Directors Report of Birla Capital And Financial Services Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their 28th Annual Report together with the consolidated Audited Accounts for the year ended 31st March, 2014. The financial results of your company are summarized below

FINANCIAL RESULTS: Rs. in Lacs

As on As on PARTICULARS 31.03.2014 31.03.2013

Total Income 132.56 77.20

Less: Total Expenditure 139.23 82.93

Profit/(Loss) Before Tax & Depreciation (6.67) (5.73)

Less: Depreciation 1.27 0.34

Profit/(Loss) Before Tax (7.94) (6.07)

Add: Other Income Nil Nil

Add: Expectional items Nil Nil

Less: Earlier year Taxes 59.85 9.96

Provision for Deferred Tax 7.17 0.03

Profit/(Loss) After Tax (57.61) (16.07)

Add:- Profit & Loss Account balance brought forward from previous years 80.61 96.98

Profit & Loss Account balance carried over 23.00 80.61

Earnings per share (0.12) (-0.04)

DIVIDEND:

Due to loss suffered during the year by the Company, your Directors do not recommend any dividend for the financial year under review.

BUSINESS REVIEW AND FUTURE PROSPECTS:

The Company has set up adequate infrastructure along with a team of professionals for carrying on the investment banking business. During the year the Company has formed its subsidiaries ''Birla Financial Distribution Private Limited'' to carry out financial distribution services and ''Birla Gold and Precious Metals Private Limited'' which provides opportunities to public to purchase small quantities of gold. The Company provides a broad range of services including advices on capital raising, merger and acquisition, Equity/Debt placements, valuation of equity shares, restructuring and transaction execution relating to structured finance. The Company is striving towards developing a healthy pipe line of mandates in all segments of business and will be reckoned with by industry for its efficient service delivery and execution capabilities

Opportunities and Threats:

The great uncertainty over how growth will recover in the advanced economies is unnerving financial markets across the world. Back home, the recent exuberance seen in the markets is largely driven by FII flows, dependent on global growth prospects. Reversal of global liquidity could adversely impact capital flows into India and put downward pressure on the INR. Currency depreciation could fuel the current account deficit, leading to weakening of macro fundamentals, viz. inflation, trade deficit, subsidy bills and hence fiscal balances. Government spending ahead of an election year and a currency with a weakening bias remain threats to domestic price pressures. Uncertain external balances continue to pose challenges. Government''s actions to stick to fiscal consolidation and boost the investment cycle remain imperative.

Domestic growth would also depend upon a timely and adequate monsoon, resumption of industrial growth, revival in exports via measures to make them competitive, curtailment of current account deficit and supply side measures to ease constraints. Tracking statistical phenomenon, the wholesale price index is likely to reflect subdued inflation rates; thus providing a cushion for rate easing, and allowing the transmission of actions taken so far for GDP and earnings growth to pick up. Government spending related to elections is likely to boost rural consumption. The economy is likely to gain gradually from the measures announced earlier. The Union Budget 2013, amongst other proposals, has reduced Securities Transaction Tax (STT) on equity futures contracts to 0.01% from 0.017%, introduced commodities transaction tax (CTT) on non-agriculture commodities futures trading and allowed participation of FIIs in the currencies derivative segment. These proposals could provide a fillip to equity derivative volumes as well as currency derivative volumes. The imposition of the CTT could impact the gross returns of the arbitrageurs by 20-30% and consequently significantly impede the growth of the segment at least over the short term. Also, arbitrage activity could return to the equities segment or move to the currencies segment, which could help growth of these segments. Thus opportunities exist in the Investment banking business depending on the economic growth of the country. Major threat to the Company fortune would be on account of adverse capital market trends and sentiments affected by domestic and global factors.

Financial Performance of the Company:

During the financial year 2013-14, our company revenue is Rs. 93 Lacs as compared to corresponding year 2012-13revenue of Rs. 77 Lacs. Net Loss of the Company is Rs. 8 Lacs in 2013-14 as compared to Loss of Rs. 6 Lacs in the corresponding year 2012-13.

The financial performance of the company is adversely impacted due to slowdown in deal completion activities due to difficult economic conditions in larger developed and emerging markets and unfavourable domestic factors marked by persistent inflation, high interest rates, lower growth and weaker investments. As a whole the Investment Banking Industry in India is continued to remain sluggish in FY 2013-14.

