teamwork multiplies our success on multiple fronts

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Directors' Report For The Financial Year 2013 -14

To the Members,

thYour Directors are pleased to present the 28 Annual Report of the Company together with the Statement of Profit and Loss for stthe year ended 31 March, 2014 and the Balance Sheet as on that date.

Operating Results

Gross Income :

Financial Position

Other Selected Data

a) Fee based – Merchant Banking and Advisory fees 532.00 491.24

b) Income from Securities, Lease and Hire Purchase and other Income 62.62 58.53

Total 594.63 549.77

Profit before Provisions, Depreciation, Interest and Tax 442.69 428.51

Provisions 51.17 7.31

Depreciation 2.82 2.80

Interest - 0.01

Profit before Tax 388.70 418.39

Profit after Tax 265.28 296.00

Equity Share Capital 58.03 58.03

Reserves and Surplus 922.55 833.79

Earnings per Share (Rs.) 45.71 51.00

Return on Equity 27% 33%

Dividend per Share (Rs.) 26.00 26.00

Book Value per Share (Rs.) 164.22 151.44

Performance Highlights

Year ended March 31 2014 2013

(Rupees in Crs.)

Some major Performance Highlights are :

Awards & Recognition

Out of the current year’s profits, the Directors propose that a sum of Rs. 26.53 Crs. be transferred to the General Reserve. During

the year, the Board declared an Interim Dividend of Rs.26 per share on 27th March, 2014. The Directors propose that the Interim

Dividend of Rs.26 per share be declared as the Final Dividend.

Your Company continued to receive both domestic and international awards during the calendar year 2013, the most

prominent being:

• IFR Asia ‘India Loan House of the Year’ 2013 for the 5th consecutive year

• Thomson Reuters PFI - Industry Deal of the Year Award for 2013 (Asia-Pacific) for Tata Steel’s 6 MTPA Green field integrated

steel plant in Odisha.

• Euromoney Project Finance Asia Pacific Mining & Metals Deal of the Year 2013 for Tata Kalinganagar (Tata Steel Odisha)

• Business World-Grant Thornton's 'Top INR Bonds & Loan Deal-maker of the Year' award for maximum issues in 2013

• "Deal of the Year" Award for 2014 from M&A International

Your Company received top rankings from many ranking agencies. Significant among them are:

• Thomson Reuters-Project Finance International

• No. 1 Global Project Finance Book Runner with a market share of 8.3%

• No. 2 Global Mandated Lead Arranger with a market share of 4.9%

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Directors' Report For The Financial Year 2013 -14 (contd.)

•

• No.1 Book Runner Asia Pacific & Japan with market share of 26.4%

• Dealogic

• No. 1 Global Mandated Lead Arranger for Global Project Finance Loans for 5th consecutive year with a market share

of 5.7%

• No. 1 Global Arranger of Project Finance Loans for the 5th successive year with a market share of 5.7%

• No. 1 Financial Advisor of Global Project Finance Loans, for the 4th successive year with a market share of 13%

• No. 1 Asian Project Finance Loans for the 5th successive year with a market share of 23.6%

• Bloomberg League Tables

• No. 1 Mandated Lead Arranger Asia Ex-Japan Loans with a market share of 7.3%

• No.1 Book Runner Asia Ex-Japan Loans with a market share of 11%

• No. 1 India Loans Mandated Lead Arranger (both INR and foreign currencies) with a market share of 40.4%

• No.1 India Loans Mandated Arranger (INR) with a market share of 58.4%

• Prime Database

• Ranked No. 1 IPP in terms of number of issues handled for FY 2014 in India

• Ranked No. 2 in terms of total amount raised through Rights Issuances league tables for FY 2014

Management Discussion and Analysis is annexed to and forms part of this report (Annexure ‘A’).

The Directors’ Report on Corporate Governance for the year 2013-14 is attached (Annexure ‘B’).

The performance of the five subsidiaries during the year 2013-14 is as follows :-

A brief summary of the financial highlights in the FY 2013-14 is given hereunder:

No. 1 Mandated Arrangers Asia-Pacific & Japan with market share of 16.1%

Management Discussion and Analysis

Corporate Governance

SUBSIDIARIES

1. SBICAP Securities Limited (SSL)

Total Income 79.03 69.60

Expenses 87.88 65.91

Profit/(Loss) Before Tax (8.85) 3.69

Profit/(Loss) After Tax (8.19) 2.43

(Rupees in Crs.)

