 15, 2009. Resolutions seeking 

your approval for the appointment of Dr. Rakesh Jain and Mr. Sushil Agarwal 

have been incorporated in the Notice of the ensuing Annual General Meeting 


Dr. Rakesh Jain, Director, retire by rotation at the forthcoming Annual General 

Meeting, being eligible, offers himself for reappointment. 


During the financial year 2009-10, the Company has not accepted any 

fixed deposits from the public. There was no unclaimed deposit and interest 

accrued on March 31, 2010. 


As required in Section 217(2AA) of the Companies Act, 1956 (the Act), 

your Directors confirm that: 




2. The Directors have selected such accounting policies and applied them 

consistently and made judgements and estimates that are reasonable 


the Company at the end of the financial year and of the profit or loss of 


3. The Directors have taken proper and sufficient care of the maintenance 


the Act for safeguarding the assets of the Company and for preventing 


4. The Directors had prepared the annual accounts on a going 

concern basis. 

STATUTORY INFORMATION 

The particulars as prescribed under sub-section (1) (e) of section 217 of the 

Companies Act, 1956, read with the Companies (Disclosure of Particulars 

in the Report of the Board of Directors) Rules, 1988 are set out hereunder: 



The information required under the Companies (Disclosure of Particulars in 

the Report of the Board of Directors) Rules, 1988 for the year ended March 

31, 2010 is given in Annexure 1, forming part of this report. 


There are no employees of the Company drawing more than Rupees Twentyfour 

Lakhs per annum or Rupees Two Lakhs per month, as the case may 

be. It may be noted that in accordance with the notification dated March 

24, 2004 issued by the Department of Company Affairs, Government of 


India, not being directors or their relatives drawing more than Rupees 

Twenty-four Lakhs per financial year or Rupees Two Lakhs per month, as 

the case may be, are not included in this statement but such particulars 

shall be furnished to the Registrar of Companies. Such particulars shall be 

made available to any shareholder on specific request made by him / her 

during the course of the Annual General Meeting. 

As such no particulars are required to be given under the Companies 

(Particulars of Employees) Rules, 1975. 


The report of the Statutory Auditors, M/s S. R. Batliboi & Co., are attached 

to this report. The observations made in the Auditors’ Report are self 

explanatory and therefore do not call for any further comments under Section 

217 (3) of the Companies Act, 1956. 




Your Directors warmly appreciate the dedication and commitment of all 

employees. 

Your Directors acknowledge the assistance, co-operation and 

encouragement given to your Company by various authorities including 

your Company’s Bankers. 



Place: Mumbai 



Director 


Director 

(443)

C M Y K 


Annexure – 1 (Forming part of Directors’ Report) 

Information required under the Companies (Disclosure of Particulars 

in the Report of the Board of Directors) Rules, 1988 







2. Research and Development (R&D) 

a. Specific areas in which R & D carried out by the Company: 

NIL 

b. Benefits derived as a result of the above R & D: 

NIL 

c. Future plan of action: 

NIL 

d. Expenditure on R & D: 


Your Company continues to use the latest hardware and software to 

improve the quality of its products and services. It will continue to invest 

in state-of–the–art technology and infrastructure to improve the 

productivity and quality of its products and services are made on an 

ongoing basis, as required. 

4. Foreign exchange earnings and outgo: 

(Rs. in crores) 


Foreign exchange earnings 12.81 26.04 

Foreign exchange outgo 0.83 1.94 



and export plans: 

In fiscal 2009, 100% of revenues were derived from exports. Your 

Company operates a direct sales marketing network in its strategic 

markets in North America, Europe and the Asia Pacific to grow 

its business. 

Particulars FY 2009-10 FY 2008-09 

a) Capital NIL NIL 

b) Recurring NIL NIL 

c) Total Not Applicable Not Applicable 

d) Total R & D expenditure as Not Applicable Not Applicable 

a percentage of total 

turnover 

(444)

C M Y K 



To 

The Members of Birla Technologies Limited 

1. We have audited the attached Balance Sheet of Birla Technologies 

Limited (“the Company”) as at March 31, 2010 and also the Profit and 

Loss Account, and the Cash Flow Statement for the year ended on that 

date, annexed thereto. These financial statements are the responsibility 

of the Company’s management. Our responsibility is to express an 

opinion on these financial statements based on our audit. 










our opinion. 


amended) issued by the Central Government of India in terms of subsection 

(4A) of section 227 of the Companies Act, 1956, we enclose in 

the Annexure a statement on the matters specified in paragraphs 4 and 

5 of the said Order. 


that: 







iii. The balance sheet, profit and loss account and cash flow statement 


iv. In our opinion, the balance sheet, profit and loss account and 






Board of Directors, we report that, none of the directors are 




vi. Without qualifying our opinion, we draw attention to Note 3 of 

Schedule 17 to the financial statements. The accompanying 

financial statements have been prepared by the management on 

the assumption that the Company will continue as a going concern 

based on the Company’s business plans and continued financial 

support from the ultimate holding company, as more fully described 

in the Note 3 of Schedule 17 to the financial statements. 

Accordingly, these financial statements do not include any 

adjustments relating to the recoverability of recorded asset amounts 

and in respect of liabilities as might be necessary for compilation 

on an alternative basis. 

vii. In our opinion and to the best of our information and according 







b) in the case of the profit and loss account, of the profit for the 








Partner 


Place: Mumbai 


(445)

C M Y K 


ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT 

OF EVEN DATE 

Re: Birla Technologies Limited (“the Company”) 



assets. 

(b) Fixed assets have been physically verified by the management 

during the year and no discrepancies were identified on such 

verification. 

(c) There was no substantial disposal of fixed assets during the year. 

(ii) The Company is engaged in the business of rendering software services 

and hence does not hold any stock of inventory. Accordingly, the 

provisions of clause 4 (ii) of the Companies (Auditor’s Report) Order, 



or unsecured to companies, firms or other parties covered in the 


1956. 

(b) As informed, the Company has not taken any loans, secured or 

unsecured from companies, firms or other parties covered in the 


1956. 


given to us, as well as taking into consideration the management 

representation that certain items of sale of software are of special 

nature for which alternative quotations are not available, there is an 

adequate internal control system commensurate with the size of the 

Company and the nature of its business, for the purchase of fixed 

assets and for the sale of goods and services. During the course of 

our audit, no major weakness has been noticed in the internal control 

system in respect of these areas. 

(v) According to the information and explanations provided by the 


arrangements, the particulars of which need to be entered in the 

register maintained under section 301 of the Companies Act, 1956. 

(vi) The Company has not accepted any deposits from the public. 

(vii) The Company is covered by the internal audit system of the ultimate 

parent company, the scope and coverage of which is commensurate 

with the size and nature of the business of the Company. 

(viii) To the best of our knowledge and as explained, the Central 



1956, for the products of the Company. 

(ix) (a) The Company is regular in depositing with appropriate authorities 

undisputed statutory dues including investor education and 

protection fund, employees’ state insurance, income-tax, salestax, 

wealth-tax, service tax, customs duty, excise duty, cess and 

other material statutory dues applicable to it. 

Further, since the Central Government has till date not prescribed 

the amount of cess payable under section 441 A of the 

Companies Act, 1956, we are not in a position to comment 

upon the regularity or otherwise of the Company in depositing 

the same. 

(b) According to the information and explanations given to us, no 

undisputed amounts payable in respect of investor education 

and protection fund, employees’ state insurance, income-tax, 

wealth-tax, service tax, sales-tax, customs duty, excise duty, cess 

and other undisputed statutory dues were outstanding, at the 

year end, for a period of more than six months from the date 

they became payable. 

(x) 

(xi) 

(xii) 

(xiii) 

(xiv) 

(xv) 

(xvi) 

(xvii) 

(xviii) 

(xix) 

(xx) 

(xxi) 

The provisions of the Employees Provident Fund and 

Miscellaneous Provisions Act, 1952, are not applicable to the 

Company. 

(c) According to the information and explanations given to us, there 

are no dues of income tax, sales-tax, wealth tax, service tax, 

customs duty, excise duty and cess which have not been deposited 

on account of any dispute. 

The Company’s accumulated losses at the end of the financial year 

are more than fifty percent of its net worth. The Company has not 

incurred cash losses in the current and immediately preceding financial 

year. 









In our opinion, the Company is not a chit fund or a nidhi/mutual 

benefit fund/society. Therefore, the provisions of clause 4 (xiii) of the 

Companies (Auditor’s Report) Order, 2003 (as amended) are not 



securities, debentures and other investments. Accordingly, the 

provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 

2003 (as amended) are not applicable to the Company. 




The Company did not have any term loans outstanding during the 

year. 



that no funds raised on short-term basis have been used for longterm 

investment. 




The Company did not have any outstanding debentures during the 

year. 

The Company has not raised any money through a public issue during 

the year. 










Partner 


Place: Mumbai 


(446)

C M Y K 



As at 

As at 



SOURCES OF FUNDS Schedule Rs. Rs. Rs. Rs. 


Share Capital 1 98,003,500 98,003,500 


293,080,044 293,080,044 

Loan Funds 

Secured Loans 3 — 76,541,147 

Unsecured Loans 4 126,500,000 126,500,000 — 76,541,147 

Total 419,580,044 369,621,191 



Gross Block 128,757,680 128,904,066 

Less: Accumulated depreciation 128,757,680 128,814,238 

Net Block — 89,828 

Current Assets, Loans & 

Advances 



Other Current Assets 8 987,261 1,023,354 


37,579,473 49,598,099 


Provisions 

Current Liabilities 10 6,566,732 81,080,691 

Provisions 11 293,687 1,172,147 

6,860,419 82,252,838 

Net Current Assets/(Liabilities) 30,719,054 (32,654,739) 

Profit and Loss Account 

(Debit balance) 388,860,990 402,186,102 

TOTAL 419,580,044 369,621,191 


INCOME 

Schedule Year Ended Period Ended 


31-Mar-09 

Revenue 12 128,706,625 269,031,541 

Other Income 13 9,490,418 428,726 

Total 138,197,043 269,460,267 

EXPENDITURE 

Personnel Expenses 14 5,901,009 13,829,205 

Operating Expenses 15 112,052,514 252,765,690 

Financial Expenses 16 6,761,002 12,023,859 

Depreciation/amortisation 5 82,406 85,831 

124,796,931 278,704,585 

Profit / (Loss) before Tax 13,400,112 (9,244,318) 

Provision for taxes: 

— Current Tax 75,000 300,000 

— Fringe Benefit Tax — 10,000 

Profit / (Loss) after Tax 13,325,112 (9,554,318) 

Net profit/(loss), at the beginning of the year (402,186,102) (392,631,784) 

Amount available for appropriation (388,860,990) (402,186,102) 

(Deficit)/Surplus carried to Balance Sheet (388,860,990) (402,186,102) 

Earnings per share [Equity shares, 

par value Rs. 10 each] 

— Basic and diluted 1.36 (0.97) 

Weighted average number of shares used 

in computing earnings/(loss) per share 

— Basic and diluted 9,800,350 9,800,350 


The schedules referred to above and notes to accounts form an integral part of 

the profit and loss account 


The schedules referred to above and notes to accounts form an integral part of the balance sheet 



Firm Registration no.: 301003E Deepak J Patel Sushil Agarwal 

Chartered Accountants Chief Executive Officer Director 

per Vijay Maniar Ramesh Kamath Dr. Rakesh Jain 

Parner Chief Financial Officer Director 











Radhika Suresh 










(447)

C M Y K 


CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010 

Year Ended 

Period Ended 


31-Mar-09 

Rs. 

Rs. 


Net Profit/(Loss) before Taxation 13,400,112 (9,244,318) 


Depreciation / Amortisation 82,406 85,831 

Unrealised Foreign exchange (gain) / loss, net (179,653) 10,656,082 

Interest Income (1,692) (42,285) 

Profit on Sale of Assets (7,574) 95,718 


Operating Profit/(loss) before changes in working capital 19,945,396 13,391,491 

Movements in working capital: 

(Increase) / Decrease in other current assets 20,992 7,209,562 

(Increase) / Decrease in sundry debtors 14,378,522 (21,021,204) 

(Increase) / Decrease in Loans & advances (3,493,509) (481,594) 

Increase / (Decrease) in current liabilities and provisions (75,252,583) 38,299,994 

Cash generated from /(used in) operations (64,346,578) 24,006,758 

Direct Taxes Paid — (194,003) 

Net Cash generated from /(used in) operations (A) (44,401,182) 37,204,246 


Proceeds from sale of fixed assets 14,996 22,418 

Interest Income Received 1,692 42,285 

Net Cash (used in) / from Investing activities (B) 16,688 64,703 


Proceeds from short-term borrowings 126,500,000 — 

Repayment of short-term borrowings (76,541,147) (27,530,343) 

Interest Paid (6,791,633) (11,840,463) 

Net Cash (used in) / from Financing activities (C) 43,167,220 (39,370,806) 

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (1,217,274) (2,101,857) 

Cash and cash equivalents at the beginning of the year 2,635,982 4,737,839 

Cash and cash equivalents at the end of the year 1,418,708 2,635,982 

Components of Cash and cash equivalents 


— in Current Accounts 1,418,708 2,635,982 

1,418,708 2,635,982 














(448)

C M Y K 




As at 


Rs. 

As at 

31-Mar-09 

Rs. 

Authorised 

12,000,000 (PY 12,000,000) Equity Shares 

of Rs.10/-each 120,000,000 120,000,000 

120,000,000 120,000,000 

Issued, Subscribed and Paid Up 

9,800,350 (PY 9,800,350) Equity Shares 

of Rs. 10/- each 98,003,500 98,003,500 

98,003,500 98,003,500 

All the above, 9,800,350 (2009: 9,800,350) 

equity shares are held by Aditya Birla Minacs IT 

Services Limited (formerly PSI Data Systems Limited, 

the holding company). 


As at 

As at 


31-Mar-09 

Rs. 

Rs. 

Securities Premium account 195,076,544 195,076,544 


195,076,544 195,076,544 

From Banks : 

— Cash Credit — 4,041,147 

— Working Capital Demand Loan — 72,500,000 

[Repayable within one year Rs. Nil (PY 72,500,000)] — 76,541,147 

(Working Capital Demand Loan & Cash Credit 

borrowings are secured against debtors and 

other present and future current assets and 

guaranteed by the holding company ABNL.) 


Intercorporate loan from ultimate holding Company 

[Repayable within one year Rs.Nil (PY Rs.Nil)] 126,500,000 — 

126,500,000 — 


GROSS BLOCK AT COST ACCUMULATED DEPRECIATION / AMORTISATION NET BLOCK 

As at Additions Deletions As at As at Depreciation/ Deletions As at As at As at 

Description 1-Apr-09 During the During the 31-Mar-10 1-Apr-09 Amortization During the 31-Mar-10 31-Mar-10 31-Mar-09 

Year Year for the Year Year 

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 


Computers and software 98,980 — — 98,980 98,977 3 — 98,980 — 3 

Office Equipment 139,151 — 77,984 61,167 58,864 80,289 77,986 61,167 — 80,287 

Furniture & Fixtures 68,402 — 68,402 — 58,864 2,114 60,978 — — 9,538 

Total - Tangible Assets 306,533 — 146,386 160,147 216,705 82,406 138,964 160,147 — 89,828 


Goodwill 53,587,533 — — 53,587,533 53,587,533 — — 53,587,533 — — 

Computer Software Products 75,010,000 — — 75,010,000 75,010,000 — — 75,010,000 — — 

Total - Intangible Assets 128,597,533 — — 128,597,533 128,597,533 — — 128,597,533 — — 

GRAND TOTAL 128,904,066 — 146,386 128,757,680 128,814,238 82,406 138,964 128,757,680 — 89,828 

Previous Year 130,099,223 — 1,195,157 128,904,066 129,805,428 85,831 1,077,021 128,814,238 89,828 



Debts outstanding for more than six months — — 

Other Debts* 6,662,139 20,845,907 

6,662,139 20,845,907 

* Includes amounts due from companies under 

the same management 

— Aditya Birla Minacs IT Services Limited — 929,359 

— Aditya Birla Nuvo Limited 615,474 — 


As at 


Rs. 

As at 

31-Mar-09 

Rs. 


— in Current Accounts 1,418,708 2,635,982 

1,418,708 2,635,982 

SCHEDULE 8 - OTHER CURRENT ASSETS 

Unbilled Revenue 987,261 1,023,354 

987,261 1,023,354 

As at 

As at 


31-Mar-09 

SCHEDULE 9 - LOANS & ADVANCES 


Advances recoverable in cash or in kind or for value to be received 

Rs. 

215,838 

Rs. 

226,772 

Service Tax - Receivable 28,281,540 23,416,919 

Deposits 13,987 813,410 

Advance Tax (Net of Provisions) — 635,755 

28,511,365 25,092,856 

SCHEDULE 10 - CURRENT LIABILITIES 


Amount due to holding company 5,093,793 68,795,183 

Interest accrued and not due — 139,836 

Other Liabilities 214,386 — 

6,566,732 81,080,691 


Provision for Gratuity 183,564 278,855 

Provision for compensated absences 27,463 893,292 

Provision for Taxation (Net of Advance Tax) 82,660 — 

293,687 1,172,147 

(449)

C M Y K 


Schedule forming part of the Profit and Loss Account 



31-Mar-09 

Rs. 

Rs. 

SCHEDULE 12 - REVENUES 

Service Revenue 

— Software services and licence fees 128,706,625 269,031,541 

128,706,625 269,031,541 


Interest Income 1,692 42,285 

[Gross of Tax Deducted at source of Rs.Nil (PY Rs Nil)] 

Profit on Sale of Assets, net 7,574 — 

Foreign exchange gain, net 9,428,904 — 

Amounts written back — 309,802 

Miscellaneous income 52,248 76,639 

9,490,418 428,726 

SCHEDULE 14 - PERSONNEL EXPENSES 

Salaries, allowances & Bonus 5,840,416 12,505,606 

Gratuity and compensated absences (440,112) 220,404 

Staff Welfare 12,374 22,895 

Expatriation Expenses 488,331 1,080,300 

5,901,009 13,829,205 

SCHEDULE 15 - OPERATING EXPENSES 

Subcontracting Expenses 107,326,410 223,790,156 

Rent 61,203 340,470 

Rates & Taxes 743,599 109,713 

Establishment Expenses — 146,000 

Communication Charges 40,566 104,371 

Printing & Stationery 7,161 35,747 

Travelling and Conveyance 283,645 — 

Insurance 1,771,063 3,500,525 


Payment to Auditors 455,507 804,157 

Foreign Exchange Loss, net — 22,834,362 

Loss on sale of fixed assets — 95,718 

Miscellaneous expenses 17,405 1,335 

112,052,514 252,765,690 

SCHEDULE 16- FINANCIAL EXPENSES 

Interest expenses 6,651,797 11,840,463 

Bank Charges 109,205 183,396 

6,761,002 12,023,859 

SCHEDULE 17 – NOTES TO ACCOUNTS 

(All amounts in rupees, except as otherwise stated) 

1. Nature of operations 

Birla Technologies Limited (“the Company”) was incorporated in India on August 18, 2000 

as a public limited company under the Companies Act, 1956. The Company is a wholly 

owned subsidiary of Aditya Birla Minacs IT Services Limited (formerly PSI Data Systems 

Limited). The ultimate holding company is Aditya Birla Nuvo Limited, India. 

The Company is engaged in rendering software development and related services and 

Information Technology enabled Services (‘ITeS’). 


a. Basis of Preparation 


the accounting standards notified by Companies Accounting Standards Rules, 2006 

and the relevant provisions of the Companies Act, 1956. The financial statements 

have been prepared under the historical cost convention on an accrual basis except 

in case of assets for which provision for impairment is made and revaluation is 

carried out. The accounting policies have been consistently applied by the Company 

and are consistent with those used in the previous year. 

b. Use of Estimates 





the reporting year end. Although these estimates are based upon management’s 


estimates. 

c. Fixed Assets 


if any. Cost comprises the purchase price and any directly attributable cost of bringing 

the asset to its present condition for its intended use. 

d. Depreciation 

Depreciation is provided using the Straight Line Method (“SLM”) as per the useful 

lives of the assets estimated by the management, or at the rates prescribed under 

schedule XIV of the Companies Act, 1956 whichever is higher. 

