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Directors Report of Edelweiss Financial Services Ltd.

Mar 31, 2013

To the Members of Edelweiss Financial ServicesLimited,

The Directors hereby present their 18th Annual Report on the business and operations of the Company together with the audited statementofaccountsfortheyearended March31,2013:

Financial Highlights

I. Consolidated Financial Information:

(Rs. in million)

2012-13 2011-12

Total Income 21,840.24 16,706.87

Total Expenditure 19,246.99 14,719.90

Profit before tax 2,593.25 1,986.97

Provision for tax 881.51 680.86

Profit after tax 1,711.74 1,306.11

Less: Share of Minority Interest (72.87) 28.68

Profit for the year after Minority interest 1,784.61 1,277.43

Add: Surplus brought forward from previous year 8,182.50 7,716.86

Less: Disinvestment in a subsidiary during the year 3.08

Profit available for appropriation: 9,964.03 8,994.29

Less: Appropriations

Interim Dividend 421.67 226.99

Proposed Dividend 76.74 227.34

Transfer to Reserves 403.91 272.22

Dividend Distribution Tax 91.74 85.24

Surplus carried to the Balance Sheet 8,969.97 8,182.50

Earnings per equity share (Face Value - Rs.1) Basic (Rs.) 2.35 1.69

Diluted (Rs.) 2.31 1.66

II. Standalone Financial Information of Edelweiss Financial Services Limited :

(Rs. in million)

2012-13 2011-12

Total Income 1,568.69 2,072.91

Total Expenditure 1,097.59 1,313.13

Profit before tax 471.10 759.78

Provision for tax 3.19 73.44

Profit after tax 467.91 686.34

Add: Surplus brought forward from previous year 283.44 106.23

Profit available for appropriation 751.35 792.57

Less: Appropriations

Interim Dividend 421.67 226.99

Proposed Dividend 76.74 227.34

Transfer to Reserves 46.79 68.63

Dividend Distribution Tax 0.86 (13.83)

Surplus carried to the Balance Sheet 205.29 283.44

Earnings per equity share (Face Value - Rs.1)

Basic (Rs.) 0.62 0.91

Diluted (Rs.) 0.60 0.89

Abridged Financial Statements

In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the abridged annual report containing salient features of the audited Balance Sheet as at March 31, 2013, Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date and the Auditors'' Report on the Abridged Financial Statements forms part of the Annual Report. Full version of the annual report will be available on the Company''s website www.edelweissfin.com and will also be made availabletothemembersoftheCompanyuponrequest.

Dividend

During the year, your Directors had declared and paid an interim dividend of Rs.0.55 per share (on the face value of Rs.1 each). The Board recommended a final dividend of Rs.0.10 per share (on the facevalueofRs.1each)forthefinancialyearendedMarch31,2013.

The payment of the final dividend is subject to the approval of the members which is being sought at the ensuing Annual General Meeting and shall be paid to those members whose names appear in the Register of Members of the Company as on July 15, 2013. The Register of Members and the share transfer books will remain closed from July 16, 2013 to July 26, 2013, both days inclusive. The Annual General Meeting of the Company is scheduledtobeheldonJuly26,2013.

InformationonthestatusofaffairsoftheCompany

Information on the operational and financial performance, among others, is given in the Management Discussion and Analysis Report which is annexed to this Report and has been preparedinaccordancewithClause49oftheListingAgreement.

Share Capital

During the year under review, the Company had allotted 70,43,000 equity shares of Rs.1 each on exercise of the options granted to the employees under various ESOP Schemes of the Company.

The disclosures required under the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are givenasanannexuretotheReport.

Finance

Your Company had raised money through issue of Commercial Papers from time to time.

Your Company had obtained credit rating of ''CRISIL A1 '' from CRISIL for an amount of Rs.48.50 billion with respect to short term borrowing, ''[ICRA] AA-'' for Rs.4.50 billion, ''[ICRA]AA-pn'' for Rs.0.80 billion and ''PP-MLD[ICRA]AA-'' for Rs.0.25 billion from ICRA and ''CRISILAA-/Stable''from CRISIL for an amount of 0.22 billion with respect to various long term debt programme.