Particulars 2012-132013-14

• On the Institutional business side, SSL has ramped up its sales and research teams and set up an exclusive FII desk to cater

to institutional investors. SSL’s research now covers all key sectors and most NIFTY stocks.

• With ramp up of operations, the Institutional market volumes for the year increased by 25.16% and the share of DII cash

market volumes increased by 35 basis points.

• Despite a decline in the overall retail market volumes in the financial year, SSL was able to grow its Retail topline by about

9% over the previous year.

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(Rupees in Crs.)

2012-132013-14

Fee Income 3.04 16.89

Other Income 0.57 0.37

Gross Income 3.61 17.26

Expenses 4.22 3.48

Profit/(Loss) Before Tax (0.61) 13.78

Profit/(Loss) After Tax (0.56) 10.76


(Rupees in Crs.)

2012-132013-14

Fee based – Trustee Remuneration Fees 18.89 13.61

Other Income 1.85 1.35

Total Income 20.74 14.96

Expenses 7.35 3.81

Profit/(Loss) Before Tax 13.39 11.15

Profit /(Loss) After Tax 8.81 7.52


• New client acquisition remained a key focus area for SSL. With an increase of 70% over the new clients acquired in the

previous year, the total new client acquisition in the year was at a record high.

• SSL has made significant investments in its various growth initiatives which has lowered PAT but enhanced wherewithal for

future growth.

A brief summary of the major financial highlights is as under:

2. SBICAP (UK) Limited (SUL)

The Company earned Income of GBP 330,050 vis-a-vis the previous year level of GBP 1,903,461. The Company suffered a loss of

GBP 32,971 as against a PAT of GBP 1,164,337 during the previous year.

A brief summary of the financial highlights in the FY 2013-14 is given hereunder :

3. SBICAP Trustee Company Limited (STCL)

During the year the Company registered encouraging growth in gross Income of 38.64% and has also registered growth in

profit after tax of 17.15% as compared to previous year.

Presently, the Company is undertaking various Corporate Trusteeship activities viz. Security Trusteeship, Security Agent and

Safe Custody of Documents, Debenture/Bond Trusteeship, Escrow Agent, Escrow Trusteeship, Share Pledge Trusteeship,

Alternate Investment Fund Trusteeship etc. It proposes to undertake various other activities like Role of Facility Agent, Will

management and Will related Trusteeship etc.

During the year, the Company made a net loss of Rs.34,75,948/- due to payment of stamp duty and registration charges for

increase of the authorised share capital from Rs.25 crores to Rs.100 crores and employee cost. The authorised share capital of

the Company was increased to Rs.100 crores as the Company is in the process of acting as Sponsor/Asset Management

Company for the Alternative Investment Funds being set up with DFID and SBI Mutual Fund.

4. SBICAP Ventures Limited (SVL)

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(Rupees in Crs.)

2012-132013-14

Fee Income 1.34 -

Other Income - -

Gross Income 1.34 -

Expenses 4.14 3.09

Profit / (Loss) Before Tax (2.81) (3.09)

Profit / (Loss) After Tax (2.93) (3.10)


5. SBICAP (Singapore) Limited (SSGL)

A brief summary of the major financial highlights is as under :

For facilitating underwriting, additional Capital of SGD 3 million was infused in SSGL during the year.

DIRECTORS

During the year under review, the following changes took place among the Directors of the Company :-

• Smt. Arundhati Bhattacharya resigned as Managing Director & CEO with effect from 2nd August, 2013.

• Shri Pratip Chaudhuri resigned as Director and as Chairman with effect from 30th September, 2013.

• Shri V.G. Kannan was appointed as Managing Director & CEO with effect from 8th October, 2013.

• Smt. Arundhati Bhattacharya was appointed as Director and as Chairman with effect from 25th October, 2013.

The Board extended a hearty welcome to Smt. Arundhati Bhattacharya as Director and as Chairman, and Shri V.G. Kannan as

Managing Director & CEO of the Company, and placed on record its deep appreciation to Smt. Arundhati Bhattacharya and

Shri Pratip Chaudhuri, for their valuable contributions during their tenure as Managing Director & CEO and Chairman,

respectively of the Company.

Shri D. Sundaram and Shri Ashok Kini, Directors retire by rotation at the 28th Annual General Meeting (AGM) of the Company.

Shri D. Sundaram has advised that he does not propose to seek re-election as an Independent Director at the ensuing AGM, as

he has been on the Board of the Company for over 12 years. The Board places on record its deep appreciation to Shri D.