Description of Assets 

Useful Life (Years) 

Computer and Software 3 

Office Equipment 5 

Furniture and Fixtures 6 

Goodwill 5 

Computer Software Products 3 

Improvements to Leasehold Assets 

Over the primary lease 

period or the estimated 

useful life of assets 

whichever is lower 

Assets individually costing less than or equal to Rs.10,000 are depreciated fully in 

the year of purchase. 

e. Impairment of Assets 

i. The carrying amounts of assets are reviewed at each balance sheet date if 

there is any indication of impairment based on internal/external factors. An 

impairment loss is recognized wherever the carrying amount of an asset exceeds 

its recoverable amount. The recoverable amount is the greater of the asset’s 

net selling price and value in use. 

ii. 

After impairment, depreciation is provided on the revised carrying amount of 

the asset over its remaining useful life. 

f. Leases: Operating Leases 


ownership of the leased term are classified as operating leases. Operating lease 


basis over the lease term. 

g. Revenue Recognition 

Revenue pertaining to time & material contracts is recognised based on the contract 

terms and time billed/billable, as the services are provided. 

Unbilled revenue represents revenues recognised in excess of the amounts billed as 

at the balance sheet date. 

(450)

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Unearned revenue represents amounts billed in excess of the revenues recognised as 


Interest income is recognized on a time proportion basis taking into account the 

amount outstanding and the rate applicable. 

h. Foreign Currency Transactions 

Transactions in foreign currencies are translated at the exchange rates prevailing on 

the date of the transaction. Realised gains/(losses) on such transactions are recognised 

in the Profit and Loss Account. Unrealised transactions in foreign currencies relating 

to monetary assets and monetary liabilities are translated into rupees at the exchange 

rates prevailing at the year-end. The exchange gains/(losses) arising out of such 

translations are dealt with in the Profit and Loss Account. 

Foreign Exchange Contracts are not intended for trading or speculation purposes. 

The Premium or discount arising at inception of forward exchange contracts is 

amortised as expense or income over the life of the contract. Exchange differences 

on such contracts are recognised in the statement of profit and loss in the year in 

which the exchange rates change. Any profit or loss arising on cancellation or renewal 

of forward exchange contract is recognised as income or as expense for the year. 

Translation gain/(loss) arising out of the above transactions are charged / credited to 

the profit and loss account. 

Translation of Integral foreign operation 

The financial statements of an integral foreign operation are translated as if the 

transactions of the foreign operation have been those of the company itself. 

i. Retirement and other Employee benefits 

i. The Company contributes the employer’s share of the Provident Fund and the 

Employees’ Pension Scheme with the Regional Provident Fund Commissioner 

and to other similar plans in United States of America, United Kingdom, Japan 

and Canada and charges all such amounts to the Profit and Loss Account on 

an accrual basis. The Company does not have any other obligation towards 

such employee benefits. 

ii. Company’s liability under the Payment of Gratuity Act is determined by actuarial 

valuation made at the end of each financial year using the projected unit 

credit method. Actuarial gains and losses are recognised immediately in the 

statement of Profit and Loss Account as income or expense. 

iii. Short term compensated absences are provided for based on estimates. Liability 

for long term compensated absences is determined by actuarial valuation based 

on accumulated leave credit outstanding to the employees as on the balance 

sheet date. Actuarial gains/losses are recognized immediately in the statement 

of profit and loss account as Income or Expenses. 

j. Segment reporting 

The Company’s operating businesses are organized and managed separately 

according to the nature of services rendered. The analysis of geographical segments 

is based on the geographical location of the Company’s customers. 

k. Provision for Taxation 

Tax expense comprises of current and deferred tax. Current income tax is measured 

at the amount expected to be paid to the tax authorities in accordance with the 

Income Tax Act, 1961 enacted in India and taxes on income from overseas branches. 

Certain items of income and expenses are not reported in tax returns and financial 

statements in the same year. The tax effect of this timing difference is reported as 

deferred income tax assets/liabilities. The tax effect is calculated on the accumulated 

timing differences at the end of the accounting period at the current enacted tax 

rates. At each balance sheet date, deferred tax assets relating to unabsorbed carry 

forward losses and depreciation are re-assessed and recognised only to the extent 

there is virtual certainty supported by convincing evidence that the same can be 

realised in future and in respect of other items where there is reasonable certainty as 

to realisation. 

Minimum Alternate Tax (‘MAT ’) credit is recognised as an asset only when and to the 

extent there is convincing evidence that the Company will pay normal income tax 

during the specified period. In the year in which the MAT credit becomes eligible to 

be recognized as an asset in accordance with the recommendations contained in 

‘Guidance Note on Accounting in respect of Minimum Alternative Tax’ issued by the 

Institute of Chartered Accountants of India, the said asset is created by way of a 

credit to the profit and loss account and shown as MAT Credit Entitlement. The 

Company reviews the same at each balance sheet date and writes down the carrying 

amount of MAT Credit Entitlement to the extent there is no longer convincing evidence 

to the effect that Company will pay normal Income Tax during the specified period. 

l. Earnings Per Share 

Basic earning per share is calculated by dividing the net profit for the year, attributable 

to equity shareholders by the weighted average number of equity shares outstanding 

during the year. For the purpose of calculating diluted earnings per share, the net 

profit for the year, attributable to equity shareholders and the weighted average 

number of shares outstanding during the year are adjusted for the effects of all 

dilutive potential equity shares, if any. 

m. Provisions and Contingencies 




discounted to its present value and are determined based on management estimate 



A disclosure for a contingent liability is made when there is a possible obligation or 

a present obligation that may, but probably will not, require an outflow of resources. 

When there is a possible obligation or a present obligation, in respect of which the 

likelihood of outflow of resources is remote, no provision or disclosure is made. 

n. Cash and Cash Equivalents 

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand 

and short-term investments with an original maturity of three months or less. 

o. Derivative instruments 

Consistent with the Institute of Chartered Accountants of India Announcement, 

accounting for derivative contracts other than those covered under AS-11 – The 

Effects of Changes in Foreign Exchange Rates are marked to market on a portfolio 

basis, and the net loss after considering the offsetting effect on the underlying hedge 

item is charged to the income statement. Net gains are ignored. 

3. Future operations: 

The net worth of the Company is completely eroded as at March 31, 2010. The Company 

recorded a profit after tax of Rs 13.33 Million for the year ended March 31, 2010. The 

Company however is able to operate uninterruptedly with continued financial support of its 

ultimate holding company. Also, based on the turn-around strategy adopted by the Company 

and the continued financial support of its ultimate holding company, the management 

projects that the Company will continue to generate profits in the future. Based on the 

above, the management believes that the Company will be able to continue as a going 

concern and thereby realize its assets and discharge its liabilities in the normal course of its 

business. 

4. Commitments & Contingent Liabilities 


a) Claims against the Company not acknowledged 

as debts not provided for including disputed taxes 26,702,854 3,300,000 

b) Estimated amount of contract remaining to be 

executed on capital account and not provided Nil Nil 


The Company’s operations constitute a single segment, Software Solutions. Hence, business 

segment is the primary segment for the Company. 

Secondary Segments (by Geography) 

Revenue March 31, March 31, 



Europe 33,836,475 33,325,177 

India 558,000 — 

128,706,625 269,031,541 

Assets : Debtors and unbilled revenue 

Debtors March 31, March 31, 



Europe 858,367 15,802,579 

India 615,474 — 

7,649,400 21,869,261 

6. Related party disclosures 

(i) Names of related parties 

1) Controlling Company 

• Aditya Birla Nuvo Limited (ABNL) - Ultimate Holding Company 

• Aditya Birla Minacs IT Services Limited (formerly PSI Data Systems Limited) - 


(451)

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(ii) 

2) Manager 

• Mr. Paneesh Rao (w.e.f 21 st October, 2008). 

3) Fellow Subsidiaries 

• Aditya Birla Capital Limited (ABCL) [formerly Laximanarayan Investment 

Limited] 

During the year, the Company has entered into transactions with related parties. 

Those transactions along with related balances as at March 31, 2010 and March 

31, 2009 and for the years then ended are presented in the following table: 


Transactions with related parties 

Software services 

— Aditya Birla Minacs IT Services Limited 2,454,650 8,581,957 

— Aditya Birla Nuvo Limited (Madura Garments 

Division) [Net of Service tax (2010 - Rs 54,474) 

(2009 – Rs.Nil)] 558,000 — 

Subcontracting expenses 

— Aditya Birla Minacs IT Services Limited 

[Net of Service tax (2010 - Rs 11,054,620) 

(2009 – Rs.23,402,854)] 107,326,410 223,790,156 

Expenses paid on behalf of the Company 

by the related party 

— Aditya Birla Minacs IT Services Limited (1,882,420) (4,535,166) 

Interest expense 

— Aditya Birla Nuvo Limited 4,561,247 — 

— Aditya Birla Capital Limited — 53,918 

Unsecured loans taken 


— Aditya Birla Capital Limited (LIL) — 61,500,000 

Balances Receivable or Payable 



Amounts Receivable 

— Aditya Birla Nuvo Limited 

(Madura Garments Division) 615,474 — 

— Aditya Birla Minacs IT Services Limited — 929,359 

Amounts Payable 

— Aditya Birla Minacs IT Services Limited 5,093,793 68,795,183 

Guarantees taken from 

— Aditya Birla Nuvo Limited 120,000,000 120,000,000 

7. Leases: Operating leases 

The Company has entered into cancellable operating leases for its Office premises. Rent 

expense for such operating leases recognized in the Profit and Loss Account for the year is 

Rs. 61,203 (2009: Rs.340,470). 

8. The timing differences relate mainly to depreciation and unabsorbed losses and the net 

effect of such differences will result in a deferred tax asset. As a measure of prudence such 

net deferred tax asset relating to the above periods has not been recognised in the accounts. 

9. Employee Benefits 

The Company has defined contribution as well as defined benefit gratuity plan. Defined 

contribution plan includes contribution to pension fund for overseas employees. Every 

employee who has completed five years or more of service gets a gratuity on departure at 

15 days’ salary (last drawn salary) for each completed year of service. The scheme is 

unfunded as at March 31, 2010 and hence the disclosures with respect to plan assets as 

per Accounting Standard 15 are not applicable to the Company. 

The Company also provides compensated absences to its employees based on the 

Company’s policy. 

a) Defined Contribution Plan: 

Expenses towards defined contribution plan charged to profit & loss account 


Contribution to Overseas Pension Plans 488,331 1,080,300 

Total 488,331 1,080,300 

b) Defined Benefits Plans 

i) Gratuity: 

Net employee benefit expense (recognised in profit and loss account) 

Gratuity 


Current Service Cost 56,043 102,361 



Past Service Cost — — 

Actuarial Losses/(Gains) (93,363) (65,817) 

Total Expense to be recognized in 

the Profit and Loss Account (18,099) 56,397 

Details of Provision for gratuity (Balance Sheet) 

Gratuity 


Defined benefit obligation 183,564 278,855 

Fair Value of Plan Assets — — 

Funded Status [Surplus/ (Deficit)] (183,564) (278,855) 

Less: Unrecognised past service cost — — 

Plan asset / (liability) (183,564) (278,855) 

Changes in present value of the defined benefit obligation are as follows: 

Gratuity 


Opening Defined benefit obligation 278,855 344,766 


Current service cost 56,043 102,361 

Benefits paid (77,192) (122,308) 

Actuarial (gains)/losses on obligation (93,363) (65,817) 

Closing defined benefit obligation 183,564 278,855 

The principal assumptions used in determining gratuity are shown below: 


% % 

Discount rate 8 7 

Increase in compensation cost 8 6 

Attrition Rate 16 5 

The estimates of future salary increases, considered in actuarial valuation, take account 

of inflation, seniority, promotion and other relevant factors, such as supply and demand 

in the employment market. 

Details for Provision for gratuity for the current and previous year are as follows: 

Gratuity 


Defined benefit obligation 183,564 278,855 

Plan assets — — 

Surplus / (deficit) (183,564) (278,855) 

Experience adjustments on plan liabilities — — 

Experience adjustments on plan assets — — 

ii) Leave encashment: 

Leave encashment benefit expensed in the Profit & Loss Account for the year is Rs. Nil 

(2009 - Rs.164,007). The Company reversed a sum of Rs. 422,013 during the year 


10. Supplementary Statutory Information 


(i) Earnings in foreign currency (on accrual basis) 

Software services 128,148,625 269,031,541 

128,148,625 269,031,541 

(452)

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(ii) 

Payment to auditors include the following amounts paid/payable to auditors (excluding 

service tax): 


– Statutory Audit 400,000 750,000 

– Tax Audit 50,000 50,000 

– Out-of-pocket expense 5,507* 4,157 

* paid to erstwhile auditor. 

455,507 804,157* 

(iii) 

Expenditure in Foreign Currency 

Salaries, allowances and bonus 5,016,309 14,106,775 

Professional and consultancy charges 664,293 848,749 


8,328,116 19,049,420 

11. Derivative Instruments and Unhedged Foreign Currency Exposure 

The Company has taken foreign exchange forward contracts to mitigate its risks associated 

with foreign currency fluctuations in respect of highly probable forecast transactions. The 

Company does not enter into any forward contracts which are intended for trading or 


The details of forward contracts outstanding at March 31, 2010 and March 31, 2009 

(indicated within brackets) are as follows: 

Currency Number of Amount in Indian 

contracts foreign Rupees 

currency equivalent 

US Dollar 7 700,000 33,180,000 

(19) (2,409,353) (123,883,426) 

Particulars of Unhedged foreign currency exposure as at Balance Sheet date 


Foreign Equivalent Foreign Equivalent 

currency (Rs.) currency (Rs.) 

Receivables - GBP 10,074 673,548 65,586 4,722,192 

Advances and Deposits – USD — — 5,607 281,979 

Creditors - USD 11,913 546,078 29,602 1,528,647 

12. Based on the information available with the Company, there are no suppliers who are 

registered as micro, small or medium enterprises under The Micro, Small and Medium 

Enterprises Development Act, 2006 as at March 31, 2010 and 2009. 

13. The financial statements of the previous year ended March 31, 2009 were audited by a 

firm of Chartered Accountants other than M/s S.R. Batliboi & Co. The figures of previous 

year have been regrouped/reclassified, where necessary, to conform to the current year’s 







per Vijay Maniar Deepak J Patel Sushil Agarwal 

Partner Chief Executive Officer Director 


Ramesh Kamath 


Place : Mumbai Chief Financial Officer Director 




Place: Mumbai 


(453)

C M Y K 


Part IV - Balance Sheet Abstract and Company’s General Business Profile 


Registration No. 31939 

State Code 08 

Balance Sheet Date 31.03.2010 

II. Capital Raised During the Year (Rs. in ‘000) 

Public Issue 

Rights Issue 

Bonus Issue 

Private Placement - Pref. Capital 

NIL 

NIL 

NIL 

NIL 

III. Position of Mobilisation And Deployment of Funds (Rs. in ‘000) 

Total Liabilities 419,580 

Total Assets 419,580 


Paid-up Capital 98,004 

Reserves and Surplus 195,077 

Secured Loans 

NIL 

Unsecured Loans 126,500 


Net Fixed Assets 

NIL 

Investments 

NIL 

Net Current Assets 30,719 


NIL 

Accumulated Losses 388,861 

IV. 

Performance of Company 

Turnover 138,197 

Total Expenditure 124,797 

Profit Before Taxes 13,400 

Profit After Taxes 13,325 

Earnings Per Share In Rs 1.36 

Dividend Rate % 0% 

V. Generic Names of the Principal Products/Services of Company 

(as per monetary terms) 

Item Code No. (ITC Code) 84712009 


Computers Hardware 

Item Code No. (ITC Code) 85249002 


Computers Software 




Ramesh Kamath 



Director 


Director 

Place: Mumbai 




(454)

C M Y K 

MADURA GARMENTS LIFESTYLE RETAIL COMPANY LIMITED 



Madura Garments Lifestyle Retail Company Limited 

Your Directors are pleased to present the Third Annual Report together with 

the Audited Statement of Accounts of the Company for the financial year 

ended 31st March 2010. 


Rs in crores 

2009-10 2008-09 

Net Income 25.4 3.8 

Operating profit before interest 

and depreciation (16.0) (39.8) 

Depreciation 7.1 3.1 

Interest 13.8 5.8 

Loss Before Tax (36.9) (48.6) 

Income Tax — — 

Fringe Benefit Tax — 0.2 

Loss after Tax (36.9) (48.8) 

Profit and Loss Account balance 

brought forward (59.5) (10.7) 

Balance carried forward (96.4) (59.5) 

REVIEW OF PERFORMANCE 

The Company is currently operating with two large format retail stores, at 

Mumbai and Bangalore. The store at Mumbai was launched during the 

financial year in October 2009. 

The Collective concept has been well received by its target customers. With 

increased scale of operations, the terms of trade have been favorably 

renegotiated with several international brands. The Collective has 

demonstrated its capability to deliver at international standards of retail, 

which has helped improve its brand portfolio. International brands such as 

Polo Ralph Lauren, Dolce & Gabbana are now being retailed through the 

stores. 

The Mumbai store has been positioned as an anchor store in “The Palladium 

Mall”. The store has been well received by its target customers. 

The Company’s third store will be launched during the coming financial 

year at Ambience Mall, Delhi. 

During the year, your Company also started a separate institutional business 

segment, which caters to customized orders from institutions. 

PROSPECTS 

The Indian luxury products market is poised to touch USD 2.55 billion by 

2015 (Source: ATK India’s Luxury Review). The Collective, with its unique 

lifestyle offering and its stores located in the mega cities, is well positioned 

to achieve a leadership position in this market. 

DIVIDEND 

In view of the accumulated losses the Board of Directors has not 

recommended any dividend for the financial year ending 31st March, 2010. 


Your Company has not accepted any deposits during the financial year 

ending 31st March, 2010. 

AUDITORS 

Your Company’s statutory auditors Deloitte Haskins & Sells, shall retire at 

the conclusion of the ensuing Annual General Meeting and offer themselves 

for re-appointment as the statutory auditors of the Company. Your Directors 

request you to appoint Auditors for the current year as set out in the 

accompanying notice of the Annual General Meeting. 

The observations made in the Auditors’ Report are self-explanatory and 

therefore do not call for any further comments under Section 217(3) of the 


REGISTERED OFFICE 

The Registered Office of your Company was shifted to Veraval, Gujarat 

during the current financial year, for administrative convenience and 

commercial expediency. 

DIRECTORS 

a. Appointment 

Mr. Sushil Agarwal was appointed as an Additional Director of the 

Company by the Board of Directors at its meeting held on 20 th July 


Mr. S Visvanathan was appointed as an Additional Director of the 

Company by the Board of Directors at its meeting held on 30 th September 


Mr. Deepanjan Bandyopadhyay was appointed as an Additional Director 

of the Company by the Board of Directors at its meeting held on 30 th 

September 2009. 

b. Resignation 

Mr. Adesh Kumar Gupta and Mr. Deepanjan Bandyopadhyay have 

resigned as Directors of the Company during the year. 

The Board places on record its appreciation for the valuable 

contributions made by Mr. Adesh Kumar Gupta and Mr. Deepanjan 

Bandyopadhyay during their tenure as Directors of the Company. 

Mr. Pranab Barua retires by rotation at the ensuing Annual General 




confirm that: 

i. in the preparation of the annual accounts, the applicable accounting 



ii. they have selected such accounting policies and applied them 




Company for that period; 

iii. they have taken proper and sufficient care for the maintenance of 

adequate accounting records in accordance with the provisions of the 

Companies Act, 1956, for safeguarding the assets of the Company 


iv. they have prepared the annual accounts on a ‘going concern basis’. 


Information required to be provided under Section 217(2A) of the Companies 

Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, 

forms part of this report. 

ANNEXURES 

Required information as per Section 217(1) (e) and 217(2A) of the Companies 

Act, 1956, are Annexed. 

APPRECIATION 

Your Directors wish to place on record their appreciation of the support 

which the Company has received from its shareholders, customers, suppliers, 

bankers, press and other business associates. Your Directors gratefully 

acknowledge the ongoing co-operation and support provided by Central 

and State Governments and all Regulatory bodies. 

