birla capital and financial services limitedbirla capital and financial services limited 2012-2013...

BIRLA CAPITAL AND FINANCIAL SERVICES LIMITED

2012-201327th Annual Report

BIRLA CAPS

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-: BOARD OF DIRECTORS :-

1. Mr. G. L. Lath2. Mr. D. S. Sharma3. Mr. Tushar Dey (upto 07.08.2013)4. Mr. Ashok Parmar (upto 28.01.2013)5. Mr. V. Subramonian (Executive Director & CEO upto 07.08.2013)6. Mr. Ravi Sharma (w.e.f. 23.07.2013)7. w.e.f. 23.07.2013)8. w.e.f. 07.08.2013)

Ms. Nikita Rattanshi (Mrs. Jasleen Singh (

-: AUDITORS :-

M/s. M. L. Choraria & Associates, Chartered Accountants,C-712, Dosti City,Wadala (E) Mumbai - 400 037.

-: BANKERS :-

HDFC BANK LTD.

-: Regd. Office :-

Morya Landmark II, Ground Floor, New Link Road, Andheri (West), Mumbai – 400 053 Web:- www.birlacaps.comE-Mail:- [email protected]

-: Registrar & Share Transfer :-

M/s Big Share Services Private LimitedE-2/3 Ansa Industrial Estate,Saki Vihar Road, Sakinaka Andheri (East),Mumbai - 400 072Tel. : +91-022-28473747 / 28473474 +91-022-28470652-3Fax. : +91-022-28475207

BIRLA CAPS


INFORMATION FOR SHARE HOLDERS

27th ANNUAL GENERAL MEETING

DATE : 30th September, 2013TIME : 8.30 a.m.Venue : Morya Landmark II, Ground Floor, New Link Road, Andheri (West), Mumbai – 400 053

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NOTICE

thNOTICE is hereby given that the 27 Annual General Meeting of the Members of Birla Capital and Financial Services thLimited will be held on Monday, the 30 September, 2013 at 8.30 A.M. at Morya Landmark II, Ground Floor, New Link

Road, Andheri (West), Mumbai – 400 053 to transact the following business: -

ORDINARY BUSINESS:

st1. To receive, consider and adopt the Balance Sheet as at 31 March 2013 and the Profit & Loss Account for the year ended on that date together with the Reports of Directors and Auditors thereon.

2. To appoint a Director in place of Mr. Dahagama. S. Sharma, who retires by rotation, and being eligible, has offered himself for re-appointment.

SPECIAL BUSINESS:

3. To appoint Mr. Ravi Sharma as a Director of the Company:

To consider and if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

“RESOLVED THAT Mr. Ravi Sharma who was appointed as an Additional Director by the Board under Section 260 of the Companies Act, 1956, who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received notice in writing under Section 257 of Companies Act, 1956 from a member signifying his intention to propose him as a candidate for the office of the Director of the Company, be and is hereby appointed as a Director of the Company.”

4. To appoint Ms. Nikita Rattanshi as a Director of the Company:


“RESOLVED THAT Ms. Nikita Rattanshi who was appointed as an Additional Director by the Board under Section 260 of the Companies Act, 1956, who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received notice in writing under Section 257 of Companies Act, 1956 from a member signifying his intention to propose her as a candidate for the office of the Director of the Company, be and is hereby appointed as a Director of the Company.”

5. To appoint Mrs. Jasleen Singh as a Director of the Company.


“RESOLVED THAT Mrs. Jasleen Singh who was appointed as an Additional Director by the Board under Section 260 of the Companies Act, 1956, who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received notice in writing under Section 257 of the Companies Act, 1956 from a member signifying his intention to propose her as a candidate for the office of the Director of the Company, be and is hereby appointed as a Director of the Company.”

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6. To appoint Mr. Ravi Sharma as an Executive Director of the Company


“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310, and Schedule XIII and all other applicable provisions, if any of the Companies Act, 1956, and sanctions as may be necessary, the company hereby accords its approval for appointment of Mr. Ravi Sharma as an Executive Director of the Company w.e.f. 1st September, 2013 upon the terms and conditions including remuneration as set out in the draft agreement submitted to the meeting and initialed by the Chairman, for the purpose of identification, which draft agreement is hereby specifically approved and sanctioned with liberty to the Board of Directors to alter any terms and conditions of the said appointment and/or the agreement so as not to exceed the limits specified in Schedule XIII to the Companies Act,1956 or any amendments thereto, as may be agreed to between the Directors and Mr. Ravi Sharma.”

“RESOLVED FURTHER THAT in the event of their being loss or inadequacy of profits for any financial year, the remuneration and perquisite as applicable shall be paid to Mr. Ravi Sharma as minimum remuneration.”

“RESOLVED FURTHER THAT in the event of any statutory amendment, modification or relaxation by the Central government to Schedule XIII of the Companies Act, 1956, the Board of Directors be and is hereby authorized to vary the prescribed ceiling limits and the agreements between the Company and Mr. Ravi Sharma, Executive Director of the Company be suitably amended to give effect to such modification, relaxation or variation without any further reference to the member of the Company in the General meeting.”

A. PERIOD OF APPOINTMENT: 05-9-2013 to 31.08.2016

B. SALARY : Rs. 1,00,000 per month

In addition to salary the Executive Director will be entitled to the following perquisites and allowances:

C. REIMBURSEMENT i) Monthly Reimbursements (Subject to Submission of bills)

a. Driver Rs. 15,000/- b. Fuel Allowance Rs.15,000/-

c. Business Promotion Rs. 12,000/- d. Car Maintenance Rs.5,000/- e. Telephone Reimbursement Rs.3,000/-

D. PERQUISITES

1. Leave travel assistance : As per company's policy.

2. Leave : As per company's policy and can encash unused leave.

3. Contribution to Provident Fund, Superannuation fund or Annuity fund to the extent these either single or put together are not taxable under the Income Tax Act, 1961.

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1. Gratuity: As per company's policy.

Perquisites shall be evaluated as per applicable provision of the Income tax rules

E. The total remuneration including perquisites shall not exceed the limits specified in schedule XIII of the Companies Act, 1956. The perquisites namely contribution to Provident Fund, Superannuation Fund or Annuity Fund, Gratuity and encashment of leave shall not be included in the computation of ceiling on remuneration.

F. Minimum Remuneration:

Notwithstanding anything hereinabove, where in any financial year during the currency of his tenure as Executive Director the Company has no profits or its profits are inadequate, the company will pay remuneration by way of salary and perquisites as above subject to the ceiling specified under Section II of part II of the Schedule XIII to the companies Act, 1956.

Termination:

The appointment is liable for termination by either party giving 6 month's notice in writing to the other.

The terms and conditions of the above appointment may be altered and varied from time to time by the Board of Directors (including Remuneration Committee constituted by the Board) as it may in its discretion deem fit within the maximum amount payable to the Executive Director in accordance to Schedule XIII to the Companies Act, 1956 or any amendments made hereafter in this regard and as may be agreed to by the Executive Director

None of the Directors except Mr.Ravi Sharma is interested in the said resolution.

7. To appoint Ms. Nikita Rattanshi as Whole Time Director of the Company:


“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310, and Schedule XIII and all other applicable provision, if any of the Companies Act, 1956, and sanctions as may be necessary, the company hereby accords its approval for appointment of Ms. Nikita Rattanshi as Whole Time Director of the Company w.e.f. 1st September, 2013 upon the terms and conditions including remuneration as set out in the draft agreement submitted to the meeting and initialed by the Chairman, for the purpose of identification, which draft agreement is hereby specifically approved and sanctioned with liberty to the Board of Directors to alter any terms and condition of the said appointment and/or the agreement so as not to exceed the limits specified in schedule XIII to the Companies Act,1956 or any amendments thereto, as may be agreed to between the Directors and Ms. Nikita Rattanshi.”