Sundaram, for his valuable contributions during his tenure as Director and also as the Chairman of the Audit Committee,

Nomination and Remuneration Committee and HR Committee of the Company. Shri Ashok Kini, being eligible, has offered

himself for re-appointment.

The Company has received notices under Section 160 of the Companies Act, 2013 from State Bank of India (the member),

together with necessary Deposit, proposing the candidatures of Shri Bansi S. Mehta, Shri Narayan K. Seshadri and Smt. Aruna

Jayanthi for appointment as Independent Directors at the ensuing 28th AGM. Shri Bansi S. Mehta, Shri Narayan K. Seshadri and

Smt. Aruna Jayanthi, non-executive Directors have submitted declarations under Section 149(7) of the Companies Act, 2013,

confirming that they meet the criteria of independence prescribed for independent directors as stipulated under Section

149(6) of the said Act.

Subsequent to the year end, the following changes took place among the Directors of the Company :-

• Shri S. Vishvanathan resigned as Director consequent to his superannuation from the services of State Bank of India on

30th April, 2014.

• Shri V.G. Kannan resigned as Managing Director & CEO and as Director with effect from 17th July, 2014, consequent to his

promotion as Managing Director & GE (A&S), State Bank of India from that date.

• Shri V.G. Kannan, Managing Director & GE (A&S), State Bank of India was appointed as SBI Nominee Director with effect

from 23rd July, 2014, pursuant to Article 139(i) of the Articles of Association of the Company, Section 35A of the State Bank

of India Act, 1955, and Section 161 of the Companies Act, 2013.

• Shri Rajnish Kumar was appointed as Director and as Managing Director & CEO of the Company with effect from 31st July,

2014, pursuant to Articles 140, 168 and 169 of the Articles of Association of the Company, Section 35A of the State Bank of

India Act, 1955, and Sections 161 and 196 of the Companies Act, 2013 and as whole-time Key Managerial Personnel

pursuant to Section 203 of the Companies Act, 2013.

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The Board extends a hearty welcome to Shri V.G. Kannan as SBI Nominee Director and Shri Rajnish Kumar as Managing Director

& CEO of the Company and places on record its deep appreciation to Shri S. Vishvanathan and Shri V.G. Kannan for their

valuable contributions during their tenure as Director and as Managing Director & CEO respectively, of the Company.

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

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

(ii) Appropriate accounting policies have been selected and applied consistently and the judgements and estimates that have

been made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st

March, 2014 and of the profit or loss of the company for the year ended 31st March, 2014;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the

provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting frauds and

other irregularities;

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

In terms of the above Rules issued by the Central Government, the following information is furnished:-

Conservation of Energy and Technology Absorption

Since the Company is engaged in Merchant Banking and Advisory Services, there is no information to report under this head.

Foreign Exchange Earnings and Outgo

During the year under review, the Company earned foreign exchange equivalent to Rs.52.97 Crs. towards advisory fee from

overseas clients and reimbursement of expenses. The total foreign exchange expended amounted to Rs.4.60 Crs. on account of

foreign travel and other expenses.

Being conscious of its obligation to society at large, your Company had undertaken the below mentioned activities during the

Financial Year 2013-14. The focus was to extend a helping hand to the under privileged, differently abled and the populace

affected by the natural calamity in Uttarakhand.

• Contributions to the Prime Minister’s Special Relief Fund for rehabilitation and rebuilding efforts post the devastating

floods in Uttarakhand in 2013.

• Donation of a 32+1 seater Eicher school bus to Little Flower Convent School for the Blind & Deaf in Chennai. The School is

a registered society working to assist underprivileged visually impaired children from the weaker sections of society and

provide them vocational training and career guidance. The bus will be utilized for transport of the school’s children.

• Funding support to a charity clinic for diabetic children run by the Hirabai Cowasji Jehangir Medical Research Institute

(HCJMRI) at Jehangir Hospital Pune. The Institute is involved with health related community programs and runs a charity

clinic, providing care for over 200 underprivileged children with insulin dependent diabetes. The clinic, apart from

assisting in diagnosis, medicine, counseling etc also aims to change attitudes and educate young patients and their

parents on how to cope with diabetes. The Company contributed Rs 20,00,000/- towards the medical expenses,

counselling and care of 50 underprivileged diabetic children for a period of one year.

