a) Securities Premium: Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

b) Special Reserve: Special Reserve represents reserve created pursuant to the Reserve Bank of India Act, 1934 (“the RBI Act”). In terms of Section 45-IC of the RBI Act, a Non-Banking Finance Company is required to transfer an amount not less than 20 per cent of its net profit to a Reserve Fund, before declaring any dividend. Appropriation from this Reserve Fund is permitted only for the purposes specified by RBI.

c) General Reserve: General Reserve represents vested ESOPs that have lapsed. As the general reserve is created by a transfer from one component of equity to another, and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

d) Capital Reserve: It represents reserve created during demerger from Grasim Industries Limited.

e) Employee Share Options Outstanding: The Company has stock options schemes, under which options to subscribe for the Company’s shares have been granted to certain employees, including key management personnel. The Employee Share Options Outstanding reserve is used to recognise the value of equity-settled share-based payments provided to employees, as part of their remuneration.

NOTE: 32 CONTINGENT LIABILITIES AND COMMITMENTSa) Contingent Liabilities

The Company has issued Corporate Guarantees to National Housing Bank on behalf of its subsidiary Aditya Birla Housing Finance Limited (ABHFL) of ' 3,500 crore up to 31^st March 2023 (Previous Year ' 2,500 crore), against which the amount outstanding in the books of ABHFL as at 31^st March 2023 is ' 2,057.71 crore (Previous Year ' 1,498.73 crore). As per the terms of the Guarantee, the Company’s liability is capped at the outstanding amount on invocation.

b) Capital Commitments

i) The Company has ' 0.37 as commitments towards Property, Plant and Equipment as at 31^st March 2023 (Previous Year ' Nil).

ii) Pursuant to the Shareholders’ Agreement entered into with Sun Life Financial (India) Insurance Investments Inc. and its holding Company Sun Life Assurance Company of Canada by Aditya Birla Capital Limited, in respect of Aditya Birla Sun Life Insurance Company Limited (ABSLI), the Company will infuse its share of capital in ABSLI from time to time to meet the solvency requirement, prescribed by the regulatory authority. Transfer of investments in ABSLI is restricted by the terms contained in Shareholders' Agreements entered into by the Aditya Birla Capital Limited.

iii) Pursuant to the Shareholders’ Agreement entered into with Momentum Metropolitian Strategic Investments (Proprietary) Limited and Platinum Jasmine A 2018 Trust by Aditya Birla Capital Limited, in respect of Aditya Birla Health Insurance Co. Limited (ABHI), the Company will infuse its share of capital in ABHI from time to time to meet the solvency requirement, prescribed by the regulatory authority.

b) Stock Options and Performance Stock Unit Scheme 2022

The shareholders of the Company, vide a special resolution passed through Postal Ballot on 16^th October 2022, approved the Scheme titled “Aditya Birla Capital Limited Employee Stock Options and Performance Stock Unit Scheme 2022” (“ABCL Scheme 2022”) for granting Employee Stock Options (“Options”) and Employee Performance Stock Units (“PSUs”) (collectively referred to as the (“Stock Options”) exercisable into not more than 41,071,270 Equity Shares. ABCL Scheme 2022 allows the grant of Stock Options to employees of the Company, and its group company(ies), including its Holding Company and Subsidiary Company(ies) and Associate Company(ies) (whether working in India or outside India), that meet the eligibility criteria. Each Stock Option confers a right upon the Grantee to apply for 1 (one) Equity Share. Out of these, the Nomination, Remuneration and Compensation Committee has granted 13,954,991 Options and 6,360,714 PSUs under ABCL Scheme 2022.

NOTE: 36 ABCL INCENTIVE PLAN 2017

The Scheme titled as “ABCL Incentive Scheme for Stock Options and Restricted Stock Units - 2017 (ABCL Incentive Scheme)” was approved by the shareholders through postal ballot on 10^th April 2017. The Nomination, Remuneration and Compensation Committee of the Company, at its meeting held on 15^th January 2018, granted 1,465,927 ESOPs and 252,310 Restricted Stock Units (RSUs) (collectively called as “Stock Options”) to the eligible grantees, pursuant to the Composite Scheme of Arrangement between erstwhile Aditya Birla Nuvo Limited (now merged with Grasim Industries Limited), Grasim Industries Limited and Aditya Birla Capital Limited. The Stock Options allotted under the Scheme are convertible into equal number of Equity Shares.

NOTE: 39 FAIR VALUES

The Management assessed that Fair Values of Financial Assets and Liabilities are approximately their carrying values.

NOTE: 40 FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Principles for Estimating Fair Value

The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in the table.