Your Directors place on record their deep appreciation of the dedication 

and commitment of the employees at all levels and look forward to their 

continued contribution in the future as well. Their dedicated efforts and 

enthusiasm have been pivotal for your Company’s growth. 

By and on behalf of the Board 

Place: Bangalore Ashish Dikshit S. Visvanathan 

Date: April 28, 2010 Director Director 

(455)

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ANNEXURE TO THE DIRECTORS’ REPORT DATED APRIL 28, 2010 

(A) Statement pursuant to Sec. 217(1)(e) of the Companies Act, 1956 

read with Companies (Disclosure of Particulars in the Report of 

Board of Directors) Rules, 1988 and forming part of the Directors’ 

Report for the period ended 31 st March, 2010 

I. Conservation of Energy 

In line with the Company’s declared commitment towards 

conservation of natural resources, the Company is engaged in 

the continuous process of energy conservation through improved 

operational and maintenance practices. 

II. 

III. 

Technology Absorption 

The Company’s activity is mainly that of trading of readymade 

garments, accessories and services. Every effort is made to utilize 

the best technology for making available the products to its intended 

consumers. Efforts to improve productivity by innovative work 

methods and adoption of better production technology are parts 

of a continual process. 

Foreign Exchange Earning and Outgo 

During the year under review, the Company spent Rs.7.7 crores 

(consisting of Rs.2.5 crores on capital imports and Rs.5.2 crores 

on the revenue account). 

(B) 

Particulars of Employees forming part of the Directors’ Report, for the year ended 31 st March 2010. Information pursuant to Section 

217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules,1975 

Particulars of last Employment held 

Sl. Name Qualification Age Expe- Date of Designation/ Gross 

before Joining the Company 

No. (Yrs) rience Commencement Nature of Remuneration Name of Designation Period of 

(Yrs) of Employment Duties Rs Employer Service (Years) 

1 George M Santacroce University 61 40 1-Aug-07 Chief Executive 36,584,018 Seattle Pacific President 1 

Graduate Officer Industries Saltaire 

2 Julie Woodhead University 48 29 28-Apr-08 General 9,840,658 Moss Bros Head - 0.5 

Graduate Merchandising PLC Merchandising 

Manager 

3 Ram Narayan Iyer PGDM; BE 39 15 1-Aug-08 Director 7,353,483 Aditya Birla Director - 0.5 

Operations Nuvo Ltd. Operations MLS 

4 Anjali Jain* PG in Fashion 44 23 1-Aug-08 Category Buyer 3,022,680 Aditya Birla Category 0.5 

Designing BSc Nuvo Ltd. Buyer - MLS 

5 Jays Chandy* M.Tech; 39 14 1-Sep-08 Head - Human 617,949 MindTree GM-People 8 

B.Tech Resources Ltd. Function 

6 G Mohana Sundaram* ACS; ICWAI; 41 21 1-Aug-08 Head Finance 1,157,773 Aditya Birla Head - Finance 1 

M.Com, Nuvo Ltd. MLS 

B.Com 

7 Sanjay Katara* MBA; B.Com 36 12 1-Aug-08 Head Retail 2,144,677 Aditya Birla Head - Retail 0.25 

Operations Nuvo Ltd. Operations MLS* 

Notes: 

1. Gross remuneration shown above is subject to tax and comprises of basic salary, allowances, monetary value of perquisites and Company’s contribution 

towards provident and superannuation funds. 

2. None of the above employees is related to any Director of the Company. 

3. The nature of employment in all cases is contractual. 

4. * Indicates employed for part of the year. 

(456)

C M Y K 



To, 

The Members of Madura Garments Lifestyle Retail Company Limited 

1) We have audited the attached Balance Sheet of Madura Garments 

Lifestyle Retail Company Limited (the “Company”) as at March 31, 

2010, the Profit and Loss Account, and the Cash Flow Statement for 

the year ended on that date, both annexed thereto. These financial 




2) We conducted our audit in accordance with auditing standards generally 






the accounting principles used and significant estimates made by the 

Management, as well as evaluating the overall financial statement 


our opinion. 

3) As required by the Companies (Auditor’s Report) Order, 2003 (CARO) 

issued by the Central Government in terms of Section 227(4A) of the 

Companies Act, 1956, we enclose in the Annexure, a statement on the 

matters specified in paragraphs 4 and 5 of the said Order. 

4) Further to our comments in the Annexure referred to in paragraph 3 

above, we report as follows: 

(a) we have obtained all the information and explanations, which to 



(b) in our opinion, proper books of account as required by law have 

been kept by the Company, so far as it appears from our 

examination of those books; 

(c) the Balance Sheet, the Profit and Loss Account, and the Cash Flow 


of account; 

(d) in our opinion the Balance Sheet, the Profit and Loss Account, and 

the Cash Flow Statement dealt with by this report are in compliance 

with the Accounting Standards referred to in Section 211 (3C) of 


(e) In our opinion and to the best of our information and according 





(i) in the case of the Balance Sheet, of the state of affairs of the 


(ii) in the case of the Profit and Loss Account, of the loss of the 


(iii) in the case of the Cash Flow Statement, of the cash flows of 


5) On the basis of the written representations received from the directors 

of the Company, as on March 31, 2010, taken on record by the Board 

of Directors, we report that none of the directors is disqualified as on 

March 31, 2010 from being appointed as a director in terms of Section 

274 (1) (g) of the Companies Act, 1956. 

For Deloitte Haskins & Sells 


(Registration No. 008072S) 

S. Sundaresan 

Place: Bangalore, 

Partner 

Date : April 28, 2010 Membership No. 25776 

(457)

C M Y K 


ANNEXURE TO THE AUDITORS’ REPORT 

(Referred to in paragraph 3 of our report of even date) 

1. Having regard to the nature of the Company’s business /activities / 

results, clauses 4(xii), 4(xiii) and 4(xiv) of CARO are not applicable. 

2. In respect of its fixed assets: 

(a) The Company has maintained proper records showing full 

particulars including quantitative details and situation of fixed 

assets. 

(b) The fixed assets were physically verified during the year by the 

Management in accordance with a regular programme of 

verification which, in our opinion, provides for physical verification 

of all the fixed assets at reasonable intervals. According to the 

information and explanations given to us, no material 

discrepancies were noticed on such verification. 

(c) The fixed assets disposed off during the year, in our opinion, do 

not constitute a substantial part of the fixed assets of the Company 

and such disposal has, in our opinion, not affected the going 

concern status of the Company. 

3. In respect of inventories: 

(a) As explained to us, the inventories were physically verified during 

the year by the Management at reasonable intervals. 

(b) In our opinion and according to the information and explanations 

given to us, the procedures of physical verification of inventory 

followed by the Management were reasonable and adequate in 

relation to the size of the Company and the nature of its business. 

(c) In our opinion and according to the information and explanations 

given to us, the Company has maintained proper records of its 

inventories and no material discrepancies were noticed on 

physical verification. 


unsecured, to/from companies, firms or other parties listed in the 

Register maintained under Section 301 of the Companies Act, 1956 

and therefore, clause 4(iii) of CARO is not applicable. 



with the size of the Company and the nature of its business with regard 

to purchases of inventory and fixed assets and the sale of goods and 

services. During the course of our audit, we have not observed any 

major weakness in such internal control system. 

6. To the best of our knowledge and belief and according to the 

information and explanations given to us, there are no contracts or 

arrangements that needed to be entered into the register maintained 

under the section 301 of the Companies Act, 1956 and therefore, 

clause 4(v) of CARO is not applicable. 

7. According to the information and explanations given to us, the 

Company has neither accepted any deposit from the public nor had 

any unclaimed deposits during the year. Accordingly clause 4(vi) of 

CARO is not applicable. 

8. The Company has an internal audit system which is commensurate 

with the size of the Company and the nature of its business. 

9. According to the information and explanations given to us, the Central 

Government has not prescribed the maintenance of cost records under 

section 209(1) (d) of the Companies Act, 1956, for any of the products 

of the Company and therefore, clause 4(viii) of CARO is not applicable. 

10. According to the information and explanations given to us in respect 

of statutory dues: 

(a) The Company has generally been regular in depositing 

undisputed dues, including Provident Fund, Investor Education 

and Protection Fund, Employees’ State Insurance, Income-tax, 

Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, 

Cess and other material statutory dues applicable to it with the 

appropriate authorities. 

(b) There were no undisputed amounts payable in respect of 

Provident Fund, Investor Education and Protection Fund, 

Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, 

Service Tax, Custom Duty, Excise Duty, Cess and other material 

statutory dues in arrears as at 31st March, 2010 for a period of 

more than six months from the date they became payable. 

(c) According to the information and explanations given to us, we 

are not aware of any disputed Income tax, Service Tax, Sales 

Tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have 

not been deposited as on March 31, 2010. 

11. The Company has been registered for a period less than five years 

and therefore, clause 4(x) of CARO is not applicable. 


given to us, the Company has not defaulted in repayment of dues to 

banks and debenture holders and during the year there were no dues 

repayable to financial institutions. 

13. The Company has not given any guarantees during the year for loan 

taken by others from banks or financial institutions and therefore, clause 

4(xv) of CARO is not applicable. 

14. The Company has not availed any new term loans during the year 

and therefore, clause 4(xvi) of CARO is not applicable. 

15. In our opinon and according to the information and explanations 

given to us and on an overall examination of the balance sheet, we 

report that funds raised on short term basis have not been used during 

the year for long term investments. 

16. The Company has not made any preferential allotment of shares during 

the year and therefore, clause 4(xviii) of CARO is not applicable. 

17. According to the information and explanations given to us and the 

records examined by us, the Company has alloted compulsorily 

convertible debentures which are unsecured and no securities / charges 

have been created in respect of such debentures. 

18. The Company has not raised any money by way of public issue during 

the year and therefore, clause 4(xx) of CARO is not applicable. 

19. To the best of our knowledge and according to the information and 

explanations given to us, no fraud by the Company and no material 

fraud on the Company has been noticed or reported during the year. 

For Deloitte Haskins & Sells, 



S. Sundaresan 

Place: Bangalore, 

Partner 

Date : April 28, 2010 Membership No. 25776 

(458)

C M Y K 


BALANCE SHEET 




Rs. 

Rs. 


Shareholders’ Funds: 

Share Capital 1 200,000,000 200,000,000 

Loan Funds: 

Secured Loans 2 534,117,450 562,441,545 


Total Funds Employed 1,525,417,450 962,241,545 


Fixed Assets: 

Gross Block 4 385,672,916 313,401,830 

Less: Depreciation 101,349,589 30,702,720 

Net Block 284,323,327 282,699,110 

Capital Work-in-Progress 100,554,448 13,112,765 

384,877,775 295,811,875 

Investments — — 

(Refer Note 17 B7) 

Current Assets, Loans and Advances: 

Inventory 5 126,585,456 106,189,278 

Sundry Debtors 6 31,026,271 664,892 



313,332,835 298,926,118 

Less: Current Liabilities & Provisions: 


Provisions 3,889,510 3,212,898 

136,507,628 227,294,301 


Debit balance in Profit and Loss Account 963,714,468 594,797,853 

Total Funds Utilized 1,525,417,450 962,241,545 


Notes on Accounts 17 (0.00) 

Schedules referred to above form an integral 

part of the Balance Sheet 


For the Year Ended 31st March, 2010 

INCOME 


Year ended year ended 


Rs. 

Rs. 

Income from Operations 10 254,072,474 38,458,628 

Other Income 11 50,058,210 7,007 

304,130,684 38,465,635 

EXPENDITURE 

Cost of Materials 12 215,625,472 143,795,597 

Employee Cost 13 81,132,691 162,245,915 

Manufacturing, Selling 

and Other Expenses 14 187,352,082 236,311,904 

Depreciation and Amortization 4 70,986,697 30,548,041 

Interest and Other 

Finance Expenses 15 138,346,535 58,127,222 

(Increase) / Decrease 

in Inventory 16 (20,396,178) (106,189,278) 

673,047,299 524,839,401 

Profit / (Loss) before Tax (368,916,615) (486,373,766) 


Current Tax — — 

Deferred Tax (Refer Note 17 B13) — — 

Fringe Benefit Tax 1,890,630 

Profit / (Loss) After Tax (368,916,615) (488,264,396) 


from previous year (594,797,853) (106,533,457) 

Profit / (Loss) carried to 

Balance Sheet (963,714,468) (594,797,853) 

Earnings / (Loss) per share of the face 

value of Rs. 10/- each 

(Refer Note 17 B8) 

Basic Earnings per share - Rs. (38) (2,622) 

Diluted Earnings per share - Rs. (38) (2,622) 



Schedules referred to above form an integral part of the Profit & Loss Accounts 









S. Sundaresan Ashish Dikshit S. Visvanathan 




Place : Bangalore 

Date : 28th April 2010 

G. Mohana Sundaram 






(459)

C M Y K 






Cash Flow from Operating Activities 

Profit / (Loss) before tax (368,916,615) (486,373,766) 


Depreciation 70,986,697 30,548,041 


Profit on sale of investments (9,222,539) — 

Interest received (39,747,462) (7,007) 

Share Issue Expenses 199,500 1,289,500 

Provision for Marked to Market Loss 2,409,198 — 

Foreign Exchange Gain (38,148) 93,328 

Provision for earlier years written back (22,913,721) — 

Provision for Doubtful Advances / Deposits 1,790,000 291,434 

141,810,060 90,342,518 

Operating Loss before working capital changes (227,106,555) (396,031,248) 

(Increase) / Decrease in Accounts Receivables (30,361,379) 837,081 

(Increase) / Decrease in Inventory (20,396,179) (106,189,278) 

(Increase) / Decrease in Loans and Advances 51,128,672 (145,016,416) 

Increase / (Decrease) in Current Liabilities and Provisions (37,071,743) 168,520,983 

(36,700,629) (81,847,630)) 

Cash generated from operations (263,807,184) (477,878,878) 

Taxes paid (including Fringe Benefit Tax) (3,495,645) (1,390,630) 

Net Cash Used in Operating Activities (267,302,829) (479,269,508) 

Cash Flow From Investing Activities 


Proceeds from Sale of Fixed Assets 827,072 567,179 

Proceeds on sale of investments 9,222,539 — 

Interest received 39,430,623 7,007 

Net Cash Used in Investing Activities (116,964,647) (236,643,436) 

Cash Flow from Financing Activities 

Proceeds from Issue of Equity Share Capital — 99,500,000 

Proceeds from Issue of Preference Share Capital — 100,000,000 

Proceeds from Borrowings from Others 391,500,000 — 

Proceeds from issue of 0% compulsorily Convertible Debentures 200,000,000 — 

Proceeds from Borrowings from Banks (28,324,095) 562,441,545 

Repayment of Inter Corporate Deposits — (13,300,000) 

Share Issue Expenses (199,500) (1,289,500) 

Interest paid (165,953,581) (30,476,339) 

Net Cash from Financing Activities 397,022,824 716,875,706 

Net Increase in Cash and Cash Equivalents 12,755,348 962,762 

Cash and Cash Equivalents at Beginning of the Year 2,062,773 1,100,011 

Cash and Cash Equivalents at the end of the Year (Refer Note 2 Below) 14,818,121 2,062,773 

Notes - 

1. The above cash flow statement has been prepared under the "Indirect Method" as set out in the Accounting Standard - 3 under Companies Accounting Standard Rule, 2006 

on Cash Flow Statements prescribed. 

2. Cash and Cash Equivalents 

Cash and Cash equivalents included in the cash flow statement comprises the following balance sheet amounts 


Cash in Hand 100,219 34,102 

Balances with banks 

On Current Accounts 10,835,702 183,471 

On Fixed Deposits Account 3,882,200 1,845,200 

3. Cash and Cash equivalent include restricted bank balance of Rs 3,882,200 (Previous Year Rs. 1,845,200). 

4. Previous year's figures have been regrouped/rearranged, wherever considered necessary, to conform to current year's presentation. 


14,818,121 2,062,773 










(460)

C M Y K 


SCHEDULES FORMING PART OF THE BALANCE SHEET 

As at 

As at 



Rs. 

Rs. 


Authorised 

10,000,000 (Previous Year 10,000,000) 

Equity Shares of Rs. 10 each 100,000,000 100,000,000 

10,000,000 (Previous Year 10,000,000) - 

8% Redeemable Cumulative Preference 

Shares of Rs. 10 each 100,000,000 100,000,000 

Total 200,000,000 200,000,000 

Issued, Subscribed & Paid-up: 

10,000,000 (Previous Year 10,000,000) 

Equity Shares of Rs. 10 each, Fully paid-up* 100,000,000 100,000,000 

10,000,000 (Previous Year 10,000,000) - 

8% Redeemable Cumulative Preference 

Shares of Rs. 10 each** 100,000,000 100,000,000 

*Includes 

-10,000,000 (Previous year 9,950,000) 

Equity Shares held by the Holding Company, 


-Nil (Previous year - 50,000) Equity shares 

held by Aditya Birla Capital Limited (formerly 

Laxminarayan Investments Limited) 

(Holding company until 26th March, 2009) 

**All the above mentioned Preference Shares 

are held by the Holding Company Aditya Birla 

Nuvo Limited (Refer note 17 B15) 

Total 200,000,000 200,000,000 

As at 

As at 



Rs. 

Rs. 


Term Loan from Banks 480,000,000 480,000,000 

(Secured by First charge on hypothecation 

of Furniture and Fixtures and other movable 

fixed assets, present / future and first charge on 

the current assets of the company / present and future) 

Corporate Guarantee by Holding Company- 


(Amount Payable within one year Nil (previous year Nil)) 

Working Capital Borrowings from Banks 54,117,450 82,441,545 

(Secured by Second charge by way of hypothecation of 

Company's entire Current assets including stocks of raw 

materials, semi-finished and finished goods, consumable 

stores and spares and such other movables, book debts, 

bills whether documentary or clean, outstanding monies, 

receivables, both present & future) 

Corporate Guarantee by Holding Company- 


534,117,450 562,441,545 


200 (Previous Year Nil) Zero Coupon fully and 

compulsorily Convertible Debentures of Rs 1,000,000/- 

each at par (Refer Note 17 B16) 200,000,000 — 

Inter Corporate Deposit - Holding Company 591,300,000 199,800,000 

(Amount repayable within one year - Nil (Previous Year Nil)) 

791,300,000 199,800,000 

SCHEDULE 4 - FIXED ASSETS AND DEPRECIATION 



Description As at Additions Deduction/ As at As at For the Deduction/ As at As at As at 

31st Mar Adjustments 31st Mar 31st Mar Year Adjustments 31st Mar 31st Mar 31st Mar 

2009 2010 2009 2010 2010 2009 

A. Tangible Assets 

Leasehold Improvements 10,121,287 — — 10,121,287 1,240,364 1,240,368 — 2,480,732 7,640,555 8,880,923 

Plant and Machinery 12,224,782 12,304,884 — 24,529,666 967,882 3,273,888 — 4,241,770 20,287,896 11,256,900 

Computer and Accessories 4,651,271 988,223 48,500 5,590,994 744,426 1,117,019 11,519 1,849,926 3,741,068 3,906,845 

Office Equipments 13,603,112 1,446,122 — 15,049,234 1,719,464 2,922,282 7,900 4,633,846 10,415,388 11,883,648 

Fixtures and Fittings 232,096,585 56,909,589 — 289,006,174 20,236,667 51,708,508 — 71,945,175 217,060,999 211,859,918 

Vehicles 5,710,995 228,852 1,118,398 4,821,449 1,231,201 987,852 320,409 1,898,644 2,922,805 4,479,794 

Sub-Total - Tangible Assets (A) 278,408,032 71,877,670 1,166,898 349,118,804 26,140,004 61,249,917 339,828 87,050,093 262,068,711 252,268,028 

B. Intangible Assets 

Technical Know-how 14,078,512 — — 14,078,512 1,218,852 2,815,703 — 4,034,555 10,043,957 12,859,660 

Specialised Software 20,915,286 1,560,314 — 22,475,600 3,343,864 6,921,077 — 10,264,941 12,210,659 17,571,422 

Sub-Total - Intangible Assets (B) 34,993,798 1,560,314 — 36,554,112 4,562,716 9,736,780 — 14,299,496 22,254,616 30,431,082 

Grand Total (A+B) 313,401,830 73,437,984 1,166,898 385,672,916 30,702,720 70,986,697 339,828 101,349,589 284,323,327 282,699,110 

Previous Year 3,293,295 310,863,210 754,675 313,401,830 342,175 30,548,041 187,496 30,702,720 282,699,110 

As at 

As at 



Rs. 