“RESOLVED FURTHER THAT in the event of their being loss or inadequacy of profits for any financial year, the remuneration and perquisite as applicable shall be paid to Ms. Nikita Rattanshi as minimum remuneration.”

“RESOLVED FURTHER THAT in the event of any statutory amendment, modification or relaxation by the Central Government to Schedule XIII of the Companies Act, 1956, the Board of Directors be and is hereby authorized to vary the prescribed ceiling limits and the agreements between the company and Ms. Nikita Rattanshi, Whole Time Director of the Company be suitably amended to give effect to such modification, relaxation or variation without any further reference to the member of the Company in the General meeting.”

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A. PERIOD OF APPOINTMENT: 05-9-2013 to 31.08.2016

B. SALARY : Rs. 50,000 per month

In addition to salary the Whole time Director will be entitled to the following perquisites and allowances: C. REIMBURSEMENT

i) Monthly Reimbursements (Subject to Submission of bills) a. Driver Rs. 10,000/- b. Fuel Allowance Rs.5,000/-

c. Business Promotion Rs. 10,000/-

D. PERQUISITES

1. Leave travel assistance : As per company's policy.

2. Leave : As per company's policy and can encash unused leave.

3. Contribution to Provident Fund, Superannuation fund or Annuity fund to the extent these either single or put together are not taxable under the Income Tax Act, 1961.

4. Gratuity: As per company's policy.

Perquisites shall be evaluated as per applicable provision of the income tax rules.

E. The total remuneration including perquisites shall not exceed the limits specified in Schedule XIII of the Companies Act, 1956. The perquisites namely contribution to Provident Fund, Superannuation Fund or Annuity Fund, Gratuity and encashment of leave shall not be included in the computation of ceiling on remuneration.

F. Minimum Remuneration:

Notwithstanding anything hereinabove, where in any financial year during the currency of his tenure as Whole-Time Director the Company has no profits or its profits are inadequate, the company will pay remuneration by way of salary and perquisites as above subject to the ceiling specified under Section II of part II of the Schedule XIII to the Companies Act, 1956.

Termination:

The appointment is liable for termination by either party giving 6 month's notice in writing to the other.

The terms and conditions of the above appointment may be altered and varied from time to time by the Board of Directors (including Remuneration Committee constituted by the Board) as it may in its discretion deem fit within the maximum amount payable to the Whole Time Director in accordance to Schedule XIII to the Companies Act, 1956 or any amendments made hereafter in this regard and as may be agreed to by the Whole-Time Director.

None of the Directors except Ms. Nikita Rattanshi is interested in the said resolution.

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8. To consider and if thought fit, to pass with or without modification, the following as an Special Resolution:

“ RESOLVED THAT in supersession of resolution passed by the members of the Company at the 26th Annual General Meeting held on 7th September,2012, reappointing M/s. Choraria & Associates, Chartered Accountants, as Statutory Auditors of the company, M/s. Goyal Nitin and Associates , Chartered Accountants, Jaipur be & are hereby appointed as Statutory Auditors of the Company to hold the office from the conclusion of this meeting until the conclusion of the ensuing Annual General Meeting of the company and to examine & audit the accounts of the company for the Financial Year 2013-14 in place of the existing statutory auditors, M/s. Choraria & Associates, Chartered Accountants, who have resigned as Statutory Auditors of the company due to their preoccupation.

RESOLVED FURTHER THAT the Board of Directors of the company be & is hereby authorized to fix the remuneration payable together with the out-of-pocket expense, if any, to M/s. Goyal Nitin and Associates, Chartered Accountants.”

9. Borrowing powers of the company

To consider and if thought fit, to pass the following resolution, with or without modification(s) as an Ordinary Resolution.

“RESOLVED THAT pursuant to the provisions of Section 293 (1) (d) and other applicable provisions, if any, of the Companies Act,1956 and Article of the Articles of Association of the Company, consent of the Company be & is hereby accorded to the Board of Directors of the Company ('the Board') for borrowing from time to time any sum or sums of money on such security and on such terms & conditions as the Board may deem fit, notwithstanding that the money to be borrowed together with the money already borrowed by the Company (apart from temporary loans obtained or to be obtained from the Company's bankers in the ordinary course of business ) may exceed, at any time, the aggregate of the paid up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided, however the total amount so borrowed in excess of the aggregate of the paid up capital of the Company and its free reserves shall not at any time exceed 25 crores”

By order of the Board For BIRLA CAPITAL AND FINANCIAL SERVICES

LIMITED

Dated: -05.09.2013Place: - Mumbai.

Director

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NOTES: -

1. A member entitled to attend the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the company.

2. The proxy form duly filled must be deposited at the registered office of the company not later than 48 hours before the commencement of the meeting.

3. Members holding shares in physical form are requested to notify immediately any change in their address with Pin Code to the Company's Shares Transfer Agent M/s. Bigshare Services Pvt. Ltd., E-2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E), Mumbai – 400 072, and to their respective Depository Participants for shares held in electronic form.

4. The Register of Members and Share Transfer Books of the Company will remain closed from 27.09.2013 to 30.09.2013

(both days inclusive).

5. Members who hold shares in the electronic form are requested to bring their DP Id/Client Id/Folio number for easy identification at the Meeting.

6. Members are requested to write to the Company at least seven days in advance before the date of Meeting, in case they need stany information as regards to the Audited Accounts for the period ended 31 March, 2013 to enable us to provide satisfactory

reply.

7. As required in terms of paragraph IV (G) (i) of clause 49 of the Listing Agreement, the details of Directors retiring by rotation and eligible for re-appointment and the appointment of Executive and Whole time Director arefurnished below: -

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N a m e o f the D i recto r Sh ri D . S . Sh arm a Shri R a v i Sha rm a

D a te of Bi r th 0 3.0 8.1 9 54 24 .0 4.1 97 8

Q ua lif ica ti on B .S c , M .B .A . M .Co m, PG D M (Fi nan ce)

D a te of A pp oin tm ent 0 2.0 8.2 0 11 23 .0 7.2 01 3

E xp erience H e h as a rich ex per ien ce o f 33 y ears in th e fi e ld o f B an kin g , M an ager ia l, leg a l and fi nan c ia l Serv ices sec to r .

H e ho ld s a M aste rs D eg ree in Co m merce f ro m the an d h as a Po st G rad ua te D ip lo ma in M anag em ent f ro m Ins titu te of M anag em ent D ev e lo p men t and Research , Pu ne . H e has ov er 1 0 years o f e xp er ience in the fi nan c ia l se rv ices sec to r and has w ork ed o n F un d ra is ing th ro u gh var io us mo d es lik e Pr iva t e E qu ity , IPO , D eb t Sy nd ica tio n and stru c tured pro du c ts. H e h as a lso w ork ed o n c ro ss-b o rd er merg er an d acq u isiti on dea l s.

L ist o f o ther D irectors hip H eld . 1. V ajra S tee ls L im ited

N il

C h air m an / M em b er of the C o m m ittee o f th e B o ard o f the o ther C o m pa nies in w hich h e is a D i recto r

N il N il

S hareh old ing of D irecto r N il N il


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Name of the Director Ms. Nikita Rattanshi Mrs. Jasleen Singh

Date of Birth 17.08.1991 30.09.1982

Qualification B.Com M.Com, MBA

Date of Appointment 23.07.2013 07.08.2013

Experience Nil Experienced in the field of Banking and financial

services

List of other Directorship

Held.

