Annual Report 2015 - Merrill · PDF fileAnnual Report 2015 | 7 Directors’ Report to the...

40th Annual Report 2015

Annual Report 2015 | 1

Contents Directors’ Report to the Members 7

Auditors’ Report to the Members 36

Balance Sheet 40

Statement of Profit & Loss 41

Cash Flow Statement 42

Notes to the Financial Statements 43

Consolidated Financial Statements 73

2 | DSP Merrill Lynch Limited


DSP MERRILL LYNCH LIMITED


BoardofDirectorsMr. Asit Bhatia Chairman and Non-Executive Director

Mr. Avinash Gupta Whole-Time Director

Ms. Amee Parikh Independent Director

Mr. Haresh Shivdasani Independent Director

Mr. Rajnarayan Balakrishnan Whole-Time Director

Mr. Sundararaman Ramamurthy Non-Executive Director

ChiefFinancialOfficer

Mr. Ashish Adukia

ComplianceOfficer&CompanySecretary

Mr. Nishith Mehta

Auditors

Price Waterhouse

Bankers

Bank of America N.A.

Citibank N.A.

Deutsche Bank A.G.

HDFC Bank Limited

Standard Chartered Bank

The Hongkong and Shanghai Banking Corporation Limited

Union Bank of India

JP Morgan Chase Bank N.A.

RegisteredOffice

Express Towers, 16th Floor

Nariman Point

Mumbai 400 021

CIN: U74140MH1975PLC018618

RegistrarsandShareTransferAgents

Sharepro Services (India) Private Limited

13AB, Samhita Warehousing Complex,

Sakinaka Telephone Exchange Lane,

Off. Andheri Kurla Road, Sakinaka,

Andheri (East), Mumbai - 400 072


Directors’ReporttotheMembers

Your Directors have pleasure in presenting the 40th Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March, 2015.

TheStateOftheCompany’sAffairs:

The Financial Results of the Company for the year 2014-15 are summarized as under:

Particulars Yearended31stMarch,2015

Rs.million

Year ended 31st March, 2014

Rs. million Gross Income 7,780.69 6,403.98

Profit before depreciation and tax 3,752.12 2,462.48

Depreciation 214.68 185.95

Profit / (loss) before tax 3,537.44 2,276.53

Profit / (loss) from continuing operations before tax 3,767.07 2,587.52

Tax expense of continuing operations 1,307.48 900.43

Profit / (loss) from continuing operations after tax (A) 2,459.59 1,687.09

Profit / (loss) from discontinuing operations before tax (229.63) (310.99)

Tax expense of discontinuing operations (50.54) (101.68)

Profit / (loss) from discontinuing operations after tax (B) (179.09) (209.31)

Profit after tax (A+B) 2,280.50 1,477.78

Balance brought forward 9,666.85 8,189.07

Balance available for appropriation 11,947.35 9,666.85

Appropriations

Utilisation for buy-back of equity shares 16.32 -

Income Distribution Tax on buy-back of equity shares 3.70 -

Transfer to Capital Redemption Reserve on buy-back of equity shares 0.05 -Balance carried to balance sheet 11,927.28 9,666.85

Earnings per share (in Rs.) 98.47 63.81

Gross income for the year was Rs. 7,781 million, 22% higher than Rs. 6,404 million in the previous year, on account of increase in income from advisory & transactional services and other income. Expenses increased by 3% to Rs. 4,243 million vs. Rs. 4,127 million in previous year. Profit before tax was Rs. 3,537 million, 55% higher than Rs. 2,277 million in previous year and profit after tax increased by 54% to Rs. 2,281 million from Rs. 1,478 million in the previous year.

Profit after tax from continuing operations increased by 46% to Rs. 2,460 million from Rs. 1,687 million in previous year primarily driven by increase in revenues. Loss after tax from discontinuing operations (representing advisory and distribution services relating to the wealth management division) was Rs. 179 million, 14% lower than Rs. 209 million in the previous year. TransfertoReserves:

During the year under review, the Company transferred an amount equivalent to Rs. 0.05 million to Capital Redemption Reserve as per Section 69 of the Companies Act, 2013. This was for the transfer of face value of 4,961 equity shares bought back, by the Company, during the year from surplus in statement of profit and loss.

Dividend:

With a view to reinvest the profits of the business, the Board does not recommend any dividend on equity shares of the Company for the year ended 31st March, 2015.


SignificantDevelopmentsduringtheYear:

Transfer of Wealth Management Business

During the year, the Shareholders of the Company resolved to transfer to the Julius Baer Group the Wealth Management (WM) division of the Company, comprising of advisory services and distribution services as undertaken by the Company, lending business relating to WM Division as undertaken by a wholly owned subsidiary of the Company, namely, DSP Merrill Lynch Capital Limited and trust services also relating to the WM Division as undertaken by DSP Merrill Lynch Trust Services Limited, a wholly owned subsidiary of the Company, together with the client relationships (including depository participant accounts, if any, relating to such relationships), employees and relevant assets relating to the WM Division. The process of the said transfer is underway.

Buy-back of Shares

During the year under review in accordance with the provisions of the Companies Act, 2013, an offer was made to all the shareholders of the Company for buy-back up to 16,095 fully paid up equity shares of the Company. During the year, the Company had bought-back 4961 equity shares from 121 shareholders of the Company.

SEBI Research Analysts Regulations

In September 2014, SEBI issued Research Analysts Regulations and the provisions there under came into effect from 30th November, 2014. As per the regulation, all Research entities including the Company were required to abide by the conditions specified in the regulations. Accordingly, the Company registered itself with SEBI for conducting research activities on Indian securities.

CorporateUpdate,OperationsandFutureOutlook:

The Indian economy in 2014-15 started on a positive note, with the election of the first single party majority government in over 3 decades, assuring political certainty for the next five years. The overall macroeconomic environment continued to improve, a process that had started in late 2014. The economy continued on a path of slow recovery as reflected by the new gross domestic product (GDP) series that registered a growth of 7.3 percent from 6.9 percent in the previous fiscal. Benefits of low crude oil prices were also felt across several macro indicators: CPI inflation continued to fall as low oil price along with a stable rupee abated imported inflation and the year ended with an average inflation of 6 percent, declining from 9.5 percent the previous fiscal; current account deficit came down further to 1.4 percent of GDP even as gold imports were liberalized; and fiscal deficit was contained at 4.1 percent of GDP, benefitting from higher excise duties on petroleum products and lower oil subsidies. Accumulation of foreign currency reserves by the Reserve Bank of India (RBI) further added to the stability of the rupee. The only disappointment came in terms of revival of capital expenditure as investment slowed down to 33.1 percent of GDP in 2014-15 from 33.7 percent the previous year. At the same time, policy rate cuts of 50 bps in 2014-15 along with a series of reforms were undertaken. This continued to provide a room for cautious optimism.

The marked improvement in overall business sentiment led to a sharp recovery in transaction volumes and revenues in Investment Banking, led by strong capital raising activity. Activity in primary markets picked up with equity raising during the year at US$15.7 billion compared with US$ 6.8 billion in the previous year. Debt Capital Markets (G3 and GBP) volumes also jumped 94 percent to US$21.8 billion in 2014-15. M&A (announced) activity continued on an upward trajectory with volumes at US$63 billion during the financial year, up 13 percent from US$ 55.7 billion in 2013-14.

Indian equities witnessed a solid year with the markets returning 24.9 per cent in 2014-15, above the 18.8 per cent recorded in the previous fiscal year. The historic election mandate boosted hopes of decisive policy action and helped markets re-rate. Secondary markets witnessed considerably higher interest from institutional investors. The year also saw the return of retail investors in a big way with domestic mutual funds (MF) recording their biggest ever inflows into equity MF schemes. During the year, Foreign Institutional Investors (FIIs) bought about US$ 18 billion (net) into the domestic equity markets as compared to US$13.5 billion (net) in the previous financial year. The heartening development of the year was that domestic mutual funds became a net buyer of Indian equities for the first time in six years with inflows of US$6.6 billion, compared to an outflow of US$ 3.7 billion in the previous year. The buoyant market led to a pick-up in primary and secondary offerings, and drove good growth in our equities business.

The Company believes that while India will remain susceptible to volatility in international markets, the domestic business sentiment will improve hereon and will help drive transaction volumes in both Investment Banking and Equities businesses. Our deal pipeline remains strong and primary markets should revive in the coming quarters as companies see more stability in the equity markets. Our Research team has forecast GDP growth of 7.5 percent for the 2015-16 fiscal. More concrete measures need to be taken by the Government to revive growth, and to ensure sustained growth over the next few years. The Company is confident that India’s long term growth prospects remain intact but one needs to be cautious keeping in mind the global uncertainties.


ExtractofAnnualReturn:

The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached as ANNEXURE-I to this Report.

NumberofMeetingsoftheBoard:

The Board of Directors has met seven (7) times during the financial year 1st April, 2014 to 31st March, 2015. The dates on which the meetings were held are as follows: 1. 6th June, 20142. 15thJuly, 20143. 1st September, 20144. 26th September, 20145. 16th December, 20146. 27th January, 20157. 20th March, 2015

Directors’ResponsibilityStatement:

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that -

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had 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 period;

c) the Directors had 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;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls with reference to the financial statements to be followed by the Company and such internal financial controls are adequate and were operating effectively;

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

AStatementonDeclarationgivenbyIndependentDirectors:

Ms. Amee Parikh (DIN – 00445583) and Mr. Haresh Shivdasani (DIN – 07124225) were appointed as Independent Directors on the Board of the Company during the financial year 2014-15. They had provided the declarations, pursuant to section 149(7) that they meet the criteria of independence as provided in section 149(6) of the Act, at the first meeting of the Board in which they participated as Directors.

NominationandRemunerationCommittee:

The Company’s policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and the recommendation in respect of the remuneration for the Directors, Key Managerial Personnel and other employees has been attached as ANNEXURE-II to this report. The composition of Nomination and Remuneration Committee pursuant to Section 178 of the Companies Act, 2013 is as follows:

1) Mr. Avinash Gupta - Chairman of the Committee2) Ms. Amee Parikh3) Mr. Haresh Shivdasani


SecretarialAuditReport:

The Company has obtained the Secretarial Audit Report in FormMR-3 and the same is attached as ANNEXURE-III to this Report.

Explanations or Comments by the Board on Qualifications, Reservations, Adverse Remarks or Disclaimers in SecretarialAuditReport:

There are no qualifications, reservations, adverse remarks and disclaimers in the Secretarial Audit Report.

Explanations or Comments by the Board on Qualifications, Reservations, Adverse Remarks or Disclaimers In StatutoryAuditor’sReport:

There are no qualifications, reservations, adverse remarks and disclaimers in the Audit Report issued by the Statutory Auditor of the Company.

ParticularsofLoans,GuaranteesorInvestments:

The particulars of loans given, guarantees provided or investments made under Section 186 during the year under review are attached as ANNEXURE-IV to this Report.

ParticularsofContractsorarrangementswithrelatedParties:

The particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013 in FormAOC-2 pursuant to Section 134 (3) (h) of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014 are attached as ANNEXURE-V to this Report.

Material changes and commitments affecting the financial position of the Company after the balance sheet date till the date ofthereport:

Pursuant to the decision taken by the Company and its subsidiaries for the sale of the Wealth Management Business, DSP Merrill Lynch Capital Limited (wholly-owned subsidiary of the Company) transferred its entire lending business (relating to the Wealth Management Division), as a going concern, by way of sale to Banc of America Securities (India) Private Limited on 6th June, 2015 for a lump sum consideration of Rs. 4,852 million.

ConservationofEnergy,TechnologyAbsorption,ForeignExchangeEarningsandoutgo:

Particulars of conservation of energy pursuant to Section 134(3) (m) and Rule 8(3) (A) of the Companies (Accounts) Rules, 2014 is attached as ANNEXURE-VI to this Report.

Particulars of technology absorption pursuant to Section 134(3) (m) and Rule 8(3) (B) of the Companies (Accounts) Rules, 2014 is attached as ANNEXURE-VII to this Report.

ForeignExchangeEarningsandoutgo:

Foreign exchange earnings of the Company during the year 2014-15 were Rs. 310.48 million (Previous year Rs. 460.58 million) while outgoings were Rs. 83.90 million (Previous year Rs. 248.71 million).

RiskManagementPolicy:

The statement indicating development and implementation of the risk management policy, adopted by the Company, including identification of element of risk which may threaten the existence of the Company pursuant to Section 134(3) (n) is attached as ANNEXURE-VIII to this Report.

CorporateSocialResponsibility:

A. The composition of Corporate Social Responsibility Committee pursuant to Section 135(2) of the Companies Act, 2013 is as follows:

1) Mr. Sundararaman Ramamurthy - Chairman of the Committee2) Ms. Amee Parikh3) Mr. Asit Bhatia


B. The details about policy developed, contents of policy and policy implemented by the Company on Corporate Social Responsibility initiatives taken during the year under review pursuant to Section 134(3) (o) and rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is attached as ANNEXURE-IX to this Report.

ChangeinnatureofBusiness:

During the year under review, there were no changes in nature of business of the company. The Shareholders of the Company resolved to transfer to the Julius Baer Group the Wealth Management division of the Company. Therefore, once the transfer process is complete the Company would not be involved in the Wealth Management business.

Directors:

The details of Directors as on 31st March, 2015:

Sr.No

NameoftheDirector Designation/Status DIN DateofAppointment

1. Mr. Asit Bhatia Chairman 05112750 25th November, 20112. Mr. Avinash Gupta Whole-time Director 05106833 25th November, 20113. Mr. Jyotivardhan Jaipuria Whole-time Director 05111689 25th November, 2011

(Ceased to be a Director w.e.f. 28th May, 2015)

4. Mr. Sundararaman Ramamurthy Additional Director 05297538 20th March, 20155. Ms. Amee Parikh Independent Director 00445583 20th March, 20156. Mr. Haresh Shivdasani Independent Director 07124225 20th March, 2015

Appointment/Re-appointment/ChangeinDesignationofDirector/ResignationtillthedateoftheReport:

Re-appointmentofDirector

Mr. Asit Bhatia (DIN:05112750) Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Mr. Avinash Gupta (DIN:05106833) Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Directors

WomanDirector

During the year, Ms. Gauri Deshmukh (DIN: 06922077) was appointed as Additional Director on the Board w.e.f 15th July, 2014. She resigned from the Board with effect from 20th March, 2015.

Further, Ms. Amee Parikh (DIN: 00445583) was appointed as Additional Director on the Board w.e.f 20th March, 2015 under the provisions of section 149(1) of the Companies Act, 2013.

IndependentDirectors

Ms. Amee Parikh (DIN: 00445583) and Mr. Haresh Shivdasani (DIN: 07124225) were appointed as Independent Additional Directors on Board w.e.f 20th March, 2015 for 1 year. The Board recommends their appointment as Independent Directors of the Company till 19th March, 2016.


Appointments

Mr. Sundararaman Ramamurthy (DIN 05297538) was appointed as Additional Director on Board w.e.f 20th March, 2015 and his term expires at the ensuing Annual General Meeting. The Board recommends his appointment as a Director of the Company liable to retire by rotation.

Mr. Rajnarayan Balakrishnan was appointed as a Whole - time Director of the Company w.e.f 28th May, 2015 for a period of three years.

Resignations

During the year under review,

° Mr. Pradeep Dokania (DIN: 0005270), Whole-time Director of the Company had resigned from the Board with effect from 22nd May, 2014.

° Mr. Allen Arakal (DIN: 05102650), Director of the Company had resigned from the Board with effect from 29th May, 2014.

° Mr. Kumar Shah (DIN: 00033865), Director of the Company, had resigned from the Board with effect from 20th March, 2015.

° Ms. Gauri Deshmukh (DIN: 06922077), Additional Director of the Company had resigned from the Board with effect from 20th March, 2015.

° Mr. Jayesh Mehta (DIN: 00030636), Director of the Company had resigned from the Board with effect from 20th March, 2015.

° Mr. Jyotivardhan Jaipuria, Whole-time Director of the Company had resigned from the Board with effect from 28th May, 2015.

The Board expresses its sincere appreciation for the valuable services provided by the outgoing Directors during their tenure in the Company.

KeyManagerialPersonnel:

Appointment

During the year under review, Mr. Ashish Adukia was appointed as the Chief Financial Officer (“CFO”) of the Company with effect from 16th December, 2014 to hold office till 19th November, 2015. Also, Mr. Avinash Gupta and Mr. Jyotivardhan Jaipuria were re-appointed as Whole-time Directors (“WTD”) of the Company with effect from 25th November, 2014 for a period of three years.

SubsidiaryCompanies,JointVentureorAssociateCompanies:

During the year under review, the Company incorporated Merrill Lynch Wealth Advisors Private Limited (“MLWA”) as the wholly owned subsidiary of the Company with effect from 27th June, 2014 to facilitate the transfer of the Wealth Management business to Julius Baer group. As a part of this transfer process, MLWA was transferred to Julius Baer group on 13th April, 2015 and thus ceased to be a subsidiary of the Company with effect from that date. The other subsidiaries of the Company are DSP Merrill Lynch Capital Limited and DSP Merrill Lynch Trust Services Limited.

The Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies in FormAOC-1 pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rule 5 of Companies (Accounts) Rules, 2014 is attached as ANNEXURE-X to this Report.

Deposits:

The Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

OrderpassedbyRegulatorsorCourtsorTribunals:

During the period under review, there are no orders passed by the regulators or courts or tribunals against the Company impacting its status as a going concern and its operations.


InternalFinancialcontrolswithreferencetofinancialstatements:

Considering the size and nature of the business, presently adequate internal controls with reference to financial statements are in place. However, as and when Company achieves further growth and higher level of operations, Company will review the internal control system to match the size and scale of operations, if required.

The Company has proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against unauthorized use or disposition and that transaction are authorised and recorded correctly.

AuditCommittee:

The Audit Committee of the Company was constituted vide meeting dated 24th June, 2000. The Committee has adopted a charter for its functioning. The primary objective of the Committee is to assist Board of Directors and Senior Management of the Company in fulfilling their responsibilities for accounting policies, financial reporting and systems of internal control with the highest levels of transparency and integrity.

The composition of the Committee pursuant to Section 177(2) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 consist of three (3) Directors, out of which two (2) Directors are Independent Directors and constitutes majority.

The Composition of the Committee as on the date of this report is as under:

1) Mr. Sundararaman Ramamurthy - Chairman of the Committee2) Ms. Amee Parikh3) Mr. Haresh Shivdasani

DetailsofIssueofSweatEquityShares:

During the period under review, no Sweat Equity Shares were issued by the Company.

Acknowledgement:

The Board place on record its appreciation of the whole hearted and sincere co-operation received by the Company during the year from the employees, clients, bankers, regulators and various government authorities at all levels.

ForandonbehalfoftheBoardofDirectorsofDSPMerrillLynchLimited

AsitBhatia Chairman (DIN: 05112750)

Date: 14th August, 2015Place: Mumbai


ANNEXURESTOTHEDIRECTOR’SREPORT

ANNEXURE-I

FormNo.MGT-9ExtractofAnnualReturn

Asonthefinancialyearendedon31stMarch,2015[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. Registrationandotherdetails:

(i) CIN U74140MH1975PLC018618(ii) RegistrationDate 23rd October, 1975(iii) NameoftheCompany DSP Merrill Lynch Limited(iv) Category

Sub-CategoryoftheCompanyCompany Limited by Shares /Indian Non-Government Company

(v) AddressoftheRegisteredofficeandcontactdetails Mafatlal Centre, 8th floor, Nariman Point, Mumbai – 400 021, MaharashtraThe Registered Office of the Company is shifted to 16th Floor, Express Towers, Nariman Point, Mumbai – 400 021, Maharashtra with effect from 20th July, 2015Contact details : +912266328439

(vi) Whetherlistedcompany No(vii) Name, Address and Contact details of Registrar and

TransferAgent,ifanySharepro Services (India) Pvt. Ltd.Regd. Office: 13 AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Tel Exchange Lane, Off. Andheri-Kurla Road, Sakinaka, Andheri (E), Mumbai -400 072 Contact no. : +912267720400

II. PrincipalbusinessactivitiesoftheCompanyAll the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sr.No.

NameandDescriptionofmainproducts/services NICCodeoftheProduct/service %tototalturnoverofthecompany

1) Securities Broking 99715210 73%2) Investment Banking Services 997151 14%3) Advisory Services & Others 997159 13%

III. Particularsofholding,subsidiaryandassociatecompanies

Sr.No.

NameandaddressoftheCompany CIN/GLN Holding/Subsidiary/Associate

%ofsharesheld

ApplicableSection

1. DSP Merrill Lynch Capital Limited U65990MH2005PLC152497 Subsidiary company 100 Sec.2 (87)

2. DSP Merrill Lynch Trust Services Limited U74999MH2006PLC163451 Subsidiary company 100 Sec.2 (87)

3. Merrill Lynch Wealth Advisors Private Limited U65923MH2014PTC255743 Subsidiary companyceased to be a subsidiary w.e.f. 13th April, 2015

100 Sec.2 (87)


IV. Shareholdingpattern(Equitysharecapitalbreakupaspercentageoftotalequity):

i)Category-wiseShareholding

CategoryofShareholders

NumberofSharesheldatthebeginningoftheyear

NumberofSharesheldattheendoftheyear

%Changeduringthe

year

Demat Physical Total %ofTotalShares

Demat Physical Total %ofTotalShares

A. Promoters

1. Indian

a. Individual/HUF - - - - - - - - -

b. Central Government - - - - - - - - -

c. State Government(s) - - - - - - - - -

d. Bodies Corporate - - - - - - - - -

e. Banks/FI - - - - - - - - -

f. Any Other - - - - - - - - -

Sub–Total(A)(1) - - - - - - - - -

2. Foreign

a. NRI – Individuals - - - - - - - - -

b. Other Individuals - - - - - - - - -

c. Bodies Corporate 13,648,800 - 13,648,800 58.93% 13,648,800 - 13,648,800 58.94% 0.01%

d. Banks/FI 9,495,105 - 9,495,105 41.00% 9,495,105 - 9,495,105 41.01% 0.01%

e. Any Other - - - - - - - - -Sub–Total(A)(2) 23,143,905 - 23,143,905 99.93% 23,143,905 - 23,143,905 99.95% 0.02%

TotalShareholdingofPromoterA=(A)(1)+(A)(2)

23,143,905 - 23,143,905 99.93% 23,143,905 - 23,143,905 99.95% 0.02%

B. PublicShareholding

I. Institutions

a. Mutual Funds/UTI - - - - - - - - -

b. Banks / FI - - - - - - - - -

c. Central Government - - - - - - - - -

d. State Government (s) - - - - - - - - -

e. Venture Capital Funds - - - - - - - - -

f. Insurance Companies - - - - - - - - -


IV. Shareholdingpattern(Equitysharecapitalbreakupaspercentageoftotalequity)(Contd...):

i)Category-wiseShareholding(Contd...)