Rs. 

SCHEDULE 5 - NVENTORY 

(At lower of cost and net realisable value) 

Finished Goods, Packing Materials and others 126,585,456 106,189,278 

(Includes goods in transit Rs 7,144,711 

(Previous Year Rs 2,056,737) 

126,585,456 106,189,278 



Due for period exceeding six months — 546,515 

Others 31,026,271 118,377 

31,026,271 664,892 

SCHEDULE 7 - CASH & BANK BALANCES 

Cash in hand 100,219 34,102 


On Current Accounts 10,835,702 183,471 

On Fixed Deposit Accounts (Under lien to 

Bank for issuing guarantees) 3,882,200 1,845,200 

14,818,121 2,062,773 

As at 

As at 





Advances recoverable in cash or in kind or value to be received 

considered good* 

Rs. 

44,537,809 

Rs. 

81,169,011 

considered doubtful 2,081,434 291,434 

46,619,243 81,460,445 

Less Provision for doubtful advances 2,081,434 291,434 

44,537,809 81,169,011 

Deposits 91,737,612 108,820,759 

Accrued Interest 316,839 — 

Advance Tax and Tax Deducted at Source 3,328,055 19,405 

Advance Fringe Benefit Tax (Net) 186,995 — 

Advance Gratuity Contribution 795,677 — 

140,902,987 190,009,175 

* Include Recoverable from 

Holding Company-Aditya Birla Nuvo Limited 365,723 — 

Madura Garments Exports Limited — 4,461 

* Maximum amount outstanding during the year 

Aditya Birla Nuvo Limited 365,723 — 

Madura Garments Exports Limited — 4,461 

(461)

C M Y K 


SCHEDULES FORMING PART OF THE BALANCE SHEET 

As at 

As at 



SCHEDULE 9 - CURRENT LIABILITIES & PROVISIONS 

Rs. 

Rs. 

A. Current Liabilities: 

Sundry Creditors 

Due to Micro and Small Enterprises (Refer Note 17 B5) — — 

Due to others* 121,604,836 188,363,472 

Advance from Customers 1,886,878 396,088 

Interest Accrued but not due 43,836 27,650,882 


132,618,118 224,081,403 

* Include due to 



Companies under same management 

Aditya Birla Finance Limited (Interest) 43,836 — 

B. Provisions 

For Employee Benefits 

Gratuity — 672,837 

Leave Encashment 1,030,135 2,089,884 

For Income Tax - Fringe Benefit Tax (Net) 450,177 450,177 

For Others 2,409,198 — 

3,889,510 3,212,898 

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT 


SCHEDULE 10 - INCOME FROM OPERATIONS 31-Mar-2010 31-Mar-2009 

Rs. 

Rs. 

Income from Sale of Apparel and Accessories 252,291,597 38,118,623 

Commission 1,780,877 340,005 

(Tax Deducted at Source Rs.37,267 (Previous Year-Rs.19,405) 

254,072,474 38,458,628 


Profit on sale of current investments 9,222,539 — 

Foreign Exchange Fluctuation Gain 1,088,209 — 

Interest received - Gross 39,747,462 7,007 

(Tax Deducted at Source Rs. 3,284,787 Previous Year Nil) 

50,058,210 7,007 

SCHEDULE 12 - COST OF MATERIALS 

Purchase of Finished Goods 214,480,292 140,847,902 

Purchase of Semi Finished Goods 1,145,180 2,947,695 

215,625,472 143,795,597 

SCHEDULE 13 - EMPLOYEE COST 

Salaries, Wages and Bonus 99,119,413 153,142,277 

Contributions to Provident fund and other funds 2,937,359 4,549,158 

Welfare Expenses 1,989,640 4,554,480 

104,046,412 162,245,915 

Less Employee incentive Provision for earlier years written back 22,913,721 — 

81,132,691 162,245,915 

SCHEDULE 14 - MANUFACTURING, SELLING AND OTHER EXPENSES 

Professional and Consultancy Expenses 33,618,153 61,011,080 


Rent 52,326,385 35,159,549 

Traveling and Conveyance 17,945,936 33,957,696 

Recruitment Expenses 672,595 24,643,988 

Training and Development Expenses 465,414 1,241,164 

Repairs and Maintenance of – Buildings 3,008,772 290,384 

– Plant and Machinery 1,362,467 1,402,800 

– Others 1,453,018 5,475,596 

Postage and Telephone 1,617,278 4,667,337 

Packing Material Expenses 1,792,983 4,046,078 

Office Maintenance 14,845 900,823 

Other Selling Expenses 13,784,082 5,266,637 

Electricity 5,334,547 2,374,314 

Printing and Stationery 979,425 1,939,838 

Rates and Taxes 10,112,924 1,845,008 

Insurance 1,137,586 511,787 

Auditors' Remuneration - (Refer Note 17 B 10) 846,084 736,649 

Legal fees and expenses 13,131 240,750 

Bad Debts 42,365 — 

Provision for Doubtful Debts / Claims 1,790,000 291,434 

Mark to Market loss on outstanding forward cover 

(Refer Note 17 B17 ) 2,409,198 — 


Subscription and Membership 28,009 22,636 

187,352,082 236,311,904 




SCHEDULE 15 - INTEREST AND OTHER 

FINANCE EXPENSES 

Interest On Term Loans 

Rs. 

133,635,365 

Rs. 

54,498,983 

Interest On Working Capital Loan 2,382,770 2,883,611 

Other Finance Charges 2,328,400 744,628 

138,346,535 58,127,222 

SCHEDULE 16 - (INCREASE) / DECREASE IN STOCK 

Closing Stock: 

Finished Goods, Packing Materials and others 126,585,456 106,189,278 

Less: Opening Stock: 

Finished Goods, Packing Materials and others 106,189,278 — 

(20,396,178) (106,189,278) 


A. ACCOUNTING CONVENTION 

Basis of Preparation 

The financial statements have been prepared on historical cost convention based on the 

accrual concept and applicable accounting standards, as a going concern and in 

accordance with Notified Accounting Standards by Companies Accounting Standard Rules, 

2006 and the relevant provisions of the Companies Act, 1956. 


The preparation of the financial statements is in conformity with Indian GAAP, requires that 

the management makes estimates and assumptions that affect the reported amounts of 

assets and liabilities, disclosure of contingent liabilities as at the date of the financial 

statements and the reported amounts of revenue and expenses during the reported period. 

Actual results could differ from those estimates. 

Fixed Assets - Tangible and Intangible 

Fixed assets are stated at cost, less accumulated depreciation/ amortization and impairment 

loss, if any. Cost comprises the purchase price and any attributable cost of bringing the 

asset to its working condition for its intended use. 

Depreciation / Amortization 

Depreciation on Fixed Assets is provided on Straight-Line basis at the rates and in the 

manner specified in Schedule XIV of the Companies Act, 1956 except as stated hereunder. 

Particulars 

Estimated Useful Life 

Computers 

4 Years 

Vehicles 

5 Years 

Assets at Showrooms 

5 Years 

Furniture, Fixtures and Equipments 7 Years 

Office Equipments 

4 Years 

Leasehold Improvements 

Over the primary period of lease 

Technical Know-how 

7 Years 

Specialised Softwares 

3 Years 

Depreciation on fixed assets added / disposed off / discarded during the period is provided 

on pro-rata basis with reference to the date of addition /disposal / discarding. Items of 

value less than Rs. 5,000 are depreciated in full in the period of purchase/acquisition. 


The carrying amount of assets are reviewed at each Balance Sheet date if there is any 

indication of impairment based on internal / external factors. An asset is treated as impaired 

when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if 

any, is charged to Profit and Loss Account in the year in which an asset is identified as 

impaired. Reversal of impairment recognized in prior years is recorded when there is an 

indication that the impairment losses recognized for the assets no longer exist or have 

decreased. 

Borrowing Cost 

Borrowing Costs attributable to acquisition and construction of qualifying assets are 

capitalized as a part of the cost of such asset up to the date when such assets are ready for 

its intended use. 

Other borrowing costs are charged to the Profit and Loss Account. 

Investments 

Current investments are stated at lower of cost and fair value. Long term investments are 

stated at cost after deducting provisions made, if any, for permanent diminution in the 

value. 

Inventories 

Finished Goods including traded goods are valued at lower of cost and net realizable 

value. Finished goods include other direct cost in bringing the inventories to their present 

location and condition. 

Cost of inventories is computed on a weighted average basis. 

(462)

C M Y K 



Sales are recorded on transfer of risk and rewards in the underlying goods and are net of 

trade discounts and rebates and taxes. 

Interest income is recognised on time-proportion basis. 

Revenue in respect of insurance claim is recognised upon lodging of claim with respective 

insurance company. 

Translation of Foreign Currency Items 

Transactions in foreign currency are recorded at the rate of exchange prevailing on the 

date of transaction. Realized gain/ (loss) on such transactions are recognized in the Profit 

and Loss Account. Foreign currency monetary assets and liabilities are restated in to rupees 

at the exchange rate prevailing at the year end. The exchange gain/ (loss) arising out of 

such translations are dealt in the Profit and Loss Account. Premium / Discount in respect of 

forward foreign exchange contracts is amortised as expense/income over the life of the 

contract. Exchange differences on such contracts are recognised in the statement of Profit 

and Loss in the year in which the exchange rates change. Any profit or loss arising on 

cancellation or renewal of forward exchange contract is recognised as income or expense 

for the year/period. 

Employee Benefits 

Short Term Employee Benefits 

All short term employee benefits such as salaries, wages, bonus, special awards, medical 

benefits which fall due within 12 months of the period in which the employee renders the 

related services which entitles him/her to avail such benefits and non accumulating 

compensated absences like sick leave and maternity leave are recognized on an 

undiscounted basis and charged to the Profit and Loss Account. 

Long Term Employee Benefits 

a. Defined Contribution Plan 

Company's contributions paid / payable during the period to Provident Fund 

Scheme, Superannuation Fund and ESI are recognized in the Profit and Loss Account 

on accrual basis. 

b. Defined Benefit Plan 

The Company's liabilities under Payment of Gratuity Act are determined on the 

basis of actuarial valuation made at the end of each financial year / reporting 

period using the projected unit credit method and are fully funded. Actuarial gains 

and losses are recognized immediately in the statement of Profit and Loss Account 


future cash flows using a discounted rate that is determined by reference to market 

yields at the Balance Sheet date on Government bonds where the currency and 

terms of the Government bonds with the currency and estimated terms of the 

defined obligation. 

c. Long Term Compensated Absences 

The Company's liability towards compensated absences is determined by actuarial 

valuation using Project Unit Credit Method based on accumulated leave credit 

outstanding to the employee as on the balance sheet date and is not funded. 

Taxation 

Income tax expense comprises current tax (i.e. amount of tax for the year determined in 

accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax 

effects of timing differences between accounting income and taxable income for the year). 

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets 

are recognized using the tax rates that have been enacted or substantively enacted by the 

balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable 

certainty that the assets can be realized in future; however, where there is unabsorbed 

depreciation or carried forward loss under taxation laws, deferred tax assets are recognized 

only when there is a virtual certainty of realization of such assets. Deferred tax assets are 

reviewed as at each balance sheet date and written down or, written up to reflect the 

amount that is reasonably/virtually certain (as the case may be) to be realized. 

Leases 


are classified as Operating Leases and lease rentals thereon are charged to Profit and 

Loss Account. 

Provisions, Contingent Liabilities and Contingent Assets 

A provision is recognized when an enterprise has a present obligation as a result of past 

event; it is probable that an outflow of resources will be required to settle the obligation, 

in respect of which a reliable estimate can be made. Provisions are not discounted to its 

present value and are determined based on best estimate required to settle the obligation 


Earning Per Share 

Earning per equity share is computed by dividing the net profit / (loss) after tax available 

to equity share holders by the weighted average number of equity shares outstanding 


Diluted earnings per share is computed using weighted average number of equity shares 

outstanding during the year and dilutive potential equity shares outstanding at the year end. 

Cash Flow Statement 

Cash flow statement has been prepared in accordance with the indirect method prescribed 

in Accounting Standard (AS-3) issued under Companies Accounting Standard Rules, 2006. 

The cash flows from regular revenue generating, investing and financing activities of the 

Company are segregated. 

B. NOTES ON ACCOUNTS 

1. The Company has incurred substantial losses during the year and accumulated 

losses as at the year end have exceeded the net worth as on that date. However, 

the Company has embarked on future business plans including growth prospects 

and to turn around in next 5 years. During the year the Company continued receiving 

funds from the holding Company being debenture issued amounting to 

Rs. 200,000,000 and loans amounting to Rs. 391,500,000. Further the holding 

Company has also guaranteed loans availed by the Company from banks. The 

holding company has also assured of continued financial support. Accordingly 

these financial statements have been prepared in accordance with the principles 

applicable to a going concern and the management believes that the Company 

will continue as a going concern and there by realise its assets and discharge its 

liabilities in the normal course of its business. 


Rs. 

Rs. 

2. Estimated amount of contracts remaining to be 

executed on capital account and not provided for — 3,251,262 

3. Contingent Liabilities not provided for: 

a) Claims against the Company not 

acknowledged as debts — — 

b) Bill discounting and Bank guarantees — — 

c) Arrears of Preference Dividend 8,109,589 109,589 

d) Dividend Distribution tax thereon 1,378,225 18,625 

e) Customs duty on capital goods imported 

under EPCG scheme against which export 

obligation is to be fulfilled 3,037,112 1,691,067 

4. a) Capital Work-in-Progress includes 

advances against Capital Expenditure 74,135,315 — 

b) Expenditure capitalised to Fixed assets 

and Capital Work-in-Progress 

(i) Salaries and Wages — 21,922,000 

(ii) Consultancy Expenses 37,465,036 150,241,811 

(iii) Others 54,378 645,361 

5. There are no Micro, Small and Medium to whom the Company owes dues, which 

are outstanding for more than 45 days as at the Balance Sheet date. The above 

information has been determined to the extent such parties have been identified 

on the basis of information available with the Company. This has been relied upon 

by the auditors. 

6. No remuneration has been paid to any of the Directors of the Company 


7. During the year the Company has invested Rs. 3,300,000,000 (Previous year Nil) 

in the units of mutual funds of Birla Sun Life Insurance Limited. The entire investment 

were fully redeemed at Rs. 3,309,222,539 (Previous year Nil). The gain from the 

investing activity of Rs. 9,222,539 (Previous year Nil) has been included under 

other income. The quantitative information related to purchase and sale of the 

abovementioned units are as follows: 

No. of Units 

Name of Units Nature of Opening Purchase Sale Closing 

investments Balance Balance 

Birla Sun Life Saving Units of 

Fund Instl.-Growth Mutual Fund — 249,260,161 249,260,161 — 

Birla Sun Life Cash 

Plus-Inst. Prem.- Units of 

Growth Mutual Fund — 501,701,706 501,701,706 — 

Total 750,961,867 750,961,867 — 

8. Earnings Per Share (EPS) is calculated as under: 

Basic and Diluted earnings per share: 


Rs. 

Rs. 

i) Numerator – Loss after tax (368,916,615) (488,264,396) 

ii) Less: Dividend 8% on Preference 

Shares on Rs 100,000,000/- including 

Dividend Distribution Tax 9,359,600 128,214 

iii) Loss available to Equity Shareholders (378,276,215) (488,392,610) 

iv) Denominator - Weighted Average 

number of Equity Shares outstanding 10,000,000 186,301 

v) Nominal value of shares (Rs.) Rs.10/- Rs.10/- 

Basic earnings per share (38) (2,622) 

Diluted earnings per share (38) (2,622) 

Note : The conversion rate of Zero percent non redeemable, fully and compulsorily 

Convertible Debenture are contingent as per terms of the agreement. However, 

the conversion of such debentures into equity shares would be anti-dilutive in 

computation of Diluted Earnings Per Share. As such the diluted earnings per share 

has been restricted up to the basic earnings per share. 

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9. Employee benefits 

(a) Defined Contribution Plans : 


Rs. 

Rs. 

Amount recognized as an expense and included 

in the Schedule 12 — “Contribution to Provident & 

Other Funds" 

Provident fund of Aditya Birla Nuvo Limited 2,806,339 2,827,393 

Superannuation fund of Aditya Birla Nuvo Limited 196,837 138,922 

Total 3,003,176 2,966,315 

(b) Defined Benefits Plan: 

Gratuity 

Gratuity liability provided for in the books are fully funded with Aditya Birla Nuvo 

Employee Gratuity Fund. The disclosures as required under AS-15 on Employee 

Benefits are as under: 


Rs. 

Rs. 

Net Employee Benefits expenses 

(Recognised in the Employee costs) 

Service Cost 604,325 1,582,843 

Interest Cost 111,724 — 

Expected return (84,811) (15,354) 

Net Actuarial (gain) / loss recognised during the year (634,074) (17,254) 

(2,836) 1,550,235 

Reconciliation of opening and closing balances of 

present value of the defined benefit obligation 

Obligation at the beginning of the year 1,582,843 — 

Service Cost 604,325 1,582,843 

Interest Cost 111,724 — 

Benefits paid (792,841) — 

Actuarial Gain (266,156) — 

Obligation at the end of the Year 1,239,895 1,582,843 

Reconciliation of opening and closing balances of 

fair value of plan assets 

Fair value of the plan asset at the beginning of the year 910,006 — 

Contribution made during the year. 672,837 877,398 

Gratuity liabilities transferred on transfer of employees 420,263 — 

Gratuity paid on behalf of the funds 372,578 — 

Benefits Settled (792,841) — 


Actuarial Gain /(Loss) on plan assets (52,345) 17,254 

Fair value of the plan asset at the end of the Year 1,615,309 910,006 

Reconciliation of present value of defined benefit 

obligation and fair value of plan assets 

Fair value of plan assets 1,615,309 910,006 

Gratuity paid on behalf of the funds for transfer 

of employees 420,263 — 

Present value of defined benefit obligation 1,239,895 1,582,843 

Assets / (Liabilities) recognised in the balance sheet 795,677 (672,837) 

Component of plan assets 

Government of India Securities 353,994 134,453 

Corporate Bonds 28,238 72,627 

Insurer Managed Funds 1,233,077 671,810 

Others — 31,116 

1,615,309 910,006 

Component of plan assets in percentage 

Government of India Securities 22 15 

Corporate Bonds 2 8 

Insurer Managed Funds 76 74 

Others — 3 

100 100 

Actual return on plan assets 

Assumptions: 

Interest rate 8.00% 7.00% 

Discount Factor 8.00% 7.00% 

Estimated rate of return on plan assets 8.00% 8.00% 

Salary Increase 6.00% 6.00% 

Attrition Rate 5.00% 5.00% 

Retirement Age 60 Years 60 Years 

The estimate of future salary increases considered in actuarial valuation, takes 

account of inflation, seniority, promotion and other relevant factors, such as supply 

and demand in the employment market. 

Leave Liability 

Leave salary expensed in the profit and loss account for the Year Nil (Previous year 

Rs. 3,069,000) has been computed on the basis of actuarial principles using 

Projected Unit Credit Method as prescribed under AS 15 on Employee Benefits. 

10. Auditors’ Remuneration 


Rs. Rs. 