Nil 1. Ahluwalia Consultancy

Services Private Limited

2. Sevvai Financial Advisors Private Limited

Chairman / Member of the Committee of the Board of the other Companies in which he

is a Director

Nil Nil

Shareholding of Director Nil Nil

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 ANNEXED TO THE NOTICE

ITEM NO. 3. TO APPOINT MR. RAVI SHARMA AS DIRECTOR:

The Board of Directors of the Company had appointed Mr. Ravi Sharma as an Additional Director at its meeting held on July 23, 2013, under Section 260 of the Companies Act, 1956. Mr. Ravi Sharma holds office till the date of forthcoming Annual General Meeting. Notice has been received from a member as required under Section 257 of the Companies Act, 1956, together with requisite deposit proposing Mr. Ravi Sharma as a candidate for the office of Director.

The Board considers that the expertise of Mr. Ravi Sharma in the field of Corporate and Investment Banking would benefit the Company and it is desirable to continue to avail his services.

The Board recommends the resolution for approval by members as an ordinary resolution.

None of the Director except Mr. Ravi Sharma is interested in the said resolution.

ITEM NO. 4. TO APPOINT MS. NIKITA RATTANSHI AS DIRECTOR: The Board of Directors of the Company had appointed Ms. Nikita Rattanshi as an Additional Director at its meeting held on July 23, 2013, under Section 260 of the Companies Act, 1956. Ms. Nikita Rattanshi holds office till the date of forthcoming Annual General Meeting. Notice has been received from a member as required under Section 257 of the Companies Act, 1956, together with requisite deposit proposing Ms. Nikita Rattanshi as a candidate for the office of Director.


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The Board considers the network of Ms. Nikita Rattanshi in the field of Corporate and Investment Banking would benefit the company and it is desirable to continue to avail her services.


None of the Director except Ms. Nikita Rattanshi is interested in the said resolution.

ITEM NO. 5. TO APPOINT MRS. JASLEEN SINGH AS DIRECTOR: The Board of the Directors of the Company had appointed Mrs. Jasleen Singh as an Additional Director at its meeting held on August, 07, 2013, under Section 260 of the Companies Act, 1956. Mrs. Jasleen Singh holds office till the date of forthcoming Annual General Meeting. Notice has been received from a member as required under Section 257 of the Companies Act, 1956, together with requisite deposit proposing Mrs. Jasleen Singh as a candidate for the office of Director.

The Board considers that the network and contact of Mrs. Jasleen Singh in the field of corporate affairs would benefit the company and it is desirable to continue to avail her services.


None of the Director except Mrs. Jasleen Singh is interested in the said resolution.

ITEM NO.6. TO APPOINT MR. RAVI SHARMA AS AN EXECUTIVE DIRECTOR:

Mr. Ravi Sharma was appointed as an Additional Director by the Board at its meeting held on July, 23, 2013, to assume responsibility of Executive Director with immediate effect due to the resignation of Mr. Subramonian Venkitarama Iyer. In accordance with Section 260 of the Companies Act, 1956, Mr. Ravi Sharma holds office till the conclusion of the

thAnnual General Meeting of the Company scheduled to be held on 30 September, 2013. Notice has been received pursuant to the Section 257 of the Companies Act, 1956, together with the requisite deposit proposing Mr. Ravi Sharma as a Director of a Company.

Since Mr. Ravi Sharma, having rich experience of the investment banking division, your Board of Directors deemed it fit and proper to appoint him on the Board of the Company and to oversee the operations as an Executive Director.

The shareholders of the Company are requested to accord their approval for the same by passing ordinary resolution.

None of the Director except Mr. Ravi Sharma is concerned or interested in this resolution.

ITEM NO.7. TO APPOINT MS. NIKITA RATTANSHI AS WHOLE TIME DIRECTOR:

Ms. Nikita Rattanshi was appointed as an Additional Director by the Board at its meeting held on July, 23, 2013, to assume responsibility of Whole Time Director with immediate effect due to the resignation of Mr. Subramonian Venkitarama Iyer. In accordance with Section 260 of the Companies Act, 1956, Ms. Nikita Rattanshi holds office till the

thconclusion of the Annual General Meeting of the company scheduled to be held on 30 September, 2013. Notices have been received pursuant to the Section 257 of the Companies Act, 1956, together with the requisite deposit proposing Ms. Nikita Rattanshi as a Director of a Company.

Since Ms. Nikita Rattanshi, is having a good network in Corporate and investment banking, your Board of Directors deemed it fit & proper to appoint her on the Board of the Company and to oversee the operations as Whole Time Director.


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The shareholders of the company are requested to accord their approval for the same by passing ordinary resolution.

None of the Director except Ms. Nikita Rattanshi is concerned or interested in this resolution.

ITEM NO.8 TO APPROVE APPOINTMENT OF M/s GOYAL NITIN AND ASSOCIATES AS STATUTORY AUDITORS OF THE COMPANY.

M/s Choraria & Associates, Chartered Accountants, were appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 7th September, 2013. Their appointment was till the conclusion of the ensuing Annual General Meeting. However, they have resigned as Statutory Auditors of the Company, due to their pre-occupation.

thThe Board Of Directors of the company at its meeting held on 5 September,2013 have appointed M/s. Goyal Nitin and Associates, Chartered Accountants, as Statutory Auditors of the company in place of M/s. Choraria & Associates, Chartered Accountants. M/s. Goyal Nitin and Associates, Chartered Accountants, would hold the office of the Statutory Auditors of the company till the conclusion of the next Annual General Meeting. Accordingly, the accounts of the company for the year ended 31.03.2014, would be audited by M/s. Goyal Nitin and Associates, Chartered Accountants. The Board of Directors has received a letter from Goyal Nitin and Associates, Chartered Accountants, giving their consent to act as Statutory Auditors of the company. M/s. Goyal Nitin and Associates, Chartered Accountants, have also confirmed that their appointment, if made, would be within the limits, as prescribed U/S 224(1-B) of the Companies Act, 1956.

Directors recommend the resolution for members' approval.

None of the Directors of the company are concerned or interested in the proposed resolution.

ITEM NO.9 BORROWING POWERS OF THE COMPANY:

The Company will have to meet some of its future fund requirements, for the purpose of expansion, acquisition out of further borrowings, to be made from banks & institutions.

Section 293(1) (d) of the Companies Act, 1956, provides inter alia, to obtain the consent of the members in general meeting by Ordinary Resolution

None of the directors of the Company is in any way concerned or interested in the proposed resolution at item no.9.

The Directors recommend the resolution at item no.9 of the Notice for approval of the Shareholders.

By order of the Board For BIRLA CAPITAL AND FINANCIAL SERVICES LIMITED

Dated: -05.09.2013Place: - Mumbai.

Director

t


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DIRECTORS' REPORT

Dear Shareholders,

thYour Directors have pleasure in presenting their 27 Annual Report together with the Audited Accounts for the year ended st31 March, 2013. The Financial Results of your company are summarized below.

FINANCIAL RESULTS (Rs. In Lacs)

PARTICULARS As on 31.03.2013 As on 31.03.2012

Total Income 77.20 74.46

Less : Total Expenditure 82.93 89.98

Profit/ (Loss) Before Tax & Depreciation (5.73) (15.52)

Less: depreciation 0.34 0.34

Profit/ (Loss) Before Tax (6.07) (15.87)

Less: Earlier year taxes 9.96 0.00

Provision for Deferred tax 0.03 0.08

Profit (Loss)After Tax (16.07) (15.95)

Add: Profit & Loss Account Balance Brought Forward

From Previous Year96.68 112.64

Profit & Loss Account Balance Carried over 80.61 96.68

Earning per share 0.00 0.00

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 & FUTURE PROSPECTS

The Company has set-up adequate infrastructure along with a team of professionals for carrying on the Investment 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 advices on capital raising, merger and acquisition, ESOP, Equity/Debt Placements, valuations of Equity shares, Restructuring 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.