Challenges, Risk and Concern:

The Company faces normal business challenges of market competition in its business and needs to continuously seek attractive growth opportunities. The company is primarily exposed to market risk, interest rate risk, liquidity risk, technology risk, compliance risk and operational risks. Internally, it has constituted the board to manage these risks. The Company adopts suitable business strategies to counter these challenges.

As a part of the overall risk management strategy, the Company consistently ensures its assets and generally follows a conservative financial profile by following prudent business practices.

Internal Control Systems and Adequacy:

The Company has a well-placed, proper and adequate internal control system, which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly to meet the objectives

Outlook:

For the current year the company is optimistic about the opportunity in the Investment banking business and envisages good growth of the said industry on the back of the strength of the Indian economy and Indian stock market.

Material development in Human resources:

The human resources are the valuable assets of the Company. Personnel policies are designed to ensure growth of the personnel in the organization and provide a challenging work environment required for nurturing professional development.

Forward-looking Statements:

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words, "believe", "estimate", "expect", "will" and other similar expressions as they relate to the Company and/or its businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ from those expressed or implied in such forward-looking statements. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

DIRECTORS:

A. Director retiring by rotation and eligible for reappointment:

Mr. Ravi Sharma, who retires by rotation, being eligible for reappointment, offers himself for reappointment in the Annual General Meeting.

B. Resignation of Directors:

Mr. V Subramoniam, Whole time Director, had resigned from the Board of Directors on 07.08.2013. The Directors placed on record their sincere appreciation of the valuable services rendered by him during his tenure.

Mr. Tushar Dey, Non-Executive director had resigned from the Board of Directors on 07.08.2013. The Directors placed on record their sincere appreciation of the valuable services rendered by him during his tenure.

Mr. G L Lath, Non-executive Director had resigned from the Board of Directors on 8.11.2013. The Directors placed on record their sincere appreciation of the valuable services rendered by him during his tenure.

Ms. Jasleen Singh, Independent Director had resigned from the Board of Directors on 26.12.2013. The Directors placed on record their sincere appreciation of the valuable services rendered by her during her tenure.

C. New appointment:

The Company has, pursuant to the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchange, appointed Mr. C R Karikal Valavan as an Independent Director with effect from 26.12.2013. As per Section 149(4) of the Companies Act 2013, every listed public company is required to have at least one-third of the total number of Directors as Independent Directors. In accordance with the provisions of Section 149 of the Companies Act, 2013, Mr. C R Karikal Valavan is appointed as an Independent Director to hold office as per the tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting of the Company

Your Directors state that, Mr. C R Karikal Valavan and Mr. D S Sharma possess appropriate balance of skills, expertise, knowledge and is qualified for appointment of Independent Director.

PUBLIC DEPOSIT:

Your Company has not accepted any fixed deposits from public. As such, no amount of principal or interest is outstanding as on the Balance Sheet date.

COMPLIANCE WITH SEBI GUIDELINES:

As per the guidelines issued by Securities Exchange Board of India, the Company has adequately complied with the prescribed Merchant Banking Rules & Regulations, wherever applicable.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect to Directors Responsibility statement, it is hereby confirmed that:

I In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures

ii. 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 as at 31st March, 2014 and the profit and loss of the Company for the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors had prepared the annual accounts on a going concern basis and

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi. 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.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:

The Company has two subsidiaries as on March 31, 2014 viz: Birla Financial Distribution Private Limited and Birla Gold and Precious Metals Private Limited. Birla Financial Distribution Private Limited is into third party financial distribution business. Birla Gold and Precious Metals Private Limited have recently launched its Gold Savings Plan.

As required under the Listing agreements entered into with the Stock Exchange, consolidated financial statements of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under the Act. Pursuant to the provisions of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs, vide its circular dated February 8, 2011 has granted exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company. The annual accounts of these subsidiaries and related information will be made available to any member of the Company/its subsidiaries seeking such information and are available for inspection by any member of the Company at the registered office of the Company. The annual accounts of the said subsidiaries will be also be available for inspection at the registered office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE AND OUTGO:

The disclosures of particulars pursuant to Companies (Disclosures of particulars in the report of the Board) Rules 1998 are not applicable to the Company. The Company being in financial services conservation/ absorption of new technology is not applicable.