For Statutory Audit Fees 300,000 300,000 

For Tax Audit 75,000 75,000 

For Other Services 250,000 250,000 

Reimbursement of Expenses (Including Service Tax) 221,084 111,649 

Total 846,084 736,649 

11. Disclosure in respect of Related Parties pursuant to Accounting Standard 18: 

a) List of Related Parties as on March 31, 2010 

I. Controlling Companies 

1. Aditya Birla Nuvo Limited (ABNL)- Holding Company from March 26, 


2. Aditya Birla Capital Limited (ABCL)- (formerly known as Laxminarayan 

Investment Limited ) - Holiding Company until March 25, 2009 

II. Fellow Subsidiaries 

1. Aditya Birla Financial Services Private Limited (ABFSPL)(w.e.f. November 

4, 2008) 

2. Aditya Birla Capital Advisors Private Limited (ABCAPL) (Subsidiary of 

ABFSPL)(w.e.f. November 4, 2008) 

3. Aditya Birla Customers Services Private Limited (ABCSPL) (Subsidiary of 

ABFSPL)(w.e.f. December 11, 2008) 

4. Aditya Birla Securities Private Limited (ABSPL) (Subsidiary of ABFSPL)(w.e.f. 

November 4, 2008 and ceased to be a subsidiary w.e.f. March 13, 


5. Aditya Birla Trustee Company Private Limited (ABTCPL) (Subsidiary of 

ABFSPL) (w.e.f. November 28, 2008) 

6. Aditya Birla Financial Shared Services Limited (ABFSSL) (Subsidiary of 

ABFSPL)(w.e.f. June 19, 2008) 

7. Aditya Birla Money Limited (ABML) (formerly known as Apollo Sindhoori 

Capital Investment Limited) (Subsidiary of ABFSPL w.e.f. March 6, 


8. Aditya Birla Commodities Broking Limited (ABCBL) (formerly known as 

Apollo Sindhoori Commodities Trading Limited) (100% Subsidiary of 

ABML) (w.e.f. March 6, 2009) 

9. Aditya Birla Money Mart Limited (ABMML) (formerly known as Birla Sun 

Life Distribution Company Limited) (Subsidiary of ABFSPL) (w.e.f. March 


10. Aditya Birla Money Insurance Advisory Services Limited (formerly known 

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

11. Aditya Birla Minacs Worldwide Limited (ABMWL) 

12. Transworks Inc (TW Inc.,) (100% Subsidiary of ABMWL) 

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

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

15. Aditya Birla Minacs Worldwide Inc. (ABMWI) (100 % Subsidiary of AVTL) 

(formerly known as Minacs Worldwide Inc.) 

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

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

18. Compass Business Process Outsourcing Ltd., India 

(w.e.f. March 9, 2010) 

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

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

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

22. Minacs Limited (100 % Subsidiary of ABMWI) 

23. Minacs Worldwide GmbH (100 % Subsidiary of Minacs Limited) 

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

25. Aditya Vikram Global Trading House Limited (AVGTHL) 

26. Aditya Birla Finance Limited (ABFL) (formerly known as Birla Global 

Finance Company Limited (BGFCL)) 

27. Birla Insurance Advisory & Broking Services Limited (BIABSL) 

(50.01% Subsidiary of BGCFPL upto March 30, 2009 and of ABFL 

w.e.f. March 31, 2009) 

28. Birla Sun Life Insurance Company Limited (BSLICL) 

29. Aditya Birla Capital Limited (ABCL) (formerly known as Laxminarayan 

Investment Limited) w.e.f. March 26, 2009 

30. Madura Garments International Brand Company Limited (MGIBCL) 

(on becoming Associate, ceased to be an subsidiary w.e.f. November 


31. LIL Investment Limited (w.e.f. July 27, 2009 and on becoming Associate 

of ABNL, ceased to be an subsidiary w.e.f. November 27, 2009) 

32. Madura Garments Exports Limited (MGEL) (merged with ABNL w.e.f. 


33. Madura Garments Exports US, Inc. (ceased to be a Subsidiary of ABNL 

from February 09, 2010) 

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34 MG Lifestyle Clothing Company Private Limited (MGCCPL) (merged 

with ABNL w.e.f. January 1, 2010) 

35 Peter England Fashions and Retail Company Limited (PEFRL) 

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

Data Systems Limited) 

37 Birla Technologies Limited (100 % Subsidiary of ABMITS) 

III. Key Management Personnel 

1 Pranab Barua Director 

2 Ashish Dikshit Director 

3 Adesh Kumar Gupta Director upto 20.07.2009 

4 Sushil Agarwal Director w.e.f. 20.07.2009 

5 S. Visvanathan Director w.e.f. 30.09.2009 

6 Deepanjan Bandyoapadhyay Director from 30.09.2009 upto 

05.10.2009 

b) During the year, the following transactions were carried out with the related 

parties in the ordinary course of business 

Description Controlling Fellow 

Company Subsidiaries Total 

Rs. Rs. Rs. 

1. Cost of Material and services 


(Division Madura Garments) 

(Finished Goods) 69,267,332 — 69,267,332 


(Mobile Reimbursement) 27,356 — 27,356 


Pvt. Limited (Finished Goods) — 28,583 28,583 

Current Year Total 69,294,688 28,583 69,323,271 


(Division Madura Garments) (6,850,722) — (6,850,722) 


Pvt. Limited — (953,668) (953,668) 

Previous Year Total (6,850,722) (953,668) (7,804,390) 

2. Loans Taken 

Aditya Birla Nuvo Limited 8,787,450,000 — 8,787,450,000 

Aditya Birla Finance Limited — 200,000,000 200,000,000 

Current Year Total 8,787,450,000 200,000,000 8,987,450,000 

Aditya Birla Nuvo Limited (670,200,000) — (670,200,000) 

Previous Year Total (670,200,000) — (670,200,000) 

3. Loans Repaid 

Aditya Birla Nuvo Limited 8,395,950,000 — 8,395,950,000 

Aditya Birla Finance Limited — 200,000,000 200,000,000 

Current Year Total 8,395,950,000 200,000,000 8,595,950,000 



4. Interest 

Aditya Birla Nuvo Limited 83,655,087 — 83,655,087 

Aditya Birla Finance Limited — 43,836 43,836 




5. Allotment of shares 

Current Year Total — — — 

Aditya Birla Nuvo Limited- 

Equity Shares (99,500,000) — (99,500,000) 

Aditya Birla Nuvo Limited- 

Preference Shares (100,000,000) — (100,000,000) 


6. Corporate Guarantee Received 


Current Year Total 25,000,000 — 25,000,000 



7a. Payment for reimbursement of 

Expenses: 


(Division Madura Garments) 5,828,954 — 5,828,954 


(Division Indo Gulf Fertilizers) 4,000 — 4,000 

Madura Garments Exports Limited — 51,214 51,214 



(Division Madura Garments) (28,221,510) — (28,221,510) 

Peter England Fashions and 

Retail Limited — (100,000) (100,000) 

Madura Garments Exports Limited — (44,177) (44,177) 

Previous Year Total (28,221,510) (144,177) (28,365,687) 

Description Controlling Fellow 

Company Subsidiaries Total 

Rs. Rs. Rs. 

b. Reimbursement against Sharing 

of common capital assets: 




Previous Year Total (20,043,496) (144,177) (20,187,673) 

8. Sale of fixed assets 


Madura Garments Exports 

Limited — (48,638) (48,638) 

Previous Year Total — (48,638) (48,638) 

9. Deposit 


(Division Madura Garments) 150,000 — 150,000 

Current Year Total 150,000 — 150,000 

Previous Year Total — — — 

10. 0% Convertible Debentures 

Aditya Birla Capital Limited — 200,000,000 200,000,000 

Current Year Total — 200,000,000 200,000,000 

Previous Year Total — — — 

11a. Amount Payable 


(Division Madura Garments) 31,368,186 — 31,368,186 


(Division Indo Gulf Fertilizers) 2,000 — 2,000 

Aditya Birla Nuvo Limited (Loan) 591,300,000 — 591,300,000 


(Interest) — 43,836 43,836 

Aditya Birla Capital Limited 

(0% Convertible Debentures) — 200,000,000 200,000,000 

Current Year Total 622,670,186 200,043,836 822,714,022 



Aditya Birla Nuvo Limited (Loan) (199,800,000) — (199,800,000) 


(Interest) (27,650,882) — (27,650,882) 


b. Amount Receivable 


(Interest) 295,890 — 295,890 


(Division Madura Garments) 69,833 — 69,833 

Current Year Total 365,723 — 365,723 

Madura Garments Exports 

Limited — (4,461) (4,461) 

Previous Year Total — (4,461) (4,461) 

c. Corporate Guarantee 


Current Year Total 625,000,000 — 625,000,000 



1. Figures in brackets represent corresponding amount of previous year. 

2. No amount in respect of the related parties have been written off / back or 

provided for during the year. 

3. Related party relationship have been identified by the management and relied 

upon by the auditors. 

12. Welfare expenses include Rs. Nil (Previous Year Rs 155,364) towards compensation charges 

on the share based payments cross charged by and reimbursed to the Holding Company 

Adyta Birla Nuvo Limited. 

13. (a) The timing difference relating mainly to depreciation and provision for employee 

benefits for the year ended March 31, 2010 resulted in a deferred tax assets as 

per Accounting Standard 22" Accounting for taxes on income". As a prudence 

measure, the deferred tax assets have not been recognized. 

(b) The Company does not have income tax liability on the total income for the year 

under the regular method as also the Minimum Alternate Tax under section 115 JB 

of the Income Tax Act, 1961. Accordingly no provision towards the income tax has 

been made in the financial statements. 

14. Lease Accounting 

The company has taken premises under operating lease on non cancellable basis. The 

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lease rentals and future minimum lease payments in respect of such operating lease are 

disclosed below. 


Rs. 

Rs. 

a) Expenses in the current year 46,803,939 16,021,524 

b) Future minimum lease rentals payable 

under non-cancellable operating lease 

Payable within one year* 73,333,700 33,754,844 

Payable between one year & five years* 384,942,444 152,174,454 

Payable more than five years 114,163,902 161,015,069 

*Note:- Does not include facilities where the lease rentals are computed on revenue share 

basis with no minimum guaranteed amount. 

15. Terms of preference share 

The Company had issued 10,000,000 8% cumulative redeemable preference shares 

of Rs 10/- each at par to its Holding Company - Aditya Birla Nuvo Limited on March 26, 

2009. These preference shares are redeemable at face value upon completion of 10 

years but before the expiry of the statutory period of 20 years from the date of allotment. 

The earliest redemption is due on March 25, 2019. The Preference share holders will be 

eligible for dividend at 8%. 

16. Terms of Debentures 

The Company has issued 200 zero coupon, fully and compulsorily convertible Debentures 

of Rs 1,000,000/- each at par to Aditya Birla Capital Limited on February 5, 2010. The 

Debentures are convertible into Equity Shares on expiry of 60 months from the date of 

allotment i.e., Compulsorily Conversion Date, or at the option of Investor, at any time 

after expiry of 24 months from the date of allotment but before 54 months with 3 months 

advance notice. The Conversion Ratio shall be determined mutually by the Company and 

Debenture holder at least 30 days prior to the Compulsorily Conversion Date or the 

Conversion Date as the case may be. The equity shares issued as above shall rank pari 

passu in all respects including with respect to dividend with the then existing fully paid up 

equity shares of the Company subject to the provisions of the Memorandum and Articles 

of Association of the Company. 

17. a) Forward Exchange Contracts outstanding as at the Balance Sheet Date 

Purpose Nature No. of Currency Amount in 

Contracts 

Foreign 

Currency 

Payables Buy 13 EURO 258,028 

Payables Buy 2 GBP 8,649 

Payables Buy 2 USD 13,108 

All the above Contracts are for hedging purposes and not for speculation. 

b) The Company does not hold or issue derivative financial instruments for trading or 

speculative purposes and all the derivatives entered into by the Company are to 

mitigate or offset the risks that arise from the normal business activities only. In 

pursuance of announcement dated 29th March, 2008 of The Institute of Chartered 

Accountants of India on accounting for derivatives, on a prudent basis the Company 

has provided for mark to market loss on outstanding forward exchange derivatives 

aggregating to Rs 2,409,198 (Previous Year Nil). 

c) The year-end foreign currency exposures that have not been hedged by a forward 

contract or otherwise are given below: 

Amounts payable in foreign currency on account of the following. 

Particulars Currency 2010 2009 

Payables USD 4,832 100,148 

Payables GBP 4,919 23,900 

Payables EURO 12,428 64,138 

INR 1,305,435 11,406,189 

18. a) Quantitative Information 

Garments and Accessories 

Particulars Apparel Accessories Total 

Qty. Amount Qty. Amount Qty. Amount 

Opening Stock 

Current Year 20,299 69,620,522 12,258 36,568,756 32,557 106,189,278 

Previous Year — — — — — — 

Cost of Materials 

Current Year 167,228 177,572,575 8,140 38,052,897 175,368 215,625,472 

Previous Year (26,672) (99,345,256) (14,962) (44,450,341) (41,634) (143,795,597) 

Sales 

Current Year 166,484 208,200,077 8,319 44,091,520 174,803 252,291,597 

Previous Year (6,373) (26,878,016) (2,704) (11,240,607) (9,077) (38,118,623) 

Closing Stock 

Current Year 21,043 80,183,433 12,079 46,402,023 33,122 126,585,456 

Previous Year (20,299) (69,620,522) (12,258) (36,568,756) (32,557) (106,189,278) 

Figures in brackets represent corresponding amount of previous year. 

b) Installed capacity cannot be quantified on account of a large variety and lines of 

products that can be manufactured with varying specifications. 

c) Value of Import calculated on C.I.F. Basis: 

Amount in Rs. 


Capital goods Purchase 9,289,175 25,562,310 

Inventory purchase 91,450,003 86,629,533 

Cost of product testing 1,324,111 368,818 

Total 102,063,289 112,560,661 

d) Expenditure in Foreign Currency 

Amount in Rs. 


Capital goods 24,568,929 47,882,751 

Consultancy 51,268,781 77,885,537 

Travel Expenses 1,492,507 — 

Total 77,330,217 125,768,288 

19. Segment Reporting 

During the year ended March 31, 2010 the Company has identified segments in line with 

the Accounting Standard -17 on Segmental Reporting taking into account the organizational 

structure as well as differential risk and returns of these segments. 

During the current year, the Company started Institutional Business. The risks and rewards 

in the abovementioned business is different from the retail business. Accordingly the 

management has identified Institutional business as reportable segment. This being the 

first year of adoption of AS 17 on Segment Reporting, the figures for the corrosponding 

previous year has not been furnished. 

Amount in Rs. 

Sr. Primary Segment Retail Institutional Unallocated Total 

No. For the For the For the Enterprise 

Year ended Year ended Year ended For the 

31st Mar 31st Mar 31st Mar Year ended 

2010 2010 2010 31st Mar 


1. Segment Revenue 

a Sale to External Customers 177,908,854 76,163,620 — 254,072,474 

b Inter-segment Revenue — — — — 

Total Revenue 177,908,854 76,163,620 — 254,072,474 

2. Segment Results before Interest & 

Depreciation (220,402,484) 10,760,891 — (209,641,593) 

3. Add : 

Interest and Other Income — — 40,835,671 40,835,671 

Profit on sale of investments — — 9,222,539 9,222,539 

4. Less : 

Interest & Finance Charges — — 138,346,535 138,346,535 

Depreciation & Amortisation 66,620,172 — 4,366,525 70,986,697 

Provision for tax — — — — 

5. Profit / (Loss) After tax — — — (368,916,615) 

6. Other Non Cash items included 

in Segment Results above — — — — 

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Sr. Primary Segment Retail Institutional Unallocated Total 

No. As at As at As at Enterprise 

31st Mar 31st Mar 31st Mar As at 

2010 2010 2010 31st Mar 


7. Carrying Amount of segment Assets 638,713,686 40,023,662 19,473,261 698,210,610 

8. Carrying Amount of segment Liabilities 107,201,021 29,262,770 1,325,461,286 1,461,925,078 

9. Cost incurred to acquire segment 

Fixed Assets during the period 160,879,667 — — 160,879,667 

Reconciliation of Segment Results with Enterprise Results 

Total Segmental Enterprise Difference 

Results Results as per 

Particulars 

Schedule VI 

For the For the For the 

Year ended Year ended Year ended 

31st Mar 2010 31st Mar 2010 31st Mar 2010 

1. Total Revenue 254,072,474 254,072,474 — 

2. Segment Results before Interest, 

Depreciation and Other Income (209,641,593) (209,641,593) — 

3. Other Income 50,058,210 50,058,210 — 

4. Less : 

Interest & Finance Charges 138,346,535 138,346,535 — 

Depreciation & Amortisation 70,986,697 70,986,697 — 

Provision for tax — — — 

5. Profit / (Loss) After tax (368,916,615) (368,916,615) — 

6. Other Non Cash items included 

in Segment Results above — — — 

20. Previous year's figures have been regrouped/rearranged, wherever considered necessary, 

to conform to current year's presentation. 

Signatures to Schedules 1 to 17 


Ashish Dikshit S. Visvanthan 

Director 

Director 





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PETER ENGLAND FASHIONS AND RETAIL LIMITED 


To the Members of Peter England Fashions and Retail Limited 

Your Directors are pleased to present the Third Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 

31st March 2010. 


Amount in Rs Crores 

Particulars Continued Operation Discontinued Operation TOTAL 

(Exports Division) 

(Domestic Division) 

March 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009 March 31, 2010 March 31, 2009 

Turnover 3.38 — 10.21 16.92 13.60 16.92 

Interest & Other Income 0.00 — 5.46 0.01 5.46 0.01 

Operating Expenses 3.18 — 28.66 88.49 31.84 88.49 

Impairment Loss — — — — — — 

Pre tax profit from operating activities 0.20 — (12.98) (71.56) (12.78) (71.56) 

Interest Expenses 0.02 — 12.50 7.96 12.52 7.96 

Profit (Loss) before tax 0.18 — (25.48) (79.52) (25.31) (79.52) 

Income tax expense 0.07 — — 0.33 0.07 0.33 

Profit (Loss) from operating activities after tax 0.11 — (25.48) (79.85) (25.37) (79.85) 

REVIEW OF PERFORMANCE 

During the year, your company opened two new stores of Peter England 

People as per the new model in Bangalore and Delhi respectively. Your 

company has also closed three of its large format stores during the year. 

Your Company has started a new division to undertake the export business 


To explore and exploit the synergy of business, your company has demerged 

its domestic garment division with the holding company Aditya Birla Nuvo 

Limited. 

PROSPECTS 

The vision of the concept of Peter England People is to create India’s favorite 

family brand by building a world class organization and by welcoming and 

delighting our customers. We are of the view that the opportunities for mid 

price casual wear apparel in Indian industry continues to exist. Consumer 

traction is picking up as per expectation. Basis the experience gained during 

last year, we have done some changes in the store model to improve the 

profitability and scalability of the concept. Also to tap the unexplored potential 

of export business, we have started a separate division which will cater to 

the need of export markets. We are happy to share that the initial response 

to the export business is overwhelming. 

DIVIDEND 

In view of the accumulated losses the Board of Directors has not 

recommended any dividend for the financial year ending 31st March, 2010. 


Your Company has not accepted any deposits during the financial year 

ending 31st March, 2010. 

AUDITORS 

Your Company’s statutory auditors Deloitte Haskins & Sells, shall retire at 

the conclusion of the ensuing Annual General Meeting and offer themselves 

for re-appointment as the statutory auditors of the Company. Your Directors 

request you to appoint Auditors for the current year as set out in the 

accompanying notice of the Annual General Meeting. 

The observations made in the Auditors’ Report are self-explanatory and 

therefore do not call for any further comments under Section 217(3) of the 


SCHEME OF ARRANGEMENT AND REORGANISATION OF SHARE CAPITAL 

During the year, the Company entered into a ‘Composite Scheme of 

Arrangement’ (the “Scheme”) with its Holding Company - Aditya Birla Nuvo 

Limited (ABNL), as approved by the shareholders vide their resolution dated 

October 30, 2009 and sanctioned by the Hon’ble High Court of Gujarat at 

Ahmedabad vide its order dated January 28, 2010 and filed with the Registrar 

of Companies, Gujarat on February 27, 2010. 

In pursuance of the said Scheme, the ‘Domestic business’ (the “Demerged 

Undertaking”) of the Company has been demerged to ABNL with effect 

from January 1, 2010 and in terms of which, 

i. the identified assets and liabilities pertaining to the Demerged 

Undertaking have been transferred at their book values as given below: 

Particulars 

Amount (Rs) 

Fixed Assets (Net, including CWIP) 182,737,876 

Current Assets, Loans and Advances 109,006,074 

Total Assets 291,743,950 

Less: 

Current Liabilities and Provisions 100,095,850 

Loans 1,192,200,000 

Total Liabilities 1,292,295,850 

Less : Cancellation of Share capital 

as explained below 190,950,000 

Net Book Value (1,191,501,900) 

Add : Debit Balance in Profit & Loss Account 1,191,501,900 

TOTAL 0 

ii. The Company has also transferred all the contracts and employees 

pertaining to the Demerged undertaking. 

iii. Upon the Scheme being effective, 

– out of Company’s paid up capital, 9,500,000 equity shares of 

Rs. 10 each; 9,500,000 8 % Redeemable Cumulative Preference 

Shares of Rs. 10 each and 9,500 6% Redeemable Cumulative 

Preference Shares of Rs 100 each, have been cancelled. 