Fair Value Hierarchy

The table below analyses financial instruments carried at fair value, by valuation method at 31^st March 2023. The different levels have been defined as follows:

Level 1: Category includes financial assets and liabilities that are measured in whole or in significant part by reference to published quotes in an active market.

Level 2: Category includes financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions. These include assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes and assets that are valued using the Company's own valuation models whereby the material assumptions are market observable.

Level 3: Category includes financial assets and liabilities measured using valuation techniques based on non-market observable inputs. This means that fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. However, the fair value measurement objective remains the same, that is, to estimate an exit price from the perspective of the Company. The main asset classes in this category are unlisted equity investments as well as unlisted funds.

The carrying amount of trade payables, other financial liabilities, loans, other financial assets, cash and cash equivalents, as at 31^st March 2023 and 31^st March 2022 are considered to the same as fair values, due to their short-term nature. These are classified as Level 3 fair value hierarchy, due to inclusion of unobservable inputs including counterparty credit risk.

During the reporting period ending 31^st March 2023, there were no transfers between Level 1 and Level 2 fair value measurements.

Assumptions to above:

* The Fair Valuation of Preference Shares is based on independent valuers report.

* The Fair Valuation of Unquoted Mutual Funds Units is done based on NAV of units.

NOTE: 41 FINANCIAL RISK MANAGEMENT

The Company, being a Core Investment Company as per the Core Investment Companies (RBI) Directions, 2016, is required to invest or lend majority of its funds to its Subsidiaries, Joint Ventures and Associates. The Company’s principal financial liabilities comprise trade, and other payables. The main purpose of these financial liabilities is to support the Company’s operations. The Company’s principal financial assets include investments, inter-corporate deposits, cash and cash equivalents, and other receivables.

The Company is exposed to certain financial risks, such as equity investment risk, market risk, credit risk and liquidity risk. The Company’s Senior Management oversees the management of these risks. The Company’s Senior Management is supported by a Risk Management Committee, that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the Company’s Senior Management that the Company’s financial risk activities are governed by appropriate policies, and procedures, and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The major risks are summarised below.

Equity Investment Risk

The Company’s investments in listed and non-listed equity securities are accounted at cost in the financial statements net of impairment. The expected cash flows from these entities are regularly monitored internally and also independently, wherever necessary, to identify impairment indicators.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. In the case of the Company, market risk primarily impacts financial instruments measured at fair value through profit or loss. These are primarily unquoted Compulsorily Convertible Preference Shares of subsidiaries and investments in mutual funds, where investments are not significant in relation to the size of its total investments. The fair value investments of these investments are regularly monitored.

Credit Risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or a customer contract, leading to a financial loss. The Company is exposed to credit risk from its financing activities towards inter-corporate deposits to subsidiaries where no significant impact on credit risk has been identified.

Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s corporate treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by the Senior Management.

The Company manages its liquidity requirement by analysing the maturity pattern of the Company's cash flows of financial assets and financial liabilities. The Company invests its surplus funds in debt schemes of mutual funds, which carry low mark-to-market risks. Also refer Note No. 42 for maturity analysis of assets and liabilities.

The table below summarises the maturity profile of the undiscounted cash flows of the Company's financial liabilities.

Under Aditya Birla Capital Limited Stock Appreciation Rights Scheme 2019, the Company has approved grant of Nil (Previous Year 59,856) Options SARs to the employees of the Company and its subsidiaries.

NOTE: 45

The Company, during the current year, has allotted 1,682,056 (Previous Year 1,034,008) Equity Shares of ' 10 each, fully paid-up, on exercise of options by eligible grantees, in accordance with the Employee Stock Options Schemes approved by the Company.

NOTE: 46

With effect from 11^th October 2017, 64,422,405 Global Depositary Shares (GDSs) representing 64,422,405 Equity Shares of ' 10 each have been admitted for trading on the Luxembourg Stock Exchange.

As on 31^st March 2023, 54,705,589 (GDS) representing 54,705,589 Equity Shares are outstanding (Previous Year 50,536,762).

NOTE: 47

The Company has made an assessment of its value of investments in Equity Shares and 0.001% Compulsory Convertible Cumulative Preference Shares ("CCPS") of Aditya Birla Capital Technology Services Limited (“ABCTSL”). Based on such assessments and independent valuation report, impairment loss on Equity Shares of ' 3.05 crore and fair value loss on CCPS of ' 12.56 crore have been provided in the previous year.

NOTE: 48

During the year, Aditya Birla Health Insurance Co. Limited (“ABHI”) has made a preferential allotment of 50,707,454 Equity Shares of ' 10 each to Platinum Jasmine A 2018 Trust, acting through its trustee, Platinum Owl C 2018 RSC Limited, being a wholly-owned subsidiary of Abu Dhabi Investment Authority ("ADIA"), on 21^st October 2022 for an aggregate consideration of ' 664.27 crore. Pursuant to such issuance of the equity shares, ADIA owns 9.99% stake in ABHI. W.e.f. 21^st October 2022, ABCL's share holding in ABHI has reduced from 51% to 45.91%. Consequently, ABHI ceased to be a subsidiary and has been accounted as a joint venture.