CategoryofShareholders

NumberofSharesheldatthebeginningoftheyear

NumberofSharesheldattheendoftheyear

%Changeduringthe

yearDemat Physical Total %ofTotal

SharesDemat Physical Total %ofTotal

Shares

g. Foreign Institutional Investors

- - - - - - - - -

h. Foreign Venture Capital Funds

- - - - - - - - -

i. Others - - - - - - - - -

SubTotalB(1) - - - - - - - - -

II. Non–Institutions

a. BodiesCorporate

I. Indian 2,698 2 2,700 0.01% 1,768 2 1,770 0.01% 0.00%

II. Overseas - - - - - - - - -b. Individual

I. Individual shareholders holding nominal share capital upto Rs. 1 Lakh

9,488 3,697 13,185 0.06% 5,574 3,584 9,158 0.04% (0.02%)

II. Individual shareholders holding nominal share capital in excess of Rs. 1 Lakh

- - - - - - - - -

c. Others 210 - 210 0.00% 206 - 206 0.00% 0.00%Sub-total(B)(2):- 12,396 3,699 16,095 0.07% 7,548 3,586 11,134 0.05% (0.02%)

TotalPublicShareholding(B)=(B)(1)+(B)(2)

12,396 3,699 16,095 0.07% 7,548 3,586 11,134 0.05% (0.02%)

C SharesheldbyCustodianforGDRs&ADRs

- - - - - - - - -

GrandTotal(A+B+C) 23,156,301 3,699 23,160,000 100% 23,151,453 3,586 23,155,039 100% -



ii)ShareholdingofPromoters

Sr.No

Shareholder’sName Shareholdingatthebeginningoftheyear Shareholdingattheendoftheyear %changeinshareholding

duringtheyear

No.ofShares

%oftotalSharesofthe

Company

%ofSharesPledged/

encumberedtototalshares

No.ofShares

%oftotalSharesofthe

Company

%ofSharesPledged/

encumberedtototalshares

1. Merrill Lynch Investment Holdings (Mauritius) Ltd.

10,738,800 46.37% - 10,738,800 46.38% - 0.01%

2. Merrill Lynch Holdings (Mauritius).

9,495,105 41.00% - 9,495,105 41.01% - 0.01%

3. Merrill Lynch Asia Investment Ltd.

2,910,000 12.56% - 2,910,000 12.56% - 0.00%

(iii)ChangeinPromoters’Shareholding(pleasespecify,ifthereisnochange)

Sr.No

Shareholdingatthebeginningoftheyear CumulativeShareholdingduringtheyear

No.ofshares %oftotalsharesoftheCompany


At the beginning of the year 23,143,905 99.93% 23,143,905 99.93%At the End of the year 23,143,905 99.95% 23,143,905 99.95%

(iv)ShareholdingPatternoftoptenShareholders(otherthanDirectors,PromotersandHoldersofGDRsandADRs):

Sr.No




1. Mr.BhupendraDalalAt the beginning of the year 2,400 0.01% 2,400 0.01%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -

At the End of the year ( or on the date of separation, if separated during the year)

2,400 0.01% 2,400 0.01%



(iv)ShareholdingPatternoftoptenShareholders(otherthanDirectors,PromotersandHoldersofGDRsandADRs)(Contd...):Sr.No




2. J M Financial and InvestmentConsultancyAt the beginning of the year 1,000 0.004% 1,000 0.004%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


1,000 0.004% 1,000 0.004%

3. Mr.AjayAgarwalAt the beginning of the year 1,000 0.004% 1,000 0.004%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


1,000 0.004% 1,000 0.004%

4. Mr.E.ASundaramAt the beginning of the year 500 0.002% 500 0.002%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

The Company bought back 500 shares on 15th December, 2014 - - -


- - - -

5. Mr.VijayBhaweAt the beginning of the year 400 0.002% 400 0.002%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


400 0.002% 400 0.002%



(iv)ShareholdingPatternoftoptenShareholders(otherthanDirectors,PromotersandHoldersofGDRsandADRs)(Contd...):Sr.No




6. Mrs.BharatiD.ThakkarAt the beginning of the year 400 0.002% 400 0.002%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


400 0.002% 400 0.002%

7. Mr.SNRajanAt the beginning of the year 353 0.002% 353 0.002%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


353 0.002% 353 0.002%

8. Mr.SaumilNarendraShah At the beginning of the year 300 0.001% 300 0.001%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):



- - - -

9. PeninsulaGatewaysPrivateLimited At the beginning of the year 290 0.001% 290 0.001%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):



- - - -



(iv)ShareholdingPatternoftoptenShareholders(otherthanDirectors,PromotersandHoldersofGDRsandADRs)(Contd...):10. Mr.DilipVithaldasLakhani

At the beginning of the year 250 0.001% 250 0.001%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):



70 0.000% 70 0.000%

11. Mr.BrijeshJaysinhVed At the beginning of the year 250 0.001% 250 0.001%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


250 0.001% 250 0.001%

12. Mrs.VijayaJaysinhVedAt the beginning of the year 250 0.001% 250 0.001%Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

- - - -


250 0.001% 250 0.001%

(v)ShareholdingofDirectorsandKeyManagerialPersonnel:

S r .No.

NameofDirector

Shareholdingatthebeginningoftheyear

ChangeinShareholdingduringtheyear

ShareholdingattheEndoftheyear

No. of shares % of total shares of the Company

Increase Decrease No. of shares % of total shares of the Company

NIL


V. Indebtedness

IndebtednessoftheCompanyincludinginterestoutstanding/accruedbutnotdueforpayment

Rs.InmillionSecuredLoans

excludingdepositsUnsecured

LoansDeposits Total

IndebtednessIndebtednessatthebeginningofthefinancialyear(i) Principal Amount 82.54 - - 82.54(ii) Interest due but not paid - - - -(iii) Interest accrued but not due - - - -Total(i+ii+iii) 82.54 - - 82.54ChangeinIndebtednessduringthefinancialyear° Addition 36.78 - - 36.78° Reduction (44.55) - - (44.55)NetChange (7.77) - - (7.77)Indebtednessattheendofthefinancialyear

(i) Principal Amount 74.77 - - 74.77(ii) Interest due but not paid - - - -(iii) Interest accrued but not due - - - -Total(i+ii+iii) 74.77 - - 74.77


VI. RemunerationofDirectorsandKeyManagerialPersonnel

A. RemunerationtoManagingDirector,Whole-timeDirectorsand/orManager:InRs.

S r .No.

ParticularsofRemuneration

NameofMD/WTD/Manager TotalAmount

Mr.PradeepDokania(Whole-TimeDirector)

Mr.AvinashGupta(Whole-TimeDirector)

Mr.JyotivardhanJaipuria

(Whole-TimeDirector)

1. Gross salarya. Salary as per

provisions contained in section 17(1) of Income-tax Act, 1961

2,531,170 69,958,937 49,115,331 121,605,438

b. Value of perquisites u/s 17(2) of Income-tax Act, 1961

4,026 12,000 28,800 44,826

c. Profits in lieu of salary under section 17(3) of Income-tax Act, 1961

- - - -

2. Stock Option3. Sweat Equity - - - -4. Commission

- as % of profit - - - -

- Others, specify… - - - -5. Others, please specify

(Includes Retirals - PF, Gratuity and Leave encashment Actuarial valuation)

1,226,174 3,083,092 2,914,586 7,223,852

Total 3,761,370 73,054,029 52,058,717 128,874,116CeilingaspertheAct 367,533,000

B. RemunerationtootherDirectors:

InRs.S r .No.

ParticularsofRemuneration NameofDirectors TotalAmount

1. IndependentDirectors Ms.AmeeParikh Mr.HareshShivdasania. Fee for attending Board / Committee

meetings- - -

b. Commission - - -c. Others, please specify - - -Total(1) - - -


VI. RemunerationofDirectorsandKeyManagerialPersonnel(Contd...)

B. RemunerationtootherDirectors(Contd...):

2. OtherNon-ExecutiveDirectorsa. Fee for attending Board / Committee

meetings - - -b. Commission - - -c. Others, please specify - - -Total(2) - - -Total(1+2) - - -TotalManagerialRemuneration - - -CeilingaspertheAct - - 36,753,300

C. RemunerationtoKeyManagerialPersonnelotherthanMD/Manager/WTD:InRs.

S r .No.

ParticularsofRemuneration KeyManagerialPersonnel

Mr.AshishAdukia(ChiefFinancialOfficer)

Mr.NishithMehta(CompanySecretary)

Total

1. Grosssalarya. Salary as per provisions contained in

section 17(1) of Income-tax Act, 1961 2,537,642 8,921,380 11,459,022

b. Value of perquisites u/s 17(2) of Income-tax Act, 1961 39,207 385,801 425,008

c. Profits in lieu of salary under section 17(3) of Income-tax Act, 1961 - - -

2. Stock Option - - -3. Sweat Equity - - -4. Commission

- as % of profit - Others, specify…

- - -

5. Others, please specify (includes retirals, PF, Gratuity and Leave encashment, Acturial valuation)

461,432 1,302,049 1,763,481

Total 3,038,281 10,609,230 13,647,511

VII. Penalties/Punishment/CompoundingofOffences:

Type SectionoftheCompaniesAct

BriefDescription

DetailsofPenalty/P u n i s h m e n t /Compounding feesimposed

Authority[RD/NCLT/COURT]

Appealmade,ifany(givedetails)

A. COMPANYPenalty - - - - -Punishment - - - - -Compounding - - - - -

B. DIRECTORSPenalty - - - - -Punishment - - - - -Compounding - - - - -

C. OTHEROFFICERSINDEFAULTPenalty - - - - -Punishment - - - - -Compounding - - - - -


ANNEXURE-II

Company’sPolicyonDirector’sAppointmentbyNominationandRemunerationCommittee

1. Background

The Nomination and Remuneration Committee (“Committee”) is a committee of the Board of Directors (“Board”) of the Company to exercise oversight with respect to the Company’s compliance with requirements set forth under Section 178 of the Companies Act, 2013 (“Act”). The Committee will report to the Board as required.

The Committee is authorized to investigate any activity or matter within this Charter or as authorized by the Board.

The Committee will have full and unrestricted access to information as it may be reasonably required and able to obtain independent professional advice deemed necessary.

2. ScopeofDuties

The Committee shall be responsible for exercising oversight with respect to the Company’s compliance with the applicable provisions of the Act which include:

A.Nomination:

° Identification of persons who are qualified to become directors and who may be appointed in the senior management in accordance with the criteria laid down

° Formulating the criteria for determining the qualifications, positive attributes and independence of the directors° Discuss the proposals for new incumbent(s) who are nominated to be Director to the Board of Directors of the Company° Review the qualification and credentials of every person nominated to the Board° Assess the suitability of the person so nominated to be on the Board of Directors° Discuss and recommend to the Board that the nominated person is fit and proper person to act as Director to the Company° Recommend to the Board of Directors of the Company removal of Directors and carry out evaluation of every Director’s performance

B. Remuneration:

° Recommend to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees° As required by the Act, while formulating the policy the Committee shall ensure that,:

- The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully

- The relationship of remuneration to performance is clear and meets appropriate performance benchmarks- The remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and

incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

° The review of compensation decisions for Research Analysts shall be as required by the Securities and Exchange Board of India (Research Analysts) Regulations.


ANNEXURE–IIIFormNo.MR-3

FortheFinancialYearended31stMarch2015

SecretarialAuditReport

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,TheMembers,DSPMERRILLLYNCHLIMITED

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by DSP MERRILL LYNCH LIMITED (hereinafter called the Company). Secretarial audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in my/our opinion, the company has, during the audit period covering the financial year ended on March 31, 2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2015 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings: Not applicable;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: Not

applicable;(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992: Not applicable;(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009: Not

applicable;(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)

Guidelines, 1999: Not applicable;(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008: Not applicable;(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993: Not applicable;(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009: Not applicable; and(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998: Not applicable;

(vi) The Company is registered with the Securities and Exchange Board of India as a stock-Broker; Merchant Banker; Underwriter; Depository Participant; Investment Advisor and Portfolio manager and has complied with the applicable Regulations / Guidelines issued by the Securities and Exchange Board of India and Stock Exchange.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India: Not notified hence not applicable to the Company during the audit period.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc.


We further report that:The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. All majority decision are carried through and there have not been any instance where any member has offered dissenting views on any business.

We further report that there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period the company has bought-back 4,961 equity shares from 121 members of the Company.

Place: Mumbai Date: : 31st July, 2015 Name of Company Secretary in Practice: Surendra U. Kanstiya FCS No.: 2777 C P No.: 1744


ANNEXURE–IV

ParticularsofLoans,GuaranteesandInvestments

S r .No.

Particulars Details

1. Nature of Transaction Loan / Inter corporate Deposit2. Date of making Loan 21st April, 20143. Name and Address of the Person/ Body Corporate to whom loan advanced DSP Merrill Lynch Trust Services limited

Mafatlal Centre, 8th Floor, Nariman Point Mumbai 400 021, Maharashtra

4. Amount of loan advanced Rs. 50,000,000 5. Time Period for which it is given 3 months6. Purpose of Loan Deployment of surplus fund7. % of Loan to the Paid up Capital, Free Reserves and Securities Premium

Account and % of Free Reserves and Securities Premium0.29% and 0.3%

8. Date of Passing of Board Resolution 4th March, 20149. Date of passing Special Resolution, if required -10. For Loans:

a) Rate of Interest 9.31%b) Date of Maturity 21st July, 2014

S r .No.

Particulars Details

1. Nature of Transaction Loan/ Inter corporate Deposit2. Date of making Loan 21st July, 20143. Name and Address of the Person/ Body Corporate to whom loan advanced DSP Merrill Lynch Trust Services limited





a) Rate of Interest 8.90 %b) Date of Maturity 20th October, 2014


S r .No.

Particulars Details

1. Nature of Transaction Loan/ Inter corporate Deposit2. Date of making Loan 20th October, 20143. Name and Address of the Person/ Body Corporate to whom loan advanced DSP Merrill Lynch Trust Services limited





a) Rate of Interest 8.89 %b) Date of Maturity 19thJanuary, 2015

Sr.No.

Particulars Details

1. Nature of Transaction Loan/ Inter corporate Deposit2. Date of making Loan 19thJanuary, 20153. Name and Address of the Person/ Body Corporate to whom loan advanced DSP Merrill Lynch Trust Services limited





a) Rate of Interest 8.75 %b) Date of Maturity 20th April, 2015


ANNEXURE-V

ParticularsofContractsorArrangementswithRelatedParties

FormNo.AOC-2(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. Detailsofcontractsorarrangementsortransactionsnotatarm’slengthbasis

Sr.No.

Particulars Remarks

(a) Name(s) of the related party and nature of relationship

NIL

(b) Nature of contracts/arrangements/transactions

(c) Duration of the contracts / arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, if any

(e) Justification for entering into such contracts or arrangements or transactions

(f) Date(s) of approval by the Board

(g) Amount paid as advances, if any

(h) Date on which the special resolution was passed in general meeting as required under first proviso to Section 188

2. Detailsofmaterialcontractsorarrangementortransactionsatarm’slengthbasis*

Sr.No.

Particulars Remarks

(a) Name(s) of the related party and nature of relationship Merill Lynch Capital Markets Espana S.A S.V

Relationship: Subsidiary of the ultimate holding company.

(b) Nature of contracts/arrangements/transactions Brokerage Income of Rs.1,170.98 million

(c) Duration of the contracts / arrangements/transactions From 6th May, 2003 till date

(d) Salient terms of the contracts or arrangements or transactions including the value, if any

To enable client to trade in securities including derivatives on the various segments of BSE, NSE & OTCEI Stock Exchanges

(e) Date(s) of approval by the Board, if any -

(f) Amount paid as advances, if any -

* Contracts or arrangement or transactions are considered as ‘Material’ if they exceed the limit requiring Shareholder’s approval as specified in Section 188 of the Companies Act, 2013 and Rules thereunder.


ANNEXURE-VI

(A) ConservationofEnergy-NotApplicable

(i) the steps taken or impact on conservation of energy; (ii) the steps taken by the Company for utilising alternate sources of energy; (iii) the capital investment on energy conservation equipments;

ANNEXURE-VII

(B) Technologyabsorption-NotApplicable

(i) the efforts made towards technology absorption; (ii) the benefits derived like product improvement, cost reduction, product development or import substitution; (iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

(a) the details of technology imported; (b) the year of import; (c) whether the technology been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

(iv) the expenditure incurred on Research and Development.

ANNEXURE-VIII

RelevantExtractOfRiskManagementPolicy

The Company is an operating company engaged in activities as Stock Broker, Merchant Banker, Depository Participant, Investment Advisor and Portfolio Manager. It is indirectly majority owned by Bank of America Corporation (“BAC”).

The Company’s risk capacity and risk appetite are aligned with return objectives and financial resources centred on the Company’s risk profile. This integration and alignment enhances BAC’s financial risk management by focusing on risk-adjusted returns within a given set of financial considerations and risk limits. The Company’s risk appetite is set annually in conjunction with the strategic, capital and financial operating plans ensuring that the aggregate risk appetite of certain subsidiaries and businesses is within the Company’s risk appetite. Evaluating these plans in conjunction allows the Company to adjust to changing business market conditions in order to keep risk-taking aligned with risk appetite.

BAC has implemented strong processes and controls to monitor its risk profile and keep performance aligned with risk appetite. Risk limits ensure BAC’s risk profile remains within the boundaries of the risk appetite, including consideration of potential stressed outcomes. Key risk governance committees set and monitor the limits, with Board oversight. Businesses and control functions define additional or supporting risk limits through established governance processes (which include appropriate representatives from Global Risk Management and other control functions as members) or at the direction of their respective executive officers.

RiskManagement

The Company’s Risk Policy operates alongside BAC’s global framework and encompasses the seven risk types described as below. It is noted that due to limited scope of business activities (primarily being fee based business), some of the below mentioned risks are currently not applicable to the Company:

° Creditrisk is defined as the possibility of losses associated with diminution in the credit quality of borrowers. The losses stem from outright default due to inability or unwillingness of a customer to meet commitments on financial transactions. No lending activity is carried out under the Company. Issuer risk arises out of corporate treasury investments, Risk process in place to manage Mutual Fund investments with daily monitoring of limits. Debt & Equity Capital market underwriting activity is approved through regional committees including local risk manager representation.


° Marketrisk is the risk of loss due to changes in the market values of the entity’s assets and liabilities caused by changing interest rates, currency exchange rates, and security prices. Market risk is inherent in the operations and arises from corporate treasury investments (No trading activity currently undertaken). Organization uses Value at Risk (“VAR”) modeling to evaluate the risks in its trading activities. The calculated VaR represents the worst loss the portfolio is expected to experience with a given level of confidence. It reflects the volatility of the positions in the portfolio and how strongly the risks are correlated. All limit excesses are communicated to senior management for review.

° Operationalrisk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. Operational Risk Events: inadequate or failed internal processes, people, systems and external events may result in unexpected or undesired consequences including a financial loss, an unexpected gain, a near miss and/or an opportunity cost (lost future revenue). The events associated with these unintended and/or undesired consequences are termed as operational risk events.

° Strategic risk including business risk is the risk that results from adverse business decisions, inappropriate business plans, ineffective business strategy execution, or failure to respond in a timely manner to changes in the macroeconomic environment, such as business cycles, competitor actions, changing customer preferences, product obsolescence, technology developments and the regulatory environment. The Company manages strategic risk through assessing earnings and risk profile throughout the year. These are periodically discussed in appropriate governance committee.

° Liquidity risk is the potential inability to meet contractual and contingent financial obligations on- or off-balance sheet as they become due. Sources of liquidity risk include unavailability of funding at the price or amount anticipated or credit rating downgrades. This may impact the ability to manage its asset and liability position. Virtually every financial transaction and commitment has liquidity implications.

° Reputational risk is the potential that negative publicity regarding an organization’s business practices will adversely affect its profitability, operations or customer base or require costly litigation or other measures. It is the potential risk that negative publicity regarding an organization’s conduct, or business practices will adversely affect its profitability, operations or customer base, or require costly litigation or other defensive measures, is by its nature extremely difficult to quantify and lends itself to being mitigated by good governance controls.

° Compliancerisk is the risk of legal or regulatory sanctions arising from the failure to comply with requirements of applicable laws, rules and regulations. Compliance is at the core of the Company’s culture and is a key component of the risk management discipline.


ANNEXURE–IX

CorporateSocialResponsibility(CSR)

[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

1.BriefoutlineoftheCompany’sCSRpolicy,includingoverviewofprojectsorprogramsundertaken:

The CSR Committee is formed to monitor the management of the Company. Corporate Social Responsibility Policy adopted by the Company is in accordance with the provisions of Section 135 of the Companies Act, 2013. The CSR Committee of the Company is the primary body providing strategic direction to the Company’s Corporate Social Responsibility initiatives and ensuring compliance with regulatory requirements and internal policies of the Company.

Being a responsible business is integral to the success of the Company and that of the clients, shareholders and communities that it serves around the world. CSR is embedded in the values of the Company and informs how it conduct business, develop products and services and deliver on its goals and commitments. The Company follow responsible business practices in the communities in which it operates. It rigorously reviews its business practices and policies and is continuing to simplify information for its customers, maintain a strong risk culture and manage its businesses to be accountable to shareholders and stakeholders.

The CSR approach of the Company in India is integrated across the following core areas, where it focuses its resources:

SupporttotheUnderprivileged:In India, the Company supports the economic health of communities, specially women and children in need, by providing grants for:° eradicating hunger, poverty and malnutrition among children and young women; ° promotion and support of education at primary, middle and secondary level schools such as teacher training that will help to improve

the education system; ° rural development projects such as support for housing; ° promoting gender equality and workforce development initiatives by supporting vocational training, financial awareness and livelihood

advancements specifically for young women.

To achieve this, the Company has entered into partnerships with non-governmental organizations (NGOs) that share its goal and can facilitate its employees’ desire to participate through volunteering.

Arts&Culture: ° The Company is committed to a supporting indigenous arts and culture – enriching society, helping organizations thrive and promoting

cultural understanding through the arts. Its support would be through a unique range of grants to art conservation and would include exhibition loaning programs through its global art conservation initiatives. The art conservation program would provide grants to non-profit institutions to conserve works that are significant to the cultural heritage of a country or region, or important to the history of art.

EnvironmentalSustainability: ° The Company would look to drive positive environmental change through addressing the environmental impact of its own operations

and through transformational finance. It commits to invest in programs and partnerships that provide sustainable solutions to developmental challenges faced by local communities. Through its global “My Environment” program, it aims to promote change by engaging its employees in specific environmental initiatives. This program would enable its employees to participate in educational and volunteer events, as well as programs that encourage employees to take a specific action to reduce their environmental impact.