AUDITORS

M/s. Shah & Taparia, Chartered Accountants, were appointed as the Statutory Auditors of the Company for the financial year

2013-14, by the Comptroller & Auditor General of India (CAG), under the provisions of Section 619(2) of the Companies Act

1956. They will hold office till the ensuing Annual General Meeting of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT

COMPANIES (DISCLOSURES OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

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COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA

PARTICULARS OF EMPLOYEES

ACKNOWLEDGEMENT

Comments of the Comptroller & Auditor General of India as per report dated 24th June, 2014, submitted under Section 619(4)

of the Companies Act, 1956 on the accounts of the Company for the year ended 31st March, 2014 is enclosed. It is reported

therein that they have decided not to review the report of the Statutory Auditor on the accounts of the Company for the year

ended 31st March, 2014 and as such have no comments to make under section 619(4) of the Companies Act, 1956.

The information as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of

Employees) Amendment Rules, 2011, as amended, is given in Annexure ‘C’.

The Board of Directors would like to express its thanks to SEBI - the Company's Regulator, and to the Comptroller & Auditor

General of India (CAG), for the advices and guidance received. The Board is also grateful to the State Bank of India and its group

companies for providing significant business support, which has been mutually rewarding.

The Board of Directors places on record its appreciation for the valued support from clients for the company, which has been

very crucial for its standing in the industry. The Board would also like to thank the investing community, intermediaries in the

investment-banking field and the statutory authorities for the co-operation extended from time to time. The Board also places

on record its deep appreciation for the dedication and commitment of its employees at all levels and looks forward to their

continued contribution in the journey ahead.

For and on behalf of the Board of Directors

(Arundhati Bhattacharya)

Chairman

Place : Mumbai

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Annexure A

Management Discussion and Analysis

1. Macroeconomic Review

At the beginning of the year, the decision of the US Federal Reserve to wind down its asset purchase program weighed heavily

on global markets and economic sentiments. The prospect of reduced stimulus and interest rate cycle reversal triggered sell-off

in stocks, bonds and currencies across the emerging markets, including India. Emerging market economies with structural

issues (high current account deficit, low growth, high inflation and ballooning fiscal deficit, etc.) were more vulnerable. The

currencies of Indonesia, South Africa, Brazil, Thailand, Turkey, Argentina and India were thus hammered down to multi years

low.

Owing to global macro factors and unfavorable domestic environment, Indian markets underperformed in the first half of fiscal

with Sensex and Nifty touching lows of 17448.71 and 5118.85 in the month of August 2013. Within sectoral indices cyclical

(high beta) Capital Goods, Banks, Realty, Power and Metal indices were badly hit, touching lows between 2 to 5 years. The 10-

year G-sec yields, which spiked 200 bps over three months till August, negatively impacted sentiments and raised short-term

borrowing risks.

A weak beginning to FY2014, was followed by strong FII inflows in February and March 2014 with inflows of Rs.264 billion. As

the year came to a close, the macroeconomic environment improved, as the government contained the current account deficit

and inflation. RBI intervention helped reverse the slide of the rupee.

Nifty and Sensex hit their all time high of 6730.05 and 22253.78 on March 31, 2014. Major contributors to this rally were IT,

Pharmaceuticals and Auto stocks, on the back of rupee depreciation and an uptick in global demand environment, whereas

Realty and PSU banks were the worst affected.

2. Investment Banking Strategies

During the year, the Company continued its thrust on synergy with State Bank of India and its Associate Banks.

The Capital Markets Group offers a bouquet of services such as pre-IPO advisory, valuation analysis, ESOP advisory, etc., and is

constantly exploring newer opportunities such as open offers, buy-backs, de-listings and QIP / IDR / GDR / FCCB.

The Debt Capital Markets Group has developed and strengthened relationships with almost all the key institutional investors

and has also developed the framework for executing structured finance transactions.

The Infra Group mainly concentrates on Infrastructure Industry segment and has launched newer businesses such as Arranging

of Private Equity, Advisory roles as well as Arrangement of Finance for M&A and Financial Restructuring, in a focused manner.

Besides continuing Advisory and Credit Syndications for large infrastructure projects, the Group has established relationships

with foreign lenders for ECB Syndications.

The Non-Infra Group has allocated various non-infra sectors amongst various teams so as to tap business relating to M&A, PE

and opportunities available in sale of distressed assets in a more focused manner.