A) Foreign Exchange earnings and outgo:

Total Foreign exchange earned Rs. 10.00 Lacs

Total foreign exchange used Rs. 3.58 Lacs

PARTICULAR OF EMPLOYEES:

The Company did not have any employee falling within the provision of Section 217(2A) of the Companies Act, 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended and hence particulars of Employees are not included.

CORPORATE GOVERNANCE:

A report in Corporate Governance pursuant to Clause 49 of the Listing Agreement with the Stock Exchange is attached as a separate annexure and forms part of the report. Corporate Governance compliance certificate obtained from the Pankaj & Associates, Practicing Company Secretary of the Company is already attached to this report.

AUDITOR AND AUDITORS REPORT:

M/s. Goyal Nitin & Associates, Chartered Accountants, the Statutory Auditors of the Company, hold office until the ensuing Annual General Meeting. The said Auditors have furnished the Certificate of their eligibility for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the Audit Committee has proposed to appoint M/s. Goyal Nitin & Associates, Chartered Accountants as Statutory Auditors of the Company from the conclusion of this Annual General Meeting for a period of 5 years, subject to the approval of shareholders and ratification of their appointment at the subsequent Annual General Meeting.

The notes to accounts referred to in the Auditors Report are self -explanatory and do not need any further comments.

APPRECIATION:

Your Directors deeply acknowledge the trust and confidence you have placed in the management of the Company. Your Directors also place on record their appreciation for co-operation received from Banks, share transfer agent, Government authorities, Customers, vendors and employees of the Company.

By order of the Board, For Birla Capital and Financial Services Limited Date: 06.09.2014 Place: Mumbai Suresh Menon Company Secretary

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Mar 31, 2010

The Directors have pleasure in presenting their 24th Annual Report together with the Audited Accounts for the year ended 31st March, 2010. The Financial Results of your company are summarized below.

1. FINANCIAL RESULTS (Rs. In lacs)

PARTICULARS March,2010 March,2008

Total Income 98.49 43.38

Less : Total Expenditure 95.67 47.34

Profit (Loss) Before Tax 2.82 (3.96)

Less: Provision for Taxation

Provision for Income tax - -

Provision for Deferred tax 0.33 0.52

Add: Excess Provision of Income-tax w/off -

Profit (Loss)After Tax 3.15 (3.44)

Less : Amount tranferred to Special Reserve -

Add: Balance Brought Forward From Previous Year 93.83 97.27

Balance Carried Over 96.98 93,83

Earning per share 0.01 -

2. DIVIDEND

With a view to conserve the resources and to strengthen the financial position of the company your Directors do not recommend any dividend during the financial year under review.

3. COMPANYS OPERATIONS -FOCUS ON FINANCIAL SERVICES

Your Company has increased its Authorised Share Capital from Rs. 8 crore to Rs. 15 crore to augment its requirement of funds for increasing its scope of business

The Company has received Category -1 Merchant Banking Licence from Sebi vide their certificate of registration dated 23rd September 2009, it is valid for the period of three years i.e. upto 22nd September 2012. The registration code allotted the Company is MB/INM000011567.

The Company has surrendered its Non-Banking Finance Company (NBFC) Licence to undertake Merchant Banking business to Reserve Bank of India in compliance with the Chapter II, Clause 6 (a) of SEBI (Merchant Bankers) Regulations 1992.

Your company has set-up adequate infrastructure along with a team of professionals for carrying on the business of Merchant banking business Your company aims to provide quality advice to its corporate clients and has built ability to execute client specific transactions. It provides a broad range of services including capital raising advisory, merger and acquisition advisory and transaction execution relating to structured finance. Your company is working towards developing a healthy pipeline of mandates in all segments of business and will endeavor to be reckoned with by industry for its efficient service delivery and execution capabilities.

4. MANAGEMENT DISCUSSION AND ANALYSIS A

(i) Business Developments:

Your company has set-up adequate infrastructure along with a team of professionals for carrying on the business of investment banking.