NOTE: 49

Board of Directors of the Company, at its meeting held on 27^th March 2023, has approved the sale of its entire stake of 50.002% of the issued and paid-up share capital of Aditya Birla Insurance Brokers Limited to Edme Services Private Limited, part of the Samara Capital Group and an affiliate of Samara Alternate Investment Fund. The Company has filed an application dated 20^th April 2023 with Insurance Regulatory and Development Authority of India (“IRDAI”), seeking approval of the proposed transaction.

The Proposed Transaction is subject to receipt of the approval of Insurance Regulatory and Development Authority of India (“IRDAI”) and other regulatory/statutory approvals and satisfaction of other conditions under the Share Purchase Agreement. Upon completion of the Proposed Transaction, ABIBL shall cease to be a subsidiary of the Company.

NOTE: 50

The ABCAP Trustee Company Private Limited has been struck off from the Register of Companies, and stands dissolved w.e.f. 21^st January 2023.

NOTE: 51

The Company has Long-Term Incentive Plan for selective employees. Long-Term Incentive Plan is payable to employees on fulfilment of criteria prescribed by the Company. On the basis of the plan, the Company has made provision of ' 4.61 crore (Previous Year ' 7 crore).

During the previous year, the Company has sold 2,850,880 Equity Shares of face value of ' 5 each of Aditya Birla Sun Life AMC Limited (ABSLAMC), at ' 712 per Equity Share by way of offer for sale in the Initial Public Offer (IPO) of ABSLAMC, in accordance with the relevant provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, and recognised gain on sale of these investments amounting to ' 196.12 crore (Net of Tax, Gain is ' 179.47 crore). Consequently, w.e.f. 7^th October 2021 ABSLAMC has ceased to be a Joint Venture and has been accounted as an Associate.

NOTE: 53

The Company has short-term rating, viz., “(ICRA) A1 ” and “(CRISIL) A1 ” (which is the highest short-term rating) and “AAA” long-term rating from ICRA (which is the highest long-term rating). During the year, the Company has not borrowed any funds.

NOTE: 54 INVESTMENT PROPERTY FAIR VALUE

The Company has carried out the valuation through an Independent Valuer to determine the fair value of its Investment Property. As per report provided by Independent Valuer, the fair value is ' 18.07 crore as on 31^st March 2023 (Previous Year ' 19.02 crore).

The fair value of Investment Property has been derived using the Direct Comparison Method based on the recent market prices without any significant adjustments being made observable data. Accordingly, fair value estimates for Investment Property is classified as Level 3.

The Company has no restrictions on the realisability of its Investment Property, and has no contractual obligations to purchase, construct or develop Investment Property.

i) Maturity Pattern of Assets and Liabilities - (Refer Annexure 9)

j) Concentration of NPAs - (Refer Annexure 10)

k) Overseas assets (for those with Joint Ventures and Subsidiaries abroad) - (Refer Annexure 11)

l) Exposure to Real Estate Sector, both direct and indirect - (Refer Annexure 12)

m) Miscellaneous Disclosures - (Refer Annexure 13)

NOTE: 59

The Letter of Comfort and awareness issued for availing credit facilities by subsidiaries of ' 460 crore and ' 200 crore, respectively, with an explicit clause that it is not in the nature of financial guarantee.

NOTE: 60

Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year is ' Nil (Previous Year ' Nil), in accordance with the Companies Act, 2013.

NOTE: 61

No fund has been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in parties identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly, lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE: 62 SEGMENT REPORTING

The main business of the Company is Investment activities. Hence, there are no separate reportable segments as per Ind AS 108 on ‘Operating Segment’.

vi) Institutional Set-up for Liquidity Risk Management

The Board of Directors has the overall responsibility for establishing the risk management framework of the Company. The Board decides the liquidity risk tolerance/limits and, accordingly, lays down strategies, policies and procedures for the management of liquidity risk.

The Company has instituted a Risk Management Committee, which reports to the Boards’, and is responsible for evaluating the overall risks faced by the Company, including liquidity risk.

The Asset-Liability Committee (ALCO) of the Company, consisting of the Company’s Senior Management and Members of the Board, is responsible for ensuring adherence to the risk tolerance/limits as well as implementing the liquidity risk management strategy of the Company.

The Company has also constituted Asset-Liability Management (ALM) Support Group at the execution level, which is responsible for analysing, monitoring and reporting the liquidity risk profile to the ALCO.