Leadership&Service:° The Company value its differences — in thought, style, culture, ethnicity and experience — understanding that diversity and inclusion are

good for business, attract and retain talent and enables the company to better serve employees, customers, clients and shareholders. Towards this, it would support programs that develop emerging women leaders in entrepreneurial space and high-performing non-profits within the communities. By investing in and sharing its expertise with women inside and outside the organization, it strives to encourage the ideas of aspiring entrepreneurs, create employment opportunities and contribute to the local economies.

° The Company would leverage its global partnerships to connect women leaders from India with established women leaders from a range of business sectors, including within the Company for one-on-one mentoring. Through its mentoring forums it will strive to convene women to discuss opportunities for leadership to address economic issues faced by women in our country as well as build their businesses and develop their critical communications, advocacy and business skills.


° The Company would support the personal growth of its employees and retain talent by encouraging its employees to volunteer their time and expertise, helping individuals and communities. The employees of the Company will act as stewards of environment through the “My Environment” program. Through employee volunteering it will be able to increase the positive impact of the programs run by the non-profits and non-governmental organizations that it will be funding and supporting.

DisasterRelief: ° The Company is committed to helping the local communities affected by natural disasters and calamities, which it would conduct

through direct charitable contributions and employee matching gift grants to support immediate, intermediary and long-term rehabilitation. It would work with community organizations to support medical aid, food supply, clean drinking water and sanitation, and re-building of schools, shelters and hospitals.

Implementationandmonitoring: ° The general philosophy of the contributions and funding made by the Company is to develop strong relationships with local charitable

and community organizations and work hand-in-hand with national partners to help the corporate build the health of communities it operates in. Contributions have been made in line with the financial resources, business strategy, applicable regulations and any internal guidance documents and policies in this space.

° The Company follows a transparent process for identifying, evaluating and contributing to projects and partnerships within its core areas of focus. Proposals are evaluated and analyzed by the country CSR committees of its Indian entities under the guidance and leadership of their respective Board of Directors.

Disclosures:

To better meet the stakeholder needs and interests, the Company aims to share comprehensive information on its CSR initiatives so as to communicate and share the impact of its projects on its communities. This would be done through the annual report that will capture the details of the projects it support and its impact on the community.

2. TheCompositionoftheCSRCommittee:

1) Mr. Sundararaman Ramamurthy - Chairman of the Comittee 2) Ms. Amee Parikh 3) Mr. Asit Bhatia

3. AveragenetprofitbeforetaxoftheCompanyforlastthreefinancialyears:Rs. 2,378.92 million

4. PrescribedCSRExpenditure(twopercentoftheamountasabove):Rs. 47.58 million


5. DetailsofCSRspentduringthefinancialyear:

(a) Total amount to be spent for the financial year - Rs. 47.58 million (b) Amount unspent, if any – Nil (c) Manner in which the amount spent during the financial year is detailed below:

S r.No.

CSRprojectoractivityidentified

SectorinwhichtheProjectiscovered

Projectsorprograms(1)Localareaorother(2)SpecifytheStateanddistrictwhereprojectsorprogramswereundertaken

Amountoutlay(budget)projectorprogramwise(Rs.)

AmountspentontheprojectsorprogramsSub–heads:(1)Directexpenditureonprojectsorprograms(2)Overheads(Rs.)

Cumulativeexpenditureuptothereportingperiod(Rs.)

AmountspentDirectorthroughimplementingagency

1. Chatrapati Shivaji Maharaj Vastu Sangrahalaya

Protection of national heritage, arts and culture

Mumbai, Maharashtra

7,000,000 7,000,000 7,000,000 Direct

2. Akansha Foundation

Education Mumbai, Maharashtra

2,200,000 2,200,000 2,200,000 Direct

3. Impact Foundation India

Programme Support

Pan-India 1,000,000 1,000,000 1,000,000 Direct

4. Habitat For Humanity India Trust

Sanitation Osmanabad and Latur, Maharashtra and Gwalior, Madhya Pradesh

31,250,000 31,250,000 31,250,000 Direct

5. Swachh Bharat Kosh

Sanitation Pan-India 6,130,000 6,130,000 6,130,000 Direct

Total 47,580,000 47,580,000 47,580,000

During the financial year 2014-15 the Company has spent 2% of its average net profits of the last 3 financial years in CSR activities.

The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

ANNEXURE-X

FormAOC-1

(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of Subsidiaries/ Associate Companies/ Joint Ventures

PartA:Subsidiaries

Sr.No.11. Name of the Subsidiary – DSP Merrill Lynch Capital Limited2. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period – N.A3. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries – N.A


4. Share capital – (i) Authorised Capital : Rs. 2,100 Million(ii) Paid-up Capital : Rs. 2,050 Million5. Reserves & Surplus – Rs.19,265.21 Million6. Total Assets – Rs. 21,618.47 Million7. Total Liabilities – Rs. 303.26 Million8. Investments – Rs.40.97 Million9. Turnover – Rs. 1,859.61Million10. Profit before taxation – Rs. 2,244.18 Million11. Provision for taxation – Rs.766.57 Million12. Profit after taxation – Rs. 1,477.61Million13. Proposed Dividend - Nil14. % of shareholding – 100%

Sr.No.21. Name of the Subsidiary – DSP Merrill Lynch Trust Services Limited2. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period – N.A3. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries – N.A4. Share capital – a. Authorised Capital : Rs. 50 Millionb. Paid-up Capital : Rs. 49 Million5. Reserves & Surplus – Rs.(99.05) Million6. Total Assets – Rs.6.99 Million7. Total Liabilities – Rs.57.04 Million8. Investments - Nil9. Turnover – Rs.6.53 Million10. Profit / (Loss) before taxation - Rs. (7.17) Million11. Provision for taxation – Rs. (0.02) Million12. Profit /(Loss) after taxation - Rs. (7.15) Million13. Proposed Dividend - Nil14. % of shareholding – 100%

Sr.No.31. Name of the Subsidiary – Merrill Lynch Wealth Advisors Private Limited2. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period – N.A3. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries – N.A4. Share capital – a. Authorised Capital : Rs. 500 Millionb. Paid-up Capital : Rs. 500 Million5. Reserves & Surplus – Rs.(104.43) Million6. Total Assets – Rs. 468.40 Million7. Total Liabilities – Rs.72.83 Million8. Investments - Nil9. Turnover – Nil10. Profit / (Loss) before taxation - Rs.(104.43) Million11. Provision for taxation – Nil12. Profit /(Loss) after taxation - Rs.(104.43) Million13. Proposed Dividend - Nil14. % of shareholding – 100%

Names of subsidiaries which are yet to commence operations – Merrill Lynch Wealth Advisors Private LimitedNames of subsidiaries which have been liquidated or sold during the year – Nil


INDEPENDENTAUDITOR’SREPORTTotheMembersofDSPMerrillLynchLimited

ReportontheStandaloneFinancialStatements

1. We have audited the standalone financial statements of DSP Merrill Lynch Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management’sResponsibilityfortheStandaloneFinancialStatements

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’sResponsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the 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 financial control relevant to the Company’s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements 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, of the state of affairs of the Company as at March 31, 2015 and its profit and its cash flows for the year ended on that date.

ReportonOtherLegalandRegulatoryRequirements

9. As required by ‘the Companies (Auditor’s Report) Order, 2015’, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.


10. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(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 Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on April 1, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31, 2015 on its financial position in its standalone financial statements - Refer Note 24;

ii. The Company has long term contracts as at March 31, 2015 for which there were no material foreseeable losses. There are no derivative contracts as at March 31, 2015.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2015.

ForPriceWaterhouse Firm Registration Number: 301112EChartered Accountants

ParthaGhoshPartnerMembership Number:55913

Place : Mumbai Date : 31st July, 2015


AnnexuretoIndependentAuditors’ReportReferred to in paragraph 10 of the Independent Auditors’ Report of even date to the members of DSP Merrill Lynch Limited on the financial statements as of and for the year ended March 31, 2015

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, the fixed assets of the Company have been physically verified by the Management during the year as this is the 3rd year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

ii. (a) The securities held as stock –in-trade have been verified by the Management with the statement of holdings obtained from the

National Securities Depository Limited (NSDL) at the financial year end. In our opinion, the frequency of verification is reasonable. (b) In our opinion, the procedures of verification of securities held as stock-in- trade followed by the Management are reasonable and

adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the records of the Company relating to securities held as stock-in-trade, in our opinion, the Company is maintaining proper records of stock-in-trade and no material discrepancies between book records and the statement of holdings provided by NSDL have been noticed.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the Company.

iv. 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 securities held as stock in trade and fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues in respect of income tax, wealth tax, provident fund, service tax, duty of customs and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs, and duty of excise or value added tax or cess which have not been deposited on account of any dispute.

Nameofthestatute Natureofdues Amount(Rs.) Periodtowhichtheamountrelates

Forumwherethedisputeispending

Chapter V of the Finance Act, 1994

Service Tax 23,459,994* April 2000 to December, 2001

Customs Excise and Service Tax Appellate

Tribunal (CESTAT)

*Excluding any interest and penalty that may apply.

(c) There are no amounts required to be transferred by the Company to the Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.


viii. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

ix. According to the records of the Company examined by us and the information and explanation given to us, the Company has not

defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans

taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company

xi. In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

ForPriceWaterhouse Firm Registration Number: 301112EChartered Accountants

ParthaGhoshPartnerMembership Number:55913

Place : Mumbai Date : 31st July, 2015


BalanceSheetasat31stMarch,2015

NoteAsat

31stMarch,2015Rs.million

As at31st March, 2014

Rs. millionIEQUITYANDLIABILITIES

Shareholders’fundsShare capital 3 231.55 231.60Reserves and surplus 4 24,538.31 22,277.83

24,769.86 22,509.43Non-currentliabilitiesLong-term borrowings 5 39.71 44.59Long-term provisions 6 329.08 299.89

368.79 344.48

CurrentliabilitiesTrade payables 7 17,146.37 14,442.78Other current liabilities 8 307.48 429.81Short-term provisions 9 58.02 60.72

17,511.87 14,933.31TOTAL 42,650.52 37,787.22

II ASSETS

Non-currentassetsFixed assets 10

Tangible assets 505.97 335.67Intangible assets 1.05 4.70Capital work-in-progress 9.43 175.12

516.45 515.49Non-current investments 11 8,250.05 8,258.50Deferred tax assets, net 33(c) 256.88 268.49Long-term loans and advances 12 1,395.67 1,373.47

10,419.05 10,415.95CurrentassetsCurrent investments 13 500.00 - Trade receivables 14 401.06 1,615.10Cash and bank balances 15 30,334.16 23,713.45Short-term loans and advances 16 721.94 1,846.71Other current assets 17 274.31 196.01

32,231.47 27,371.27TOTAL 42,650.52 37,787.22

Theaccompanyingnotes1to41formanintegralpartoftheFinancialStatements

This is the Balance Sheet referred to in our report of even date

ForPriceWaterhouse ForandonbehalfoftheBoardofDirectorsFirm Registration Number : 301112EChartered Accountants

ParthaGhosh AsitBhatia AvinashGuptaPartner Director DirectorMembership Number : 55913 AshishAdukia NishithMehta Chief Financial Officer Company SecretaryMumbai : 31st July, 2015 Mumbai : 31st July, 2015


StatementofProfitandLossfortheyearended31stMarch,2015

NoteYearEnded


Year Ended31st March, 2014

Rs. millionRevenue from operations :

Advisory and Transactional Services 18 5,325.90 4,270.18

Other income 19 2,454.79 2,133.80

TotalRevenue 7,780.69 6,403.98

Expenses:

Employee benefits expense 20 2,296.32 2,394.80

Finance costs 21 9.05 10.44

Depreciation and amortisation expense 22 214.68 185.95

Other expenses 23 1,723.20 1,536.26

Totalexpenses 4,243.25 4,127.45

Profit/(loss)beforetax 3,537.44 2,276.53

Continuingoperations

Profit / (loss) from continuing operations before tax 3,767.07 2,587.52

Tax expense of continuing operations 33(a) 1,307.48 900.43

Profit/(loss)fromcontinuingoperationsaftertax A 2,459.59 1,687.09

Discontinuingoperation

Profit / (loss) from discontinuing operation before tax (229.63) (310.99)

Tax expense of discontinuing operation 33(b) (50.54) (101.68)

Profit/(loss)fromdiscontinuingoperationaftertax B (179.09) (209.31)

Profit/(loss)fortheyear (A+B) 2,280.50 1,477.78

Earningsperequityshare,inRs.[facevalueofRs.10/-each] 32

Basic 98.47 63.81

Diluted 98.47 63.81


This is the Statement of Profit and Loss referred to in our report of even date




CashFlowStatementfortheyearended31stMarch,2015YearEnded


Year Ended 31st March, 2014

Rs. millionCashflowfromoperatingactivities:

Profitbeforetax 3,537.44 2,276.53 Adjustedfor:Depreciation / amortisation 214.68 185.95 Bad debts and advances written off 6.73 2.88 Credit balances written back (0.08) (1.09)Gratuity (27.07) (53.86)Compensated absence 53.56 44.04 Interest on bank loans 9.05 10.44 (Write-back of provision) / provision made for bad and doubtful debts and advances, net (3.09) (21.54)(Write-back of provision) / provision for diminution in value of long term investments, net - (0.04)Provision for loans to subsidiary company 5.00 5.00 Loss on fixed assets sold / discarded, net 7.11 - (Profit) on fixed assets sold / discarded, net - (0.03)(Profit) on assets held for disposal - (4.80)Unrealised foreign exchange differences, net - 5.50

Operatingprofitbeforechangesinoperatingassetsandliabilities 3,803.33 2,448.98 Adjustedfor:(Increase) in other bank balances (4,852.00) (3,359.99)Decrease in loans and advances 1,117.82 1,894.76 Decrease in trade receivables 1,207.41 647.92 (Increase) in other current assets (78.30) (102.54)Increase in trade payables 2,703.67 5,972.24 (Decrease) / Increase in other current liabilities (119.44) 65.72 (Decrease) in short term provision - (0.42)

Cashgeneratedfromoperatingactivities 3,782.49 7,566.67 Direct taxes (paid), net (A) (1,262.58) (819.14)

Netcashgeneratedfromoperatingactivities 2,519.91 6,747.53 Cashflowfrominvestingactivities:

Purchase of fixed assets / capital advances (237.89) (356.40)Proceeds from sale of fixed assets 15.13 17.21 Proceeds from sale of assets held for disposal - 5.09 Redemption of long term investments 8.45 - Purchase of current investment (500.00) - Purchase of long term investments - (4.54)

Netcash(usedin)investingactivities (B) (714.31) (338.64)Cashflowfromfinancingactivities:

Buyback of equity shares (20.07) - Loans from bank, net of repayments (7.77) (30.21)Interest on bank loans (C) (9.05) (10.44)

Netcash(usedin)financingactivities (36.89) (40.65)Netincreaseincashandcashequivalents (A+B+C) 1,768.71 6,368.24 Cashandcashequivalentsasatthebeginningoftheyear 12,523.58 6,155.34 Cashandcashequivalentsasatthecloseoftheyear

Cash on hand - - Balances with scheduled banks in current accounts 1,772.29 799.58 Balances with scheduled banks in fixed deposit accounts 7,410.00 6,999.00 Current investments in mutual funds 5,110.00 4,725.00

14,292.29 12,523.58

Netincreaseincashandcashequivalents 1,768.71 6,368.24


This is the Cash Flow Statement referred to in our report of even date ForPriceWaterhouse ForandonbehalfoftheBoardofDirectorsFirm Registration Number : 301112EChartered Accountants

ParthaGhoshAsitBhatiaAvinashGuptaPartner Director Director Membership Number : 55913

AshishAdukia NishithMehta Chief Financial Officer Company Secretary

Mumbai : 31st July, 2015 16th July, 2015 Mumbai : 31st July, 2015


1. Companybackground:

DSP Merrill Lynch Limited (“the Company”) was incorporated under the Companies Act, 1956 (“the Act”) on October 23, 1975. The Company is registered with the Securities and Exchange Board of India (“SEBI”) as a Stock Broker, Merchant Banker, Underwriter, Depository Participant, Investment Advisor and Portfolio Manager. The Company is engaged in the business of stock broking, investment banking including advice on merger and acquisition transactions, wealth management and principal transactions in securities.

The Company is ultimately controlled by Bank of America Corporation (“BAC”).

2. Significantaccountingpolicies:

a. Basisofpreparationoffinancialstatements:

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India under the historical cost convention and comply, in all material aspects, with the Accounting Standards (“AS”) prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Act. The accounting policies have been consistently applied, except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on nature of its business, the Company has identified its operating cycle as twelve (12) months for the purpose of current and non-current classification of assets and liabilities in the Balance Sheet.

b. Useofestimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and difference between the actual results and estimates are recognised in the period in which the results are known or materialise.

c. Tangiblefixedassetsandcapitalwork-in-progress: Tangible fixed assets are stated at the original cost of

acquisition and related expenses less accumulated depreciation and accumulated impairment losses, if any. Assets, which are not under active use and held for disposal, are stated at lower of net book value and net realizable value. Capital work-in-progress comprises cost of fixed assets that are not yet ready for their intended use at the reporting date.

d. Intangibleassets:

The Company capitalises intangible assets, where it is reasonably estimated that the intangible asset has an enduring useful life. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

e. Depreciationandamortisation:

i. Except for items forming part of (ii) and (iii) below, depreciation on tangible assets is provided, pro-rata for the period of use, by straight line method (SLM), based on management’s estimate of useful lives for the fixed assets as stated in the table below:

Category UsefulLife

Buildings 40 years

Computers and Allied Equipment

– Desktops / Printers 2 years

– Servers / Laptops 4 years

– Computer Cabling 7 years

Office Equipment

– EPABX 5 years

– Others 3 years

Furniture and Fittings 10 years

Vehicles 5 years

ii. Assets costing less than the rupee equivalent of USD 1,500 are fully depreciated on purchase.

iii. Leasehold improvements are depreciated over the lease period including the renewal periods, if any. Assets associated with premises taken on lease are depreciated on straight line basis over the lease period or the useful lives stated above, whichever is shorter.

NotestotheFinancialStatements


iv. The Company has arrived at the above estimates of useful lives based on an internal assessment and technical evaluation and believes that the useful lives stated above represent the best estimate of the period over which it expects to use the assets. With the exception of Furniture and Fittings and EPABX Office Equipment, the useful lives estimated by the Company as stated in the table above are different from the useful lives prescribed under “Part C” of “Schedule II” of the Act.

v. Intangible assets are amortised over their useful lives as estimated by the management commencing from the date the asset is available for use as stated in the table below:

Category UsefulLife

Software 3 years

BSE Membership Card 10 years

f. Impairmentofassets:

In accordance with AS-28 on “Impairment of Assets”, an asset is considered as impaired when at the balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable, the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value-in-use). The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than the carrying amount, the carrying amount is reduced to the recoverable amount and the reduction is recognised as an impairment loss in the Statement of Profit and Loss.

g. Investments:

Investments are classified as current or non-current (long-term) based upon management intent at the time of acquisition. Investments that are intended to be held for not more than one year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments. Current investments are stated at lower of cost and fair value. Any reduction in the carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

Non-current investments are recorded at cost as on the date of transaction. Provision is made to recognise a decline, other than temporary, in the value of such investments.

h. Revenuerecognition:

Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection on the following basis:

Fees from investment banking activities including issue management, mergers and acquisitions, and advisory services

On stage wise basis / as per agreement

Investment advisory As per agreement

Brokerage on equity / debt market transactions

On trade date basis

Brokerage / marketing fees on mutual funds / new issues

Based on mobilisation and intimation received from clients / intermediaries

Trading revenues (principal transactions)

On trade date basis

Underwriting commission earned, to the extent not reduced from cost of acquisition of securities

On closure of the issue

Dividend income is recognised when the right to receive payment is established.

Revenue excludes service tax, wherever recovered.

i. Employeebenefits:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render services) are measured at cost. Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render services) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual independent third party actuarial valuations.

The Company has a defined contribution plan for post

employment benefits in the form of Provident Fund.

NotestotheFinancialStatements(Contd...)


Under the Provident Fund Plan, the Company contributes to a Government administered provident fund on behalf of the employees. The Company has no further obligation beyond making the contributions. Contributions to Provident Fund are made in accordance with the statute, and are recognised as an expense when employees have rendered services entitling them to the contributions.

The costs of providing benefits under defined benefit

plans are determined using the Projected Unit Credit Method on the basis of a third party actuarial valuation at each balance sheet date. The leave encashment and gratuity benefit obligations recognised on the balance sheet represent the present value of the obligations as reduced by the fair value of plan assets, if any. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

j. Foreigncurrencytransactions:

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are reported using the exchange rate prevailing at the balance sheet date. All exchange differences are dealt with in the Statement of Profit and Loss. Non–monetary items are carried at historical cost using the exchange rates on the date of the transaction. Outstanding foreign exchange forward contracts are marked to market. Resulting losses are recognised in the Statement of Profit and Loss; gains are ignored.

k. Borrowingcosts:

Borrowing costs primarily include interest and related costs of amounts borrowed for the operations of the Company. These are expensed to revenue on a time-proportionate basis.

l. Operatinglease:

Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

m. Earningpershare:

The Company reports basic and diluted earnings per share (EPS) in accordance with AS-20 on “Earnings Per Share”. Basic EPS is computed 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. Diluted EPS is computed 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 as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

n. Taxation:

Taxes on income are accounted for in accordance with AS-22 on “Accounting for Taxes on Income” and comprise current and deferred tax.

Current tax is measured at the amount expected to be paid in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The tax effect of timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods is recorded as a deferred tax asset or deferred tax liability. These are measured using the substantively enacted tax rates and tax regulations. Deferred tax assets arising on account of carry forward of losses and unabsorbed depreciation under tax laws are recognised only if there is virtual certainty of realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences 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. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realised.

o. Cashflowstatement:

The cash flow statement is prepared by the indirect method set out in AS-3 on “Cash Flow Statements” and presents the cash flows by operating, investing and financing activities of the company.



Cash and cash equivalents presented in cash flow statement consist of cash on hand, deposits with banks and current investments readily convertible to known amounts of cash and subject to insignificant risk of change in value.

p. Employeestockcompensation:

Liability in respect of restricted stocks and restricted units of the ultimate parent company granted to the employees of the Company in terms of the global long-term incentive compensation plans of the ultimate parent company is accounted for initially at the fair value of the awards on the date of grant. The difference between the fair value on the date of grant and fair value on the date of vesting is accounted for when the stocks vest. At the balance sheet date, liability in respect of unvested stocks is re-measured based on the fair value of the stocks on that date.

q. Contingentliabilities:

Contingent liabilities as defined in AS-29 on “Provisions, Contingent Liabilities and Contingent Assets” are disclosed by way of notes to the accounts. Disclosure is not made if the possibility of an outflow of future economic benefits is remote. Provision is made if it is probable that an outflow of future economic benefits will be required to settle the obligation.