3. SBICAP’s Performance

The performance of your Company during the year 2013-14 has been discussed hereunder :

3.1 Quantitative Performance

The Company booked a fee based income of Rs. 532 Crs. during the year and Profit after Tax (PAT) was Rs.265.28 Crs.

The performance in respect of various activities is as under:

3.1.1 Merchant Banking & Advisory Fees

3.1.1.(a) Capital Markets Group- Equity Capital Market (ECM)

The Indian equity markets faced one of the difficult years in FY 14, as the country witnessed an economic slowdown, resulting in

low investor sentiment and movement of capital out of equity to other asset class like gold and government bonds. With both

domestic as well FII shunning the markets, the Rupee witnessed a free fall to Rs. 68.80 against the USD in August 2013, post

which it recovered to an extent.

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Annexure A (contd.)

Under this tough market conditions, the Capital Markets Group (CMG) has been able to earn a fee income of Rs. 20.8 Crs in FY

14, an increase of 60% YoY. A total of 3 companies raised an amount of Rs. 8375 Crs through IPO/FPO out of which SBICAP was

involved in raising 83% of the total issue size. SBICAP was ranked 2nd in terms of the issues handled in the IPO/FPO market.

SBICAP was also ranked 2nd in the Rights issues market in terms of both size as well as the number of issues, assisting firms in

raising over Rs. 2400 Crs, representing 52.7% of overall amount raised through Rights offer as per league tables published by

Prime Database.

The group was also instrumental in setting up the Bharatiya Mahila Bank (BMB). Bharatiya Mahila Bank is the first Bank to be set

up in the country since 2004 and the first public sector bank set up by the Government of India. CMG advised the Bank on its

business model, selection of the core team, IT strategy, IT implementation, product roadmap, setting up forex and treasury

desks, branch rollout strategy, ATM network besides the launch marketing campaign. The CMG is actively on the lookout for

more such opportunities.

3.1.1(b) Debt Capital Markets – DCM

During FY14, the Group has handled debt issue (both Private and Public Issues) aggregating to around Rs. 69,964 crores. On the

Public Issue side, SBICAP handled three Public Issues of Tax Free Bonds as well as one public issue of taxable bonds from the

private sector in the current year. SBICAP was associated with the public issue of tax free bonds of IIFCL, IRFC and NTPC as the

lead merchant bankers to the issue. On the Private Placement side, SBICAP placed debt issues aggregating to Rs. 55,313 crores.

The debt distribution arm at SSL was further strengthened to provide a one-stop solution to the investors. The placement team

at SSL now provides complete solutions viz. primary issues and support for purchase/sale in secondary market to the

institutional market players.

As a part of the strategy to provide complete solutions to the corporates, we are proud that SBICAP is the first Indian Investment

Bank to help the companies raise funds through the international market via foreign currency bond issuances. During the

current year, SBICAP launched two foreign currency bond issues – one in US dollar issuance by the leading bank in the country

i.e. SBI and the other in SGD for a leading private sector player.

3.1.1(c) Infrastructure Group

After the global downturn the previous year, which saw the Indian debt syndication market decline by as much as 50%, the

market declined by a further 11% in CY 2013, with a drop in both the number of deals as well as the volume. However, despite

the challenges posed due to the macroeconomic environment, the Group’s fee income for the financial year 2013-14 posted a

4.21% increase over the previous year.

In the Indian loan arrangers’ market, the Group was able to maintain its standing as Rank No. 1 in the Global Project Finance

Loans Rankings by Dealogic along with Rank No. 1 in Indian Loans Mandated Arranger league tables by Bloomberg for the 5th

consecutive year, with a market share of 40.4% in CY 2013, providing testimony to the Group’s enduring perception as the go-to

loan house. The Company has also had the distinction of being accredited as India Loan House for CY 2013 for its leadership in

Loan Advisory by IFR Asia - Thomson Reuters, again for the 5th successive year since 2009, thereby consolidating its long-

standing leadership position.

Further, the Group achieved the following awards and rankings in FY 2013-14 :–

• Awarded Top INR Bonds & Loan Deal-maker of the Year for maximum issues in CY 2013 by BW-Grant Thornton

• Ranked by Dealogic as

4No.1 Arranger of Global Project Finance Loans

4No.1 Financial Adviser of Global Project Finance Loans

4No.1 in Asian Project Finance Loans

4No.2 Provider of Global Project Finance Loans

• Ranked by PFI – Thomson Reuters as

4No.1 Global Bookrunner

4No. 1 Mandated Arrangers Asia Pacific & Japan

4No.1 Book Runner Asia Pacific & Japan

4No.2 Global Mandated Lead Arranger

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Annexure A (contd.)