Public Deposits

Your Company did not accept public deposits during the year under review.

Subsidiaries

During the year under review, the following companies became the subsidiaries of your Company:-

- Affluent Dealcom Private Limited; and

- Edelweiss Securities (Hong Kong) Private Limited.

During the year under review, Allium Finance Private Limited ceased to be a subsidiary of the Company.

During the year under review, Edelweiss Stock Broking Limited (ESBL) merged with Edelweiss Financial Advisors Limited. Consequently, ESBL ceased to be a subsidiary of the Company.

In terms of the General Circular No. 2/2011 dated February 8, 2011 (the Circular) issued by the Central Government in respect of Section 212 of the Companies Act, 1956, the Board of Directors of the Company had accorded their consent for not attaching the balance sheet of the subsidiaries with the accounts of the Company.

Pursuant to the Circular, the financial data of the subsidiaries have been furnished under "Summary of Financial information of Subsidiary Companies" and forms part of this Annual Report.

The Annual Accounts of the subsidiaries shall be available to the members of the Company and its subsidiaries on request and also for inspection at the Registered Office of the Company.

Directors

In accordance with the requirements of the Companies Act, 1956, Mr. Narendra Jhaveri and Mr. P. N. Venkatachalam, the Directors of the Company retire by rotation at the ensuing Annual General Meeting and, being eligible, have offered themselves for re- appointment.

Mr. Navtej S. Nandra was appointed as an Additional Director of the Company w.e.f. May 15, 2013. He holds office upto the ensuing Annual General Meeting. The approval of the members for appointing Mr. Nandra as a Director of the Company is sought attheensuingAnnualGeneralMeeting.

Auditors

B S R & Associates, Chartered Accountants, the auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The members are requested to consider their re-appointment for the current financial year 2013-14 and authorise the Board of Directors to fix their remuneration. The retiring auditors have, under Section 224 (1B) of the Companies Act, 1956, furnished certificateoftheir eligibility for the re-appointment.

Directors'' ResponsibilityStatement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they 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 stateofaffairsoftheCompanyasatMarch31,2013andof the profitof the Company for the financial year endedonthat date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts have been prepared on a going concern basis.

Conservation of Energy, Technology Absorption and Foreign ExchangeEarnings/Outgo

A. CONSERVATIONOFENERGY

a) Energy Conservation measures taken-The operationsofyour Company are not energy-intensive. However, adequate measureshavebeen initiatedforconservationofenergy.

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy - Not applicable in view of the nature of activities carried on by the Company.

c) Impact of the measures taken at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production of goods - Not applicable in view of the nature of activities carried on by the Company.

d) Total energy consumption and energy consumption per unit of production as per Form A to the Annexure to the Rules in respect of industries specified in the Schedule thereto - Not applicable.

B. TECHNOLOGYABSORPTION

Not applicable in view of the nature of activities carried on by theCompany.

C. FOREIGNEXCHANGEEARNINGANDOUTGO

Foreign exchange earnings and outgo (including dividend) during the year under review were Rs.65.51 million (previous year Rs.133.53 million) and Rs.58.33 million (previous year Rs.46.01 million) respectively.

ParticularsofEmployees

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, forms part of this Report. In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members of the Company excluding the aforesaid information.

Any member interested in obtaining a copy of this information under section 217(2A) of the Companies Act, 1956, may write to the Company Secretary, at the Registered Office of the Company.

CorporateGovernance

Pursuant to Clause 49 of the Listing Agreement, the report on Corporate Governance together with the Certificate issued by M/s Manish Ghia & Associates, Practising Company Secretaries oncomplianceinthisregardformsapartofthisAnnualReport.

Acknowledgments

The Board of Directors wishes to acknowledge the continued support and co-operation extended by the Securities and Exchange Board of India, Reserve Bank of India, Stock Exchanges, Commodity Exchanges, Insurance Regulatory and Development Authority, Forward Markets Commission, other government authorities, Banks and other stakeholders. Your Directors would also like to take this opportunity to express their appreciation for thededicatedeffortsoftheemployeesoftheCompany.