MANAGEMENT DISCUSSION AND ANALYSIS (I)Industry structure and developments:

The world economy is passing through the recessionary mode wherein it is hard for Indian Economy and Indian Capital Market to remain unaffected.The weakening of rupee against the dollar and the slowdown on the Industrial Growth has put pressure on the Indian Economy resulting in slow down on Investment Banking activities. As per data published by SEBI, in the current year i.e. FY 2013 Rs. 30,859 Crs were mobilized out of 60 Public Issues in comparison to Rs. 48,468 Crs in FY 2012 from 71 Public Issues. This shows the

decline in the industry as a whole. Also with an overall recession in the economy, the economy is not expected to do a turnaround and is likely to remain stagnant. The same is therefore likely to have an effect on the Company's core business i.e. Investment Banking.


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(i) Opportunities and Threats:Opportunities exist in the Investment Banking business depending on the economic growth of the country. Major threat to your Company's fortune would be on account of adverse capital market trends and sentiments affected by domestic and global factors.

(ii) Segment wise or product wise performance:The Company has performed reasonably well in the Corporate Advisory Services including valuation, Mergers, Acquisitions and Open Offers, Project Appraisals and Loan Syndication. The Primary market area fortune is linked directly to the Stock market and is trying to overcome the hurdles to achieve the best results.

(iii) 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.

(iv) Risks and concerns:Your Company is exposed to the fluctuations of economy and industry cycles. Also the entry from internationally established players may affect the fortune of your Company. The management believes that efficient business planning; risk management and product diversification would help mitigate such risks.

(v) Internal control system and their adequacy:The Company has adequate internal control systems, commensurate with its size and nature of the business.

(vi) 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.

REGISTERED OFFICE thThe Board of Directors in their meeting held on 28 August,2013, changed the Registered office of the Company from

159, Industry House, 5th Floor, Churchgate Reclamation, Mumbai – 400 020 to Morya Landmark II, Office No. G-002, thGround Floor, New Link Road, Andheri (West), Mumbai- 400 053 effective from 28 August, 2013, for the purpose of

administrative convenience.

DIRECTORS

A. Director retiring by rotation & eligible for reappointment

Mr. Dahagama. S. Sharma who, retires by rotation, being eligible for reappointment, offers himself for re-appointment in the Annual General Meeting.

B. Resignation of Directors

thMr. Tushar Dey, an Independent Director who was appointed on 15 May,2012 has resigned from the Board of thDirectors on 7 August,2013. The Directors placed on record their sincere appreciation of the valuable services

rendered by him during his tenure as an Independent Director.

Mr. Ashok Parmar, an Independent Director has resigned from the Board of Directors on 28.01.2013. The Directors placed on record their sincere appreciation of the valuable services rendered by him during his tenure as an Independent Director.

Mr. Subramonian Venkitarama Iyer, an Executive & Whole Time Director have resigned from the Board of Directors thon 7 August,2013. The Directors placed on record their sincere appreciation of the valuable services rendered by him

during his tenure as an Executive Director.

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C. New Appointments

rdMr. Ravi Sharma was appointed as an Additional Director with effect from 23 July,2013 & holds office upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing under Section 257 of Companies Act, 1956 from a member signifying his intention to propose him as a candidate for the office of the Director of the Company. Further the Board of Directors has appointed Mr. Ravi Sharma, as Executive/Whole time Director of the Company subject to approval of the members in the ensuing Annual General Meeting. The Director recommends the appointment of Mr. Ravi Sharma.

rdMs. Nikita Rattanshi was appointed as an Additional Director with effect from 23 July,2013 & holds office upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing under Section 257 of Companies Act, 1956 from a member signifying his intention to propose her as a candidate for the office of the Director of the Company. Further the Board of Directors has appointed Ms. Nikita Rattanshi, as Executive/Whole time Director of the Company subject to approval of the members in the ensuing Annual General Meeting. The Director recommends the appointment of Ms. Nikita Rattanshi.

thMs. Jasleen Singh was appointed as an Additional Director with effect from 7 August,2013 & holds office upto the date of the ensuing Annual General Meeting. The Company has received notice in writing under Section 257 of Companies Act, 1956 from a member signifying his intention to propose her as a candidate for the office of the Director of the Company.

The Director recommends the appointment of Ms. Jasleen Singh.

PUBLIC DEPOSIT

Your Company has not accepted any fixed deposit 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 the Securities Exchange Board of India, the Company has adequately complied with prescribed Merchant Banking Rules & Regulations, wherever applicable.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

sti) In the preparation of the accounts for the financial year ended 31 March 2013, the applicable accounting standards have been followed along with proper explanation relating to material developments/deviations.

ii) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that stare reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2013 and of

the Profit/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 have prepared the accounts on a “going concern” basis.

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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, to the extent applicable is given below:

FOREIGN EXCHANGE EARNINGS AND OUTGO DURING THE YEAR

There were no foreign exchange transactions during the current and previous year.

PARTICULARS OF EMPLOYEES

The Company did not have any employee falling within the purview of Section 217(2A) of the Companies Act, 1956, as amended with effect from 01/04/2011 Vide CIR-03.05.2011 and hence particulars of Employees are not included.

CORPORATE GOVERNANCE

A report on 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 Auditors of the Company is already attached to this report.

AUDITORS

M/s. M. L. Choraria & Associates, Chartered Accountants, Statutory Auditors of the Company, have resigned as Statutory Auditors & M/s Goyal Nitin & Associates, Chartered Accountants, have been appointed as Statutory Auditors of the company in their place in the Board meeting held on 5th September,2013 to audit the accounts of the company for the year ended 31.03.2014. The Company has received a letter from M/s.Goyal Nitin & Associates,Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956 and they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

AUDITORS' REPORT

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

DISCLOSURE

The Company belongs to the Yash Birla Group.

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 & Employees of the Company.

By Order of the Board For BIRLA CAPITAL AND FINANCIAL SERVICES LIMITED

Date : 05.09.2013 Ravi Sharma Nikita Rattanshi Place : Mumbai (Executive Director) ( Whole Time Director)


BIRLA CAPS

CORPORATE GOVERNANCE REPORT

PHILOSOPHY OF THE COMPANY: The Company is committed to implement good corporate governance. The Company respects the rights of its shareholders to be informed on the performance of the Company and it is its endeavor, to maximize value to the shareholders of the Company. The Corporate Governance policies of the Company are comparable to the best in the industry and it envisages:

1. Recognizing the roles and responsibilities of Board and Management.2. An effective composition and size of the Board and commitment to effectively discharge its responsibilities. 3. Independent verification and safeguarding integrity of the Company's financial reporting.4. Timely and balanced disclosure of all material information related to the Company.5. Compliance with applicable rules and regulations from time to time.

I. BOARD OF DIRECTORS:

a) Composition and Category As on 07/08/2013:

The Board comprises of Executive Director, Non-executive Directors and Independent Director with vast experience in financial services industry. The Company has initiated the steps to appoint additional Independent Directors. The Composition of the Board is as follows:

Sr. No.