• Ranked by Bloomberg as

4No.1 Book Runner Asia ex-Japan Loans

4No.1 India Loans Mandated Arranger (INR).

The Tata Steel Odisha project was awarded PFI Industry Deal of the Year - 2013 by Thomson Reuters as well as Project Finance thAsia Pacific Mining & Metals Deal of the Year 2013 by Euromoney. It also had the distinction of being ranked 5 in the Global top

15 deals by Dealogic, Global top 10 deals by PFI – Thomson Reuters and Asia Pacific Ex -Japan top 10 deals by Bloomberg. It was ndranked 2 in the top 10 Asian deals by PFI – Thomson Reuters.

th thONGC Petro-additions Limited (OPaL) was ranked 11 in the Global top 15 deals by Dealogic, ranked 9 in the Global top 10 thdeals by PFI – Thomson Reuters and ranked 4 in the top 10 Asian deals by PFI – Thomson Reuters.

It is noteworthy that Tata Steel Odisha and OPaL were the only two Indian deals to feature in the global lists.

During the year, the aggregate banking facilities tied up, including those under the CDR mechanism, stood at Rs. 2,39,751 crs,

the highest ever achieved by the Group. While Tata Steel was the largest deal in INR market, the SBLC backed USD 1.9 bn ECB

facility for Aban Holdings Pte was the largest USD fund raising by any intermediary in India. The Zamin-Amapa deal in Brazil

helped launch the Group's project financing foray in Latin America, increasing the reach of our operations.

The Group closed 39 restructuring deals under the CDR mechanism aggregating to Rs. 92,875 crs during the year with lenders

actively referring many complex cases to the Group. Bombay Rayon was the fastest CDR mandate cleared by the CDR cell since

inception, with a 68 day completion time.

3.1.1(d) Non-Infra Group

The Non-Infrastructure Group successfully closed 21 transactions in the financial year in various areas of M&A Advisory

services, acquisition financing, debt syndication, debt restructuring feasibility services and business valuations.

During the year, the Group has successfully closed three notable cross-border deals. One of the deals involved Buy-side

advisory services to Kokuyu, a USD 3 bn Japanese conglomerate, in its acquisition of an Indian paper stationery manufacturer

Riddhi Enterprises. SBICAP won the prestigious 'Deal of the Year Award' in M&A International amongst 40 countries across the

globe for this deal.

The Group continues leveraging the funding strength and domestic reach of SBI coupled with the global reach and platform

provided by M&A International to explore both organic and inorganic growth opportunities.

3.1.2 Income from Securities - Treasury & Investments

stThe treasury income for the year ended 31 March, 2014 was Rs. 43.92 Crs as against Rs. 45.97 Crs in the corresponding period

last year. During the period, investments were done in the debt with focus on maximizing post-tax returns. During the year we

have locked funds in Fixed Maturity Plans of Mutual funds to take advantage of indexation benefits, thus lowering the incidence

of tax on income from investments. Anticipating the decline in interest rates long term funds were invested in tax free bonds

and Gilt Fund.

3.2 Qualitative Performance

3.2.1 Human Resources

The Company's mission to provide credible, professional and customer focused world class investment banking solutions has

been endorsed by the several awards and recognitions received by the Company.

The Company believes that “Human Resources” are the critical resource for achieving its objectives and values the resources as

“Intellectual Capital”. The Human Resources function in the Company focuses on transformational rather than transactional

processes and continuously strives to align and benchmark its HR policies/practices to the best industry practices. The Human

Resource function understands the needs of the product groups and collaborates with them, thus contributing to the

achievement of the business objectives of the Company.

The organization is growing rapidly and to keep pace and fuel the growth, experienced professionals were hired from the

market and through campus recruitments from the premier B-schools. Our people integration model ensures minimum

process time to board people in the Company for faster time to productivity.

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Annexure A (contd.)

Diverse set of professionals are integrated within the Company and by fostering performance behavior the performance driven

culture is well ingrained in the Company. Performances of individuals are differentiated and “Star Performers” who have

contributed significantly to the business goals of the Company are recognized. The employees are rewarded monetarily as well as

by investing in them for their skills development. During the year 2013-14, 37 officials attended Overseas Training/Conferences/

Seminars/Forums/Summits.