– Since the entire paid up equity share capital and 10,000,000 8% 

Redeemable Cumulative Preference Share Capital is held by ABNL 

along with its nominees, there is no issue / allotment of any further 

equity shares and / or preference shares by ABNL; 

– ABNL has allotted 10,000 6% Redeemable Preference Shares of 

Rs. 100 each, fully paid up, to the holders of 10,000 6% 

Redeemable Preference Shares of Rs. 100 each, fully paid up and 

held in the Company. 

(468)

CMYK 


SHARE CAPITAL: 

During the year, the Company has increased its authorized share capital from Rs 200,000,000/- (Rupees Twenty Crores Only) to Rs 201,500,000/- 

(Rs Twenty Crores Fifteen lakhs Only) divided into 10,000,000 (One Crores) Equity Shares comprising of Rs 10/- (Ten) each, 10,000,000 (One Crores) 

Redeemable Cummulative Preference Shares of Rs 10/- (Ten) each and 15000 (Fifteen Thousand) Cummulative Redeemable Preference Shares of 

Rs100/- (Rupees One Hundred) each. On account of increase in share capital and cancellation of shares pursuant to Scheme of demerger mentioned 

above, the Share Capital has been re-organised as under :- 

Opening Balance Additions Cancellation on Demerger Closing Balance 

31.03.2009 31.03.2010 

Particulars Units(Nos) Value (Rs) Units(Nos) Value (Rs) Units(Nos) Value (Rs) Units(Nos) Value (Rs) 

Equity Share Capital 10,000,000 100,000,000 9,500,000 95,000,000 500,000 5,000,000 

8% Preference 

Share Capital 10,000,000 100,000,000 9,500,000 95,000,000 500,000 5,000,000 

6% Preference 

Share Capital — — 10,000 1,000,000 9,500 950,000 500 50,000 

20,000,000 200,000,000 10,000 1,000,000 19,009,500 190,950,000 1,000,500 10,050,000 

REGISTERED OFFICE 

The Registered Office of your Company was shifted to Veraval, Gujarat, 

during the current financial year, for administrative convenience and 

commercial expediency. 

DIRECTORS 

a. Appointment 

Mr. Sushil Agarwal was appointed as an Additional Director of the 

Company by the Board of Directors at its meeting held on 06 th August 


Mr. S Visvanathan was appointed as an Additional Director of the 

Company by the Board of Directors at its meeting held on 27 th July 


Mr. Ashish Dikshit was appointed as an Additional Director of the 

Company by the Board of Directors at its meeting held on 15 th April 


b. Resignation 

Mr. Adesh Kumar Gupta and Mr. N V Balachandar have resigned as 

Directors of the Company during the year. 

The Board places on record its appreciation for the valuable 

contributions made by Mr. Adesh Kumar Gupta and Mr. N V 

Balachandar during their tenure as Directors of the Company. 

Mr. Pranab Barua retires by rotation at the ensuing Annual General 




confirm that: 

i. in the preparation of the annual accounts, the applicable accounting 



ii. 

iii. 

iv. 

they have selected such accounting policies and applied them 




Company for that period; 

they have taken proper and sufficient care for the maintenance of 

adequate accounting records in accordance with the provisions of the 

Companies Act, 1956, for safeguarding the assets of the Company 


they have prepared the annual accounts on a ‘going concern basis’. 


Information required to be provided under Section 217(2A) of the Companies 

Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, 

forms part of this report. 

ANNEXURES 

Required information as per Section 217(1) (e) and 217(2A) of the Companies 

Act, 1956, are Annexed. 

APPRECIATION 

Your Directors wish to place on record their appreciation of the support 

which the Company has received from its shareholders, customers, suppliers, 

bankers, press and other business associates. Your Directors gratefully 

acknowledge the ongoing co-operation and support provided by Central 

and State Governments and all Regulatory bodies. 

Your Directors place on record their deep appreciation of the dedication 

and commitment of the employees at all levels and look forward to their 

continued contribution in the future as well. Their dedicated efforts and 

enthusiasm have been pivotal for your Company’s growth. 

By and on behalf of the Board 

Place: Bangalore Ashish Dikshit S. Visvanathan 

Date: April 28, 2010 Director Director 

(469)

C M Y K 


ANNEXURE TO THE DIRECTORS’ REPORT DATED APRIL 28, 2010 

(A) Statement pursuant to Sec. 217(1)(e) of the Companies Act, 1956 

read with Companies (Disclosure of Particulars in the Report of 

Board of Directors) Rules, 1988 and forming part of the Directors’ 

Report for the period ended 31 st March, 2010 

I. Conservation of Energy 

In line with the Company’s declared commitment towards 

conservation of natural resources, the Company is engaged in 

the continuous process of energy conservation through improved 

operational and maintenance practices. 

II. 

III. 

Technology Absorption 

The Company’s activity is mainly that of trading of readymade 

garments, accessories and services. Every effort is made to utilize 

the best technology for making available the products to its intended 

consumers. Efforts to improve productivity by innovative work 

methods and adoption of better production technology are parts 

of a continual process. 

Foreign Exchange Earning and Outgo 

During the year under review, the Company spent Rs.2.92 lakhs 

towards Consultancy Services. 

(B) 

Particulars of Employees forming part of the Directors’ Report, for the year ended 31 st March 2010. Information pursuant to Section 

217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules,1975 

Details of Previous Employment (other than the Company) 

Sr. Name Designation and Remuneration Qualifications Age (Yrs) Experience Date of joining Name of Employer Designation Period of 

No. Nature of Duties (Rs.) Yrs. of the Company Service Yrs. 

1 Puneet Kumar Malik Head - Sourcing 4,678,489 B Tech and 40 17 1-Mar-07 Madura Garments Coats Technical Manager 3.2 

and Supply Chain 

Post-graduate Diploma 

2 Zeenath Abidi Freeman* CEO - PEEX 39,392,831 MBA 43 19 23-May-09 Aeropostale, New York Sr. Vice President 11 Months 

3 Amit Chand* Manager - Business 2,114,739 CA, MBA 29 9 26-Oct-09 NA NA NA 

Development and 

Strategy Peter 

England Exp. 

Notes: 

1. Gross remuneration shown above is subject to tax and comprises of basic salary, allowances, monetary value of perquisites and Company’s contribution 

towards provident and superannuation funds. 

2. None of the above employees is related to any Director of the Company. 

3. The nature of employment in all cases is contractual. 

4. * Indicates employed for part of the year. 

(470)

C M Y K 



TO THE MEMBERS OF 


1) We have audited the attached Balance Sheet of PETER ENGLAND 

FASHIONS AND RETAIL LIMITED (the “Company”) as at March 31, 

2010, the Profit and Loss Account, and the Cash Flow Statement for 

the year ended on that date, both annexed thereto. These financial 




2) We conducted our audit in accordance with auditing standards generally 




examining, on a test basis, evidence supporting the amounts and the 


the accounting principles used and the significant estimates made by 

the Management, as well as evaluating the overall financial statement 


our opinion. 

3) As required by the Companies (Auditor’s Report) Order, 2003 (CARO) 

issued by the Central Government in terms of Section 227(4A) of the 

Companies Act, 1956, we enclose in the Annexure, a statement on the 

matters specified in paragraphs 4 and 5 of the said Order. 

4) Further to our comments in the Annexure referred to in paragraph 3 

above, we report as follows: 




(b) in our opinion, proper books of account as required by law have 

been kept by the Company so far as it appears from our 

examination of those books: 

(c) the Balance Sheet, the Profit and Loss Account, and the Cash Flow 


of account; 

(d) in our opinion the Balance Sheet, the Profit and Loss Account, and 

the Cash Flow Statement dealt with by this report are in compliance 

with the Accounting Standards referred to in Section 211 (3C) of 


(e) In our opinion and to the best of our information and according 





(i) in the case of the Balance Sheet, of the state of affairs of the 


(ii) in the case of the Profit and Loss Account, of the loss of the 


(iii) in the case of the Cash Flow Statement, of the cash flows of 


5) On the basis of the written representations received from the directors 

as on March 31, 2010, taken on record by the Board of Directors, 

none of the Directors is disqualified as on March 31, 2010 from being 

appointed as a director in terms of Section 274 (1) (g) of the Companies 

Act, 1956. 

For DELOITTE HASKINS & SELLS, 



S. Sundaresan 

Partner 

Bangalore, April 28, 2010 Membership No. 25776 

(471)

C M Y K 


ANNEXURE TO THE AUDITORS’ REPORT 

(Referred to in paragraph 3 of our report of even date) 

1. Having regard to the nature of the Company’s business /activities / 

results, clauses 4(xii), 4(xiii) and 4(xiv) of CARO are not applicable. 

2. In respect of its fixed assets : 

(a) The Company has maintained proper records showing full 

particulars including quantitative details and situation of fixed 

assets. 

(b) The fixed assets were physically verified during the year by the 

Management in accordance with a regular programme of 

verification which, in our opinion, provides for physical verification 

of all the fixed assets at reasonable intervals. According to the 

information and explanations given to us, no material discrepancies 

were noticed on such verification. 

(c) During the year, the Company has transferred a significant portion 

of fixed assets pursuant to a scheme of arrangement as approved 

by the High Court of Gujarat at Ahmedabad vide its order dated 

January 28, 2010, in terms of which the Company’s ‘Domestic 

Garments Business’ has been demerged to its holding company 

Aditya Birla Nuvo Limited. However such disposal has, in our 

opinion, not affected the going concern status of the Company. 

3. In respect of inventories: 

(a) As explained to us, the inventories were physically verified during 

the year by the Management at reasonable intervals. 

(b) In our opinion and according to the information and explanations 

given to us, the procedures of physical verification of inventories 

followed by the Management were reasonable and adequate in 

relation to the size of the Company and the nature of its business. 

(c) In our opinion and according to the information and explanations 

given to us, the Company has maintained proper records of its 

inventories and no material discrepancies were noticed on physical 

verification. 


unsecured, to/from companies, firms or other parties listed in the Register 

maintained under Section 301 of the Companies Act, 1956 and 

therefore, clause 4(iii) of CARO is not applicable. 

5. In our opinion and according to the information and explanations given 

to us, there is an adequate internal control system commensurate with 

the size of the Company and the nature of its business with regard to 

purchases of inventory and fixed assets and the sale of goods. During 

the course of our audit, we have not observed any major weakness in 

such internal control system. 

6. To the best of our knowledge and belief and according to the information 

and explanations given to us, there are no contracts or arrangements 

that needed to be entered into the register maintained under the section 

301 of the Companies Act, 1956 and therefore, clause 4(v) of CARO 

is not applicable. 

7. According to the information and explanations given to us, the Company 

has neither accepted any deposit from the public nor had any unclaimed 

deposits during the year. Accordingly clause 4(vi) of CARO is not 

applicable. 

8. The Company has an internal audit system which is commensurate 

with the size of the Company and the nature of its business. 

9. According to the information and explanations given to us, the Central 

Government has not prescribed the maintenance of cost records under 

section 209(1) (d) of the Companies Act, 1956, for any of the products 

of the Company and therefore, clause 4(viii) of CARO is not applicable. 

10. According to the information and explanations given to us in respect 

of statutory dues: 

(a) The Company has generally been regular in depositing undisputed 

dues, including Provident Fund, Investor Education and Protection 

Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth 

Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material 

statutory dues applicable to it with the appropriate authorities. 

(b) There were no undisputed amounts payable in respect of Provident 

Fund, Investor Education and Protection Fund, Employees’ State 

Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom 

Duty, Excise Duty, Cess and other material statutory dues in arrears 

as at 31st March, 2010 for a period of more than six months from 

the date they became payable. 

(c) According to the information and explanations given to us, we are 

not aware of any disputed Income Tax, Service Tax, Sales Tax, 

Custom Duty, Wealth Tax, Excise Duty and Cess which have not 

been deposited as on March 31, 2010. 

11. The Company has been registered for a period less than five years and 

therefore, clause 4(x) of CARO is not applicable. 

12. In our opinion and according to the information and explanations given 

to us, the Company has not defaulted in repayment of dues to banks 

and during the year there were no dues repayable to financial institutions 

or debentureholders. 

13. The Company has not given any guarantees during the year for loans 

taken by others from banks or financial institutions and therefore, clause 

4(xv) of CARO is not applicable. 

14. The Company has not availed any new term loans during the year and 

therefore, clause 4(xvi) of CARO is not applicable. 

15. In our opinon and according to the information and explanations given 

to us and on an overall examination of the balance sheet, we report 

that funds raised on short term basis have not been used during the 

year for long term investment. 

16. The Company has not made any preferential allotment of shares during 

the year and therefore, clause 4(xviii) of CARO is not applicable. 

17. The Company has not issued any debentures during the year and 

therefore, clause 4(xix) of CARO is not applicable. 

18. The Company has not raised any money by way of public issue during 

the year and therefore, clause 4(xx) of CARO is not applicable. 

19. To the best of our knowledge and according to the information and 

explanations given to us, no fraud by the Company and no material 

fraud on the Company has been noticed or reported during the year. 

For DELOITTE HASKINS & SELLS 


(Registration No008072S) 

S. Sundaresan 

Partner 

Bangalore, April 28, 2010 Membership No. 25776 

(472)

C M Y K 



As at 

As at 




Shareholders’ Funds: 

Share Capital 1 10,050,000 200,000,000 

10,050,000 200,000,000 

Loan Funds: 

a. Secured Loans 2 — 612,251,589 

b. Unsecured Loans 3 — 271,851,712 

— 884,103,301 

Total Funds Employed 10,050,000 1,084,103,301 


Fixed Assets: 

Gross Block 4 25,500 329,546,851 

Less : Depreciation 4,958 55,472,540 

Net Block 20,542 274,074,311 

Capital Work-in-Progress — — 

20,542 274,074,311 

Current Assets, Loans & Advances: 

Inventories 5 540,887 72,205,875 


Cash & Bank Balances 7 624,171 85,578 


9,770,303 198,944,015 

Less: Current Liabilities & Provisions: 9 

Current Liabilities 7,892,796 333,333,106 

Provisions 797,280 2,288,896 

8,690,076 335,622,002 

Net Current Assets 1,080,227 (136,677,986) 

Debit balance in Profit & Loss Account 8,949,231 946,706,977 

Total Funds Utilised 10,050,000 1,084,103,301 



Schedules referred to above form an integral part of Balance Sheet 




31-Mar-2010 31- Mar-2009 


INCOME 

Income from Operations 10 135,955,344 169,218,195 

Other Income 11 54,616,449 105,920 

190,571,793 169,324,115 

EXPENDITURE 

Cost of Materials 12 60,790,854 206,304,554 

Employee Benefits 13 9,668,522 221,154,420 

Manufacturing, Selling and other expenses 14 164,931,580 466,014,660 

Depreciation / Amortisation 5 47,712,182 63,412,362 

Interest and Finance Charges 15 125,240,915 79,603,370 

(Increase)/Decrease in Stocks 16 35,309,895 (71,944,968) 

443,653,947 964,544,397 

Loss Before Tax (253,082,154) (795,220,282) 

Profit from continued operation 

before tax (Refer Schedule 17B 2) 1,762,770 — 


– Current Tax 662,000 — 

– Deferred Tax — — 

– Fringe Benefit Tax — — 

Profit from continued operation 

after tax 1,100,770 — 

Loss from discontinued operation 

before tax (Refer Schedule 17B 2) (254,844,924) (795,220,282) 


– Current Tax — — 

– Deferred Tax — — 


Loss from discontinued operation 

after tax (254,844,924) (798,495,282) 

Loss after Tax (253,744,154) (798,495,282) 

Profit / (Loss) brought forward (946,706,977) (148,211,695) 

Less: Adjustment under scheme of 

Arrangement (Refer Schedule 17B 1) 1,191,501,900 — 

Profit / (Loss) Carried forward to 

Balance Sheet (8,949,231) (946,706,977) 

Basic & Diluted Earnings per share - 

Refer Schedule 17B7 

(Face Value of Rs. 10/- each) (33) (10,336) 



Schedules referred to above form an integral part of Profit and Loss Account 











Place: Bangalore 

Date: 




Date: 

(473)

C M Y K 


SCHEDULES TO THE BALANCE SHEET 

As at As at 


Rs. 

Rs. 

SCHEDULE - 1- SHARE CAPITAL 

Authorized: 

10,000,000 (Previous year - 10,000,000) 

Equity shares of Rs. 10 each 100,000,000 100,000,000 

10,000,000 (Previous year - 10,000,000) - 

Redeemable Cumulative Preference 

shares of Rs. 10 each 100,000,000 100,000,000 

15,000 (Previous year - NIL) - 

Redeemable Cumulative Preference shares 

of Rs. 100 each 1,500,000 — 

201,500,000 200,000,000 

Issued, Subscribed and Paid up: 

10,000,000 (Previous year - 10,000,000) 

Equity shares of Rs.10 each, Fully paid up* 100,000,000 — 

Less: 9,500,000 shares - Shares cancelled 

under scheme of Arrangement# 95,000,000 5,000,000 100,000,000 

10,000,000 (Previous year - 10,000,000) - 

8% Redeemable Cumulative Preference 100,000,000 

shares of Rs. 10 each** 

Less: 9,500,000 shares - Shares cancelled 

under scheme of Arrangement# 95,000,000 5,000,000 100,000,000 

10,000 (Previous year - NIL) - 

6% Redeemable Cumulative Preference 1,000,000 

shares of Rs. 100 each** 

Less: 9,500 shares - Shares cancelled 

under scheme of Arrangement# 950,000 50,000 — 

* Includes: 

- 500,000 (Previous year - 10,000,000) 

Equity shares are held by the Holding 

Company, Aditya Birla 

Nuvo Ltd (ABNL) & its nominees 

- Nil (Previous year - 49,994) Equity 

shares are held by 

Laxminarayan Investment Limited 

(Holding Company until March 30, 2009) 

** All the Abovementioned Preference 

Shares in the current year and previous 

year are held by the Holding Company ABNL. 

# Refer Schedule 17B1 

10,050,000 200,000,000 

SCHEDULE - 2 - SECURED LOANS 

Term Loan from Banks — 480,000,000 

(Secured by First charge on hypothecation of Furniture 

and Fixtures and other movable fixed assets/present and 

future and second charge on the current assets of the 

Company, both, present and future), Corporate guarantee 

given by the holding company - Aditya Birla Nuvo Limited. 

(Amount Payable within one year NIL (Previous year NIL) 

Working Capital Borrowings from Banks — 132,251,589 

(Secured by First pari passu charge by way of hypothecation 

of Company’s entire current assets including stocks of 

raw materials, semi-finished and finished goods, 

consumable stores and spares and such other movables, 

book debts, bills whether documentary or clean, outstanding 

monies, receivables, both present & future and Corporate 

guarantee givent by the holding company ABNL. 

Total — 612,251,589 

SCHEDULE - 3 - UNSECURED LOANS 

As at 


Rs. 

As at 


Rs. 

