Motilal Oswal Financial Services

I Nature of Business:
 
 The Company is Non-banking Financial Company registered with the
 Reserve Bank of India (RBI) under Section 45-IA of the Reserve Bank
 of India Act, 1934 and primarily engaged in lending and related
 activities. The Company received the Certificate of Registration from
 the RBI on 5th April, 2006, enabling the Company to carry on business
 as a Non-banking Finance Company.
 
 In accordance with the provisions of Section 45- IC of the RBI Act,
 1934, the Company has created a Reserve Fund & during the year, the
 Company has transferred an amount of Rs. 90,623,298 (Previous Year
 Rs.34,580,866) to Reserve Fund, it being 20% of the Profit After Tax.
 
 2.1 Contingent Liabilities:
 
 The company has given corporate guarantees of Rs. 47,000,000. (Previous
 Year : 47,000,000 ) to various banks for its subsidiary Motilal Oswal
 Commodity Brokers Pvt. Ltd.
 
 2.2 Employees Stock Options Scheme (ESOS) :
 
 During the year the Company has granted 4,610,000 Employee Stock
 Options to various employees of the Company and its subsidiary
 Companies.
 
 The Company has adopted intrinsic value method of accounting Employee
 Compensation Cost in respect of ESOS. The intrinsic value of shares is
 excess of market price of the shares under ESOS over the exercise
 price. Employee Compensation Cost is accounted for by amortizing the
 intrinsic value on the straight line basis over the vesting period. The
 total amount to be amortized as at March 31, 2009 over the balance
 vesting period is Rs. 772,286 (Previous year-NIL).
 
 2.3 Commercial paper:
 
 The maximum balance outstanding during the year in respect of
 commercial paper was Rs. 2,000,000,000 ( Rs. 1,000,000,000 in the
 previous year).
 
 2.4 Sub-division of equity shares:
 
 The members at 3rd Annual General Meeting of the company held on 8th
 July, 2008 had approved the Sub- Division of the Equity Shares of the
 face value of Rs. 5 each into face value of Re.1 each. Per share data
 for current and all previous periods is calculated at the face value of
 Re. 1 each.
 
 2.5 Related Party Disclosure :
 
 Names of Related Parties :- (as certified by Management)
 
 A) Enterprises where control exists Subsidiary companies :
 
 a) Motilal Oswal Securities Limited
 
 b) Motilal Oswal Investment Advisors Private Limited
 
 c) Motilal Oswal Private Equity Advisors Private Limited (formerly
 known as Motilal Oswal venture Capital Advisors Private Limited)
 
 d) Motilal Oswal Commodities Broker Private Limited
 
 e) Motilal Oswal Capital Market Private Limited
 
 f) Antop Traders Private Limited (with effect from 29th September,
 2008)
 
 B) Enterprises in which Key Managerial Personnel exercise Significant
 Influence :
 
 1.  Passionate Investment Management Private Limited
 2.  Motilal Oswal Insurance Brokers Private Limited
 3.  Nagori Agro & Cattle Feeds Private Limited
 4.  Rishabh Securities Private Limited
 5.  Windwell Securities Private Limited
 6.  Textile Exports Private Limited
 7.  Motilal Oswal Asset Management Company Limited (with effect from
     4th November, 2008)
 
 8.  Motilal Oswal Trustee Company Limited (with effect from 14th
 November, 2008)
 
 2.6 Segment Reporting:
 
 The Company is engaged in single segment and there are no separate
 reportable segments as defined in AS-17.
 
 2.7 The issue proceeds of Rs. 2,460,700,000, has been fully utilized
 as per the Objects of the Issue. In accordance with the objects of the
 issue the excess amount of Rs. 130,700,000 in respect of Purchase /
 lease of new office space for business expansion has been utilised for
 General Corporate Purpose.
 
 2.8 Initial margin for open positions in respect of Futures and
 Options is Rs. 75,512,004 which includes non-cash component (i.e.
 collateral).
 
 2.9 The company pledges Stock in Trade towards margin requirement for
 trading/arbitrage in equity/derivatives.
 
 2.10 During the year, Crisil Limited assigned the Credit Rating of
 P1+ (pronounced P One Plus) to the Short Term Debt Programme of Rs.
 4,000,000,000/- of the Company.
 
 2.11 Out of the capital commitment of 10% (subject to maximum limit of
 Rs. 450,000,000) given by the Company in respect of total capital
 commitment of Business Excellence Trust, the Trust sponsored by the
 Company under the Indian Trust Act, 1982, the Company has contributed
 an amount of Rs. 225,000,000 towards its capital contribution as per
 the draw down intimations received from the Fund.
 
 2.12 During the year, the Company settled Realty Excellence Trust
 (RET). The Company has given a capital commitment of an amount of Rs.
 150,000,000 to India Realty Excellence Fund launched by RET. In respect
 of this, the Company has contributed an amount of Rs. 15,000,000 as per
 the draw down intimations received from the Fund.
 
 2.13 Disclosures, relating to amounts unpaid as at the year end
 together with interest paid / payable as required under the Micro
 Small and Medium Enterprise Development Act, 2006 have been given to
 the extent Group has received intimation from Suppliers regarding
 their status under the said Act.
 
 2.14 Previous years figures have been regrouped, rearranged,
 reclassified to the extent considered necessary.