For and on behalf of the Board of Directors

Edelweiss Financial Services Limited

Rashesh Shah Chairman & Managing Director

May 15, 2013


Mar 31, 2012

To the Members of Edelweiss Financial Services Limited,

The Directors hereby present their 17th Annual Report on the business and operations of the Company together with the audited statement of accounts for the year ended March 31, 2012:

Financial Highlights

I. Consolidated Financial Information:

(Rs in million)

2011-12 2010-11

Total Income 16,706.87 14,290.12

Total Expenditure 14,719.90 10,790.00

Profit Before Tax 1,986.97 3,500.12

Provision for Tax 680.86 1,030.97

Profit After Tax 1,306.11 2,469.15

Less: Share of Minority Interest 28.68 138.99

Profit for the year after Minority interest 1,277.43 2,330.16

Add: Surplus brought forward from previous year 7,716.86 6,407.19

Profit available for appropriation: 8,994.29 8,737.35

Less: Appropriations

Interim Dividend 226.99 187.98

Proposed Dividend 227.34 263.24

Transfer to Reserves 272.22 493.69

Dividend Distribution Tax 85.24 75.58

Surplus carried to the Balance Sheet 8,182.50 7,716.86

Earnings per equity share (Face Value - Rs 1/-)

(Rs in million)

2011-12 2010-11

Basic (Rs) 1.69 3.10

Diluted (Rs) 1.66 3.00

Total Income 2,072.91 4,395.55

Total Expenditure 1,313.13 3,771.84

Profit Before Tax 759.78 623.71

Provision for Tax 73.44 36.46

Profit After Tax 686.34 587.25

Add: Surplus brought forward from previous year 106.23 42.76

Profit available for appropriation: 792.57 630.01

Less: Appropriations

Interim Dividend 226.99 187.98

Proposed Dividend 227.34 263.24

Transfer to Reserves 68.63 58.73

Dividend Distribution Tax (13.83) 13.83

Surplus carried to the Balance Sheet 283.44 106.23

Earnings per equity share (Face Value - Rs 1/-)

Basic (Rs) 0.91 0.78

Diluted (Rs) 0.89 0.76

Dividend

Your Directors have recommended a final dividend of Rs 0.30/- per share (on the face value of Rs 1/- each) for the financial year 2011-2012.

The payment of the final dividend is subject to the approval of the members to be obtained at the ensuing Annual General Meeting and shall be paid to those members whose names appear in the Register of Members of the Company as on the book closure date.

During the year, your Directors had declared and paid an interim dividend of Rs 0.30/- per share.

The Register of Members and the share transfer books will remain closed from July 16, 2012 to July 26, 2012, both days inclusive. The Annual General Meeting of the Company is scheduled to be held on July 26, 2012.

Change in the name of the Company

Pursuant to the approval of the members obtained at the Annual General Meeting of the Company held on July 25, 2011, the name of the Company stands changed from Edelweiss Capital Limited to Edelweiss Financial Services Limited with effect from August 1, 2011.

Transfer of Portfolio Management Services business of the Company

Pursuant to the approval of the members of the Company and the Securities and Exchange Board of India, the Portfolio Management Services business of the Company has been transferred to Edelweiss Global Wealth Management Limited, a wholly owned subsidiary of the Company, with effect from February 2, 2012.

Share Capital

During the year under review, the Company had allotted 4,773,000 equity shares of Rs 1 each on the exercise of the options granted to the employees under various ESOP Schemes of the Company.

The disclosures required under the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 are given as an annexure to the Report.

Information on the status of affairs of the Company

Information on the operational and financial performance, among others, is given in the Management Discussion and Analysis Report which is annexed to this Report and has been prepared in accordance with Clause 49 of the Listing Agreement.

Finance

Your Company had raised money through issue of Commercial Papers from time to time.

Your Company had obtained credit rating of CRISIL A1 from CRISIL for an amount of Rs 48.50 billion with respect to short term borrowing, ICRA AA-/Stable from ICRA for an amount of Rs 5.55 billion and CRISIL AA-/Stable from CRISIL for an amount of Rs 220 million with respect to various long term debt programme.

Public Deposits

Your Company did not accept public deposits during the year under review.

Subsidiaries

During the year under review, the following companies became the subsidiaries of your Company:

- Edel Commodities Trading Limited;

- EFSL Commodities Limited; and

- EFSL Comtrade Limited.