Inter Corporate Deposits from Holding Company ABNL — 269,200,000 

(Amount payable within one year - NIL (Previous year - NIL) 


Book Overdraft — 2,651,712 

— 271,851,712 

SCHEDULE - 4 - FIXED ASSETS & DEPRECIATION 

Gross Block Depreciation/Amortisation Net Block 

Description As at 31st Additions Deduction/ Transfer under Upto 31st Upto 31st For the Deduction/ Transfer under Upto 31st As at 31st As at 31st 

March-09 for the Year Adjustments Scheme of March-10 March-09 Year Adjustments Scheme of March-10 March-10 March-09 

Arrangement* 

Arrangement* 

A. Tangible Assets 

Leasehold improvements 16,014,382 — — 16,014,382 — 1,845,042 1,314,705 — 3,159,747 — — 14,169,340 

Plant & Machinery 25,775,054 335,250 2,362,639 23,747,665 — 4,769,750 3,542,599 961,113 7,351,236 — — 21,005,304 

Computers & Telecommunication 24,316,823 3,399 172,156 24,148,066 — 4,824,879 4,509,410 44,735 9,289,554 — — 19,491,944 

Furniture, Fixtures & Equipment 170,699,922 1,620,936 67,539,499 104,781,359 — 34,125,695 24,986,437 22,438,446 36,673,686 — — 136,574,227 

Vehicles 2,663,260 217,173 — 2,880,433 — 477,989 412,091 — 890,080 — — 2,185,271 

B. Intangible Assets 

Technical Knowhow 66,853,524 — — 66,853,524 — 8,721,785 7,136,010 — 15,857,795 — — 58,131,739 

Specialised Software 23,223,886 25,500 — 23,223,886 25,500 707,401 5,810,930 — 6,513,373 4,958 20,542 22,516,486 

Total 329,546,851 2,202,258 70,074,294 261,649,315 25,500 55,472,540 47,712,182 23,444,294 79,735,470 4,958 20,542 274,074,311 

Previous Year 10,438,628 365,354,792 46,246,569 — 329,546,851 845,580 63,412,362 8,785,402 — 55,472,540 274,074,311 

* Refer Schedule 17B1 

Rs. 

(474)

C M Y K 


SCHEDULES TO THE BALANCE SHEET 

As at 

As at 


Rs. 

Rs. 

SCHEDULE - 5 - INVENTORIES 

(At lower of cost and net realisable value) 

Finished Goods, Packing Materials and others 540,887 72,205,875 

540,887 72,205,875 

SCHEDULE - 6 - SUNDRY DEBTORS 

(Unsecured excepts for debts agaisnt letter of credit 

as disclosed below and Considered good except 

otherwise stated) 

Due for period exceeding six months 

Others* 6,070,076 1,994,355 

6,070,076 1,994,355 

*Includes debts secured against Letter of Credit 5,025,462 — 

SCHEDULE - 7 - CASH & BANK BALANCES 

Cash in hand — 85,578 


On Current Accounts 624,171 — 

624,171 85,578 

SCHEDULE - 8 - LOANS AND ADVANCES 


Advances recoverable in cash or in kind or value to be received 

– Considered good 654,177 22,567,380 

– Considered doubtful — 100,000 

654,177 22,667,380 

Less: Provision for doubtful advances — (100,000) 

654,177 22,567,380 

Deposits 

– Considered good 150,000 100,013,750 

– Considered doubtful — 6,968,628 

150,000 106,982,378 

Less: Provision for doubtful deposits — (6,968,628) 

150,000 100,013,750 

Deposits with Government Authorities — 13,000 

Balances with Custom / VAT Authorities 1,573,758 1,377,655 

Advance tax - Fringe Benefit tax (Net) — 352,250 

Advance Gratuity Contribution 157,233 334,172 

SCHEDULE - 9 - CURRENT LIABILITIES & PROVISIONS 

(a) 

(b) 

2,535,168 124,658,208 


Sundry Creditors 

Due to Micro, Small and Medium Enterprises 

(Refer Note 11 of Schedule 17B) — — 

Due to others 7,825,691 310,722,080 

Other Liabilities 67,105 8,612,477 

Interest accrued but not due — 13,998,548 

7,892,796 333,333,106 

* Include amount due to company under the 

same management 


Madura Garments Exports Limited — 1,061,205 

MG Lifestyle Clothing Company Pvt. Limited — 3,445,823 

Provisions: 

For Employee benefits 135,280 2,247,896 

For Taxation including Fringe Benefit Tax (Net) 662,000 41,000 

797,280 2,288,896 

8,690,076 335,622,002 

Schedules Forming Part of the Profit and Loss Account 


31-Mar-2010 31- Mar- 2009 

Rs. 

Rs. 

SCHEDULE - 10 - INCOME FROM OPERATIONS 

Income from sale of apparel products 

Domestic Sales 102,135,933 169,218,195 

Export Sales 31,003,204 — 

Export Benefits 2,816,207 — 

135,955,344 169,218,195 

SCHEDULE - 11 - OTHER INCOME 

Other Income 86,129 — 

Interest Income* 54,530,320 105,920 

54,616,449 105,920 

*TDS deducted on Interest Income 5,446,916 — 

SCHEDULE - 12 - COST OF MATERIALS 

Cost of Materials 60,790,854 206,304,554 

60,790,854 206,304,554 

SCHEDULE - 13 - EMPLOYEE BENEFITS 

Salaries, Wages, Bonus and benefits 17,143,657 206,586,724 

Less : Reversal of Incentive Provision made in Previous year (10,078,189) — 

Salaries, Wages, Bonus and benefits 7,065,468 206,586,724 

Contribution to Provident & Other Funds 1,452,142 5,879,071 

Welfare Expenses 1,125,912 8,132,973 

Training & Developments Expenses 25,000 555,652 

9,668,522 221,154,420 

SCHEDULE - 14 - MANUFACTURING, 

SELLING AND OTHER EXPENSES 

Electricity Expense 4,610,984 14,389,404 

Processing Charges 1,063,823 226,967 

Discounts — 94,756 

Export Expenses 836,371 — 


Transportation & Handling Charges 2,017,099 5,949,111 

Other Manufacturing & Selling expenses 6,712,531 49,056,199 

Recruitment and Relocation 101,263 15,839,981 


For Statutory Audit 300,000 300,000 

For Tax Audit 75,000 75,000 

For Other Attest Services 93,750 250,000 

For Reimbursement of Expenses (including Service Tax) 69,208 116,594 

Provision for doubtful advances / Deposits 26,297,343 7,068,628 

Repairs & Maintenance of: 

Buildings 13,706,566 45,531,397 

Plant & Machinery 119,182 404,438 

Others 69,335 2,153,397 

Rent 40,647,558 92,598,032 

Rates & Taxes 81,901 1,218,625 


Software Licenses 391,082 6,362,870 

Insurance 605,344 2,345,248 

Travelling & Conveyance 1,811,304 20,494,842 

Loss on sale / Discard of Fixed Assets (Net) 46,557,237 35,875,055 

Printing & Stationery 293,985 3,967,812 

Communication Expenses 966,252 4,674,786 

Legal and Professional Consultancy Expenses 5,138,427 28,592,917 


Foreign exchange (gain)/loss 273,144 81,916 

164,931,580 466,014,660 

SCHEDULE - 15 - INTEREST AND FINANCE CHARGES 

Interest on Term Loan 120,818,192 72,910,977 

Interest on Working Capital Loan 3,208,757 5,279,074 

Other Finance Expenses 1,213,966 1,413,319 

125,240,915 79,603,370 

SCHEDULE - 16 - (INCREASE)/DECREASE IN STOCK 

Closing Stocks: 

Finished Goods, Packing Materials and others 540,887 72,205,875 

540,887 72,205,875 

Less: Opening Stocks: 

Finished Goods, Packing Materials and others 72,205,875 260,907 

Less: Stock transferred under scheme of arrangement 

(Refer Note 1 on Schedule 17B) 36,355,093 

72,205,875 260,907 

35,309,895 (71,944,968) 

(475)

C M Y K 




Amount Rs. Amount Rs. Amount Rs. Amount Rs. 

Cash flow from operating activities 

Loss before tax (253,082,154) (795,220,282) 


Depreciation 47,712,182 63,412,362 

Loss on Fixed Assets 46,557,237 35,875,055 

Interest expense 125,240,915 79,603,369 

Interest & other Income (54,530,320) (105,920) 


Provision for doubtful advances / deposits 26,297,343 7,068,628 

Reversal of Incentive Provision (10,078,189) — 

Unrealised Foreign exchange (gain)/loss — 181,407,668 (101) 187,043,393 

Operating profit before working capital changes (71,674,486) (608,176,889) 

Increase in Accounts Receivables (4,615,358) (1,456,429) 

Increase in Loans and Advances 30,392,788 (13,605,961) 

Increase in inventories 35,309,895 (71,944,968) 

Increase in current liabilities and Provisions (203,421,339) (142,334,015) 227,389,739 140,382,381 

Cash generated from operations (214,008,501) (467,794,508) 

Taxes paid (including Fringe Benefit Tax) (5,566,916) (3,234,000) 

Net cash from operating activities (219,575,417) (471,028,508) 

Cash flow from investing activities 

Purchase of Fixed Assets including CWIP (3,026,291) (167,768,329) 

Proceeds from sale of Fixed Assets 72,764 1,586,112 

Interest received 54,530,320 105,920 

Net cash from/(used) in investing activities 51,576,793 (166,076,296) 

Cash flow from financing activities 

Proceeds from issue of Equity Share Capital — 99,500,000 

Proceeds from issue of Preference Share Capital 1,000,000 100,000,000 

Proceeds from Term Loan from Bank — 480,000,000 

Proceeds from working capital borrowings from Bank (132,251,588) 134,903,301 

Proceeds from /(Repayment of) Inter Corporate Deposits 440,348,288 (112,800,000) 

Share Issue Expenses (208,500) (1,190,000) 

Interest paid (139,239,463) (65,604,822) 

Net cash from/(used) in financing activities 169,648,737 634,808,479 

Net increase/(decrease) in cash and cash equivalents 1,650,113 (2,296,325) 

Cash and cash equivalents at beginning of the year 85,578 2,381,902 

Less : Transfer on Demerger (Refer Schedule 17B1) 1,111,519 — 

Cash and cash equivalents at end of the year (Refer Note 2) 624,172 85,578 

Notes- - - 

1. The above cash flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard - 3 on Cash Flow Statements’ prescribed under Companies Accounting 

Standards Rules, 2006. Further, in terms of the scheme of demerger, as explained in Schedule 17B1, current year Cash figures are not comparable with those of previous year. 

2. Cash and Cash Equivalents 

Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts 


Cash on hand — 85,578 

Balances with banks 624,171 — 

Cash and cash equivalents 624,171 85,578 

3. The above cash flow statement does not include the movement in assets & liabilities on account of demerger & cancellation 

of capital as per the scheme approved by the Hon’ble High Court of Gujarat at Ahmedabad. (Refer Schedule 17B1). 

4. Since the demerger of domestic division has been carried at the book value, there are no cash flows on disposal / demerger. 

5. Previous year’s figures have been regrouped/rearranged, wherever considered necessary, to conform to current year’s presentation. 








Date: 

(476)

C M Y K 


SCHEDULE - 17 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 

ACCOUNTING CONVENTION 

BASIS OF PREPARATION 

The financial statements have been prepared under the historical cost convention on an accrual 

basis in compliance with all material aspect of the Notified accounting standard by Companies 

Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies 

Act, 1956. The accounting policies have been consistently applied by the Company and are 


USE OF ESTIMATES 

The preparation of the financial statements is in conformity with Indian GAAP, which requires that 

the management makes estimates and assumptions that affect the reported amounts of assets 

and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the 

reported amounts of revenue and expenses during the reported period. Actual results could differ 

from those estimates. 

FIXED ASSETS - TANGIBLE AND INTANGIBLE 

Fixed assets including intangible assets are stated at cost, less accumulated depreciation/ 

amortization and impairment loss, if any. Cost comprises the purchase price and any attributable 

cost of bringing the asset to its working condition for its intended use. 

DEPRECIATION / AMORTIZATION 

Depreciation on Fixed Assets is provided on Straight-Line basis at the rates and in the manner 

specified in Schedule XIV of the Companies Act, 1956 except stated hereunder. 

Particulars 

Estimated Useful Life 

Computers 

4 Years 

Vehicles 

5 Years 

Assets at Showrooms 

5 Years 

Furniture, Fixtures and Equipments 

7 Years 


Over the primary period of lease 

Technical Know-how 

7 Years 

Specialised Softwares 

3 Years 

Depreciation on fixed assets added / disposed off / discarded during the period is provided on 

pro-rata basis with reference to the date of addition/disposal / discarding. Items of value less than 

Rs. 5,000 are depreciated in full in the period of purchase/acquisition. 

IMPAIRMENT OF ASSETS 

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication 

of impairment based on internal/external factors. An asset is treated as impaired when the carrying 

cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to Profit 

and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment 

losses recognized in prior years is recorded when there is an indication that the impairment losses 

recognized for the assets no longer exist or have decreased. 

BORROWING COST 

Borrowing Costs attributable to acquisition and construction of qualifying assets are capitalized 

as a part of the cost of such asset up to the date when such assets are ready for its intended use. 

Other borrowing costs are charged to the Profit & Loss Account. 

INVENTORIES 

Finished Goods, Packing materials and others are valued at lower of cost and net realizable value. 

Finished goods include other cost in bringing the inventories to their present location and condition. 

Cost of inventories is computed on a weighted average basis. 

REVENUE RECOGNITION 

Sales are recorded on transfer of risk and rewards in the underlying goods, net of trade discounts 

and rebates and taxes. 

Interest income is recognised on time proportion basis. 

TRANSLATION OF FOREIGN CURRENCY ITEMS 

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of 

transaction. Realized gain/(loss) on such transactions are recognized in the Profit & Loss Account. 

Foreign currency monetary assets and liabilities are translated in to rupees at the exchange rate 

prevailing at the year end. The exchange gain/ (loss) arising out of such translations are dealt in 

the profit & loss account. 

EMPLOYEE BENEFITS 

Short-term Employee benefits 

All short term employee benefits such as salaries, wages, bonus, special awards, medical benefits 

which fall due within 12 months of the period in which the employee renders the related services 

which entitles him/her to avail such benefits and non accumulating compensated absences like 

sick leave and maternity leave are recognized on an undiscounted basis and charged to the profit 

and loss account. 

Long-term Employee benefits 


Company’s contributions paid / payable during the year to Provident Fund Scheme, superannuation 

fund and ESI are recognized in the Profit and Loss Account on accrual basis. 


The Company’s liabilities, under Payment of Gratuity Act, are determined on the basis of actuarial 

valuation made at the end of each financial year using the projected unit credit method and are 

fully funded. Actuarial gains and losses are recognized immediately in the statement of Profit and 

Loss Account as income or expense. Obligation is measured at the present value of estimated 

future cash flows using a discounted rate that is determined by reference to market yields at the 

Balance Sheet date on Government bonds. 

Long-term Compensated absences 

The Company’s liability towards compensated absences is determined by actuarial valuation by 

using Projected Unit Credit Method based on accumulated leave credit outstanding to the employees 

as on the balance sheet date and is not funded. 

TAXATION 

Income tax expense comprises current tax (i.e., amount of tax for the year determined in accordance 

with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing 

differences between accounting income and taxable income for the year). The deferred tax charge 

or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates 

that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets 

are recognized only to the extent there is reasonable certainty that the assets can be realized in 

future; however, where there is unabsorbed depreciation or carried forward loss under taxation 

laws, deferred tax assets are recognized only when there is a virtual certainty of realization of such 

assets. Deferred tax assets are reviewed as at each balance sheet date and written down or, 

written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be 

realized. 

LEASES 

Leases where significant portion of risk and reward of ownership are retained by the Lessor are 

classified as Operating Leases and lease rentals thereon are charged to Profit and Loss Account. 

EARNING PER SHARE 

Earning per equity share (basic/diluted) is arrived at based on net profit/(loss) available to equity 

shareholders to the outstanding weighted average number of equity shares. 

CASH FLOW STATEMENT 

Cash flow statement has been prepared in accordance with the indirect method prescribed in 

Accounting Standard (AS-3) issued by The Institute of Chartered Accountants of India. The cash 

flows from regular revenue generating, investing and financing activities of the Company are 

segregated. 

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS 

A provision is recognized when an enterprise has a present obligation as a result of past event; it 

is probable that an outflow of resources will be required to settle the obligation, in respect of 

which a reliable estimate can be made. Provisions are not discounted to its present value and are 

determined based on best estimate required to settle the obligation at the balance sheet date. 

Contingent Liabilities are possible but not probable obligations as on Balance Sheet date, based 

on the available evidence and are not accounted but disclosed in notes to accounts. 

(477)

C M Y K 

ADITYA VIKRAM GLOBAL TRADING HOUSE LTD. 

COMMENTARY OF THE DIRECTORS 

YEAR ENDED 31 MARCH 2010 

Results 

The results for the year are shown in the statement of comprehensive income 

and related notes. 

Directors 

The present membership of the Board during the year is set out on page 1. 

All directors served office throughout the year. 

Directors' Responsibilities in respect of the Financial Statements 

Company law requires the directors to prepare financial statements for each 

financial year, which present fairly the financial position, financial performance 

and the cash flow of the Company. The directors are also responsible for 

keeping accounting records which: 

• correctly record and explain the transactions of the Company; 

• disclose with reasonable accuracy at any time the financial position of 

the Company; and 

• would enable them to ensure that the financial statements comply with 

the Companies Act 2001. 

The directors confirm that they ave complied with the above requirements in 

preparing the financial statements. 

Auditors 

The auditors, Deloitte, have expressed their willingness to continue in office. 

Certificate from the Secretary Under Section 166 (D) of the Companies 

Act 2001 

We certify to the best of our knowledge and belief that we have filed with the 

Registrar of Companies all such returns as are required of Aditya Vikram 

Global Trading House Ltd under the Companies Act 2001, during the 

financial year ended 31 March 2010. 

For International Financial Services Limited 

Secretary 

Registered office: 

IFS Court, TwentyEight 

Cybercity 

Ebene 

Mauritius 

Date: 20 April 2010 

(478)

C M Y K 


Independent Auditor’s Report to the shareholders of Aditya 

Vikram Global Trading House Ltd. 

This report is made solely to the company’s shareholders, as a body, in 

accordance with section 205 of the Mauitius Companies Act 2001. Our 

audit work has been undertaken so that we might state to the company’s 

shareholders those matters we are required to state to them in an auditor’s 

report and for no their purpose. To the fullest extent permitted by law, we do 

not accept or assume responsibility to anyone other than the company and 

the company’s and the company’s shareholders as a body, for our audit 

work, for this report, or for the opinions we have formed. 

Report on the Financial Statements 

We have audited the financial statements of Aditya Vikram Global Trading 

House Ltd expressed in its functional currency in United States Dollars as set 

out on pages 5 to 16 which comprise the statement of financial position as 

at 31 March 2010 and the statement of comprehensive income, statement 

of changes in equity and statement of cash flows for the year then ended 

and a summary of significant accounting policies and other explanatory 

notes. 

Directors’ responsibilities for the financial statements 

The directors are responsible for the preparation and fair presentation of 

these financial statements in accordance with International Financial Reporting 

Standards. This responsibility includes: designing, implementing and 

maintaining internal control relevant to the preparation and fair presentation 

of financial statements that are free from material misstatement, whether 

due to fraud or error, selecting and applying appropriate accounting policies, 

and making accounting estimates that are reasonable in the circumstances. 

Auditor’s responsibility 


based on our audit. We conducted our audit in accordance with International 

Standards on Auditing. Those standards require that we comply with ethical 

requirements and plan and perform the audit to obtain reasonable assurance 

whether the financial statements are free from material misstatement. 

relevant to the entity’s preparation and fair presentation of the financial 

statements in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the 

effectiveness of the entity’s internal control. An audit also includes evaluating 

the appropriateness of accounting policies used and the reasonableness of 

accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and 

appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the financial statements on pages 5 to 16 give a true and 

fair view of the financial position of the Company as at 31 March 2010, 

and of their financial performance and cash flows for the year then ended in 

accordance with International Financial Reporting Standards and comply 

with the requirements of the Mauritius Companies Act 2001 in so far as 

applicable to Category 1 Global Business Licence companies. 

Amounts expressed in Indian Rupees 

The figures expressed in Indian Rupees have been inserted in the financial 

statements solely for information purposes. We do not express an opinion 

on the above figures. 

Report on other legal requirements 

In accordance with the requirements of the Mauritius Companies Act 2001, 

we report as follows: 

● 

● 

● 

we have no relationship with, or interests in, the company other than in 

our capacity as auditors; 

we have obtained all information and explanations that we have required; 

and 

in our opinion, proper accounting records have been kept by the company 

as far as appears from our examination of those records. 