Name of Director Category

*1 Mr. V Subramonian Whole Time Director

2 Mr. G. L. Lath Non Executive, Non independent

3 Mr. D. S. Sharma Non Executive, Independent

*4 Mr. Tushar Dey Non Executive, Non independent

5 Mr. Ravi Sharma Executive, Non-Independent

6 Ms. Nikita Rattanshi Whole Time Director

7 Mrs. Jasleen Singh Non- Independent

*8 Mr. Ashok Parmar Independent

* Ceased to be Directors during the year under report

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c) Non-Executive Directors' compensation & disclosures:

Apart from sitting fees that are paid to the Non Executive and Independent Directors for attending Board and Committee Meetings, no other fee/compensation was paid during the year. During the year under review, there was no pecuniary relationship or business transaction by the Company with any Non-Executive Directors. The details of sitting fees paid to the Directors are given separately in this Report.

d) Information on Directors re-appointment:

A brief resume of the Director being proposed to be appointed or reappointed at the ensuing Annual General Meeting, nature of their expertise in specific functional areas and names of the Companies in which they hold directorship and the membership of committees of the Board is furnished in this report.

e) Other provisions as to Board & Committees:

st thDuring the year ended 31 March 2013, Four Board Meetings were held. The meetings were held on 15 May th th2012, 30 July 2012, 7 November 2012, and 28th January 2013.

The Company has held atleast one meeting in every three months and the maximum gap between any two board meetings was not more than four months. None of the Directors of the Company were a member of more than ten committees or Chairman of more than five committees across all public limited companies in which he was a director.

For the purpose of considering the limit of the committees as stated above, only Audit Committee and Shareholders/ Investors Grievances Committee across all public limited companies has been considered in accordance with clause 49 of the Listing Agreement.

b) D eta ils of the o ther D ir ec torsh ip and C hair m ansh ip /M e m be rsh ip of Co m m ittee of e ac h D ire cto r in var ious C om pa nie s a s on 31

st M arc h 2013 is as fol low s:

Sr. N o.

D ir ec tor

N o. o f D ir ec tor ship he ld in o ther C om panie s

N o. of Me m be rsh ip / C hair m ansh ip o n other Boa rd C om m itt ee s

P ubl ic Pr iv ate M e m ber C hairm an

1 M r. V . Su bram onian W hole T im e D irec tor

3 4 - -

2 M r. G . L . L ath

N on-E xec ut ive

7 15 3 -

3 M r. D . S . Sh arm a Inde pe nden t D irec tor

0 1 - 2

4 M r. T ushar D ey N on-E xec ut ive

4 4 - 1

5 M r. A shok Parm ar 0 2 - -

5 M r. R avi Shar ma 0 0 0 0

6 M s. N ik ita Ra ttanshi 0 0 0 0

7 M s. Jaslee n S ing h 0 2 0 0

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Details of the Attendance of Directors at the Board Meetings and the Annual General Meeting are as follows:

Sr. No. Name of Director No. of Board

Meetings attended

Whether attended

previous AGM 1. Mr. V Subramonian 4 Yes

2. Mr. G. L. Lath 4 Yes

3. Mr. D. S. Sharma 4 Yes

4. Mr. Tushar Dey 4 Yes

5. Mr. Ashok Parmar $ 4 Yes 6. Mr. Arun Singhi # 1 Yes

7 Mr. B.L.Varma # 1 Yes

$ Resigned on 28th January, 2013 # Resigned on 15th May, 2012

f) Code of Conduct:

The Company has laid down a Code of Conduct for all the Board Members and Senior Management personnel of the Company. The Code of Conduct is available on Company's website

In pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 the Board has approved the “Code of Conduct for prevention of Insider Trading” and authorized the Compliance Officer to implement and monitor the various requirements as set out in the Code under the superintendence and control of the Board of Directors of the Company.

I. COMMITTEES OF THE BOARD

A. AUDIT COMMITTEE:

The Audit Committee, comprising of three Directors look after various matters relating to the finance and accounts of the Company, which are also in conformity with the requirements as per Clause 49 of the Listing Agreement with the Stock Exchange.

stDuring the year ended 31 March, 2013 the Audit Committee comprised of:

www.birlacaps.com

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Name Title Status Mr. D.S.Sharma Chairman Independent Mr. G. L. Lath Member Non Executive, Non Independent Mr. V. Subramonian Member Executive, Non Independent

The Company Secretary of the Company generally acts as a Secretary to the Audit Committee.

Since the Company Secretary has resigned from the Company, the Company is in the process of recruiting a qualified person for the vacant post and is confident that it will be successful in appointing a suitable candidate.

Terms of Reference

The terms of reference of the Audit Committee are as per the guidelines set out in the Listing Agreement with the Stock Exchange, read with Section 292A of the Companies Act, 1956 and includes such other functions as may be assigned to it by the Board from time to time.


BIRLA CAPS

Meetings during the year 2012-13

Four Meetings of the Audit Committee were held during the year to discuss on the various matters as detailed below:-

Date of Meeting No. of Directors Present 15.05.2012 3 30.07.2012 3 07.11.2012 3 28.01.2013 3

Attendance of Directors during the year 2012-13 :

Name of Director No. of Meeting Held Attended Mr. Ashok Parmar $ 4 4 Mr. Arun Singhi # 4 1 Mr. G. L. Lath 4 4 Mr. D.S.Sharma 4 4 Mr. V.Subramonian 4 3

$ Resigned on 28th January, 2013 # Resigned on 15

th May, 2012

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B. REMUNERATION COMMITTEE:

The Composition of the Committee for the year ended 31st March, 2013 was as under:-

Name Title Status Mr. D.S.Sharma Chairman Independent Mr. G. L. Lath Member Non Executive

Mr. Tushar Dey Member Non Executive

The Committee has been constituted to fix remuneration payable to the Managing Director/ Executive Directors, and such other matters relating to the remuneration and compensation payable to the Director(s) and Employees.

The Company does not pay any remuneration to its non executive directors except sitting fees for attending each Meeting of the Board of Directors and Committee. Details of remuneration paid to all the Directors of the Company during the financial year 2012-2013:


BIRLA CAPS

Sr. No. Name of Director Remuneration (Rs.) Sitting Fees (Rs.)

1. Mr. V. Subramonian 29,30,520/- N.A.

2. Mr. Arun Singhi 2,01,860/- N.A.

3. Mr. G. L. Lath - 10,000/-

4. Mr. B. L. Varma - 2,500/- 5. Mr. Ashok Parmar - 10,000/-

6. Mr. D. S. Sharma - 10,000/-

7. Mr. Tushar Dey - 10,000/-

Except for, Mr. Arun Singhi and Mr. G. L. Lath, who hold 16200 and 5000 Equity shares in the Company respectively, no other directors, hold shares in the Company.

C. SHAREHOLDER'S GRIEVANCE COMMITTEE:

A Shareholder Grievance Committee of the Board is in place to inter alia look into issues relating to Shareholders including transfer / transmission of shares, issue of Duplicate Share Certificate / Non-

streceipt of Dividend, Annual Report etc. The Composition of the Committee for the year ended 31 March 2013 was as under: -

1. Mr. Tushar Dey – Chairman 2. Mr. G. L. Lath

The Company Secretary of the Company acts as a Secretary to the committee and as a Compliance Officer.

The number of complaints received and resolved to the satisfaction of the investors during the year under review is as under:

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Nature of Complaint No. of Grievances BSE 0 SEBI 0 Total Grievance attended 0 No complaint was received from the shareholders during the year ended 31st March, 2013.

To expedite the process of share transfer in physical segment, authority has been delegated to certain officers of the Company to approve Share transfers.


BIRLA CAPS

Year Venue Date Time 2011-2012 126,Sitaram Poddar Marg, Fanas wadi,

Mumbai-400 002. 07.09.2012 3.00 P. M.

2010-2011 126,Sitaram Poddar Marg, Fanas wadi, Mumbai-400 002.

23.09.2011 3.00 P. M.

2009-2010 126,Sitaram Poddar Marg, Fanas wadi, Mumbai-400 002.

28.09.2010 3.0 . M.