During the year under review, Edelweiss Advisors Limited (presently known as Styrax Commodities Limited) ceased to be the subsidiary of the Company.

Subsequent to the year end, Edelweiss Trading & Holdings Limited (ETHL) merged with Comfort Projects Limited. Consequently, ETHL ceased to be the subsidiary of the Company.

In terms of the General Circular No. 2/2011 dated February 8,2011 (the Circular) issued by the Central Government in respect of Section 212 of the Companies Act, 1956, the Board of Directors of the Company had accorded their consent for not attaching the balance sheet of the subsidiaries with the accounts of the Company.

Pursuant to the Circular, the financial data of the subsidiaries have been furnished under "Summary of Financial information of Subsidiary Companies" and forms part of this Annual Report.

The consolidated financial statements prepared in accordance with the Accounting Standard 21 - Consolidated Financial Statements prescribed by the Companies (Accounting Standards) Rules, 2006, forms part of this Annual Report and are reflected in the consolidated accounts of the Company.

The Annual Accounts of the subsidiaries and the related detailed information shall be available to the members of the Company and its subsidiaries on request and also for inspection at the Registered Office of the Company.

A statement pursuant to Section 212 of the Companies Act, 1956 is set out as an Annexure to the Report.

Directors

In accordance with the requirements of the Companies Act, 1956, Mr. Berjis Desai and Mr. Kunnasagaran Chinniah, Directors of the Company retire by rotation at the ensuing Annual General Meeting and, being eligible, have offered themselves for re-appointment.

Mr. Himanshu Kaji and Mr. Sunil Mitra were appointed as Additional Directors of the Company with effect from November 1, 2011 and December 7, 2011, respectively.

Mr. Himanshu Kaji and Mr. Sunil Mitra hold office upto the ensuing Annual General Meeting. The approval of the members for appointing Mr. Himanshu Kaji and Mr. Sunil Mitra as Directors of the Company is sought at the ensuing Annual General Meeting.

Mr. Himanshu Kaji was appointed as an Executive Director of the Company for a period of three years with effect from November 1, 2011. The approval of the members for appointing Mr. Himanshu Kaji as an Executive Director of the Company is sought at the ensuing Annual General Meeting.

Particulars of Employees

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, forms part of this Report. In terms of the provisions of Section 219(1) (b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the members of the Company excluding the aforesaid information.

Any member interested in obtaining a copy of this information under Section 217(2A) of the Companies Act, 1956, may write to the Company Secretary, at the Registered Office of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings/Outgo

The provisions of Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of the Board of Directors) Rules, 1988 relating to conservation of energy and technology absorption are not applicable to the Company.

Foreign exchange earnings and outgo (including dividend) during the year under review were Rs 133.53 million (previous year Rs 114.40 million) and Rs 46.01 million (previous year Rs 46.79 million) respectively.

Auditors

B S R & Associates, Chartered Accountants, the auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The members are requested to consider their re-appointment for the current financial year 2012-13 and authorise the Board of Directors to fix their remuneration. The retiring auditors have, under Section 224 (IB) of the Companies Act, 1956, furnished certificate of their eligibility for the re-appointment.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, the report on Corporate Governance together with the Certificate issued by M/s P. K. Pandya & Co, Practising Company Secretary on compliance in this regard forms a part of this Annual Report.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) we have selected such accounting policies and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profits of the Company for the financial year ended on that date and changes in the accounting policies are stated in the notes to accounts;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts have been prepared on a going concern basis.

Acknowledgments

The Board of Directors wishes to place on record appreciation for the continued support and co-operation extended by the Securities and Exchange Board of India, Reserve Bank of India, Stock Exchanges, Commodity Exchanges, Insurance Regulatory and Development Authority, Forward Markets Commission, other government authorities, Banks and other stakeholders. Your Directors would also like to take this opportunity to express their appreciation for the dedicated efforts of the employees of the Company. For and on behalf of the

Board of Directors

Edelweiss Financial Services Limited

Rashesh Shah

Chairman & Managing Director

May 16, 2012


Mar 31, 2007

Not Available

 
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