An audit involves performing procedures to obtain audit evidence about the 

amounts and disclosures in the financial statements. The procedures selected 

depend on the auditor’s judgment, including the assessment of the risks of 

material misstatement of the financial statements, whether due to fraud or 

error. In making those risk assessments, the auditor considers internal control 


20 April 2010 

Per: Jacques de C du Mee, ACA 

(479)

C M Y K 


STATEMENT OF FINANCIAL POSITION 

AT 31 MARCH 2010 

ASSETS 

Notes 2010 2009 2010 2009 

1 USD USD INR INR 


Receivables 5 38,831 19,614 1,752,872 999,340 

Prepayments 2,062 1,656 93,099 84,433 

Cash at bank : 

Current Account - SBI Mauritius 4,042 1,638 182,463 83,431 

Fixed Deposits Account - 

SBI Mauritius 1,162,018 1,170,632 52,453,470 59,643,734 

1,206,953 1,193,540 54,481,904 60,810,938 

Current liabilities 

Accruals 10,740 12,487 484,781 636,294 

10,470 12,487 484,781 636,294 

1,196,213 1,181,053 53,997,123 60,174,644 

STATEMENT OF CHANGES IN EQUITY 


Note Stated Retained 

capital earnings Total 

USD USD USD 

At 1 April 2008 850,000 323,786 1,173,786 

Profit for the year — 7,267 7,267 

At 31 March 2009 850,000 331,053 1,181,053 

Profit for the year — 15,160 15,160 

At 31 March 2010 850,000 346,213 1,196,213 

1 INR INR INR 

At 1 April 2008 37,000,000 9,916,251 46,916,251 

Profit for the year — 13,258,393 13,258,393 

At 31 March 2009 37,000,000 23,174,644 60,174,644 

Profit/(loss) for the year — (6,177,521) (6,177,521) 

At 31 March 2010 37,000,000 16,997,123 53,997,123 

EQUITY AND LIABILITIES 

Capital and reserves 

Share capital 6 850,000 850,000 37,000,000 37,000,000 

Retained earnings 346,213 331,053 16,997,123 23,174,644 

1,196,213 1,181,053 53,997,123 60,174,644 

The notes on pages 9 to 16 are an integral part of these financial statements. 

Approved by the Board of Directors and authorised for issue on 20 April 2010 and signed on its 

behalf by: 

DIRECTOR 

DIRECTOR 


STATEMENT OF COMPREHENSIVE INCOME 


Note 2010 2009 2010 2009 


INCOME 

Interest income 41,293 38,142 1,957,964 1,751,269 

EXPENSES 

41,293 38,142 1,957,964 1,751,269 

Administrative expenses 20,045 21,460 950,417 985,309 

Bank charges 223 330 10,620 15,159 

Audit fees 5,865 9,085 278,101 417,163 

Foreign exchange (gain)/loss — — — 5 

Foreign exchange (gain)/loss on 

Translation — — 6,896,347 (12,924,760) 

26,133 30,875 8,135,485 11,507,124 

Profit/(Loss) for the year 15,160 7,267 (6,177,521) 13,258,393 

STATEMENT OF CASH FLOWS 


Notes 2010 2009 2010 2009 


Cash flows from 

operating activities 

Profit for the year 15,160 7,267 (6,177,521) 13,258,393 


Foreign exchange loss — — — 5 

Interest income (41,293) (38,142) (1,957,964) (1,751,269) 

(41,293) (38,142) (1,957,964) (1,751,264) 

Operating loss before 

working capital changes (26,133) (30,875) (8,135,485) 11,507,129 

(Increase)/ decrease in prepayments (406) 1,888 (8,666) 57,234 

(Increase) in receivables (19,217) (11,872) (753,532) (689,887) 

Increase/(decrease) in accruals (1,747) 3,041 (151,513) 186,333 

(21,370) (6,943) (913,711) (446,320) 

Net cash used in operating 

activities (47,503) (37,818) (9,049,196) 11,060,809 

Cash flows from investing 

activities 

Interest income 41,293 38,142 1,957,964 1,751,269 

Net cash flows from investing 

activities 41,293 38,142 1,957,964 1,751,269 

Net increase/(decrease) in 

cash and cash equivalents (6,210) 324 (7,091,232) 12,812,078 

Foreign exchange gain/ (loss) — — — (5) 

Cash and cash equivalents at 

beginning of year 1,172,270 1,171,946 59,727,165 46,915,092 

Cash and cash equivalents at 

end of year 1,166,060 1,172,270 52,635,933 59,727,165 



(480)

C M Y K 


NOTES TO THE FINANCIAL STATEMENTS 


1. GENERAL 

The Company was incorporated in Mauritius on 21 December 1999 as a private company 

with limited liability and holds a Category 1 Global Business Licence issued by the Financial 

Services Commission. The address of the Company’s registered office is IFS Court, 

TwentyEight, Cybercity, Ebene, Mauritius. 

The principal activity of the Company is to acquire brand, technical know-how and undertake 

commercial and other activities relating to brand and technical know-how, software services, 

and to carry on business of general merchant and traders, manufacturers’ agents and 

representatives to enhance the global presence of the holding company. The Company is 

presently not in active operations. 

The financial statements of the Company are expressed in United States Dollar (“USD”). 

The Company’s business or other activity is carried out in a currency other than the Mauritian 

rupee. 

Solely for the convenience of the readers, the financial statements have been translated 

into Indian rupees. The statement of financial position items have been translated at closing 

rate while the share capital has been translated at the transaction date. The income and 

expenditure items have been translated at the average rate for the year. No representation 

is made that the United States Dollar amounts have been, could have been or could be 

converted into INR at such rate or any other rate. 

2. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING 

STANDARDS 

In the current period, the Company has adopted all of the new and revised Standards and 

Interpretations issued by the International Accounting Standards Board (“IASB”) and the 

International Financial Reporting Interpretations Committee (“IFRIC”) of the IASB that are 

relevant to its operations and effective for accounting periods beginning on 1 April 2009. 

2.1 Standards and Interpretations affecting amounts reported in the current period 

and prior periods 

The following new and revised Standards and Interpretations have been adopted in 

the current period and have affected the amounts reported in these financial statements. 

Details of other Standards and Interpretations adopted in these financial statements 

but that have had no impact on the amounts reported are set out in section 2.2. 

Standards affecting presentation and disclosure 

IAS 1 (as revised in 2007) IAS 1(2007) has introduced terminology changes 

Presentation of Financial (including revised titles for the financial statements) 

Statements 

and changes in the format and content of the 


Improving Disclosures about The amendments to IFRS 7 expand the disclosures 

Financial Instruments required in respect of fair value measurements and 

(Amendments to IFRS 7 liquidity risk. 

Financial Instruments: 

Disclosures) 

Amendments to IAS 7 The amendments (part of Improvements to IFRSs 

Statement of Cash Flows (2009)) specify that only expenditures that result in 

(adopted in advance of a recognised asset in the statement of financial 

effective date of 1 January position can be classified as investing activities in 

2010) the statement of cash flows. 

Standards and Interpretations affecting the reported results or financial position. 

2.2 Standards and Interpretations adopted with no effect on financial statements 

The following relevant new and revised Standards and Interpretations have also been 

adopted in these financial statements. Their adoption has not had any significant 

impact on the amounts reported in these financial statements but may impact the 

accounting for future transactions or arrangements. 

IAS 1 Presentation of Financial Statements – Amendments relating to disclosure 

of puttable instruments and obligations arising on liquidation 

IAS 1 Presentation of Financial Statements – Amendments resulting from May 

2008 Annual Improvements to IFRSs 

IAS 16 Property, Plant and Equipment – Amendments resulting from May 2008 

Annual Improvements to IFRSs 

IAS 23 Borrowing costs – Comprehensive revision to prohibit immediate 

expensing 

IAS 23 Borrowing costs – Amendments resulting from May 2008 Annual 

Improvements to IFRSs 

IAS 27 Consolidated and Separate Financial Statements – Amendment relating 

to cost of an investment on first time adoption 

IAS 27 Consolidated and Separate Financial Statements – Amendments resulting 

from May 2008 Annual Improvements to IFRSs 

IAS 32 Financial Instruments: Presentation – Amendments relating to puttable 

instruments and obligations arising on liquidation 

IAS 36 Impairment of Assets – Amendments resulting from May 2008 Annual 


IAS 38 

IAS 39 

Intangible Assets – amendments resulting from May 2008 Annual 


Financial Instruments: Recognition and Measurement – Amendments 

resulting from May 2008 Annual Improvements to IFRSs 

IAS 41 Agriculture – Amendments resulting from May 2008 Annual Improvements 

to IFRSs 

2.3 Standards and Interpretations in issue not yet adopted 

At the date of authorisation of these financial statements, the following Standards 

and Interpretations were in issue but effective on annual periods beginning on or 

after the respective dates as indicated: 

IAS 1 Presentation of Financial Statements – Amendments resulting from April 

2009 Annual Improvements to IFRSs (effective 1 January 2010) 

IAS 7 

IAS 17 

IAS 24 

IAS 27 

IAS 28 

IAS 31 

IAS 32 

IAS 36 

Statement of Cash Flows – Amendments resulting from April 2009 Annual 

Improvements to IFRSs (effective 1 January 2010) 

Leases – Amendments resulting from April 2009 Annual Improvements 

to IFRSs (effective 1 January 2010) 

Related Party Disclosures – Revised definition of related parties (effective 

1 January 2011) 

Consolidated and Separate Financial Statements – Consequential 

amendments arising from amendments to IFRS 3 (effective 1 July 2009) 

Investments in Associates – Consequential amendments arising from 

amendments to IFRS 3 (effective 1 July 2009) 

Interests in Joint Ventures – Consequential amendments arising from 

amendments to IFRS 3 (effective 1 July 2009) 

Financial Instruments: Presentation – Amendments relating to classification 

of rights issues (effective 1 February 2010) 

Impairment of Assets – Amendments resulting from April 2009 Annual 


IAS 38 Intangible Assets – Amendments resulting from April 2009 Annual 

Improvements to IFRSs (effective 1 July 2009) 

IAS 39 Financial Instruments: Recognition and Measurement – Amendments 

for eligible hedges items (effective 1 July 2009) 


resulting from April 2009 Annual Improvements to IFRSs (effective 1 

January 2010) 


for embedded derivatives when reclassifying financial instruments 

(effective 1 July 2009) 

IFRS 1 First-time Adoption of International Financial Reporting Standards – 

Amendments relating to oil and gas assets and determining whether an 

arrangement contains a lease (effective 1 January 2010) 

IFRS 2 Share-based Payment – Amendments resulting from April 2009 Annual 

Improvements to IFRSs (effective 1 July 2009) 

IFRS 2 Share-based Payment – Amendments relating to group settled sharebased 

payment transactions (effective 1 January 2010) 

IFRS 3 Business Combinations – Comprehensive revision on applying the 

acquisition method (effective 1 July 2009) 

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – 

Amendments resulting from May 2008 Annual Improvements to IFRSs 

(effective 1 July 2009) 

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – 

Amendments resulting from April 2009 Annual Improvements to IFRSs 

(effective 1 January 2010) 

IFRS 8 Operating Segments – Amendments resulting from April 2009 Annual 


IFRS 9 Financial Instruments – Classification and measurement (effective 1 

January 2013) 

IFRIC 14 IAS 19 – The limit on a Defined Benefit Asset, Minimum Funding 

Requirements and their Interaction (November 2009 amendment with 

respect to voluntary prepaid contributions effective 1 January 2011) 

IFRIC 17 Distributions of Non-Cash Assets to Owners (effective 1 July 2009) 

IFRIC 18 Transfers of Assets from Customers (effective 1 July 2009) 

IFRIC 19 Extinguishing financial liabilities with Equity Instruments (effective 1 July 

2010) 

The directors anticipate that the adoption of these Standards and Interpretations on the 

above effective dates in future periods will have no material impact on the financial statements 

of the company. 

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - 

Amendments resulting from April 2009 Annual Improvements to IFRSs 

(effective 1 January 2010) 

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C M Y K 


IFRS 8 Operating Segments - Amendments resulting from April 2009 Annual 


The directors anticipate that the adoption of these standards and 

Interpretations in future periods will have no material impact on the 

financial statements of the company. 


The financial statements have been prepared in accordance with and comply with 

International Financial Reporting Standards. The preparation of financial statements in 

accordance with International Financial Reporting Standards requires the directors to make 

estimates and assumptions that affect the reported amounts and disclosures in the financial 

statements. Actual results could differ from those estimates. A summary of the more important 

accounting policies, which have been applied consistently, is set out below. 

(a) Basis of preparation 

The financial statements are prepared under the historical cost convention on an 

accruals basis and in United States Dollar which is considered to be the Company’s 

principal trading currency. 

(b) Revenue recognition 

Interest income is recorded on an accrual basis. Interest revenue is recognised when it 

is probable that the economic benefits will flow to the Company and the amount of 

revenue can be measured reliably. Interest revenue is accrued on a time basis, by 

reference to the principal outstanding and at the effective interest rate applicable, 

which is the rate that exactly discounts estimated future cash receipts through the expected 

life of the financial asset to that asset’s net carrying amount on initial recognition. 

(c) Expense recognition 

All expenses are accounted for in the statement of comprehensive income on the 

accrual basis. 

(d) Transactions in foreign currencies 

Transactions denominated in foreign currencies are recorded in United States Dollar 

at the rates of exchange ruling at the dates of the transactions. Monetary assets and 

liabilities at the statement of financial position date which are denominated in foreign 

currencies are translated into United States Dollar at the rates of exchange ruling at 

that date. Exchange differences are taken to the statement of comprehensive income. 

(e) Cash and cash equivalents 

Cash comprises cash at bank. Cash equivalents are short term, highly liquid 

investments that are readily convertible to known amounts of cash and which are 

subject to an insignificant risk of change in value. 

(f) Related parties 

Related parties are individuals and companies where the individual or company has 

the ability, directly or indirectly, to control the other party or exercise significant influence 

over the other party in making financial and operating decisions. 

(g) Income tax 

Income taxes currently payable are provided for in accordance with the existing 

legislation of the various countries in which the Company operates. 

(h) Deferred tax 

Deferred tax is provided, using the liability method, for all temporary differences arising 

between the tax bases of assets and liabilities and their carrying values for financial 

reporting purposes. Currently enacted tax rates are used to determine deferred tax. 

The principal temporary differences arise from tax losses carried forward. Deferred 

tax assets are recognised to the extent that it is probable that future taxable profit will 

be available against which the temporary differences can be utilised. 

(i) Financial instruments 

Financial instruments carried on the statement of financial position include receivables, 

cash and cash equivalents, and other payables and accruals. The particular recognition 

methods adopted are disclosed in the individual policy statements associated with 

each item. 

Disclosures about financial instruments to which the Company is a party are provided 

in note 8. 

(j) Provisions 

Provisions are recognised when the Company has a present legal or constructive 

obligation as a result of past events, it is probable that an outflow of resources will be 

required to settle the obligation, and a reliable estimate of the amount can be made. 

4. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY 

The preparation of financial statements in accordance with IFRS requires the directors and 

management to exercise judgment in the process of applying the accounting policies. It 

also requires the use of accounting estimates and assumptions that may affect the reported 

amounts and disclosures in the financial statements. Judgments and estimates are 

continuously evaluated and are based on historical experience and other factors, including 

expectations and assumptions concerning future events that are believed to be reasonable 

under the circumstances. The actual results could, by definition therefore, often differ from 

the related accounting estimates. 

Where applicable, the notes to the financial statements set out areas where management 

has applied a higher degree of judgement that have a significant effect on the amounts 

recognised in the financial statements, or estimations and assumptions that have a significant 

risk of causing a material adjustment to the carrying amounts of assets and liabilities within 

the next financial year. 

5. RECEIVABLES 

Convenience translation into INR (Note 1) 


USD USD INR INR 

Interest on fixed deposit 38,831 19,614 1,752,872 999,340 

6. SHARE CAPITAL 

Convenience translation into INR (Note 1) 


USD USD INR INR 

Authorised 

1,000,000 Ordinary shares of 

USD1.00 each 1,000,000 1,000,000 — — 

Issued and fully paid 

850,000 Ordinary shares of 

USD1.00 each 850,000 850,000 37,000,000 37,000,000 

The holder of the ordinary shares of the Company has the right to an equal share in 

dividends authorised by the Board and in the distribution of the surplus assets of the Company 

and also, the right to one vote on a poll at a meeting of the Company on any resolution. 

7. TAXATION 

The Company under current laws and regulations is liable to pay income tax on its net 

income at a rate of 15%. The Company is, however, entitled to a tax credit equivalent to the 

higher of actual foreign tax suffered or 80% of Mauritius tax payable in respect of its foreign 

source income thus reducing its maximum effective tax rate to 3%. 

No Mauritian capital gain tax is payable on profits arising from sale of securities, and any 

dividends and redemption proceeds paid by the Company to its Shareholder will be exempt 

in Mauritius from any withholding tax. 

The Company has received a certificate from the Mauritian Tax Authorities and believes 

that such certification is determinative of its tax resident status for treaty purposes. The Tax 

Residence Certificate is renewable each year provided some undertakings are adhered to. 

At 31 March 2010, the Company had accumulated tax of USD226,825 (31 March 2009: 

USD201,067) and is, therefore, not liable to income tax. 

Tax reconciliation 2010 2009 

USD USD 

Profit before taxation 15,160 7,267 

Tax calculated at the rate of 3% 455 218 


Exempt income (1,239) (1,144) 

Unauthorised deductions 11 926 

Unrecognised deferred tax assets 773 — 

Tax reconciliation NIL NIL 

Deferred tax 

A deferred tax asset of USD6,805 (2009: USD6,032) has not been recognised in respect 

of the tax losses carried forward as the directors consider that it is not probable that future 

taxable profit will be available against which the unused tax losses can be utilised. 

8. FINANCIAL INSTRUMENTS 

Fair values 

The Company’s financial assets and liabilities include receivables, cash at bank and other 

payables and accruals, which approximate their fair values. 

Currency profile 

The currency profile of the Company’s financial assets and liabilities is summarised as 

follows: 

Financial Financial Financial Financial 

Assets Liabilities Assets Liabilities 


USD USD USD USD 

United States Dollar 1,204,891 10,740 1,191,884 12,487 

Prepayments amounting to USD2,062 (2009: USD1,656) have not been included in 

financial assets. 

Currency risk 

The assets and liabilities, revenue and expenditure of the Company are in United States 

Dollar and hence no currency risk exposure. 

Interest rate risk 

The Company’s income and operating cash flows are substantially independent of changes 

in the market interest rates. The Company’s only significant interest-bearing assets are cash 

and cash equivalents. Interest income from cash at bank may fluctuate in amount, in particular 

due to changes in interest rates. 

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Two directors of the Company, Mr Couldiplall Basanta Lala and Mr Kapil Dev Joory, are also directors of International Financial Services Limited (the “Administrator”), and are hence deemed to 

have beneficial interests in the Service Agreement between the Company and the Administrator. 

During the year ended 31 March 2010, the Company had transactions with related parties. The nature, volume of transactions and the balances with the related parties are as follows: 

Name of Related Party Relationship Nature of Transactions Volume of Balance Volume of Balance 

whether Receivable (R) Transactions Transactions 

or Payable (P) 


USD USD USD USD 

Messrs Kapil Directors of the Directors’ fees (R) 2,658 625 2,000 783 

Dev Joory and Couldiplall 

Company 

Basanta Lala 

International Administrator and Administration 12,700 4,786 16,460 9,037 

Financial Secretary fees (P) 

Services 

Limited 

Secretarial fees (R) 1,593 375 1,250 486 

10. Holding Company 

The directors regard Aditya Birla Nuvo Limited, a company incorporated in India, as its holding company. 

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Aditya Birla Nuvo Ltd. 

Corporate Finance Division 

Aditya Birla Centre, ‘A’ Wing, 4 

th Floor, 

S.K. Ahire Marg, Worli, Mumbai 400 030. India 

Telephone +91 22 66525000, 24995000 

Fax +91 22 66525821, 24995821 

Website www.adityabirlanuvo.com 

www.adityabirla.com 

E-mail nuvo.cfd@adityabirla.com 

Registered Office : Indian Rayon Compound, Veraval – 362 266, Gujarat

2009-10 - Aditya Birla Nuvo, Ltd

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