3. Sharecapital:

Particulars Asat31stMarch,2015

Rs.million


Rs. million

Authorised73,750,000 (Previous year 73,750,000) Equity shares of Rs. 10/- each 737.50 737.50 810,000,000 (Previous year 810,000,000) Cumulative redeemable preference shares of Rs. 10/- each 8,100.00 8,100.00

8,837.50 8,837.50 Issued,subscribedandpaid-upEquitysharecapital23,155,039 (Previous year 23,160,000) Equity shares of Rs. 10/- each, fully paid up 231.55 231.60

231.55 231.60

Reconciliationofnumberofshares:Particulars Asat31stMarch,2015 As at 31st March, 2014

NumberofShares

Rs.million Number of Shares

Rs. million

EquityShares:

Balance as at the beginning of the year 23,160,000 231.60 23,160,000 231.60

Add: Shares issued during the year - - - -

Less: Shares bought back during the year (refer note below) (4,961) (0.05) - -

Balance as at the end of the year 23,155,039 231.55 23,160,000 231.60

During the year, the Company bought back 4,961 equity shares of face value of Rs. 10/- each for a total consideration of Rs. 16.37 million. The difference of Rs. 16.32 million between amount paid for buy back and the face value of the shares bought back has been adjusted against surplus in statement of profit and loss.

Rights,preferencesandrestrictionsattachedtoshares:

EquityShares:

The company has only one class of equity shares with a par value of Rs. 10/- each. Each shareholder is eligible for one vote per share.


3. Sharecapital(Contd...):

Sharesheldbytheholdingcompany,ultimateholdingcompanyandtheirsubsidiaries/associatesareasbelow: NameofShareholder Natureof

RelationshipAsat31stMarch,2015 As at 31st March, 2014

NumberofShares

Rs.million

Number of Shares

Rs. million

EquityShares:Merrill Lynch Investment Holdings (Mauritius) Limited Fellow Subsidiary 10,738,800 107.39 10,738,800 107.39Merrill Lynch Holdings (Mauritius) Fellow Subsidiary 9,495,105 94.95 9,495,105 94.95Merrill Lynch Asia Investments Limited Fellow Subsidiary 2,910,000 29.10 2,910,000 29.10

Detailsofsharesheldbyshareholdersholdingmorethan5%oftheaggregatesharesintheCompany:NameofShareholder Asat31stMarch,2015 As at 31st March, 2014

NumberofShares

%ofHolding

Number of Shares

% of Holding

EquityShares:Merrill Lynch Investment Holdings (Mauritius) Limited 10,738,800 46.38% 10,738,800 46.37%Merrill Lynch Holdings (Mauritius) 9,495,105 41.01% 9,495,105 41.00%Merrill Lynch Asia Investments Limited 2,910,000 12.57% 2,910,000 12.56%

Thecompanyhasnotissuedanyequitysharesforconsiderationotherthancashorbywayofbonusduringthelastfivefinancialyears.

4. Reservesandsurplus:Particulars Asat


As at 31st March, 2014

Rs. million

InvestmentallowancereserveBalance as at the beginning of the year 1.19 1.19 Balance as at the end of the year 1.19 1.19

CapitalredemptionreserveBalance as at the beginning of the year 8,100.00 8,100.00 Add: Transfer from surplus in statement of profit and loss on buy-back of equity shares 0.05 - Balance as at the end of the year 8,100.05 8,100.00

GeneralreserveBalance as at the beginning of the year 4,509.79 4,509.79 Balance as at the end of the year 4,509.79 4,509.79

SurplusinStatementofProfitandLossBalance as at the beginning of the year 9,666.85 8,189.07 Add: Profit for the year 2,280.50 1,477.78 Appropriations:Utilisation for buy-back of equity shares (16.32) - Income distribution tax on buy-back of equity shares (3.70) - Transfer to capital redemption reserve on buy-back of equity shares (0.05) - Balance as at the end of the year 11,927.28 9,666.85

24,538.31 22,277.83




5. Long-termborrowings:Particulars Asat



Rs. millionSecuredTerm loans :From banks 39.71 44.59 [Secured against hypothecation of vehicles][Terms of repayment: Repayable in 48 equal installments from the date of respective loan with varying maturity dates till 5th March, 2019 along with interest at rates ranging from 9.25% p.a. to 11.00% p.a.]

39.71 44.59

6. Long-termprovisions:Particulars Asat



Rs. millionProvision for employee benefits :

Gratuity [refer note 27 (ii)] 66.47 93.54 Compensated absences 262.61 206.35

329.08 299.89

7. Tradepayables:


Rs.million


Rs. millionSundry creditors [refer note 35] 17,146.37 14,442.78

17,146.37 14,442.78

8. Othercurrentliabilities:


Rs.million


Rs. millionCurrent maturities of long-term loans [refer note 5] 35.06 37.95 Statutory dues including Provident fund, Tax deducted at source and Service tax 28.44 110.68 Salaries and bonus payable 238.39 217.44 Other Payables [refer note 35] 5.59 63.74

307.48 429.81

9. Short-termprovisions:


Rs.million


Rs. millionProvision for employee benefits :

Compensated absences 46.84 49.54 Provision for contingencies [refer note 36] 11.18 11.18

58.02 60.72


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11.Non-currentinvestments:

Particulars Asat31stMarch,2015 As at 31st March, 2014Quantity

(No.)Rs.million Quantity

(No.) Rs. million

I. TradeInvestment[valuedatcost,netofprovisionfordiminutioninvalue]UnquotedInvestmentinEquityshares: Bombay Stock Exchange Limited [Face Value Re. 1/-] 130,000 0.01 130,000 0.01 Sub-totalI 0.01 0.01

II. OtherInvestments[valuedatcost,netofprovisionfordiminutioninvalue]Unquoted(i)Equityshares

a.Investmentinsubsidiaries[face value of Rs. 10/-each fully paid -up]DSP Merrill Lynch Capital Limited 205,000,000 8,250.00 205,000,000 8,250.00 DSP Merrill Lynch Trust Services Limited 4,900,000 49.00 4,900,000 49.00

8,299.00 8,299.00 Less: Provision for diminution in value (49.00) (49.00)

8,250.00 8,250.00 b.Others

[face value of Rs. 10/-each fully paid -up]Avon Industries Limited 21,000 0.51 21,000 0.51 Co-Nick Alloys Limited 122,500 1.79 122,500 1.79 Eastern Circuits Limited 5,100 0.06 5,100 0.06 Eastern Medikit Limited 18,000 0.54 18,000 0.54 Inland Printers Limited 16,000 0.96 16,000 0.96 Magnetix India Limited 810 0.01 810 0.01 Montari Industries Limited 36 * 36 *Orissa Extrusions Limited 89 ** 89 **Sangam Aluminium Limited 9,000 0.17 9,000 0.17 Travancore Cements Limited 2,410 0.06 2,410 0.06 Varun Polymol Organics Limited 26 *** 26 ***Wood Polymer Limited 200 0.01 200 0.01

4.11 4.11 Less : Provision for diminution in value (4.11) (4.11)

- - Sub-total(i)=a+b 8,250.00 8,250.00

(ii)Debentures9% Secured Non-Convertible Redeemable Debentures of JK Lakshmi Cement Ltd. 5,643 0.56 5,643 0.56

0.56 0.56 Less : Provision for diminution in value (0.56) (0.56)Sub-total(ii) - -

Quoteda.Debentureswithequitylinkedcoupon[face value of Rs. 100,000/-each fully paid -up] DSP Merrill Lynch Capital Limited 2011/B - Maturity August 12, 2014 - - 40 3.91 DSP Merrill Lynch Capital Limited 2010/D - Maturity April 23, 2014 - - 40 4.54

- 8.45 Less : Provision for diminution in value - -

- 8.45



11.Non-currentinvestments(Contd....):Particulars Asat31stMarch,2015 As at 31st March, 2014

Quantity(No.)

Rs.million Quantity (No.)

Rs. million

b.Equityshares[face value of Rs. 4/- each fully paid -up]Udaipur Cement Works Limited 10,567 0.04 10,567 0.04

0.04 0.04 Less : Provision for diminution in value - -

0.04 0.04 Sub-totalII 8,250.04 8,258.49

Total[I+II] 8,250.05 8,258.50

Summary:QuotedAggregate of book value 0.04 8.49 Aggregate of market value 0.13 9.63 UnquotedAggregate value of unquoted investments 8,250.01 8,250.01 Aggregate provision for diminution in value of investments 53.67 53.67

* Amount [Rs. 1,476/-] below rounding off norm adopted by the Company.** Amount [Rs. 1,621/-] below rounding off norm adopted by the Company.

*** Amount [Rs. 637/-] below rounding off norm adopted by the Company.

12. Long-termloansandadvances:Particulars Asat



Rs. million

Unsecured,consideredgood:

Advance payment of taxes 1,247.03 1,229.79

[net of provision for tax Rs. 16,258.57 million (previous year Rs. 15,012.99 million)]

Cash deposits placed with exchanges and depository 68.13 28.13

Advances - 0.03

Deposits placed for premises and others 72.48 109.64

Prepayments and others 8.03 5.88

1,395.67 1,373.47

13. Currentinvestments:

Particulars Asat31stMarch,2015 As at 31st March, 2014Quantity

(No.)Rs.million Quantity

(No.)Rs. million

Unquoted

Equityshares

Investmentinsubsidiaries

Merrill Lynch Wealth Advisors Private Limited (refer note 38) 50,000,000 500.00 - - 500.00 -

Less: Provision for mark-to-market loss - -

500.00 -



14. Tradereceivables:


Rs.million


Rs. millionDebts outstanding for a period exceeding six months

Unsecured

considered good - -

considered doubtful - 0.92

- 0.92

Less: Provision for doubtful debts - (0.92)

- -

Other debts

Unsecured

considered good 401.06 1,615.10

considered doubtful 1.10 0.28

402.16 1,615.38

Less: Provision for doubtful debts (1.10) (0.28)

401.06 1,615.10

401.06 1,615.10

15. Cashandbankbalances:


Rs.million


Rs. millionCash and cash equivalents :

Cash on hand - - Bank balances :

In current accounts 1,772.29 799.58 Fixed deposits with banks with original maturity less than 3 months 7,410.00 6,999.00

9,182.29 7,798.58

Short term, highly liquid investments - Mutual Funds [refer note 40]DSP Blackrock Liquidity Fund - Direct Plan - Growth 1,500.00 1,500.00 HDFC Liquid Fund - Direct Plan - Growth 660.00 - ICICI Prudential Liquid Plan - Direct Plan - Growth 1,200.00 1,100.00 Reliance Liquidity Fund - Direct Plan - Growth 1,750.00 1,800.00 SBI Premier Liquid Fund - Direct Plan - Growth - 200.00 UTI Liquid Cash Plan Institutional - Direct Plan - Growth - 125.00

5,110.00 4,725.00

Cash and cash equivalents - Total 14,292.29 12,523.58

Other bank balances :Fixed deposits with banks under lien as collateral with stock exchange* 16,041.87 11,189.87

Other bank balances - Total 16,041.87 11,189.87

30,334.16 23,713.45

* These fixed deposits are under lien with Bombay Stock Exchange Limited/ National Securities Clearing Corporation Limited towards Base and Additional Base Capital / Margins.



16. Short-termloansandadvances:


Rs.million


Rs. millionLoansandadvancestorelatedpartiesUnsecured, considered doubtful :

Loans to subsidiaryLess: Provision

52.50 47.50 (52.50) (47.50)

- -

OtherLoansandadvancesUnsecured, considered good :

Cash deposits placed with exchanges 654.80 1,794.80 Advances 0.45 0.30 Deposits placed for premises and others 40.82 19.28 Prepayments and others 25.87 32.33

Unsecured, considered doubtful :Advances 0.45 0.45 Deposits placed for premises and others 0.36 3.36 Less: Provision for doubtful advances/deposits (0.81) (3.81)

721.94 1,846.71 721.94 1,846.71

17. Othercurrentassets:


Rs.million


Rs. millionInterest accrued on:

Fixed deposits 210.53 167.45 Inter-corporate deposits 0.92 0.80

Other receivables 62.86 27.76

274.31 196.01



18. AdvisoryandTransactionalServices:

Particulars YearEnded31stMarch,2015

Rs.million


Rs. millionProfessional fees 795.69 621.93 Brokerage / marketing fees 4,513.49 3,634.57 Depository participant income 16.72 13.68

5,325.90 4,270.18

19. Otherincome:


Rs.million


Rs. million

Profit on sale of current investments 625.98 470.94 Interest on:

Bank deposits 1,645.44 1,441.11

Debentures 0.05 0.05

Inter-corporate deposits 4.66 4.28

Infrastructure and support fees recovered (refer note 34) 95.35 100.57

Secondment charges recovered (refer note 34) 75.46 88.71

Dividend income on other long term investments 0.52 0.52

Credit balances written back 0.08 1.09

Foreign exchange differences, net 3.64 -

Profit on fixed assets sold / discarded, net - 0.03

Profit on sale of assets held for disposal - 4.80

Write-back of provision for diminution in value of long term investments, net - 0.04

Write-back of provision for bad and doubtful debts & advances, net 3.09 21.54

Miscellaneous income 0.52 0.12

2,454.79 2,133.80

20. Employeebenefitsexpense:


Rs.million


Rs. million

Salaries and bonus 2,153.27 2,314.08 Contribution to provident fund [refer note 27(i)] 66.28 64.71 Gratuity [refer note 27(ii)] 54.35 (13.86)Staff welfare expenses 22.42 29.87

2,296.32 2,394.80


21. Financecosts:Particulars YearEnded



Rs. millionInterest on bank loans 9.05 10.44

9.05 10.44

22. Depreciationandamortisationexpense:Particulars YearEnded



Rs. millionDepreciation on tangible assets [refer note 10] 210.86 174.60 Amortisation on intangible assets [refer note 10] 3.82 11.35

214.68 185.95

23. Otherexpenses:Particulars YearEnded



Rs. millionAdvertisement, publicity and sales promotion 1.77 20.09 Bad debts and advances written off 6.73 2.88

Brokerage, clearing charges and exchange fees 105.82 96.51

Communication costs, net 132.38 176.24

Corporate Social Responsibility expenditure [refer note 26 (e)] 47.58 -

Data subscription costs, net 114.92 94.87

Electricity 63.00 64.88

Foreign exchange differences, net - 19.90

Insurance 5.61 5.06

Infrastructure and support costs 46.13 30.19

Legal and professional fees, net 233.86 131.90

Loss on fixed assets sold / discarded, net 7.11 -

Printing and stationery 14.67 11.64

Provision for loans to subsidiary company 5.00 5.00

Rates and taxes 314.30 246.59

Rent 209.16 228.83

Repairs and maintenance:

Building 95.05 77.36

Plant and machinery 121.95 79.30

Secondment charges incurred 56.12 61.11

Sub-brokerage, fees, commission and other direct expenses 20.73 76.34

Travelling expenses, net 87.11 81.89

Miscellaneous expenses 34.20 25.68

1,723.20 1,536.26



24. Contingentliabilities:


Rs.million


Rs. million

(a) Claims against the company not acknowledged as debt :

- Income tax demands disputed in appeals before the authorities to the extent not provided for and fully paid 943.13 901.32

- Service tax demand disputed in appeals before the authorities to the extent not provided for (excluding any interest and penalty that may apply)* 23.46 23.46

(b) Guarantees - -

(c) Others:Show cause notice received from SEBI related to disclosures in Initial Public Offer document by an issuer. 10.00 10.00

* Customs Excise and Service Tax Appellate Tribunal (CESTAT) has granted an unconditional stay and waiver of pre-deposit of all dues in the matter.

25.Commitments:


Rs.million


Rs. million

(a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for 12.52 42.24

(b) Uncalled liability on shares and other investments partly paid - -

(c) Other commitments - -

12.52 42.24

26.Additionaldisclosures:

a. Paymenttoauditors(includingservicetax):


Rs.million


Rs. million

Audit fees 3.76 3.13

In any other manner including certifications 3.35 3.35

Out of pocket expenses - 0.09

Total 7.11 6.57

b. Earningsinforeigncurrency(onaccrualbasis):


Rs.million


Rs. million

Professional fees 310.48 437.81

Referral fees - 22.77

Total 310.48 460.58



26.Additionaldisclosures(Contd....):

c. Imports:


Rs.million


Rs. million

CIF value of imports [capital goods] 0.34 0.67

CIF value of imports [others] - 0.37

Total 0.34 1.04

d. Expenditureinforeigncurrency(onaccrualbasis):


Rs.million


Rs. million

Reimbursement towards restricted shares and units, net

Travel

Professional fees

Networking charges

Service charges

Referral fees

Others

-20.1633.21

4.2817.85

-8.40

117.15

21.80

18.88

7.39

74.94

1.12

7.43

Total 83.90 248.71

e. CorporateSocialResponsibility(CSR)expenditure:


Rs.million


Rs. million

(a) Gross amount required to spent by the Company during the year 47.58 -

(b) Amount spent during the year on:

i) Construction / acquisition of any asset

In cash - -

Yet to be paid in cash - -

ii) On any other purpose

In cash 47.58 -

Yet to be paid in cash - -

Total 47.58 -



27. Employeebenefits:

DisclosuresinrespectofDefinedContributionPlanandDefinedBenefitPlan:i. DefinedContributionPlan:

Company’s contribution to provident fund Rs.66.28million [Previous year Rs. 64.71 million].

ii. DefinedBenefitPlan:

LiabilitiesrecognisedinBalanceSheetinrespectoffundeddefinedbenefitobligations:


Rs.million


Rs. millionPresent value (PV) of funded obligation for gratuity 371.89 349.38Fair Value of Plan Assets (305.43) (255.84)Balance as on the year end 66.46 93.54

Current portion of the gratuity liability - -Non-current portion of the gratuity liability 66.46 93.54

Gratuityexpensesduringtheyear:


Rs.million


Rs. millionCurrent service cost 55.13 62.55Interest on defined benefit obligation 30.24 32.97Expected return on plan asset (23.44) (16.86)Net actuarial (gains) / losses recognised (7.58) (92.52)Total 54.35 (13.86)

Reconciliationofdefinedbenefitobligations(Gratuity)duringtheyear:Particulars Asat



Rs. millionOpening defined benefit obligation 349.38 358.39Current service cost 55.13 62.55Interest cost 30.24 32.97Net actuarial (gains) / losses recognised 3.53 (92.02)Acquisition / business combination / divesture (39.72) -Benefits paid (26.67) (12.51)Total 371.89 349.38

Changeinfairvalueofassets:


Rs.million


Rs. millionOpening fair value of plan assets 255.84 210.99Expected return on plan assets 23.44 16.86Actuarial gains / (losses) 11.12 0.50Contributions by employer 41.70 40.00Benefits paid (26.67) (12.51)Total 305.43 255.84



27. Employeebenefits(Contd...):

Investmentpattern:



Government of India securities 76.44% 73.85%

High quality corporate bonds (including public sector bonds) 14.27% 11.22%

Special deposit scheme 5.74% 12.25%

Others 3.55% 2.68%

Total 100.00% 100.00%

Principalactuarialassumptions:



Discount rate (p.a.) 7.85% 9.00%

Salary escalation rate (p.a.) 9.00% 9.00%

Expected rate of return on assets (p.a.) 7.68% 8.90%

Attrition rate 8.50% 9.50%

ExperienceAdjustments: Rs.million

Particulars Gratuity

YearEnded

31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12 31-Mar-11

Defined benefit obligation 371.89 349.38 358.39 308.64 334.15

Plan assets 305.43 255.84 210.99 184.22 165.13

Surplus / (deficit) (66.46) (93.54) (147.40) (124.42) (169.02)

Experience adjustment on plan liabilities 3.53 92.02 (15.89) (36.70) 92.06

Experience adjustment on plan asset 11.12 0.50 3.73 0.56 (2.96)

The mortality assumptions and rates considered in assessing the Company’s post retirement liabilities are as per the published rate under the Indian Assured Lives Mortality (2006-08) Ultimate table.

The estimates of future salary increase, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.



28. Segmentreporting:

The Company has identified two primary reportable business segments namely ‘Advisory and Transactional Services’ and ‘Principal Transactions’ in terms of Accounting Standard (AS) – 17 “Segment Reporting”. Information in respect of reportable segments performance is given below:

No. Particulars AdvisoryandTransactional

Services

PrincipalTransactions

Unallocable Total

CurrentYear

Previous Year

CurrentYear

Previous Year

CurrentYear

Previous Year

CurrentYear

Previous Year

Rs.million Rs. million Rs.million Rs. million Rs.million Rs. million Rs.million Rs. million

1 Segment Revenue 6,686.89 5,345.62 1,023.14 978.71 70.66 79.65 7,780.69 6,403.98

2 Segment Results 2,580.22 1,288.65 1,006.97 977.66 (49.75) 10.21 3,537.44 2,276.53

3 Segment Assets 20,164.16 16,868.54 12,725.37 10,962.85 9,760.99 9,955.83 42,650.52 37,787.22

4 Segment Liabilities 17,851.24 15,131.04 - - 29.42 146.75 17,880.66 15,277.79

5 Capital Expenditure 395.09 174.07 - - 8.48 7.55 403.57 181.63

6 Depreciation/amortisation 210.88 181.13 - - 3.80 4.82 214.68 185.95

7 Other significant non-cash expenses / (credits) :

a) Gratuity 53.27 (13.46) - - 1.08 (0.40) 54.35 (13.86)

b) Compensated absence 52.49 42.83 - - 1.07 1.21 53.56 44.04

c) Provision / (Write-back of provision) for doubtful debts and advances (3.09) (21.54) - - - - (3.09) (21.54)

d) Provision for loans to subsidiary company - - - - 5.00 5.00 5.00 5.00

e) (Write-back of provision) / provision for diminution

in value of long-term investment - - - - - (0.04) - (0.04)

The Advisory and transactional services comprise Merchant Banking, Underwriting, Broking, Distribution of Securities and interest on fixed deposits. The Principal Transactions segment consists of earnings from transactions in securities and deployment of surplus funds.

Segment assets include all operating assets used by a segment and consist primarily of fixed assets net of provision and allowance, investments, other current assets and fixed deposits. Segment liabilities include all operating liabilities and other payables.

Items that relate to the enterprise as a whole or at the corporate level not attributable to a particular segment including investment in subsidiaries are included under “Unallocable”.

The company operates in a single reportable geographical segment.