(ii) Opportunities and Threats:

Immense opportunities exist in the invertment banking business depending on the economic growth of the country. Major threat to your Companys fortune would be on account of adverse capital market trends and sentiments affected by domestic and global factors.

(iii) Segment-wise or product-wise performance:

The Company being in the capital market, is trying to overcome the hurdles to achieve the best and expand the scope of its activities.

(iv) Outlook:

Company is very optimistic about the opportunity in the invertment banking business and envisages immense growth of the said industry on the back of the strength of the Indian economy and Indian stock market.

(v) Risks and concerns:

Your company is exposed to the fluctuations of economy and industry cycles. The management believes that efficient business planning; risk management and product diversification would help mitigate such risks. (vi) Internal control system and their adequacy:

The Company has adequate internal control systems, commensurate with its size and nature of the business. The assets of the Company are insured adequately.

(vii) Material development in Human Resources:

The human resources are the valuable assets of the Company. Personnel policies are designed to ensure growth of the personnel in the organization and provide a challenging work environment required for nurturing professional development.

5. DIRECTORS

Shri. Ashok Parmar who, retire by rotation, being eligible for reappointment, offer himself for re-appointment in the Annual General Meeting.

6. COMPANY SECRETARY

Ms. Varsharani Katre, the Company Secretary of the Company resigned on 16/09/2009

7. PUBLIC DEPOSIT

Your Company has not accepted any fixed deposit from As such, no amount of principal or interest is outstanding as on the Balance Sheet date

8. COMPLIANCE WITH SEBI GUIDELINES

As per the guidelines issued by the Securities Exchange Board of India, the Company has adequately complied with prescribed Merchant Banking rules & regulations, wherever applicable.

9. DIRECTORS RESPONSIBILITY STATEMENT

Directors Responsibility Statement as required u/s.217 (2AA), of the Companies Amendment Act, 2000, your Directors confirm:

i) that in the preparation of the accounts, the applicable accounting standards have been followed along with proper explanation relating to material developments/deviations.

(ii) that we have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the period ended on 31.03.2010 and of the Profit/Loss of the company for that period. ,

(iii) that we have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

(iv) that we have prepared the accounts on a "going concerns basis."

10. EMPLOYEES-

As required under the provisions of section 217 (2A) of the Companies Act, 1956 read along with the Companies (Particulars of Employees) Rule, 1975 as amended, one employee was employed in the company for part of the Year of which the particulars are set out below:-

Name Qualification Date of Joining Experience

& Age (Yrs) & Designation (Years)

Mr. T. R. PRASHANTH MBA 02/03/09 22 Years

KUMAR 49 Yrs C.E.O.

Mr.V. SUBRAMONIAN Masters in 18/01/2010 30 Years

Financial

Management C.E.O. 55 Yrs.



Name Gross Last

Remuneration Employment held Name of

(in Lacs) Employer /Designation

Mr. T. R. PRASHANTH 36.90 IL & FS Investment

KUMAR Securities Ltd.

Mr.V.SUBRAMONIAN 36.00 GV Films Limited

President- Corporate Affairs

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

There is no Foreign Exchange Earnings and Outgo during the year.

As the Company is in Financial Services its not possible for the company o absorb new technology

12 CORPORATE GOVERNANCE

As per the Clause 49 of the Listing Agreement with Bombay Stock Exchange Limited, Mumbai, the Company has enclosed separate report on Corporate Governance along with the Certificate of compliance from the Auditors forming part of the annual report.

13. AUDITORS

M/s.M.L.Choraria & Associates, Chartered Accountant, Mumbai, retires as Auditors of the Company and being eligible, offer themselves for re-appointment as Auditors of the Company.

14. AUDITORS REPORT

The notes to accounts referred to in the Auditors Report are self-explanatory and do not need any further comments.

15. DISCLOSURE

The Company belongs to the Yash Birla Group.

16. APPRECIATION

Your Directors deeply acknowledge the trust and confidence you have placed in the management of the Company. Your Directors also place on record their appreciation for co-operation received from Banks, Share Transfer Agent, Government authority, Customers, Vendors & Employees of the Company.

By Order of the Board

For BIRLA CAPITAL AND

FINANCIAL SERVICES LTD.

Dated: 22.04. 2009. Arun Singhi GL.Lath

Place: Mumbai. (Executive Director) (Director)