The work environment embraces diversity. The Company offers a challenging work environment, fostering a stimulating work

culture of innovation and individual growth.

The HR initiatives for talent development through learning and development programmes have ensured that the Company has

the right competencies and skill sets in its workforce to meet the challenging business objectives.

Focus on Talent Management, Competency Development, 360 Degrees Feedback Survey, Career Progression, Market Related

Compensation and Benefits has helped the Company to attract, motivate and retain talent as well as build a robust pipeline of

future leaders for the Company.

We are an employer providing equal opportunity to all the employees.

3.2.2 Information Technology

In the last financial year Information Technology Group has taken significant steps in enhancing the organisational efficiency.

Business Process Re-Engineering has been performed to enhance the efficiencies of the processes and procedures. An ERP

implementation covering Finance, HR and Project Management is in progress. A full fledged Unified Communication Solution

covering Video, Audio and Presence has been implanted to enhance the productivity. Continuous enhancements are done in

Enterprise Applications to make them more business centric.

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Annexure B

Corporate Governance Report

i) Composition of the Board

The principles of Corporate Governance are followed in letter and spirit reflecting our deep belief in such principles and the

pedigree of our parent shareholder. For your Company, Corporate Governance is not just an objective in isolation but a means

to an end - "To be the Best India based Investment Bank".

As on 31st March, 2014, the Board of Directors comprised ten Directors out of whom six are independent. Given hereunder is

the composition of the Board of Directors along with brief profiles of the Directors :

1. Smt. Arundhati Bhattacharya, Chairman [SBI Nominee]: Smt. Bhattacharya is the Chairman of State Bank of India (SBI) and

is also Head of the entire State Bank Group. Earlier she was MD & CFO of SBI. Prior to this, she was MD & CEO of SBI Capital

Markets Ltd. from 21st August, 2012 to 2nd August, 2013. Before her assignment in SBICAP, she was Deputy Managing

Director and Corporate Development Officer of SBI. She joined the Bank in the year 1977 and since then has held various

assignments spanning Credit, Forex, Treasury and Retail Operations. She has also had a stint in the Bank’s New York office

where she was in charge of monitoring branch performance, overseeing External Audit and Correspondent Relations. In

her extensive service in the Bank she has had the opportunity of working in Metro, Urban and Rural areas, criss-crossing

the length and breadth of the country. She has handled large Corporate Credit as well as initiatives like Financial Inclusion

and financing of Self Help Groups. She was involved in setting up several new companies / initiatives of the Bank including

SBI General Insurance, SBI Macquarie Infrastructure Fund, SBI SG Global Securities Services, etc., as well as the launch of

new IT platforms such as Mobile Banking and Financial Planning in the Bank.

2. Shri S. Vishvanathan, Non Executive Director [SBI Nominee]: Shri Vishvanathan was the Managing Director & GE

(Associates & Subsidiaries) of State Bank of India. He has over 37 years of Banking experience with SBI. He was appointed

as Managing Director of SBI with effect from 9th October, 2012. Earlier, he was Dy. Managing Director (Mid Corporate), SBI.

Prior to that, he was Managing Director & CEO of SBI Capital Markets Limited (SBICAP) for more than three years from June

2009 to August 2012. Earlier, he was Chief General Manager of State Bank of India’s North Eastern operations. He has

served the bank in several important capacities which include an assignment in New York Branch and stints as Regional

Manager and Deputy General Manager in Delhi Circle and as General Manager (Global Markets).

3. Smt. Bharati Rao, Non Executive Director [SBI Nominee]: Smt. Rao has over 37 years of experience in the banking sector.

She retired from State Bank of India in October, 2008. During her tenure with the Bank, she had held various responsible

positions. Her 36 years in the Bank have seen a range of assignments both in India and abroad in areas like Commercial

Banking, Project Finance, and International Banking. She was Dy. Managing Director & Chief Credit Officer, SBI, Corporate

Centre, Mumbai with an additional charge as Dy. Managing Director and Group Executive (Associate Banks) and Dy.

Managing Director & CDO at the time of retiring from the Bank’s service.

4. Shri Bansi S. Mehta, Non Executive Independent Director: Shri Mehta is a well-known practicing Chartered Accountant

and is a Senior Partner of Bansi S. Mehta & Co., Chartered Accountants. Shri Mehta has rich experience of over 54 years in

the fields of financial management, taxation, accounting and auditing.