29. Disclosureinrespectofdiscontinuingoperation: Bank of America Corporation (the “Ultimate Controlling Enterprise”) agreed to procure the sale of its international wealth management

(“WM”) businesses based outside of the United States (U.S.) to Julius Baer Group (“JBG”), the leading Swiss private banking group in August 2012 subject to local regulatory and other approvals and the execution of relevant agreements for the sale of WM business in each relevant jurisdiction, including India.

In order to facilitate the proposed transition of the WM businesses to JB Group, the Company on June 27, 2014, incorporated a wholly owned subsidiary, Merrill Lynch Wealth Advisors Private Limited (“MLWA”). MLWA acquired the requisite registrations / licenses from the Securities and Exchange Board of India (“SEBI”) to function as a Stock Broker, Depository Participant, Investment Advisor, and registration as a distributor of Mutual Funds in India with the Association of Mutual Funds in India (“AMFI”).

The Board of Directors of the Company, at its meeting held on January 27, 2015, subject to the applicable provisions of the Companies Act, 2013, the receipt of approval from members of the Company in accordance with the Companies Act, the requisite regulatory approvals and consents, as may be necessary and the execution of definitive documents for the sale and transfer of the WM business, approved the sale and transfer of the entire share capital of MLWA, WM businesses comprising of advisory and distribution services relating to the WM division as undertaken by the Company, the lending business relating to WM Division as undertaken by Company’s wholly owned subsidiary, namely DSP Merrill Lynch Capital Limited (“DSPMLC”) and the trust services business also relating to the WM division as undertaken by another wholly owned subsidiary of the Company, namely DSP Merrill Lynch Trust Services Limited (“DSPMLTS”), together with the client relationships including the depository participant accounts, if any relating to such relationships, employees and assets relating to the WM business to JBG, in the following manner:

1. Subject to the receipt of the necessary regulatory approvals, the entire share capital of MLWA, wholly owned subsidiary of the Company, shall be transferred by the Company to JBG, by way of a share sale, in accordance with and on terms and conditions mutually agreed between the Company and JBG;

2. Subsequent to the share sale of MLWA to JBG, the entire business of the WM division as undertaken by the Company shall be transferred as a going concern, by way of a sale, to MLWA (JBG owned) together with the entire share capital of DSPMLTS, on the terms and conditions mutually agreed between the Company and MLWA (JBG owned);

3. The entire lending business relating to WM division as undertaken by DSPMLC, shall be transferred as a going concern, by way of a sale, to an affiliate entity, namely, Banc of America Securities (India) Private Limited (“BASIL”), subject to receipt of necessary corporate approvals and in accordance with the terms and conditions mutually agreed between DSPMLC and BASIL.

The members of the Company approved the sale and transfer of entire share capital of MLWA and WM businesses to JBG on March 5, 2015.

Separately, following the transfer of lending business, subject to regulatory approvals, the entire share capital of BASIL will be transferred to JBG in accordance with terms and conditions as may be mutually agreed between the shareholders of BASIL and JBG.

The transfer of share capital held by the Company in MLWA to JBG was completed on April 13, 2015 and accordingly, MLWA ceased to be a subsidiary of the Company with effect from that date. The transfer of the lending business relating to WM Division undertaken by DSPMLC (Company’s wholly owned subsidiary) to BASIL was completed on June 6, 2015.

Transfer of the WM businesses comprising of advisory and distribution services relating to WM division as undertaken by the Company and the trust services business relating to WM division as undertaken by DSPMLTS (Company’s wholly owned subsidiary) is yet to be completed.

The other disclosures as required in terms of AS-24 on ‘Discontinuing Operations’ are given below:



29.Disclosureinrespectofdiscontinuingoperation(Contd…):

a. Descriptionofthediscontinuingoperation: Advisory and distribution services relating to the WM Division of the Company.

b. SegmentunderwhichreportedasperAS17,SegmentReporting:

“Advisory and Transactional Services” business segment

c. Dateoftheinitialdisclosureevent: January 27, 2015.

d. Thecarryingamountsofthetotalassetsandliabilitiespertainingtodiscontinuingoperation:


Rs.million


Rs. million

Assets 694.77 282.62

Liabilities 204.17 213.16

e. Amountofrevenue,expenses,pre-taxprofitandincometaxexpenseattributabletothediscontinuingoperation:


Rs.million


Rs. million

Revenue 925.44 699.68

Expenses 1,155.07 1,010.67

Profit / (loss) before tax (229.63) (310.99)

Tax expense / (credit) [refer note 33 (b)] (50.54) (101.68)

f. Netcashflowsattributabletothediscontinuingoperation:


Rs.million


Rs. million

Netcashgeneratedfrom/(usedin):

Operating activities (200.73) (269.56)

Investing activities (19.53) (28.46)

Financing activities (10.88) (10.76)




30.Relatedpartydisclosures:

i.Listofrelatedpartiesandtheirrelationships:Sr.No. Nameoftherelatedparty Relationship

1 Bank of America Corporation (BAC) Ultimate Controlling enterprise (a)

2 Merrill Lynch & Co., Inc. (merged with BAC w.e.f 1st October, 2013)

Controlling enterprise

3 DSP Merrill Lynch Capital Limited Subsidiary 4 DSP Merrill Lynch Trust Services Limited Subsidiary 5 Merrill Lynch Wealth Advisors Private Limited Subsidiary (b)

6 Bank of America, N.A - India Branches Fellow Subsidiary 7 Banc of America Securities (India) Private Limited Fellow Subsidiary 8 Merrill Lynch (Asia Pacific) Limited Fellow Subsidiary 9 Merrill Lynch Australia Pty Limited Fellow Subsidiary

10 Merrill Lynch Capital Markets Espana, S.A., S.V. Fellow Subsidiary 11 Merrill Lynch Europe Limited Fellow Subsidiary 12 Merrill Lynch Holdings (Mauritius) Fellow Subsidiary (c)

13 Merrill Lynch International Fellow Subsidiary 14 Merrill Lynch International Inc. Fellow Subsidiary 15 Merrill Lynch (Mauritius) Investments Limited Fellow Subsidiary (c & d)

16 Merrill Lynch Investment Holdings (Maurititus) Limited Fellow Subsidiary (c & d)

17 Merrill Lynch Asia Investments Limited Fellow Subsidiary (c)

18 Merrill Lynch, Pierce, Fenner & Smith Incorporated Fellow Subsidiary 19 Merrill Lynch (Singapore) Pte Limited Fellow Subsidiary 20 Mr. Avinash Gupta, Mr. Jyotivardhan Jaipuria,

Mr. Pradeep Dokania * Key Management Personnel (KMP)

(a) Refer Note 1 - Company background

(b) Related party with effect from June 27, 2014.

(c) Refer Note 3 - Share capital

(d) Merrill Lynch (Mauritius) Investments Limited (MLMI) has merged with Merrill Lynch Investment Holdings (Mauritius) Limited (MLIHM) by way of amalgamation on March 22, 2013. Shares were transferred from MLMI to MLIHM on April 26, 2013.

* Resigned with effect from May 22, 2014



30. Relatedpartydisclosures(Contd…):

ii.Transactionsduringtheyear/balanceswithrelatedparties:Sr.No.

Natureoftransaction UltimateControllingEnterprise

Subsidiaries FellowSubsidiaries

KeyManagement

Personnel(KMP)

DSPMerrillLynchCapital

Limited

MerrillLynchWealthAdvisorsPrivateLimited

DSPMerrillLynchTrustServices

Limited

Rs.million Rs.million Rs.million Rs.million Rs.million Rs.million1 Investments/stock-in-trade

Balance as at 31st March, 2015 - 8,250.00 500.00 49.00 - - Previous year - 8,258.45 - 49.00 - -

2 Bankbalance - - - - 236.38 (1) -

Previous year - - - - 217.80 -

3 Fixeddepositsplaced

Placed during the year - - - - 350.00 (2) - Previous year - - - - 565.00 - Received back during the year - - - - 550.00 - Previous year - - - - 585.00 - Balance as at 31st March, 2015 - - - - - - Previous year - - - - 200.00 -

4 Inter-corporatedeposits-placement (3)

Placed during the year - - - 207.50 - - Previous year - - - 183.00 - -

Received back during the year - - - (202.50) - - Previous year - - - (178.00) - -

Balance as at 31st March, 2015 - - - 52.50 - - Previous year - - - 47.50 - -

5 Margindeposits

Received during the year - 356.59 - - 67,307.99 (4) - Previous year - 340.39 - - 76,438.39 -

Refunded / adjusted during the year - 407.44 - - 64,657.55 - Previous year - 340.50 - - 69,806.87 -

Balance as at 31st March, 2015 - - - - (15,154.13) - Previous year - (50.85) - - (12,503.69) -

6 Incomefromoperations

Advisory and transactional services - 0.50 - - 1,487.33 (6) 0.33 (7)

Previous year - 0.41 - - 1,577.29 0.01

Balance as at 31st March, 2015 - - (5) - - 70.41 - Previous year - * - - (461.33) -


Sr.No.



KeyManagement

Personnel(KMP)


Limited



Limited

Rs.million Rs.million Rs.million Rs.million Rs.million Rs.million7 Otherincome,net

(a) Infrastructureandsupportfeesrecovered - 34.88 19.73 2.35 33.49 (8) -

Previous year - 34.56 - 2.36 63.65 -

Balance as at 31st March, 2015 - - - - 5.40 - Previous year - - - - 10.04 -

(b) Interestanddividend - - - 4.65 11.66 (9) -

Previous year - - - 4.28 12.77 -

Balance as at 31st March, 2015 - - - 0.92 - -

Previous year - - - 0.80 5.01 -

(c) Secondmentchargesrecovered - 4.81 3.70 - 66.95 (9) -

Previous year - 2.68 - - 86.03 -

Balance as at 31st March, 2015 - 0.84 0.07 - 44.61 - Previous year - 0.22 - - 59.28 -

(d) Write-backofamountspayable - - - - - (10) -


8 Reimbursement/(recovery)ofamounts - - (4.89) - (3.07) (11) -

Previous year - - - - (1.18) -

Balance as at 31st March, 2015 - - - - 9.15 - Previous year - - - - 0.20 -

9 Otherreceivables Balance as at 31st March, 2015 - - 3.61 - - - Previous year - - - - - -

10 Payment/(recovery)inrespectofretirementbenefitsoftransferredemployees,net - 1.74 11.71 - 27.32 (9) - Previous year - - - - - -

Balance as at 31st March, 2015 - - (11.71) - - -

Previous year - - - - - -

11 Remuneration - - - - - 128.87 (12)

Previous year - - - - - 207.24

Balance as at 31st March, 2015 - - - - - -

Previous year - - - - - -

12 Infrastructurecostsincurred - - - - 46.13 (9) -


Balance as at 31st March, 2015 - - - - (17.96) - Previous year - - - - (5.87) -

13 Secondmentchargesincurred - - - - 56.12 (9) -



14 Bankcharges - - - - 0.10 (9) -




ii.Transactionsduringtheyear/balanceswithrelatedparties(Contd…):


Sr.No.



KeyManagement

Personnel(KMP)


Limited



Limited

Rs.million Rs.million Rs.million Rs.million Rs.million Rs.million15 Otherexpenses

(a) Advisoryandtransactionalservices - - - - 17.85 (13) - Previous year - - - - 76.07 -

Balance as at 31st March, 2015 - - - - (0.08) - Previous year - - - - - -

(b) Professionalfeesexpenses - - - - 6.53 (14) - Previous year - - - - 4.58 -


16 Reimbursementtowardsrestrictedstocks/units,net - - - - - -

Previous year 117.15 - - - - -

Balance as at 31st March, 2015 (133.06) - - - - - Previous year (128.16) - - - - -

17 Receivabletowardswith-holdingtax(TDS)recoveredfromemployeesonstockcompensation

Balance as at 31st March, 2015 - - - - - - Previous year 45.14 - - - - -

18 PurchaseofFixedassets - - - - - -

Previous year - 0.32 - - - -

Balance as at 31st March, 2015 - - - - - - Previous year - (0.17) - - - -

19 Saleoffixedassets - - - - - -

Previous year - 0.90 - - - -

Balance as at 31st March, 2015 - - - - - - Previous year - - - - - -

Note: Figures within brackets against balance denote amounts payable by the Company to the related parties

(1) Balance in current accounts maintained with Bank of America, N.A - India Branches.

(2) Fixed deposits placed with Bank of America, N.A - India Branches.

(3) Maximum amount outstanding during the year Rs. 52.50 million [Previous year Rs. 47.50 million].

(4) Margin deposits placed by and refunded to Merrill Lynch Capital Markets Espana, S.A., S.V.

(5) Amount receivable Rs. Nil [Previous year Rs. 2,872/-] below the rounding off norm adopted by the Company.

(6) Income from advisory and transactional services includes commission income of Rs. 1,170.98 million [Previous year Rs. 1,396.59 million] from Merrill Lynch Capital Markets Espana, S.A., S.V.

(7) Represents commission income from Mr. Jyotivardhan Jaipuria Rs. 0.28 million [Previous year Rs. Nil] and Mr. Pradeep Dokania Rs. 0.02 [Previous year Rs. 0.01 million].

(8) Include recovery of Rs. 33.11 million [Previous year Rs. 63.65 miliion] from Bank of America, N.A - India Branches.

(9) Amount relates to Bank of America, N.A - India Branches.

(10) Includes write-back of amounts payable to Merrill Lynch International of Rs. Nil [Previous year Rs. 0.03 million], Rs. Nil [Previous year Rs. 0.22 million] payable to Merrill Lynch, Pierce, Fenner & Smith Incorporated and Rs. Nil [Previous year Rs. 0.84 million] payable to Merrill Lynch (Asia Pacific) Limited.

(11) Includes recovery of Rs. Nil [Previous year Rs. 0.41 million] from Merrill Lynch, Pierce, Fenner & Smith Incorporated, Rs. 3.07 million [Previous year Rs. 0.21 million] from Merrill Lynch International Inc., Rs. Nil [Previous year Rs. 0.05 million] from Merrill Lynch International towards reimbursement of expenses.

(12) Includes Rs. 3.76 million [Previous year Rs. 43.62 million] pertaining to Mr Pradeep Dokania, Rs. 73.05 million [Previous year Rs. 91.97 million] pertaining to Mr. Avinash Gupta and Rs. 52.06 million [Previous year Rs. 71.65 million] pertaining to Mr. Jyotivardhan Jaipuria.

(13) Amount relates to Merrill Lynch International Inc.

(14) Amounts relates to Merrill Lynch, Pierce, Fenner & Smith Incorporated.



ii.Transactionsduringtheyear/balanceswithrelatedparties(Contd…):


31. Operatinglease:


Rs.million


Rs. millionFuture minimum lease rental relating to non-cancellable operating lease

a) Due within one year - 21.98

b) Due between one and five years - -

c) Due beyond five years - -

Total - 21.98

Lease rental charges (including cancellable leases) recognised in the Statement of Profit and Loss 209.16 228.83

32.Earningsperequityshare(EPS):The earnings per share, computed as per the requirement under Accounting Standard (AS) 20 on “Earning Per Share” is as under:



Net profit after tax attributable to equity shareholders [Rs. million] 2,280.50 1,477.78

Weighted average numbers of shares outstanding during the year 23,158,586 23,160,000

Face value per share [Rs.] 10.00 10.00

Basic EPS [Rs.] 98.47 63.81

Note: There is no dilution to Basic EPS as there are no outstanding dilutive potential equity shares.

33.Taxation:a. Break-upoftaxexpensefromcontinuingoperations:


Rs.million


Rs. million

Current income tax 1,213.01 787.97

Deferred tax expense / (credit), net 62.14 81.29

Provision for tax for earlier years, net 32.33 31.17

Total 1,307.48 900.43

b. Break-upoftaxexpensefromdiscontinuingoperations:


Rs.million


Rs. million

Current income tax - -

Deferred tax expense / (credit), net (50.54) (101.68)

Total (50.54) (101.68)



33.Taxation(Contd...):

c. Deferredtaxassets,net: The major components of deferred tax balances on account of timing differences are set out below:


Rs.million


Rs. million

Deferredtaxassets

−Disallowance u/s 43B of Income tax Act, 1961 196.61 183.62

−Provision for bad / doubtful debts and advances, net 0.38 0.41

−Provision for loans to subsidiary company 18.17 16.15

−Provision for contingencies 3.87 3.80

−Depreciation / amortisation, net 37.85 64.51

Deferredtaxassets(a) 256.88 268.49

Deferredtaxliabilities(b) - -

Deferredtaxassets,net(a-b) 256.88 268.49

34. Infrastructure and support fees recovered represent amounts recovered from subsidiaries and fellow subsidiaries towards use of the Company’s facilities and resources. Secondment charges represent amounts recovered from subsidiaries and fellow subsidiaries towards secondment of employees.

35. DisclosurespertainingtoMicroEnterprisesandSmallEnterprises: There are no delays in payments and there are no amounts due to Micro and Small Enterprises as required to be disclosed under the

Micro, Small and Medium Enterprises Development Act, 2006. The above information regarding Micro and Small Enterprises 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.

36. Provision for contingencies represents management’s best estimate of compensation payable to aggrieved (or otherwise) applicants / investors in an initial public offering of equity shares managed by the Company for one of its clients. Movement in provision is as under:


Rs.million


Rs. million

Opening balance in provisions 11.18 11.60Additions - -Amount used - 0.42Unused amount reversed - -Closing balance in provisions 11.18 11.18



37. Restricted stocks / restricted units of the Company’s ultimate holding company, Bank of America Corporation (BAC), are granted to the eligible employees of the company in terms of the global long-term incentive compensation plans of the ultimate holding company. These restricted stocks / restricted units vest in three equal annual installments beginning one year from the grant date. During the year ended 31st March, 2015, 139,488 numbers of restricted stocks / restricted units were granted (Previous Year – 168,349 numbers) and the estimated fair value per unit on the date of grant was US$16.61 (Previous year – US$ 16.70).Employee benefits expense for the year includes Rs.Nil [Previous year – Rs. 117.15 million] towards equity–settled awards and Rs.273.97million [Previous year – Rs. 333.35 million] towards cash-settled awards. The liability towards restricted stocks / restricted units recognised as on 31st March, 2015 is Rs.154.72million (as on 31st March, 2014 - Rs. 160.47 million).

38. The Company promoted a wholly owned subsidiary company Merrill Lynch Wealth Advisors Private Limited (“MLWA”), on 27th June,

2014 and contributed Rs.500.00million towards subscription money on 8th July, 2014. The entity was incorporated in order to facilitate transition of Wealth Management business (“WM business”) to Julius Baer Group (“JBG”). MLWA acquired the requisite registrations / licenses from the Securities and Exchange Board of India (“SEBI”) to function as a Stock Broker, Depository Participant, Investment Advisor, and registration as a distributor of Mutual Funds in India with the Association of Mutual Funds in India (“AMFI”).

The transfer of the share capital held by the Company in MLWA to the two JB Group entities, viz. Julius Baer Group Ltd. and Julius Baer Investment Ltd. has been completed on April 13, 2015.

39. Disclosuresinrespectofderivativeinstruments: a. No equity index / stock futures and options were acquired by the Company during the year.

b. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows :

Natureoftransaction Asat31stMarch,2015 As at 31st March, 2014

AmountRs.million

TransactionValue(inmillion)

Amount Rs. million

Transaction Value (in million)

Receivable on account of export of services 44.62 USD0.71 133.76 USD 2.23

Payable on account of import of services 0.06 HKD0.01 - -

Payable on account of import of services 0.35 SDG0.01 0.49 SGD 0.01

Payable on account of import of services 3.04 USD0.05 4.23 USD 0.07

Receivable towards with-holding tax (TDS) recovered from employees in stock compensation - - 45.14 USD 0.75

Payable on account of reimbursement towards restricted shares,units,stock options, net 132.93 USD2.12 128.16 USD 2.12

c. There is no option premium paid / received carried forward in the Balance Sheet.



40. Quantitativedetailsinrespectofshorttermhighlyliquidinvestments(mutualfunds):

Particulars Asat31stMarch,2015 As at 31st March, 2014

QuantityNumberof

units

AmountRs.million

Quantity Number of

units

Amount Rs. million

DSP Blackrock Liquidity Fund - Direct Plan - Growth 749,880.357 1,500.00 817,975.525 1,500.00

HDFC Liquid Fund - Direct Plan - Growth 23,913,216.763 660.00 - -

ICICI Prudential Liquid Plan - Direct Plan - Growth 5,797,037.038 1,200.00 5,799,846.251 1,100.00

Reliance Liquidity Fund - Direct Plan - Growth 830,349.807 1,750.00 931,926.401 1,800.00

SBI Premier Liquid Fund - Direct Plan - Growth - - 99,260.972 200.00

UTI Liquid Cash Plan Institutional - Direct Plan - Growth - - 59,497.447 125.00

5,110.00 4,725.00

41. Figures of the previous year have been regrouped / reclassified wherever necessary to correspond to the figures of the current year.

Signaturestonotes1to41





DSP MERRILL LYNCH LIMITEDCONSOLIDATED FINANCIAL

STATEMENTS


INDEPENDENTAUDITORS’REPORTTotheMembersofDSPMerrillLynchLimited

ReportontheConsolidatedFinancialStatements

1. We have audited the consolidated financial statements of DSP Merrill Lynch Limited (“hereinafter referred to as the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”); (refer Note 28(a) to the attached consolidated financial statements), comprising of the consolidated Balance Sheet as at March 31, 2015, the consolidated Statement of Profit and Loss, the consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information prepared based on the relevant records (hereinafter referred to as “the Consolidated Financial Statements”).

Management’sResponsibilityfortheConsolidatedFinancialStatements

2. The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. The Holding Company’s Board of Director is also responsible for ensuring accuracy of records including financial information considered necessary for the preparation of Consolidated Financial Statements. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which has been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

Auditors’Responsibility

3. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

4. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

6. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph 9 of the Other Matters paragraph below is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

Opinion

7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements 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 of the consolidated state of affairs of the Group, as at March 31, 2015, and their consolidated profit and their consolidated cash flows for the year ended on that date.

EmphasisofMatter

8. We draw attention to the following emphasis of matter paragraphs included in the Audit report of DSP Merrill Lynch Capital Limited (DSPMLC), a subsidiary of the company, issued by us vide report dated June 24, 2015.


“Without qualifying our opinion, we draw your attention to Note 27(c) to the financial statement which describes facts related to Company undertaking activities in the nature of loans against shares, corporate loans, investments (deployment of surplus funds into the units of mutual fund liquid schemes and government securities) and principal transactions during the year. The aforesaid activities of the Company, other than investments (deployment of surplus funds into the units of Mutual Fund liquid schemes and government securities) and principal transactions in securities, commercial papers and certificates of deposit, were confined to the eighteen permissible activities as stipulated in the FEMA Notification 94/2003-RE dated June 18, 2003. The ultimate outcome of the matter cannot presently be determined, for which no provision for any liability that may result has been made in the financial statements as of March 31, 2015”.