B. Details of Special Resolutions passed in the previous three AGMs: Date of AGM Particulars of Special Resolutions passed

2011-2012 Alteration in the Articles 77(1) of the Articles of Association. 2010-2011 Nil 2009-2010 Nil

III. CEO/CFO CERTIFICATION:

The Board of Directors has received a certificate issued by Ms. Nikita Rattanshi, Whole Time Director, of the Company as required under Clause 49 (V) of the Listing Agreement.

IV. DISCLOSURES:

1. The Company has not entered into any transactions with the Promoters, Directors or the Management, their subsidiaries and relatives that may have a potential conflict with the interest of the Company.

2. The Company has complied with all the requirements relating to Capital Market, Stock exchanges, SEBI and other regulatory bodies except on the Composition of Board of Directors. The Company is in the process of inducting more independent Directors on the Board

3. No regulatory body has imposed any penalty or had initiated any inquiry against the Company in the past three years.

V. MEANS OF COMMUNICATIONS

i. Quarterly ResultsIn compliance of the provisions of Clause 41 of the Listing Agreement, the un-audited and audited financial results, as approved by the Board were duly published within the stipulated time period in “Business Standard” (English) and “Mumbai Lakshadeep/Aapala Mahanagar” (Vernacular).

ii. Management Discussion and Analysis Report forms part of the Directors' Report which is posted to the Shareholders of the Company.

iii. The Company has designated the following email id for redressal of Investor Grievances and the necessary disclosures to this effect has also been made on the Company's website

www.birlacaps.com - [email protected].

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II. GENERAL BODY MEETINGS

A. The last three Annual General Meetings of the Company were held as under:


BIRLA CAPS

VI. GENERAL SHAREHOLDERS' INFORMATION:

Annual General Meeting:

thDay & Date : Monday the 30 September, 2013.Venue : Morya Landmark II, Ground Floor, New Link Road, Opp. Infinity Mall, Andheri (West), Mumbai –

400 053 Time : 8.30 a.m.

Financial Calendar 2012-13 (Tentative):

thFirst Quarterly Results : On or before 14 August, 2013thSecond Quarterly Results : On or before 14 November, 2013thThird Quarterly Results : On or before 14 February, 2014thFourth Quarterly Results : On or before 15 May, 2014

Date of Book Closure:

27.09.2013 to 30.09.2013 (Both days inclusive)

Date of Dividend Disclosure:

Not Applicable.

Listing of Equity Shares on:

The Bombay Stock Exchange, Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai -400 001Stock Code: 512332

Annual Listing Fees were duly paid to the Stock Exchange for the year 2013-14.

Demat ISIN Number in NSDL & CDSL for equity shares: INE776E01027

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BIRLA CAPS

Registrar & Share Transfer Agents: - M/s. Bigshare Services Private LimitedE-2/3, Ansa Industrial EstateSakivihar Road, Saki Naka, Andheri (East)Mumbai – 400 072. Tel: +91-022-40430200Fax: +91-022-28475207

Share Transfer System: - The share transfers which are received in physical form are processed and the share certificates returned within a period of 30 days from the date of receipt, subject to the documents being valid and complete in all respects. The Board has delegated the authority for approving transfer, transmission etc of the Company's Securities to the Shareholders' Grievance Committee for noting. The Company obtains from a Company Secretary in practice half yearly certificate for compliance with the share transfer formalities as required under Clause 47 (C) of the Listing Agreement with Stock Exchange and files a copy of the Certificate with the Stock Exchanges.

Stock Prices Monthly High/Low of market price of the company’s equity shares (Face value Rs 2 per share) traded at Bombay Stock Exchange during the year along with BSE Sensex:

Source: - www.bseindia.com

Birla Capital & Financial Services Limited (BCFSL)

Bombay Stock Exchange, Sensex

Month BCFSL High (Rs.)

BCFSL Low (Rs.)

BSE High BSE Low

April, 2012 1.44 1.15 17429.96 17318.81 May, 2012 1.11 1.4 17370.93 16218.53 June, 2012 1.34 1.15 16217.48 17429.98 July, 2012 1.15 1.53 17438.68 17236.18 August, 2012 1.46 1.17 17244.44 17429.56 September, 2012 1.12 1.23 17465.6 18762.74 October, 2012 1.26 1.31 18784.64 18505.38 November, 2012 1.37 2.31 18487.9 19339.9 December, 2012 2.27 1.67 19342.83 19426.71 January, 2013 1.64 1.39 19513.45 19894.98 February, 2013 1.34 1.54 19907.21 18861.54 March, 2013 1.6 1.13 18876.68 18835.77

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BIRLA CAPS

Distribution of shareholding as on 31st March 2013

Shareholding Pattern as on 31st March, 2013

Sr. No.

Category Total Shareholders

% of Shareholders

Total shares

1 Clearing Member 8 0.1323 15119

2 Corporate Bodies 129 2.1340 2568649

3 Corporate Bodies (Promoter Companies)

5 0.0827 24598881

4 Non Resident Indians 23 0.3805 90046

5 Promoters (Individual) 1 0.0165 800600

6 Promoters/Directors 2 0.0331 21200

7 Public 5875 97.1878 10959305

8 Relatives of Director 2 0.0331 6200

Total 6045 100 39060000

Sr. No.

Shareholding Range

(in Rs.)

No. of Shareholders

% of total holders

Total Shareholding in Rupees

% of total capital

1 1 to 5000 5292 87.54 6773498 8.67

2 5001 to 10000 399 6.60 3188706 4.08

3 10001 to 20000 203 3.36 3190904 4.08

4 20001 to 30000 57 0.94 1437082 1.84

5 30001 to 40000 24 0.40 828788 1.06 6 40001 to 50000 18 0.30 859856 1.10

7 50001 to 100000 26 0.43 1773464 2.27

8 100001 to 9999999999

26 0.43 60067702 76.90

Total 6045 100 78120000 100.00

D e m a ter ial isation O f Shar es

C ate gor y Sha re hold ing as on 31 .03.2 013

%

Sh are s in De ma t mod e w i th N SD L 3,4 0,12,4 61 87.0 8 Sh are s in De ma t mod e w i th C D SL 46,38 ,239 11.8 7

Sh are s in Ph ysic al mod e 4093 00 1.05

T otal 3,9 0,60,0 00 1 00

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BIRLA CAPS

Address for Correspondence:Registered Office:Morya Landmark II, Office No. G-002,Ground Floor, New Link Road,Andheri (West), Mumbai- 400 053E-mail Id:

Investor Correspondence: -

Big Share Services Private Limited Registrar and Share Transfer Agents E-2/3 Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (East), Mumbai - 400072 Tel: - +91-022-40430200Fax: - +91-022-28475207 E-mail:

[email protected]

[email protected]

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BIRLA CAPS

Annexure IWhole Time Director Certificate

To,

Board of Directors,

Birla Capital and Financial Services Limited.

Dear Sirs,

(a) I have reviewed financial statements and the cash flow statement for the year and that to the best of my knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

(b) There are, to the best of my knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company's code of conduct.

(c) I accept responsibility for establishing and maintaining internal controls for financial reporting and I have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and I have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies.

(d) I have indicated to the auditors and the Audit committee

(i) significant changes in internal control over financial reporting during the year;

(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which I have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company's internal control system over financial reporting.

Yours sincerely,

Nikita RattanshiWhole Time DirectorDated: 05.09.2013Place: Mumbai

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BIRLA CAPS

DECLARATION

As provided under Clause 49 of the Listing Agreement with Stock Exchange, we confirm that the Board Members and Senior Management of the Company have confirmed compliance with the Code of Conduct for the year ended March 31, 2013.