[Note 27(c) of DSPMLC is reproduced as Note 29(c)(ii) to the consolidated financial statements].

Our opinion is not qualified in respect of the matters.

OtherMatter

9. We did not audit the financial statements of 1 subsidiary, whose financial statements reflect total assets of Rs 6.99 million and net asset of Rs. (50.05 million) as at March 31, 2015, total revenue of Rs. 6.75 million, net loss of Rs 7.17 million and net cash out-flows amounting to Rs 1.68 million for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion on the consolidated financial statements insofar as it relates to the amounts and disclosures included in respect of these subsidiary, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act insofar as it relates to the aforesaid subsidiary, is based solely on the report of the other auditors.

10. Our opinion on the consolidated financial statements and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements certified by the Management.

ReportonOtherLegalandRegulatoryRequirements

11. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, based on the comments in the auditors’ reports of the Holding company, subsidiary companies, incorporated in India (Refer Note 28(a) to the consolidated financial statements), we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

12. As required by Section143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.

(b) In our opinion, proper books of account as required by law maintained by the Holding Company, its subsidiaries included in the Group, incorporated in India including relevant records relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and records of the Holding Company and the reports of the other auditors.

(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained by the Holding Company, its subsidiaries included in the Group, incorporated in India including relevant records relating to the preparation of the consolidated financial statements.

(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors of the Holding Company as on April 1, 2015 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies, incorporated in India, none of the directors of the Group companies, incorporated in India is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The consolidated financial statements disclose the impact, if any, of pending litigations as at March 31, 2015 on the consolidated financial position of the company, DSP Merrill Lynch Capital Limited, subsidiaries of the company, aforesaid entities audited by us and DSP Merrill Lynch Trust Services Limited, subsidiaries of the company, based on report of other auditor submitted to us – Refer Note 29 to the consolidated financial statements.


There were no pending litigations as at March 31, 2015 for subsidiaries, other than as mentioned aforesaid as audited by us and based on the reports of other auditors submitted to us, which would impact the consolidated financial position of the Group.

(ii) The Group had long-term contracts as at March 31, 2015 for which there were no material foreseeable losses. The Group did not have any derivative contracts as at March 31, 2015.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary companies, incorporated in India during the year ended March 31, 2015.

ForPriceWaterhouseFirm Registration Number : 301112EChartered Accountants

ParthaGhoshPartnerMembership Number : 55913

Place : MumbaiDate : 31st July, 2015


AnnexuretoIndependentAuditors’ReportReferred to in paragraph 11 of the Independent Auditors’ Report of even date to the members of DSP Merrill Lynch Limited on the consolidated financial statements as of and for the year ended March 31, 2015

i. (a) The Holding Company and its subsidiaries incorporated in India are maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets as audited by us and in certain cases audited by other firm of Chartered Accountants (“Other Auditor”).

(b) The fixed assets of the Holding Company and its subsidiary, DSP Merrill Lynch Capital Limited, incorporated in India, have been physically verified by the Management of the Company according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. Pursuant to the programme, a portion of the fixed assets have been physically verified by the Management of the relevant entities during the year and no material discrepancies have been noticed on such verification.

In case of DSP Merrill Lynch Trust Services Limited, subsidiary of the company, audited by another firm of chartered accountants, who vide their report dated July 20, 2015 have reported as follows: “Some of the fixed assets were physically verified during the year by the management in accordance with a program 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”.

ii. (a) The inventory has been physically verified by the respective Managements of the Holding Company and its subsidiary, DSP Merrill Lynch Capital Limited, incorporated in India, the securities held as stock –in-trade have been verified by the Management with the statement of holdings obtained from the National Securities Depository Limited (NSDL) at the financial year end. In our opinion, the frequency of verification is reasonable during the year. In our opinion, the frequency of verification is reasonable.

In case of DSP Merrill Lynch Trust Services Private Limited, a subsidiary of the Company, audited by another firm of chartered accountants, who vide their report dated July 20, 2015 have reported as follows: “The company acts as a trustee for private trusts setup in India and does not maintain any Inventories as the main business is providing services of estate planning and wealth management”. Therefore the provisions of Clause 3(ii) of the said Order are not applicable.

(b) In our opinion, the procedures of physical verification of inventory followed by the respective Managements of the Holding Company and its subsidiary incorporated in India are reasonable and adequate in relation to the size of the aforesaid Holding Company, its subsidiary and the nature of their respective businesses.

(c) On the basis of our examination of the inventory records, in our opinion, the Holding Company and its subsidiary incorporated in India are maintaining proper records of inventory.

iii. The Holding Company and its subsidiaries, incorporated in India have not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the aforesaid Holding Company and its subsidiaries.

iv. 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 Holding Company and its subsidiary DSP Merrill Lynch Capital Limited, incorporated in India, and the nature of their respective businesses for the purchase of securities held as stock in trade and fixed assets and for the sale of services. Further, on the basis of our examination of the books and records of the aforesaid Holding Company, its subsidiary, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

In case of DSP Merrill Lynch Trust Services Private Limited, a subsidiary of the Company, audited by another firm of chartered

accountants, who vide their report dated July 20, 2015 have reported as follows: “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 sale of services. The nature of the Company’s activities is such that there is no purchase of inventory and sale of goods during the year. Further on the basis of our examination of the books of account and according to the information and explanations given to us, we have not come across nor have we been informed of any instance of major weaknesses in internal control systems”.

v. The Holding Company and its subsidiaries incorporated in India have not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for

any of the products of the Holding Company and its subsidiaries incorporated in India as examined by us and based on the report of other auditor.

vii. (a) In our opinion, and according to the information and explanations given to us and the records of the Holding Company and its subsidiary incorporated in India examined by us, and based on the report of the other auditor of the Holding company’s subsidiary


incorporated in India, the Holding Company and its subsidiaries are regular in depositing the undisputed statutory dues, including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Holding Company and its subsidiary incorporated in India examined by us, and based on the reports of the other auditors of the Holding company’s subsidiary incorporated in India, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs, and duty of excise or value added tax or cess which have not been deposited on account of any dispute.

NameoftheCompany

Relationship Nameofthestatute

Natureofdues

Amount(Rs.)

Periodtowhichtheamountrelates

Forumwherethedisputeispending

DSP Merrill Lynch Limited

Holding Company

Chapter V of the Finance

Act, 1994

Service Tax 23,459,994* April, 2000 to December, 2001

Customs Excise and Service Tax Appellate

Tribunal (CESTAT)

*Excluding any interest and penalty that may apply.

(c) There are no amounts required to be transferred by the Holding Company and its subsidiaries incorporated in India to the Investor Education and Protection Fund in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

viii. The Holding Company and its subsidiary, DSP Merrill Lynch Capital Limited incorporated in India have no accumulated losses as at

the end of the financial year and they have not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

In case of DSP Merrill Lynch Trust Services Private Limited, subsidiary of the Holding Company incorporated in India, audited by another firm of chartered accountants who vide their report dated July 20, 2015 have reported as follows: “The accumulated losses of the company as at March 31, 2015 are more than fifty percent of its net worth. The company has incurred cash loss during the year and also in the immediately preceding financial year”.

ix. According to the records of the Holding Company and its subsidiary incorporated in India examined by us and the information and explanation given to us and based on the reports of the other auditors, the Holding Company and its subsidiaries incorporated in India have not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

x. In our opinion, and according to the information and explanations given to us and based on the reports of the other auditors furnished to us, the Holding Company and its subsidiaries incorporated in India have not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the aforesaid Holding Company and its subsidiaries.

xi. In our opinion, and according to the information and explanations given to us, the term loans obtained by the Holding Company and its subsidiary, DSP Merrill Lynch Capital Limited, incorporated in India have been applied for the purposes for which they were obtained.

In respect of DSP Merrill Lynch Trust Services Limited, a subsidiary of the company incorporated in India, audited by another firm of chartered accountants, who vide their report dated July 20, 2015 have reported as follows “Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year and hence the question of its application does not arise”.

xii. During the course of our examination of the books and records of the Holding Company and its subsidiary incorporated in India carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us and based on the reports of the other auditors, we/the other auditors have neither come across any instance of material fraud on or by the Holding Company and its subsidiaries incorporated in India noticed or reported during the year, nor have we/the other auditors been informed of any such case by the respective Managements of the aforesaid Holding Company and its subsidiaries.

ForPriceWaterhouseFirm Registration Number : 301112EChartered Accountants

ParthaGhoshPartnerMembership Number : 55913

Place : MumbaiDate : 31st July, 2015


ConsolidatedBalanceSheetasat31stMarch,2015

NoteAsat


IEQUITYANDLIABILITIESShareholders’fundsShare capital 3 231.55Reserves and surplus 4 37,587.85

37,819.40Non-currentliabilitiesLong-term borrowings 5 41.54Long-term provisions 6 398.88

440.42

CurrentliabilitiesTrade payables 7 17,169.36Other current liabilities 8 311.14Short-term provisions 9 265.78

17,746.28TOTAL 56,006.10

II ASSETS

Non-currentassetsFixed assets 10

Tangible assets 511.50Intangible assets 1.76Capital work-in-progress 9.43

522.69Non-current investments 11 0.05Deferred tax assets, net 38(c) 341.26Long-term loans and advances 12 2,566.49Other non-current assets 13 43.69

3,474.18CurrentassetsCurrent investments 14 540.97Inventories-Securities held as stock in trade 15 10,542.18Trade receivables 16 506.57Cash and bank balances 17 32,637.63Short-term loans and advances 18 7,717.04Other current assets 19 587.53

52,531.92TOTAL 56,006.10

Theaccompanyingnotes1to45formanintegralpartoftheConsolidatedFinancialStatements

This is the Consolidated Balance Sheet referred to in our report of even date


ParthaGhosh AsitBhatia AvinashGuptaPartner Director DirectorMembership Number : 55913 AshishAdukia NishithMehta Chief Financial Officer Company Secretary

Mumbai : 31st July, 2015 Mumbai : 31st July, 2015


ConsolidatedStatementofProfitandLossfortheyearended31stMarch,2015

NoteYearEnded


Revenue: Revenue from operations :

Advisory and Transactional Services 20 5,331.93

Interest income 21 1,602.34

Profit on principal transactions, net 22 256.10

Other income 23 3,064.97

TotalRevenue 10,255.34

Expenses:Employee benefits expense 24 2,408.49

Finance costs 25 9.65

Depreciation and amortisation expense 26 218.16

Other expenses 27 1,840.77

Totalexpenses 4,477.07

Profitbeforetax 5,778.27

Taxexpense:

Continuingoperations

Profit from continuing operations before tax 5,044.26

Tax expense of continuing operations 38(a) 1,748.84

Profitfromcontinuingoperationsaftertax A 3,295.42

Discontinuingoperation

Profit from discontinuing operation before tax 734.01

Tax expense of discontinuing operation 38(b) 276.72Profitfromdiscontinuingoperationaftertax B 457.29

Profitfortheyear (A+B) 3,752.71

Earningsperequityshare,inRs.[facevalueofRs.10/-each] 37

Basic 162.04

Diluted 162.04


This is the Consolidated Statement of Profit and Loss referred to in our report of even date





ConsolidatedCashFlowStatementfortheyearended31stMarch,2015YearEnded


Cashflowfromoperatingactivities:Profitbeforetax 5,778.27

Adjustedfor:Depreciation / amortisation 218.16Bad debts and advances written off 6.73Credit balances written back (0.08)Gratuity (24.94)Compensated absence 56.43Interest on bank loans 9.65Interest on non-convertible debentures 35.97Interest income on long term investments [other than trade] (4.60)Interest income on current investments (3.27)(Write-back) of provision for bad and doubtful debts and advances, net (3.24)(Write-back) of provision for input service tax credit (5.59)(Write-back) of contingent provision for standard assets (2.90)Provision for restructured standard advances 57.38Profit on redemption of long-term investments, net (3.60)Amortisation of premium received on issue of debentures (0.54)Loss on fixed assets sold / discarded, net 7.14

Operatingprofitbeforechangesinoperatingassetsandliabilities 6,120.97Adjustedfor:(Increase) in inventories - securities held as stock in trade (2,390.81)(Increase) in other bank balances (4,852.00)Decrease in loans and advances 2,957.46Decrease in trade receivables 1,102.35(Increase) in other current assets (45.29)Increase in trade payables 2,756.59(Decrease) in other current liabilities (146.74)

Cashgeneratedfromoperatingactivities 5,502.53Direct taxes (paid), net (2,297.61)

Netcashgeneratedfromoperatingactivities (A) 3,204.92Cashflowfrominvestingactivities:

Interest received on long term investments [other than trade] 6.89Interest received on current investments [other than trade] 3.27Purchase of fixed assets / capital advances (238.62)Proceeds from sale of fixed assets 15.65Purchase of long-term investment (129.31)Purchase of current investment (500.00)Redemption / sale of long term / current investments 278.58

Netcash(usedin)investingactivities (B) (563.54)Cashflowfromfinancingactivities:

Buyback of equity shares (20.07)Repayment of debentures (82.30)Loans from bank, net of repayments (10.84)Interest on bank loans (9.65)Interest on non-convertible debentures (35.97)

Netcash(usedin)financingactivities (C) (158.83)Netincreaseincashandcashequivalents (A+B+C) 2,482.55Cashandcashequivalentsasatthebeginningoftheyear 14,113.19Cashandcashequivalentsasatthecloseoftheyear

Cash on hand -Balances with scheduled banks in current accounts 1,880.74Balances with scheduled banks in fixed deposit accounts 8,280.00Current investments in mutual funds 6,435.00

16,595.74

Netincreaseincashandcashequivalents 2,482.55


This is the Consolidated Cash Flow Statement referred to in our report of even date ForPriceWaterhouse ForandonbehalfoftheBoardofDirectorsFirm Registration Number : 301112EChartered Accountants

ParthaGhoshAsitBhatia AvinashGuptaPartner Director Director Membership Number : 55913

AshishAdukia NishithMehta Chief Financial Officer Company Secretary Mumbai : 31st July, 2015 Mumbai : 31st July, 2015


1. CorporateInformation:

DSP Merrill Lynch Limited (“the Company”) and its subsidiary companies [excluding the unconsolidated subsidiary – refer note 28 (b)], collectively referred to as the “Group” are engaged in financial service businesses, namely stock broking, investment banking including advice on mergers and acquisition transactions, wealth management, financing and lending, principal transactions in securities and derivative instruments and trustee-ship services for private trusts set up for estate planning and wealth management purposes.

The Company is ultimately controlled by Bank of America Corporation (“BAC”).

2. Significantaccountingpolicies:

a. Basisofpreparationoffinancialstatements:

The accompanying consolidated financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India and comply in all material aspects with the Accounting Standards (“AS”) prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act. The consolidated financial statements have been prepared under the historical cost convention on accrual basis, except for certain financial instruments measured at fair value through profit or loss. Accounting policies have been consistently applied, except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy.

All assets and liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in Schedule III of the Act. Based on the nature of its business, the Group has identified its operating cycle as twelve (12) months for the purpose of current and non-current classification of assets and liabilities in the Balance Sheet.

b. Principlesofconsolidation:

The financial statements of the subsidiary companies (refer note 28) used in the consolidation are drawn up to the same reporting date as that of the Company. The consolidated financial statements have been prepared on the following basis:i. The financial statements of the Company and its

subsidiary companies have been combined on a line-by-line basis by adding together like items of assets,

liabilities, income and expenses. Inter-company balances and transactions along with unrealized profits or losses have been fully eliminated.

ii. The excess of the cost to the parent of its investments in a subsidiary company over the parent’s portion of equity at the date on which investment in the subsidiary is made, is recognised as ‘Goodwill (on consolidation)’. When the cost to the parent of its investment in a subsidiary is less than the parent’s portion of equity of the subsidiary at the date on which investment in the subsidiary is made, the difference is treated as ‘Capital Reserve (on consolidation)’ in the consolidated financial statements.

iii. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

c. Useofestimates:

The preparation of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and difference between the actual results and estimates are recognised in the period in which the results are known or materialise.

d. Tangiblefixedassetsandcapitalwork-in-progress:

Tangible fixed assets are stated at the original cost of acquisition and related expenses less accumulated depreciation and accumulated impairment losses, if any. Assets, which are not under active use and held for disposal, are stated at lower of net book value and net realizable value. Capital work-in-progress comprises costs incurred on fixed assets that are not yet ready for their intended use as at the reporting date.

e. Intangibleassets:

Intangible assets are capitalised, where it is reasonably estimated that the intangible asset has an enduring useful life. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

NotestotheConsolidatedFinancialStatements


f. Depreciationandamortisation:

i. Except for items forming part of (ii) and (iii) below, depreciation on tangible assets is provided, pro-rata for the period of use, by straight line method (SLM), based on management’s estimate of useful lives for the fixed assets as given in the table below:

Category UsefulLife

Buildings 40 years

Computers and Allied Equipment

– Desktops / Printers 2 years

– Servers / Laptops 4 years

– Computer Cabling 7 years

Office Equipment

– EPABX 5 years

– Others 3 years

Furniture and Fixtures 10 years

Vehicles 5 years

ii. Assets costing less than the rupee equivalent of USD 1,500 are fully depreciated on purchase.

iii. Leasehold improvements are depreciated over the lease period including the renewal periods, if any. Assets associated with premises taken on lease are depreciated on straight line basis over the lease period including the renewal periods or the useful lives stated above, whichever is shorter.

iv. The management has arrived at the above estimates of useful lives based on an internal assessment and technical evaluation and believes that the useful lives stated above represent its best estimate of the period over which it expects to use the assets. The useful lives estimated by the management as stated in the table above are different from the useful lives prescribed under “Part C” of “Schedule II” of the Act with the exception of Furniture and Fixtures and EPABX Office Equipment.

v. Intangible assets are amortised over their useful lives estimated by the management as stated in the table below, commencing from the date the asset is available for use:

Category UsefulLife

Software 3 years

BSE Membership Card 10 years

g. Impairmentofassets:

In accordance with AS-28 on ‘Impairment of Assets’, an asset is considered as impaired when at the balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable, the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value-in-use). The management of the Group assesses at each balance sheet date whether there is any indication that an asset may be impaired based on internal/external factors. If any such indication exists, the management estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than the carrying amount, the carrying amount is reduced to the recoverable amount and the reduction is recognised as an impairment loss in the Statement of Profit and Loss.

h. Allowanceforbad/doubtfuldebtsandadvances:

Allowance for bad and doubtful debts and advances is made and disclosed in accordance with the applicable prudential norms prescribed by the regulators. In cases where management estimates a higher risk of recovery, allowance is made at amounts higher than those prescribed under the prudential norms.

i. Investments:

Investments are classified as current or non-current (long-term) based upon management intent at the time of acquisition. Investments that are intended to be held for not more than one year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments. Current investments are stated at lower of cost and fair value. Any reduction in the carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

Non-current investments are recorded at cost as on the date of transaction. Provision is made to recognise a decline, other than temporary, in the value of such investments.

j. Inventoriesandderivativeinstruments:

(i) Inventories: Securities held as stock-in-trade are valued at lower

of cost and market value by category of security held.

NotestotheConsolidatedFinancialStatements(Contd...)


(ii) Equity index / stock futures : The outstanding equity index / stock futures

contracts are marked-to-market on a scrip-wise / index-wise basis and resulting unrealised net losses are provided for; net unrealised gains are ignored in accordance with the concept of prudence contained in Accounting Standard 1 on “Disclosure of Accounting Policies”. Provision for losses on outstanding contracts is presented under current liabilities. Mark-to-market margins paid to and received from the Stock Exchange(s) on outstanding contracts are net off and presented under loans and advances / current liabilities, as the case may be. At the time of final settlement or on squaring up a contract by entering into a reverse contract, the difference between the final settlement price and the contract price is recognised in the Statement of Profit and Loss.

(iii) Equity index / stock options : Premium paid to and received from the Stock

Exchange(s) on equity index / stock option contracts are net off and presented under other assets / current liabilities, as the case may be. Outstanding equity option contracts are marked-to-market on a scrip-wise / index-wise basis and resulting unrealised net losses are provided for; net unrealised gains are ignored in accordance with the concept of prudence contained in Accounting Standard 1 on “Disclosure of Accounting Policies”. Provision for losses on the outstanding contracts is presented as a deduction from the net option premium if an asset, else disclosed under current liabilities. The difference between the final settlement price and the strike price on exercise of options is recognised in the Statement of Profit and Loss. On squaring up a contract by entering into a reverse contract, the difference between the premium paid and received is transferred to the Statement of Profit and Loss.

k. Debenturesissuedwithequity-linkedcouponpayments:

Debentures issued, where the primary returns are linked to equity related benchmarks have been accounted for at fair value in the Statement of Profit and Loss. The fair value is determined by using an appropriate valuation model. The model discounts the expected cash flows under the terms of each specific contract to the present value. These models use as their basis the relevant market parameters including, interest rate yield curves, equity prices, option volatilities and currency rates. Most market parameters are either directly observable or are implied from instrument prices, however where certain inputs are unobservable, management estimate is used.

The model may perform numerical procedures in the pricing such as interpolation when input values do not directly correspond to the most actively traded market trade parameters.

l. Revenuerecognition:

Revenue is recognised when it is earned and no significant uncertainty exists as to its realization or collection on the following basis:i. Brokerage from equity / debt market transactions is

recognised on trade date basis.

ii. Fees from investment banking activities including issue management, mergers and acquisitions, and advisory services are recognised on stage wise basis / as per agreement.

iii. Underwriting commission earned, to the extent not reduced from cost of acquisition of securities is accounted on closure of the issue.

iv. Income from financing and lending activities is recognised on a time proportionate basis and is primarily in the nature of interest on loans, advances, debentures and bonds and upfront fees and commission. Interest on loans classified as non-performing assets is recognised in accordance with the applicable prudential norms as prescribed by the regulators.

v. Income from principal transactions are accounted on trade date basis and comprises gains and losses on securities including derivative instruments and fair value gains or losses including coupon payments on debentures issued by the Company with equity-linked coupons.

vi. Brokerage / marketing fees on mutual funds / new issues are accounted based on mobilisation and intimation received from clients / intermediaries.

vii. Investment advisory income is accounted as per agreement.

viii. Income in the nature of initial fees from trustee-ship services are recognised immediately on formation of the trust, administrative fees are recognised on a time-proportionate basis and termination fees upon termination of the trust.

ix. Interest on bank deposits is accounted on accrual basis.



x. Dividend income is recognised when the right to receive payment is established.

xi. Revenue excludes service tax, wherever recovered.

m. Employeebenefits:

Short-term employee benefits (benefits which are payable within twelve months after the end of the period in which the employees render services) are measured at cost. Long-term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which the employees render services) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual independent third party actuarial valuations.

The Group has defined contribution plans for post

employment benefits in the form of Provident Fund. Under the plan, contributions are made to a Government administered provident fund on behalf of the employees and the Group has no further obligation beyond making the contributions. Contributions to Provident Fund are made in accordance with the statute, and are recognised as an expense when employees have rendered services entitling them to the contributions.

The costs of providing benefits under defined benefit

plans are determined using the Projected Unit Credit Method on the basis of a third party actuarial valuation at each balance sheet date. The leave encashment and gratuity benefit obligations recognised on the balance sheet represent the present value of the obligations as reduced by the fair value of plan assets, if any. Any asset resulting from this calculation is limited to the discounted value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

n. Foreigncurrencytransactions:

Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Monetary foreign currency assets and liabilities are reported using the exchange rate prevailing at the balance sheet date. All exchange differences are dealt with in the Statement of Profit and Loss. Non–monetary items are carried at historical cost using the exchange rates on the date of the transaction. Outstanding foreign

exchange forward contracts are marked to market. Resulting losses are recognised in the Statement of Profit and Loss; gains are ignored.

o. Borrowingcosts:

Borrowing costs primarily include interest and related costs of amounts borrowed for the operations of the Company. These are expensed to revenue on a time-proportionate basis.

p. Operatinglease:

Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

q. Earningpershare:

Basic and diluted earnings per share (EPS) are reported in accordance with Accounting Standard 20 on “Earnings Per Share”. Basic EPS is computed 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. Diluted EPS is computed 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 as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

r. Taxation:

Taxes on income are accounted for in accordance with Accounting Standard 22 on “Accounting for Taxes on Income” and comprise current and deferred tax.

Current tax is measured at the amount expected to be paid in respect of taxable income for the year in accordance with the Income Tax Act, 1961.

The tax effect of timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods is recorded as a deferred tax asset or deferred tax liability. These are measured using the substantively enacted tax rates and tax regulations. Deferred tax assets arising on account of carry forward of losses and unabsorbed depreciation under tax laws are recognised only if there is virtual certainty of realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences 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. The carrying amount of deferred



tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realised.

.

s. Cashflowstatement::

The cash flow statement is prepared by the indirect method set out in Accounting Standard 3 on “Cash Flow Statements” and presents the cash flows by operating, investing and financing activities of the company.

Cash and cash equivalents presented in cash flow statement comprise cash on hand, deposits with banks and current investments readily convertible to known amounts of cash and subject to insignificant risk of change in value.

t. Employeestockcompensation:

Liability in respect of restricted stocks and restricted units of the ultimate parent company granted to the employees of the Group in terms of the global long-term incentive compensation plans of the ultimate parent company is accounted for initially at the fair value of the awards on the date of grant. The difference between the fair value on the date of grant and fair value on the date of vesting is accounted for when the stocks vest. At the balance sheet date, liability in respect of unvested stocks

is re-measured based on the fair value of the stocks on that date.

u. Contingentliabilities:

Contingent liabilities as defined in Accounting Standard 29 on “Provisions, Contingent Liabilities and Contingent Assets” are disclosed by way of notes to the accounts. Disclosure is not made if the possibility of an outflow of future economic benefits is remote. Provision is made if it is probable that an outflow of future economic benefits will be required to settle the obligation.



3. Sharecapital:


Rs.millionAuthorised 73,750,000 Equity shares of Rs. 10/- each 737.50

810,000,000 Cumulative redeemable preference shares of Rs. 10/- each 8,100.00

8,837.50

Issued,subscribedandpaid-up

Equitysharecapital

23,155,039 Equity shares of Rs. 10/- each, fully paid up 231.55

231.55

Reconciliationofnumberofshares:


NumberofShares Rs.million

EquityShares: Balance as at the beginning of the year 23,160,000 231.60

Add: Shares issued during the year - -

Less: Shares bought back during the year (4,961) (0.05)

Balance as at the end of the year 23,155,039 231.55


During the year, the Company bought back 4,961 equity shares of face value of Rs. 10/- each for a total consideration of Rs 16.37 million. The difference of Rs. 16.32 million between amount paid for buy back and the face value of the shares bought back has been adjusted against surplus in statement of profit and loss.

Rights,preferencesandrestrictionsattachedtoshares:EquityShares:The company has only one class of equity shares with a par value of Rs. 10/- each. Each shareholder is eligible for one vote per share.

Sharesheldbytheholdingcompany,ultimateholdingcompanyandtheirsubsidiaries/associatesareasbelow:

NameofShareholderNatureofRelationship

Asat31stMarch,2015

NumberofShares Rs.million

EquityShares: Merrill Lynch Investment Holdings (Mauritius) Limited Fellow Subsidiary 10,738,800 107.39Merrill Lynch Holdings (Mauritius) Fellow Subsidiary 9,495,105 94.95Merrill Lynch Asia Investments Limited Fellow Subsidiary 2,910,000 29.10

Detailsofsharesheldbyshareholdersholdingmorethan5%oftheaggregatesharesintheCompany:

NameofShareholder Asat31stMarch,2015

NumberofShares %ofHolding

EquityShares: Merrill Lynch Investment Holdings (Mauritius) Limited 10,738,800 46.38%Merrill Lynch Holdings (Mauritius) 9,495,105 41.01%Merrill Lynch Asia Investments Limited 2,910,000 12.57%

Thecompanyhasnotissuedanyequitysharesforconsiderationotherthancashorbywayofbonusduringthelastfivefinancialyears.



4. ReservesandSurplus:


Rs.millionInvestmentallowancereserveBalance as at the beginning of the year 1.19

Balance as at the end of the year 1.19

Securitiespremiumaccount

Balance as at the beginning of the year 44.28

Balance as at the end of the year 44.28

Capitalredemptionreserve

Balance as at the beginning of the year 8,100.00

Add: Transfer from Surplus in Statement of Profit and Loss on buy-back of equity shares 0.05

Balance as at the end of the year 8,100.05

Generalreserve



ReserveunderSection45-ICoftheReserveBankofIndiaAct,1934


Transfer from profit for the current year 295.52


Surplusinstatementofprofitandloss


Add: Profit for the year 3,752.71

Appropriations:

Utilisation for buy-back of equity shares (16.32)

Income distribution tax on buy-back of equity shares (3.70)

Transfer to reserve under section 45-IC of the Reserve Bank of India Act, 1934 (295.52)

Transfer to capital redemption reserve on buy-back of equity shares (0.05)


37,587.85

5. Long-termborrowings:


Rs.millionSecured Term loans :

From banks 41.54

[Secured against hypothecation of vehicles]

41.54



6. Long-termprovisions:


Rs.millionProvision for employee benefits :

Gratuity [refer note 32 (ii)] 79.52

Compensated absences 275.67

Loan loss provision 43.69

398.88

7. Tradepayables:


Rs.millionSundry creditors [refer note 39] 17,169.36

17,169.36

8. Othercurrentliabilities:


Rs.millionCurrent maturities of long-term loans [refer note 5] 37.23Statutory dues including Provident fund, Tax deducted at source and Service tax 29.67

Interest received in advance 0.11

Salaries and bonus payable 238.54

Other Payables [refer note 39] 5.59

311.14

9. Short-termprovisions:


Rs.millionProvision for employee benefits :

Gratuity [refer note 32 (ii)] 0.82

Compensated absences 49.08

Others :

Contingent provisions against standard assets 6.34

Provision for restructured standard advances 198.36

Provision for contingencies [refer note 40] 11.18

265.78


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11.Non-currentinvestments:

Particulars Asat31stMarch,2015Quantity

(No.)Rs.million

I. TradeInvestment[valuedatcost,netofprovisionfordiminutioninvalue]UnquotedInvestmentinEquityshares: Bombay Stock Exchange Limited [Face Value Re. 1/-] 130,000 0.01TotalI 0.01

II. OtherInvestments[valuedatcost,netofprovisionfordiminutioninvalue]Unquoted(i)Equityshares

[facevalueofRs.10/-eachfullypaid-up]Avon Industries Limited 21,000 0.51Co-Nick Alloys Limited 122,500 1.79Eastern Circuits Limited 5,100 0.06Eastern Medikit Limited 18,000 0.54Inland Printers Limited 16,000 0.96Magnetix India Limited 810 0.01Montari Industries Limited 36 *Orissa Extrusions Limited 89 **Sangam Aluminium Limited 9,000 0.17Travancore Cements Limited 2,410 0.06Varun Polymol Organics Limited 26 ***Wood Polymer Limited 200 0.01

4.11Less : Provision for diminution in value (4.11)

-(ii)Debentures

9% Secured Non-Convertible Redeemable Debentures of JK Lakshmi Cement Limited 5,643 0.560.56

Less : Provision for diminution in value (0.56)-

Sub-total-A -Quoted

Equityshares[facevalueofRs.4/-eachfullypaid-up]Udaipur Cement Works Limited 10,567 0.04

0.04 Less : Provision for diminution in value -

Sub-total-B 0.04

TotalII[A+B] 0.04

Total[I+II] 0.05

Summary:QuotedAggregate of book value 0.04Aggregate of market value 0.13UnquotedAggregate value of unquoted investments 0.01Aggregate provision for diminution in value of investments 4.67


**** Amount [Rs. 1,476/-] below rounding off norm adopted by the Company.**** Amount [Rs. 1,621/-] below rounding off norm adopted by the Company.**** Amount [Rs. 637/-] below rounding off norm adopted by the Company.


12. Long-termloansandadvances:


Rs.millionUnsecured,consideredgood: Advance payment of taxes (net of provision for tax Rs. 21,372.07 million) 2,417.85

Cash deposits placed with exchanges and depository 68.13

Deposits placed for premises and others 72.48

Prepayments and others 8.03

2,566.49


13. Othernon-currentassets:


Rs.million

Interest receivable on loans 43.69

43.69

14. Currentinvestments:

Asat31stMarch,2015

Quantity(no.) Rs.million

Currentportionoflong-terminvestments Quoted[valuedatcostunlessstatedotherwise]

CorporateBonds:

[Face value Rs. 1,000,000/- each]

9.40% National Agricultural Bank - Maturity July 31, 2015 40 39.97

9.46% Power Finance Corporation - Maturity May 2, 2015 1 1.00

40.97

Less: Provision for mark-to-market loss -

Sub-total-A 40.97

Unquoted

EquityShares

Investmentinsubsidiaries

Merrill Lynch Wealth Advisors Private Limited [refer note 28 (b)] 50,000,000 500.00

500.00

Less: Provision for mark-to-market loss -

Sub-total-B 500.00

Total-[A+B] 540.97

Summary:QuotedAggregate of book value 40.97Aggregate of market value 41.12

UnquotedAggregate of book value 500.00



15. Inventories-Securitiesheldasstockintrade:Particulars Asat31stMarch,2015

Quantity(No.) Rs.millionIQuoted

Debenturesandbonds[valuedatlowerofcostsandmarketvalue][Face value Rs. 1,000,000/- each unless otherwise stated]

10.00% BLP Energy Private Limited - Maturity July 5, 2015 1,000 1,000.008.93% Power Grid Corporation of India - Maturity October 20, 2018 100 101.688.15% Power Grid Corporation of India - Maturity March 9, 2020 150 150.009.18% Power Finance Corporation Limited - Maturity April 15, 2021 250 258.249.95% Food Corporation of India - Maturity March 7, 2022 50 55.379.30% Export Import Bank of India - Maturity May 11, 2022 50 52.758.28% Mahanagar Telephone Nigam Limited - Maturity November 19, 2024 200 203.588.29% Mahanagar Telephone Nigam Limited - Maturity November 28, 2024 500 513.038.57% Rural Electrification Corporation Limited - Maturity December 21, 2024 150 152.828.40% LIC Housing Finance Limited - Maturity January 30, 2025 1,500 1,500.008.15% Power Grid Corporation of India - Maturity March 9, 2025 150 150.008.15% Power Grid Corporation of India - Maturity March 9, 2030 150 150.00

4,287.47Less: Provision for mark-to-market loss -TotalQuoted 4,287.47

Aggregate amount of book value 4,287.47Aggregate of market value 4,404.83

IIUnquoteda.Certificateofdeposits[valuedatlowerofcostsandmarketvalue]

[Face value Rs. 100,000/- each]

Canara Bank - Maturity February 17, 2016 2,500 230.76Corporation Bank - Maturity February 29, 2016 5,000 461.48Andhra Bank - Maturity March 4, 2016 5,000 463.74Axis Bank Limited - Maturity March 8, 2016 15,000 1,382.49Andhra Bank - Maturity March 9, 2016 2,500 231.96Indian Bank - Maturity March 9, 2016 10,000 922.24Indian Bank - Maturity March 10, 2016 10,000 922.08Oriental Bank of Commerce - Maturity March 10, 2016 2,500 231.61Corporation Bank - Maturity March 11, 2016 7,500 691.62Andhra Bank - Maturity March 15, 2016 2,500 231.36

5,769.34Add: Accretion of Interest 22.96

5,792.30Less: Provision for mark-to-market loss -Sub-total(a) 5,792.30

Aggregate of book value 5,792.30

b.Commercialpaper[valuedatcarryingcost][Face value Rs. 500,000/- each]National Bank for Agriculture and Rural Development - Maturity March 14, 2016 1,000 460.96

460.96Add: Accretion of Interest 1.45Subtotal(b) 462.41

TotalUnquoted[a+b] 6,254.71

Total[I+II] 10,542.18Summary:QuotedAggregate of book value 4,287.47Aggregate of market value 4,404.83UnquotedAggregate of book value 6,254.71


16. Tradereceivables:


Rs.millionOtherdebts

Unsecured :

Considered good 506.57

Considered doubtful 1.10

507.67

Less: Provision for doubtful debts (1.10)

506.57

506.57


17. Cashandbankbalances:


Rs.millionCash and cash equivalents : Cash on hand -

Bank balances :

In current accounts 1,880.74

Fixed deposits with banks with original maturity less than 3 months 8,280.00

10,160.74

Short term, highly liquid investments - Mutual Funds [refer note 43]

DSP Blackrock Liquidity Fund - Direct Plan - Growth 1,500.00

Birla Sun Life Cash Plus - Growth - Direct Plan 500.00

HDFC Liquid Fund - Direct Plan - Growth 660.00

ICICI Prudential Liquid Plan - Direct Plan - Growth 1,200.00

Reliance Liquidity Fund - Direct Plan - Growth 1,750.00

SBI Premier Liquid Fund - Direct Plan - Growth 825.00

6,435.00

Cash and cash equivalents - Total 16,595.74

Other bank balances :

Fixed deposits with banks under lien as collateral with stock exchange* 16,041.87

Other bank balances ** 0.02

Other bank balances - Total 16,041.89

32,637.63

*** These fixed deposits are under lien with Bombay Stock Exchange Limited/ National Securities Clearing Corporation Limited towards Base and Additional Base Capital / Margins.*** Represents fixed deposit of Rs. 0.02 million lien-marked in favour of Commercial Tax Officer, Sales Tax Office, Indore


18. Short-termloansandadvances:


Rs.millionLoansandadvances Secured, considered good :

Loans given 6,994.66

Unsecured, considered good :

Cash deposits placed with exchanges 654.80

Advances 0.45


Prepayments and others 26.25

Unsecured, considered doubtful :

Advances 0.45


Service tax input credit 39.41

40.22

Less: Allowance (40.22)

-

7,717.04


19. Othercurrentassets:


Rs.millionAccrued income - administrative fees 2.42Interest accrued on:

Fixed deposits 217.52

Loans 202.16

Investments 0.57

Securities held as stock-in-trade 101.80

Other receivables 63.06

587.53



20. AdvisoryandTransactionalServices:


Rs.millionProfessional fees 795.69Brokerage / marketing fees 4,513.01

Depository participant income 16.70

Other operating revenue 6.53

5,331.93

21. Interestincome:


Rs.millionInterest on loans and advances 1,092.61Interest on securities held as stock-in-trade 509.73

1,602.34

22. Profitonprincipaltransactions;net:


Rs.millionDebentures/Bonds/CertificateofDeposits/CommercialPapers:

Sales / redemptions 48,420.79

Less : Cost of sales

Opening stock 8,151.36

Add : Purchases 50,460.97

Add : Accretion of Interest 96.37

58,708.70

Less: Closing stock 10,542.18

Cost of sales 48,166.52

Sub-total 254.27

Profit on equity futures and options, net 13.53

Valuation gains / (losses) on debentures with equity-linked coupon payments, net 24.27

Interest payments on debentures with equity-linked coupon payments (35.97)

Sub-total 1.83

Total 256.10



23. Otherincome:


Rs.millionProfit on sale of current investments 950.24Interest on:

Bank deposits 1,675.78

Income tax refund 232.08

Debentures 0.05

Long term investments [other than trade] 4.60

Current investments [other than trade] 3.27

Others 1.03

Infrastructure and support fees recovered 58.11

Secondment charges recovered 75.04

Dividend income on other long term investments 0.52

Professional fees 45.25

Profit on sale of long term investments [other than trade] 3.60

Credit balances written back 0.08

Foreign exchange differences, net 3.59

Write-back of provision for input service tax credit 5.59

Write-back of contingent provision for standard assets 2.90

Write-back of provision for bad and doubtful debts & advances, net 3.24

3,064.97

24. Employeebenefitsexpense:


Rs.millionSalaries and bonus 2,258.81Contribution to provident fund [refer note 32(i)] 70.01

Gratuity [refer note 32(ii)] 56.79

Staff welfare expenses 22.88

2,408.49

25. Financecosts:


Rs.millionInterest on Bank loans 9.65

9.65


27. Otherexpenses:


Rs.millionAdvertisement, publicity and sales promotion 1.81Bad debts and advances written off 6.73

Brokerage, clearing charges and exchange fees 105.34

Communication costs, net 132.93

Corporate Social Responsibility expenditure [refer note 31(e)] 79.06

Data subscription costs, net 121.45

Electricity 63.00

Insurance 5.71

Infrastructure and support costs 46.13

Legal and professional fees, net 243.92

Loss on fixed assets sold / discarded, net 7.14

Printing and stationery 14.74

Provision for restructured standard advances 57.38

Rates and taxes 322.87

Rent 209.16

Repairs and maintenance:

Building 95.05

Plant and machinery 127.52

Secondment charges incurred 56.12

Sub-brokerage, fees, commission and other direct expenses 21.34

Travelling expenses, net 89.19

Miscellaneous expenses 34.18

1,840.77

26. Depreciationandamortisationexpenses:


Rs.millionDepreciation on tangible assets [refer note 10] 214.01Amortisation of intangible assets [refer note 10] 4.15

218.16




28. a. Particularsofsubsidiarieswhoseaccountshavebeenconsideredfortheconsolidatedfinancialstatements:

NameoftheCompany CountryofIncorporation

Percentageofvotingpowerasat

31stMarch,2015DSP Merrill Lynch Capital Limited India 100%DSP Merrill Lynch Trust Service Limited India 100%

b. Particularsofsubsidiarywhoseaccountshavenotbeenconsideredfortheconsolidatedfinancialstatements(“UnconsolidatedSubsidiary”):

NameoftheUnconsolidatedSubsidiary:Merrill Lynch Wealth Advisors Private Limited

Bank of America Corporation (the “Ultimate Controlling Enterprise”) agreed to procure the sale of its international wealth management (“WM”) businesses based outside of the United States (U.S.) to Julius Baer (JB) Group, the leading Swiss private banking group in August 2012 subject to local regulatory and other approvals and the execution of relevant agreements for the sale of WM business in each relevant jurisdiction, including India.


The Board of Directors of the Company, at its meeting held on January 27, 2015, subject to the applicable provisions of the Companies Act, 2013, the receipt of approval from members of the Company in accordance with the Companies Act, the requisite regulatory approvals and consents, as may be necessary and the execution of definitive documents for the sale and transfer of the WM business, approved the sale and transfer of the entire share capital of MLWA, WM businesses comprising of advisory and distribution services relating to the WM division as undertaken by the Company, the lending business relating to WM Division as undertaken by Company’s wholly owned subsidiary, namely DSP Merrill Lynch Capital Limited (“DSPMLC”) and the trust services business also relating to the WM division as undertaken by another wholly owned subsidiary of the Company, namely DSP Merrill Lynch Trust Services Limited (“DSPMLTS”), together with the client relationships including the depository participant accounts, if any relating to such relationships, employees and assets relating to the WM business to JBG. The members of the Company approved the sale and transfer of WM businesses to JB Group on March 5, 2015.

In terms of the aforesaid plan, the entire share capital held by the Company in MLWA was transferred to JB Group entities on April 13, 2015 in accordance with terms and conditions mutually agreed at a fair value determined by way of an independent valuation and subject to the receipt of the necessary approvals. The transfer of the share capital held by the Company in MLWA to the two JB Group entities, viz. Julius Baer Group Ltd. and Julius Baer Investment Ltd. has been completed on April 13, 2015.

Given the temporary nature of control, MLWA has been excluded from the scope of consolidated financial statements in line with Accounting Standard 21 on “Consolidated Financial Statements”



29. Contingentliabilities:


Rs.million(a) Claims against the group not acknowledged as debt :

- Income tax demands disputed in appeals before the authorities to the extent not provided for and fully paid 949.51

- Service tax demand disputed in appeals before the authorities to the extent not provided for (excluding any interest and penalty that may apply)*

23.46

(b) Guarantees -

(c) Others:

(i) Show cause notice received from SEBI related to disclosures in Initial Public Offer document of an issuer. 10.00

(ii) The wholly owned subsidiary company, DSP Merrill Lynch Capital Limited (“DSPMLC”) undertakes activities in the nature of loans and principal transactions in securities, derivative instruments and other financial products including investment in units of mutual fund liquid schemes and government securities, which in its view, are covered under the head “Leasing & Finance” in the list of the eighteen activities permitted for NBFCs with Foreign Direct Investment (“FDI”) under the automatic route in terms of the FDI policy of the Government of India.

DSPMLC had sought a clarification from the Foreign Investment Promotion Board (“FIPB”) with respect to its principal transactions on 16th June, 2010. DSPMLC received a response (dated 31st October, 2011) from the FIPB stating that proprietary trading should not be allowed in NBFCs, which are set up or which are group companies of Banks (either Indian or foreign) with or without physical presence in India. DSPMLC, vide letter dated 25th January, 2012, has written to FIPB clarifying that it undertakes activities, which involve trading, but do not constitute proprietary trading since these are undertaken to facilitate treasury operations, liquidity management, hedging activity for risk management purposes, buying / subscribing and selling / syndication of debentures and corporate bonds to provide financing to clients and market making for clients for their investments in bonds / debentures. DSPMLC has sent a reminder letter dated 11th October, 2012 and is awaiting response. The ultimate outcome of the matter cannot presently be determined, for which no provision for any liability that may result has been made in the financial statements.