For Birla Capital and Financial Services Limited

Dated: -05.09.2013 Ravi SharmaPlace: - Mumbai Executive Director

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BIRLA CAPS

AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE

To the Members ofBirla Capital and Financial Services Ltd

1. We have examined the compliance of conditions of Corporate Governance by Birla Capital and stFinancial Services Ltd for the year ended on 31 March, 2013 , as stipulated in clause 49 of the Listing

Agreement of the said company with stock exchanges in India.

2. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.

3. In our opinion and to the best of our information and according to the explanations given to us, we certify that the company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement except on appointment of Independent Directors which we understand that they have initiated necessary steps to rectify.

4. We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company.

For M. L. Choraria & Associates, Chartered Accountants

Dated: -10.05.2013Place: - Mumbai

(M. M. Choraria) Proprietor

Membership No.44180 F.R.No. – 113782W

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BIRLA CAPS

Independent Auditor's Report

To,

The Members of Birla Capital and Financial Services Limited

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Birla Capital And Financial Services Limited ('the

stCompany') which comprise the Balance Sheet as at 31 March 2013, the Statement of Profit and Loss and Cash Flow

Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial

position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to

in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design,

implementation and maintenance of internal control 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's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards

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. An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the

accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(ii) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

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BIRLA CAPS

Other Matter with respect to financial statements

Further to our comments in the Annexure referred in report on other legal and regulatory requirements, we wish to

state that:

a) Sundry Debtors, Sundry Creditors, Loans & Advances, are subject to adjustments due to verification and

reconciliation of amounts as per books and consequential adjustments thereof.

b) No provision has been made in respect of the following: -

(i) Income Tax Demands aggregating Rs.5,32,21,791 against which the company has referred the matter to the

Settlement Commission. The Settlement commission has passed order in favour of the Company and has

directed the Assessing Officer to recalculate the net tax liability/ Refund.

(ii) Gratuity amounting to Rs.46,500 accrued upto March 2013 is accounted for on cash basis and payable at the

time of settlement of the employees accounts. The Company has not obtained an actuarial certificate for the

stvaluation of the gratuity liability upto 31 March, 2013.

(iii) Leave encashments accrued upto employees for which liability has not been determined is accounted on

cash basis, since the same will be accounted for at the time of settlement of the employees' accounts. The

stCompany has not obtained an actuarial certificate for the valuation of Leave encashment upto 31 March,

2013.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 (“the Order”), as amended, issued by the Central

Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement

on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from

our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in

agreement with the books of account;

d. in our opinion, the Balance Sheet the Statement of Profit and Loss and Cash Flow Statement comply with the

Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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BIRLA CAPS

ste. on the basis of written representations received from the directors as on 31 March, 2013, and taken on record by

stthe Board of Directors, none of the directors is disqualified as on 31 March, 2013, from being appointed as a

director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

For M. L. Choraria & Associates Chartered Accountants

M. M. Choraria

Proprietor Membership No:44180 F.R.N. 113782W

Date: 10.05.2013Place: Mumbai

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BIRLA CAPS

ANNEXURE TO TH E INDEPENDENT AUDIT ORS REPO RT O F E VEN DATE O N TH E

FINANCIAL STAT EM ENTS FOR THE YEAR ENDED 31 st M ARCH , 2013 OF BIRLA

CAPIT AL AND FINANCIAL SERVICES LIM ITED

On the b asis of su ch ch ecks as we consid ered appr opriate and in term s of the inf ormation and

ex planatio ns given to us, we sta te tha t: -

i. In respect of its fixed a ssets;

a) The Co mpany h as generally m aintained prop er r ecords showing f ull par ticulars,

inc lud ing q uantitative de ta ils and situa tion of fixed asse ts;

b) As explained to us, co nsiderin g th e na tu re o f the Fixed Asse ts, the same have been

p hysically verif ied b y the m an agement a t reason able inter vals du ring the year as p er

the verification plan ado pted by the Co mpany, which is reasonable having regar d to

the size of the com pan y and nature of its asse ts. According to the inform atio n and

explan ations given to us and the records p roduced to u s for ou r verifica tion,

d iscr epancies noticed o n such p hysical verifica tion were not, in ou r op inion, materia l

h owever the same have been pro perly dealt with in the B ooks of Account.;

c) Du ring the year under audit, the Com pany h as not disposed off any o f i ts fix ed

assets;

ii . In respect of its Inventories;

The Co mpany d oes not have inventory, accor dingly the c lause 4 (i i) (a) to (c) are no t

applicable;

ii i. In respect of its L oans;

a) The Com pan y h as granted interest bearing Inter corpora te Depo sits, to C ompanies

covered in the register m ainta ined un der section 301 o f the Co mpanies Act, 195 6.

b) The Com pany has not taken Inter corpo rate Deposits, from Co mpanies co vered in th e

r egister main tained under sec tion 3 01 of the Com panies Act, 1956.

c) In our o pinion, the rate of interest and other term s & cond itions on which th e loans

are granted/taken, a re not prim a f ac ie prejudicial to the interest of the co mpany.

d) In case of loans granted/taken, th e b orrower h as been r egular in m aking th e paym ent

o f inter est as st ipu la ted. The term s o f arr angement do not stipula te the repaym en t

schedule and is repayable on d em and . Accordingly, par agraph 4( iii)(c ) of the ord er

is not app licable to the Com pan y in respect of p aym en t of prin cipal am ount.

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BIRLA CAPS

As p er the information and explanation given to u s all th e loan s and advances granted

are repay able on dem an d and there is no o verd ue am ount of m ore than Rs.1,00,000/-

in respect o f loans granted to th e bo dy co rporate listed in r egister maintained under

section 301 of the Com pan ies Act,1956. Accordingly , paragraph 4(iii)( d) of the ord er

is not app licable .

iv . In our op inion and acco rdin g to the inform ation and explanation given to us, there

are adeq uate internal control procedures co mm en su rate with the size of the

C omp any and the nature of i ts b usiness;

v. a) On the basis of au dit procedu res perform ed by us, and according to the information

and explanation given to u s, the transactio ns r equired to be entered in th e register

r equired to be maintained under Section 30 1 o f the Co mpanies Act has been so

entered;

b) In ou r o pinion an d according to info rmation and explanations given to u s, th e

transactio ns m ade in pu rsuan ce of con tracts or arrangements entered in the register

m aintained u nder section 301 o f the C ompanies Act, 1 956 have been m ad e at prices

wh ich are reasonable h aving reg ard s to prevailing market prices at the r elevant t ime

except and unless as mentioned in Para (iii) above;

vi. In ou r o pin ion, dur ing th e year the C ompany has no t accepted any pub lic d epo sits

and hen ce the directives issued by the Reserve Bank of India and the pro visions of

Sectio n 58A and 58AA of the Com pan ies Act, 19 56 and the Com panies (Acceptance

o f Deposits) Rules, 1975, with regard to the deposits accepted fro m th e public is no t

applicable .

vii. In our opinion the Com pany h as system of in ternal audit com mensurate with the size

and nature of its business.

viii. Acco rdin g to in form ation and ex planatio n p rovided to us, main ten ance of cost

r ecords has not been prescrib ed by the C entral Go vernm en t under Sectio n 20 9(1) (d)

o f th e Co mpanies Act, 195 6;

ix. a) As per the record s of th e Comp any, i t has been observed that the Com pany h as been

generally regular in d epositing un dispu ted sta tutory dues inclu ding Income tax , Sales

tax , Pro vident fun d, Emp loyees’ State In suran ce and other materia l Statutory Dues

with the ap propriate authorities;

b) On the basis of our examinatio n of the d ocum en ts and record s o f the Com pany and

the informatio n and explanatio ns g iven to us upon our enquiries, there ar e no

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On the basis of our examination of the documents and records of the Company and the information and

explanations given to us upon our enquiries, there are no amounts payable in respect of Sales Tax, Income Tax,

Service Tax, on account of any dispute except the amount disputed in respect of Income Tax is Rs. 532.22 lacs

against which the Company has referred the matter to the settlement commission. The settlement commission

has passed the order in favour of the Company and has directed the Assessing Officer to recalculate the net tax

liability/ Refund.