* Customs Excise and Service Tax Appellate Tribunal (CESTAT) has granted an unconditional stay and waiver of pre-deposit of all dues in the matter.

30. Commitments:


Rs.million

(a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for 12.79

(b) Uncalled liability on shares and other investments partly paid -

(c) Other commitments -

12.79



b. Earningsinforeigncurrency(onaccrualbasis):


Rs.millionProfessional fees 310.48Total 310.48

31. Additionaldisclosures:

a. Paymenttoauditors(includingservicetax):


Rs.millionAudit Fees 6.36

In any other manner including certifications 3.53Total 9.89

c. Imports:


Rs.millionCIF value of imports [capital goods] 0.34Total 0.34

d. Expenditureinforeigncurrency(onaccrualbasis):


Rs.millionTravel 20.19

Professional fees 33.59

Networking charges 4.28

Service charges 17.85

Others 8.40Total 84.31

e. CorporateSocialResponsibility(CSR)expenditure:


Rs.million(a) Gross amount required to spent by the group during the year 79.06

(b) Amount spent during the year on:

i) Construction / acquisition of any asset

In cash -

Yet to be paid in cash -

ii) On any other purpose

In cash 79.06

Yet to be paid in cash -Total 79.06



32.Employeebenefits:

DisclosuresinrespectofDefinedContributionPlanandDefinedBenefitPlan:

(i) DefinedContributionPlan:

Group’s contribution to provident fundRs.70.01million

(ii) DefinedBenefitPlan:

LiabilitiesrecognisedinBalanceSheetinrespectoffundedandunfundeddefinedbenefitobligations:

Particulars FundedAsat


UnfundedAsat


ConsolidatedAsat


Present value (PV) of obligation for gratuity 371.89 13.88 385.77

Fair Value of Plan Assets (305.43) - (305.43)

Balance as on the year end 66.46 13.88 80.34

Current portion of the gratuity liability - 0.82 0.82

Non-current portion of the gratuity liability 66.46 13.06 79.52

Gratuityexpensesduringtheyear:

Particulars FundedYearEnded


UnfundedYearEnded


ConsolidatedYearEnded


Current service cost 55.13 3.06 58.19

Interest on defined benefit obligation 30.24 1.06 31.30

Expected return on plan asset (23.44) (1.68) (25.12)

Net actuarial (gains) / losses recognised (7.58) - (7.58)

54.35 2.44 56.79

Reconciliationofdefinedbenefitobligations(Gratuity)duringtheyear:



UnfundedAsat


ConsolidatedAsat


Opening defined benefit obligation 349.38 11.73 361.11

Current service cost 55.13 3.06 58.19

Interest cost 30.24 1.06 31.30

Net actuarial (gains) / losses recognised 3.53 (1.68) 1.85

Acquisition/ business combination / divesture (39.72) (0.29) (40.01)

Benefits paid (26.67) - (26.67)

371.89 13.88 385.77



32.Employeebenefits(Contd....):

Changeinfairvalueofassets:



UnfundedAsat


ConsolidatedAsat


Opening fair value of plan assets 255.84 - 255.84

Expected return on plan assets 23.44 - 23.44

Actuarial gains / (losses) 11.12 - 11.12

Contributions by employer 41.70 - 41.70

Benefits paid (26.67) - (26.67)

305.43 - 305.43

Investmentpattern:


Government of India securities 76.44%

High quality corporate bonds (including public sector bonds) 14.27%

Special deposit scheme 5.74%

Others 3.55%

100.00%

Principalactuarialassumptions:


Discount rate (p.a.) 7.85%

Salary escalation rate (p.a.) 9.00%

Expected rate of return on assets (p.a.) 7.68%

Attrition rate 8.50%

ExperienceAdjustments:Rs.million

Particulars Gratuity

YearEnded

31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12 31-Mar-11

Defined benefit obligation 385.76 361.11 366.82 314.68 340.35

Plan assets 305.43 255.84 210.99 184.22 165.13

Surplus / (deficit) (80.33) (105.27) (155.83) (130.46) (175.22)

Experience adjustment on plan liabilities 1.86 91.22 (15.77) (36.23) 89.30

Experience adjustment on plan asset 11.12 0.50 3.73 0.56 (2.96)

The mortality assumptions and rates considered in assessing the Company’s post retirement liabilities are as per the published rate under the Indian Assured Lives Mortality (2006-08) Ultimate table.

The estimates of future salary increase, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.


33.Segmentreporting:

The Company has identified three primary reportable business segments namely ‘Advisory and Transactional Services’ , ‘Financing-Lending’ and ‘Principal Transactions’ in terms of Accounting Standard (AS) – 17 “Segment Reporting”. Information in respect of reportable segments performance is given below: No. Particulars Advisoryand

TransactionalServices

FinancingLending

PrincipalTransactions

Unallocable Inter-SegmentElimination

(refernote4below)

Total

1. Segment revenue :External revenue 6,646.44 1,247.70 2,049.07 312.13 - 10,255.34Inter-segment revenue - - 5.47 - (5.47) -

TotalRevenue 6,646.44 1,247.70 2,054.54 312.13 (5.47) 10,255.34

2. Segment results 2,537.84 1,084.40 1,999.18 156.85 - 5,778.27

3. Segment assets 20,170.23 8,267.51 24,799.01 2,769.35 - 56,006.10

4. Segment liabilities 17,854.86 272.12 9.75 49.97 - 18,186.70

5. Capital expenditure 395.09 0.72 0.01 8.49 - 404.31

6. Depreciation/Amortisation 211.23 1.01 0.36 5.56 - 218.16

7. Other significantnon-cash expenses / (credits):

a) Gratuity 53.51 0.56 0.27 2.45 - 56.79b) Compensated

absence 52.74 0.83 0.36 2.99 - 56.92c) (Write-back of

contigent provision) / contingent provision against standard assets - (2.90) - - - (2.90)

d) Provision for restructured standard advances - 57.38 - - - 57.38

e) Provision / (Write-back of provision) for doubtful debts and advances (3.24) - - - - (3.24)

Notes: 1. The Advisory and transactional services comprise Merchant Banking, Underwriting, Broking, Distribution of Securities and interest on fixed

deposits. The Financing-Lending segment comprises activity of lending operations. The Principal Transactions segment consists of earnings from transactions in securities (including equity derivative) and deployment of surplus funds.

2. Segment assets include all operating assets used by a segment and consist primarily of fixed assets net of provision and allowance, investments, other current assets and fixed deposits.

3. Segment liabilities include all operating liabilities and other payables.

4. Inter-segment transfers comprise the cost related to debentures with equity-linked coupon payments for one of its subsidiary, which is measured by applying the benchmark average borrowing rate to the average holding of such debentures at the end of each month and charged to segments of the subsidiary company on the basis of the average level of assets.

5. Items that relate to the enterprise as a whole or at the corporate level not attributable to a particular segment are included under “Unallocable”. 6. The company operates in a single reportable geographical segment.




34. Disclosureinrespectofdiscontinuingoperation:

Bank of America Corporation (the “Ultimate Controlling Enterprise”) agreed to procure the sale of its international wealth management (“WM”) businesses based outside of the United States (U.S.) to Julius Baer Group (“JBG”), the leading Swiss private banking group in August 2012 subject to local regulatory and other approvals and the execution of relevant agreements for the sale of WM business in each relevant jurisdiction, including India.


The Board of Directors of the Company, at its meeting held on January 27, 2015, subject to the applicable provisions of the Companies Act, 2013, the receipt of approval from members of the Company in accordance with the Companies Act, the requisite regulatory approvals and consents, as may be necessary and the execution of definitive documents for the sale and transfer of the WM business, approved the sale and transfer of the entire share capital of MLWA, WM businesses comprising of advisory and distribution services relating to the WM division as undertaken by the Company, the lending business relating to WM Division as undertaken by Company’s wholly owned subsidiary, namely DSP Merrill Lynch Capital Limited (“DSPMLC”) and the trust services business also relating to the WM division as undertaken by another wholly owned subsidiary of the Company, namely DSP Merrill Lynch Trust Services Limited (“DSPMLTS”), together with the client relationships including the depository participant accounts, if any relating to such relationships, employees and assets relating to the WM business to JBG, in the following manner:

1. Subject to the receipt of the necessary regulatory approvals, the entire share capital of MLWA, a wholly owned subsidiary of the Company, shall be transferred by the Company to JBG, by way of a share sale, in accordance with and on terms and conditions mutually agreed between the Company and JBG;

2. Subsequent to the share sale of MLWA to JBG, the entire business of the WM division as undertaken by the Company shall be transferred as a going concern, by way of a sale, to MLWA (JBG owned) together with the entire share capital of DSPMLTS, on the terms and conditions mutually agreed between the Company and MLWA (JBG owned);

3. The entire lending business relating to WM division as undertaken by DSPMLC, shall be transferred as a going concern, by way of a sale, to an affiliate entity, namely, Banc of America Securities (India) Private Limited (“BASIL”), subject to receipt of necessary corporate approvals and in accordance with the terms and conditions mutually agreed between DSPMLC and BASIL.

The members of the Company approved the sale and transfer of the entire share capital of MLWA and WM businesses to JBG on March 5, 2015.

Separately, following the transfer of lending business, subject to regulatory approvals, the entire share capital of BASIL will be transferred to JBG in accordance with terms and conditions as may be mutually agreed between the shareholders of BASIL and JBG.

The transfer of the share capital held by the Company in MLWA to JBG was completed on April 13, 2015 and accordingly, MLWA ceased to be a subsidiary of the Company with effect from that date. The transfer of the lending business relating to the WM Division undertaken by DSPMLC (Company’s wholly owned subsidiary) to BASIL was completed on June 6, 2015.

Transfer of the WM businesses comprising of advisory and distribution services relating to WM division as undertaken by the Company and the trust services business relating to WM division as undertaken by DSPMLTS (Company’s wholly owned subsidiary) is yet to be completed.

The other disclosures as required in terms of AS-24 on ‘Discontinuing Operations’ are given below:


34. Disclosureinrespectofdiscontinuingoperation(Contd…):

a. DescriptionofthediscontinuingoperationandSegmentunderwhichreportedasperAS17,SegmentReporting:

Advisory & distribution services and the trust services business relating to WM Division reported under the “Advisory & Transactional Services” business segment and the Lending business relating to WM Division reported under “Financing - Lending” business segment of the Group.

b. Dateoftheinitialdisclosureevent: January 27, 2015.

c. Thecarryingamountsofthetotalassetsandliabilitiespertainingtodiscontinuingoperation:


Rs.millionAssets 7,973.91

Liabilities 422.58


d. Amountofrevenue,expenses,pre-taxprofitandincometaxexpenseattributabletothediscontinuingoperation:


Rs.millionRevenue 2,023.05

Expenses 1,289.04

Profit / (loss) before tax 734.01Tax expense / (credit) [refer note 38 (b)] 276.72

e. Netcashflowsattributabletothediscontinuingoperation:


Rs.millionNetcashgeneratedfrom/(usedin):

Operating activities 2,658.03

Investing activities (19.71)Financing activities (11.92)



35.Relatedpartydisclosures: i. Listofrelatedpartiesandtheirrelationships:

Sr.No. Nameoftherelatedparty Relationship

1 Bank of America Corporation (BAC) Ultimate Controlling Enterprise (a)

2 Merrill Lynch & Co., Inc. (merged with BAC w.e.f 1st October, 2013) Controlling Enterprise

3 Merrill Lynch Wealth Advisors Private Limited Subsidiary (b)

4 Bank of America, N.A - India Branches Fellow Subsidiary

5 Banc of America Securities (India) Private Limited Fellow Subsidiary

6 Bank of America Singapore Limited Fellow Subsidiary

7 Merrill Lynch (Asia Pacific) Limited Fellow Subsidiary

8 Merrill Lynch Australia Pty Limited Fellow Subsidiary

9 Merrill Lynch Capital Markets Espana, S.A., S.V. Fellow Subsidiary

10 Merrill Lynch Europe Limited Fellow Subsidiary

11 Merrill Lynch Holdings (Mauritius) Fellow Subsidiary (c)

12 Merrill Lynch International Fellow Subsidiary

13 Merrill Lynch International Inc. Fellow Subsidiary

14 Merrill Lynch (Mauritius) Investments Limited Fellow Subsidiary (c & d)

15 Merrill Lynch Investment Holdings (Maurititus) Limited Fellow Subsidiary (c & d)

16 Merrill Lynch Asia Investments Limited Fellow Subsidiary (c)

17 Merrill Lynch, Pierce, Fenner & Smith Incorporated Fellow Subsidiary

18 Merrill Lynch (Singapore) Pte Limited Fellow Subsidiary

19 Mr. Avinash Gupta, Mr. Jyotivardhan Jaipuria, Mr. Pradeep Dokania* Key Management Personnel (KMP)

(a) Refer note 1- Company background

(b) Related party with effect from June 27, 2014. Also refer note 28 (b).

(c) Refer Note 3 - Share capital

(d) Merrill Lynch (Mauritius) Investments Limited (MLMI) has merged with Merrill Lynch Investment Holdings (Mauritius) Limited (MLIHM) by way of amalgamation on March 22, 2013. Shares were transferred from MLMI to MLIHM on April 26, 2013.

* Resigned with effect from May 22, 2014



35.Relatedpartydisclosures(Contd...): ii. Transactionsduringtheyear/balanceswithrelatedparties:

Sr.No.

NatureofTransaction UltimateControllingEnterprise

Subsidiary:MerrillLynchWealthAdvisors

PrivateLimited

FellowSubsidiaries

KeyManagementPersonnel(KMP)

Rs.million Rs.million Rs.million Rs.million

1 Investments/stock-in-trade

Balance as at 31st March, 2015 - 500.00 - -

2 Bankbalance - - 245.29 (1) -

3 Fixeddepositsplaced

Placed during the year - - 350.00 (2) -

Received back during the year - - 550.00 -

Balance as at 31st March, 2015 - - - -

4 Margindeposits

Received during the year - - 67,307.99 (3) -

Refunded / adjusted during the year - - 64,657.55 -

Balance as at 31st March, 2015 - - (15,154.13) -

5 Incomefromoperations

Advisory and transactional services - - 1,487.33 (4) 0.33 (5)

Balance as at 31st March, 2015 - - 70.41 -

6 Otherincome,net

(a) Infrastructureandsupportfeesrecovered - 19.73 33.49 (6) -


(b) Interestanddividend - - 11.66 (7) -


(c) Secondmentchargesrecovered - 3.70 71.34 (7) -

Balance as at 31st March, 2015 - 0.07 45.39 -

7 Reimbursement/(recovery)ofamounts - (4.89) (3.07) (8) -


8 Otherreceivables

Balance as at 31st March, 2015 - 3.87 - -

9 Payment/(recovery)inrespectofretirementbenefitsoftransferredemployees,net

- 13.69 27.87 (7) -

Balance as at 31st March, 2015 - (13.69) - -

10 Remuneration - - - 128.87 (9)


11 Infrastructurecostsincurred - - 46.13 (7) -

Balance as at 31st March, 2015 - - (17.96) -

12 Secondmentchargesincurred - - 56.12 (7) -


13 Bankcharges - - 0.11 (7) -



Sr.No.

NatureofTransaction UltimateControllingEnterprise

Subsidiary:MerrillLynchWealthAdvisors

PrivateLimited

FellowSubsidiaries

KeyManagementPersonnel(KMP)

Rs.million Rs.million Rs.million Rs.million14 Otherexpenses

(a) Advisoryandtransactionalservices - - 17.85 (10) -


(b) Professionalfeesexpenses - - 6.91 (11) -


15 Reimbursementtowardsrestrictedstocks/units,net - - - -

Balance as at 31st March, 2015 (133.83) - - -

Note: Figures within brackets against balance denote amounts payable by the Company to the related parties. (1) Balance in current accounts maintained with Bank of America, N.A - India Branches. (2) Fixed deposits placed with Bank of America, N.A - India Branches. (3) Margin deposits placed by and refunded to Merrill Lynch Capital Markets Espana, S.A., S.V.

(4) Income from advisory and transactional services includes commission income of Rs. 1,170.98 million from Merrill Lynch Capital Markets Espana, S.A., S.V.

(5) Represents commission income from Mr. Jyotivardhan Jaipuria Rs. 0.28 million and Mr. Pradeep Dokania Rs. 0.02 million.

(6) Includes recovery of Rs. 33.11 million from Bank of America, N.A - India Branches.

(7) Amount relates to Bank of America, N.A - India Branches.

(8) Includes recovery of Rs. 3.07 million from Merrill Lynch International Inc.

(9) Includes Rs. 3.76 million pertaining to Mr. Pradeep Dokania, Rs. 73.05 million pertaining to Mr. Avinash Gupta and Rs. 52.06 million pertaining to Mr. Jyotivardhan Jaipuria.

(10) Amount relates to Merrill Lynch International Inc.

(11) Amounts relates to Merrill Lynch, Pierce, Fenner & Smith Incorporated.


35.Relatedpartydisclosures(Contd...): ii. Transactionsduringtheyear/balanceswithrelatedparties(Contd...):


36. Operatinglease:


Rs.millionFuture minimum lease rental relating to non-cancellable operating lease

(a) Due within one year -

(b) Due between one and five years -

(c) Due beyond five years -

Total -

Lease rental charges (including cancellable leases) recognised in the Statement of Profit and Loss 209.16


37. Earningsperequityshare(EPS):

The earnings per share, computed as per the requirement under AS-20 on “Earning Per Share” is as under:


Net profit after tax attributable to equity shareholders [Rs. million] 3,752.71

Weighted average numbers of shares outstanding during the year 23,158,586

Face value per share [Rs.] 10.00

Basic EPS [Rs.] 162.04

38. Taxation:

a. Break-upoftaxexpensefromcontinuingoperations:


Rs.millionCurrent income tax 1,649.02

Deferred tax expense / (credit), net 70.68

Provision for tax for earlier years, net 29.14

Total 1,748.84

b. Break-upoftaxexpensefromdiscontinuingoperations:


Rs.millionCurrent income-tax 347.44

Deferred tax expense / (credit), net (70.72)Total 276.72


38. Taxation(Contd...):

c. Themajorcomponentsofdeferredtaxbalancesonaccountoftimingdifferencesaresetoutbelow:


Rs.millionDeferredtaxassets

- Disallowance u/s 43B of Income tax Act, 1961 211.75

- Provision for loan losses 15.12

- Contingent provision against standard assets 2.19

- Provision for restructured standard advances 68.65

- Provision for bad / doubtful debts and advances, net 0.38

- Provision for contingencies 3.87

- Depreciation / amortisation, net 39.30

Deferredtaxassets,net 341.26


39. DisclosurespertainingtoMicroEnterprisesandSmallEnterprises:

There are no delays in payments and there are no amounts due to Micro and Small Enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006. The above information regarding Micro and Small Enterprises 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.

40. Provision for contingencies represents management’s best estimate of compensation payable to aggrieved (or otherwise) applicants / investors in an initial public offering of equity shares managed by the Company for one of its clients. Movement in provision is as under:


Rs.millionOpening balance in provisions 11.18

Additions -

Amount used -

Unused amount reversed -

Closing balance in provisions 11.18

41. Restricted stocks / restricted units of the Company’s ultimate holding company, Bank of America Corporation (BAC), are granted to the eligible employees of the company in terms of the global long-term incentive compensation plans of the ultimate holding company. These restricted stocks / restricted units vest in three equal annual installments beginning one year from the grant date. During the year ended 31st March, 2015, 147,350numbers of restricted stocks / restricted units were granted and the estimated fair value per unit on the date of grant was US$16.61. Employee benefits expense for the year includes Rs.Nil towards equity–settled awards and Rs.278.87million towards cash-settled awards. The liability towards restricted stocks / restricted units recognised as on 31st March, 2015 is Rs.156.21million.



42. Disclosuresinrespectofderivativeinstruments:

a. No equity index / stock futures and options were acquired by the Company during the year.

b. The foreign currency exposures that are not hedged by a derivative instrument or otherwise are as follows:

Natureoftransaction Asat31stMarch,2015

AmountRs.million

TransactionValue(inmillion)

Receivable on account of export of services 44.62 USD0.71

Payable on account of import of services 0.06 HKD0.01

Payable on account of import of services 0.35 SDG0.01

Payable on account of import of services 3.17 USD0.05

Payable on account of reimbursement towards restricted shares, units, stock options, net 133.70 USD2.13

c. There is no option premium paid / received carried forward in the Balance Sheet.

43. Quantitativedetailsinrespectofshorttermhighlyliquidinvestments(mutualfunds):


QuantityNumberofunits

AmountRs.million

DSP Blackrock Liquidity Fund - Direct Plan - Growth 749,880.357 1,500.00

Birla Sunlife Cash Plus - Growth - Direct Plan 2,227,680.535 500.00

HDFC Liquid Fund - Direct Plan - Growth 23,913,216.853 660.00

ICICI Prudential Liquid Plan - Direct Plan - Growth 5,797,037.038 1,200.00

Reliance Liquidity Fund - Direct Plan - Growth 830,349.807 1,750.00

SBI Premier Liquid Fund - Direct Plan - Growth 375,371.072 825.00

6,435.00



44. StatementofNetAssetsandProfitorLossAttributabletoownersandminorityinterest.

Nameoftheentity NetAssetsi.e.totalassetsminustotalliabilities

Shareinprofitorloss

Asa%ofconsolidatednet

assets

AmountRs.million

Asa%ofconsolidatedprofitorloss

AmountRs.million

DSP Merrill Lynch Limited 53.81% 24,769.86 60.80% 2,280.50

Subsidiaries(refernote28)

DSP Merrill Lynch Capital Limited 46.30% 21,315.21 39.39% 1,477.61

DSP Merrill Lynch Trust Services Limited -0.11% (50.05) -0.19% (7.15)

Total(A) 100.00% 46,035.02 100.00% 3,750.96

(a) Adjustment arising out of consolidations (8,215.62) 1.75(b) Minority interest - -

Total(B) (8,215.62) 1.75

ConsolidatedNetAssets/Profitaftertax(A+B) 37,819.40 3,752.71

45. The consolidated financial statements have been prepared for the first time in terms of the requirements of the Companies Act, 2013. Accordingly, corresponding amounts (comparatives) for the previous year have not been presented. The figures pertaining to subsidiary companies have been reclassified, wherever required to bring them in line with the consolidated financial statements.

Signaturestonotes1to45 ForPriceWaterhouse ForandonbehalfoftheBoardofDirectorsFirm Registration Number : 301112EChartered Accountants




NOTES

40th Annual Report 2015

Annual Report 2015 - Merrill · PDF fileAnnual Report 2015 | 7 Directors’ Report to the...

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