The Company does not have any accumulated losses at the end of financial year and has incurred cash loss in the

immediately preceding financial year.

The Company has neither borrowed any sums from financial institutions nor through debentures and therefore

question of repayment does not arise.

As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge

of shares, debentures or any other securities; Para 4(xii) of the Order is not applicable.

In our opinion, considering the nature of activities carried on by the company during the period, the provisions of

any special statute, applicable to Chit Fund/ Nidhi/ Mutual benefit Fund/ Societies are not applicable to the

Company, hence Para 4(xiii) of the Order is not applicable.

The Company has maintained proper records of transaction and contracts in respect of investments in securities

and timely entries have been made therein. All Investments at the close of the year have been held in the name of

the Company.

As per the information and explanations given to us and on our enquiries and records of the Company examined

by us, the Company has not given any guarantee for loans taken from financial institutions and/or banks on

behalf of others;

The Company has not obtained any term loan during the year hence Para 4(xvi) is not applicable.

According to the information and explanations given to us and on an overall examination of the Balance Sheet of

the Company, we report that no funds raised on short term basis have been used for long term investments. No

long term funds have been used to finance short term asset except permanent working capital.

In our opinion, and on the basis of information and explanations given to us, since the Company has not made

any preferential allotment of shares to parties and companies covered in the register maintained under Section

301 of the Companies Act, 1956, Para 4(xviii) of the Order is not applicable;

In our opinion, and on the basis of information and explanations given to us, since the company has not issued

any debenture during the period, question of creating securities in respect thereof does not arise.

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xx. In our opinion, on the basis of information and explanations given to us, since the

Company has not raised any money by public issue during the period, Para 4(xx) of

the Order is not applicable;

xxi. During the course of our examination of the books of account 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 fraud on or by the Company, noticed or reported during the year nor have

been informed of any such case by the management.

For M. L. Choraria & Associates

Chartered Accountants

M. M. Choraria

Proprietor

Membership No:44180

F.R.N. 113782W

Date: 10.05.2013 Place: Mumbai


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31st March 2013

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[1] NOTES FORMING PARY OF ACCOUNTS

(A) SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF ACCOUNTING

The Financial statements are prepared under the historical cost convention, on accrual basis, in accordance

with the generally accepted accounting principles in India , the Institute of Chartered Accountants of India and

the provisions of the Companies Act. 1956. The Company follows merchantile system of Accounting.

2. INCOME

The Company follows the practice of accounting all incomes on accrual basis except, in respect of hire purchase

agreements, which is accounted applying the interest rate on reducing balance of the amount financed during

the period of the agreement.

3. EXPENSES

Expenses are accounted on accrual basis except gratuity and leave encashment.

4. FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation

b) Depreciation

i. Own Assets

Depreciation has been provided as per straight line method under Schedule XIV of the Companies Act, 1956.

ii. Leased Assets

Depreciation is provided as per straight line method, depreciating the entire cost of leased assets over the lease

period.

Depreciation on all assets acquired is provided on pro-rata basis from the month in which addition is made.stAggregate value of the Assets given on lease as on 31 March, 2013 is Nil (Previous year Rs. Nil)

5. INVESTMENTS

Long term Investments are stated at the cost of acquisition. The diminution if any, in the value of investment

stated at the cost, is recognized when such diminution is permanent.

6. EMPLOYEES RETIREMENT BENEFITS

Gratuity will be provided on cash basis at the time of settlement of employees account.

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7. TAXATION

Deferred Tax is recognized on timing difference between the accounting income and taxable income for the year

and quantified using the tax rates and laws enacted or substantively enacted on the balance sheet date.

8. CONTINGENCIES

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are

treated as contingent and disclosed by way of notes to the accounts.

(B) NOTES ON ACCOUNTS

1. In the opinion of the Board of Directors, the current assets, loans and advances have a value on realization

in the ordinary course of business at least equal to the amount stated in the balance sheet unless otherwise

stated.

2) Sundry Debtors, Sundry Creditors , Loans and advances are subject to adjustments due to verification and

reconciliation of amount as per books.

3) No provision has been made in respect of the following:

Income Tax Demand aggregating to Rs. 5,32,21,791/- against which the company has referred the matter to

the Settlement Commission. The Settlement Commission has passed the order in favour of the Company

and has directed the Assessing Officer to recalculate the net tax liability/ Refund.

(i) Income matters of earlier years in appeals, rectification towards which the liability is not ascertained , will

be accounted for in the year in which the matters are settled.

(ii) Gratuity amounting to Rs. 46,500/- upto March 2013, since the same will be accounted for at the time of

settlement of the employees accounts.

4. Deferred Tax:

In accordance with the requirements of Accounting Standard 22 on “ Accounting for taxes on income”

issued by the Institute of Chartered Accountants of India , the Company has given effect to Deferred Tax staccounting. The break-up of deferred tax assets/ liabilities as on 31 March, 2013 is as under: -

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Mr. V. Subromonian

Mr. Arun Singhi

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Regd. Office : Morya Landmark II, Ground Floor, New Link Road, Andheri (West) Mumbai - 400 053

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER THE ENTRANCE OF MEETING HALL

DP ID*:-____________________ FOLIO NO :-___________

CLIENT ID*:-________________NAME(S) AND ADDRESS OF THE SHARE HOLDER._____________________________________________________________________________________________________________________________No. of Share held :-__________________________________i/we hereby my/ ourpresence at the 27th ANNUAL GENERAL MEETING of the Company held on Monday the 30th September, 2013 at 8.30 am. at Morya Landmark II, Ground Floor, New Link Road, Andheri (West) Mumbai - 400 053

___________________________ SIGNATURE OF SHAREHOLDER* Applicable for investors holding Shares in electronic form** Strike out whichever is not applicable


Regd. Office : Morya Landmark II, Ground Floor, New Link Road, Andheri (West) Mumbai - 400 053

PROXY FORM

DP ID*:-______________ FOLIO NO:-______________CLIENT ID*:-_____________I/we _____________________________________________________________being a member / membersof BIRLA CAPITAL AND FINANCIAL SERVICES LIMITED hereby appoint_____________________________ _______________________________________________________________________________________of ____________________________(or failing him)____________________________________________of ______________________________at my/our proxy to attend and vote for me / us and my/our behalf at the 27th ANNUAL GENERAL MEETING of the Company being held on Monday. the 30th September, 2013 at 8.30 am. at Morya Landmark II, Ground Floor, New Link Road, Andheri (West) Mumbai - 400 053. or any adjoumment thereof As Witness my hand / our hand this__________day of____________2013

* Applicable for investors holding Shares in electronic form** Strike out whichever is not applicable

Note :-

The proxy in order to be effective, should be duly stamped, completed and signed must ne deposited at the Registered Office of the Company at Morya Landmark II, Ground Floor, New Link Road, Andheri (West) Mumbai - 400 053. not less than 48 Hours of before the time for holding the Meeting. The Proxy need not be a Member of the Company.

Signature_______________________

AffixRs.1

RevenueStamp

BOOK POST

U. C. P.

if undelivered Please return to :BIRLA CAPITAL AND FINANCIAL SERVICES LIMITEDMorya Landmark II, Ground Floor, New Link Road, Andheri (West) Mumbai - 400 053

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