5. Shri D. Sundaram, Non Executive Independent Director & Chairman of the Audit Committee: Shri Sundaram is the Vice

Chairman and Managing Director of TVS Capital Funds Ltd. and has over 37 years of experience in the areas of Finance and

Accounting. He was with the HUL group since 1975. He was seconded twice to Unilever, London. He had held important

positions such as Commercial Manager & Treasurer, Finance Member– TOMCO Integration Team, Finance Director BBLIL

and Sr. Vice President– Finance, Central Asia & Middle East Group and was the Vice Chairman & CFO of HUL.

6. Shri Narayan K. Seshadri, Non Executive Independent Director: Shri Seshadri is the Chairman and CEO of Halcyon Group

an Investment Advisory and Management Services enterprises specializing in 'turnaround' and 'turn up' activities. He is a

Chartered Accountant. He headed Andersen and KPMG Business Consulting businesses before founding Halcyon. He

carries a rich experience of over 29 years in Finance, Accounts, Audit, Advisory and Management Services. His experience

ranges across industries in different countries.

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Annexure B (contd.)

7. Shri Ashok Kini, Non Executive Independent Director: Shri Kini has over 39 years of experience in the Banking Sector. He

joined State Bank of India (SBI) in December 1967 and retired in December 2005. During his tenure with SBI, he had held

various responsible positions, including those of Managing Director & GE (National Banking), Dy. Managing Director –

Information Technology Dept., Chief General Manager – Information Technology Dept., Chief General Manager –

Technology Planning, General Manager (Commercial Banking), General Manager (Development & Personal Banking), Dy.

General Manager – Industrial Finance - Dept., and Dy. General Manager – Computer Planning & Services.

8. Shri Pradeep Kumar Sarkar, Non Executive Independent Director: Shri Sarkar has over 35 years of experience in the

Banking Sector. He joined State Bank of India (SBI) in November 1967 and retired in November 2001. During his tenure

with SBI, he had held various responsible positions in SBI and SBI Capital Markets Limited (SBICAP), including those of

Dy. Managing Director & GE (International Banking Group), Dy. Managing Director & Chief Financial Officer, Chief General

Manager - Kolkata, General Manager–SBICAP, New Delhi Regional Office, General Manager-Corporate Finance, SBICAP,

Dy. General Manager-Cadre Management and Dy. General Manager-Main Branch, Kolkata.

9. Smt. Aruna Jayanthi, Non Executive Independent Director: Smt. Jayanthi is the Chief Executive Officer (CEO) of Capgemini

India. Capgemini India is the Capgemini Group’s largest delivery centre and main innovation hub with over 36,000

employees. As the CEO of Capgemini India, Smt. Jayanthi manages the operations of all the business units in India

covering consulting, technology and outsourcing services. In addition, she plays a key role in Leadership Development

and building alignment between HR and Business. She has over 26 years experience in the IT services industry and has

worked in key roles in multinational and Indian system integrator companies. She holds a Masters in Management Studies

in Finance from Narsee Monjee Institute of Management Studies (NMIMS). She has been featured as one of the ‘Most

Powerful Women’ in India Inc. by India’s leading business magazine ‘Business Today’ in its eighth annual list (2011). She is

also ranked 4th in the List of 50 Most Powerful Indian Women by Fortune India magazine.

10. Shri V. G. Kannan, Managing Director & CEO [SBI Nominee]: Shri V.G. Kannan has assumed charge as MD & CEO of SBI

Capital Markets Ltd. on 8th October, 2013. Earlier, he was President & COO of SBICAP from 27th August, 2012. Prior to his

assignment in SBICAP, he was CGM (Mid Corporate Group), SBI Corporate Office at Mumbai. He joined SBI in the year

1978, and since then, he has held various assignments spanning Credit, Forex and Investments and Retail Banking. He has

had considerable experience of over 10 years in Credit and over 16 years in various aspects of Treasury and was actively

involved in the setting up of the first Integrated Forex and Treasury Module of the Bank. He was head of the Bank’s Forex

Department and later on moved back to credit. His assignments included heading the Delhi Mid Corporate Region as

General Manager and DGM Commercial Banking, Hyderabad. He has had a stint in Retail Banking having served as

General Manager of Bank’s Retail Network in Chennai for 2 years. He also worked in Hong Kong as Chief Manager Money

and Treasury desk.

The Chairman has been appointed by State Bank of India (SBI) in terms of Articles 139(ii) & 157 of the Articles of Association of

the Company.

The Non-Executive Nominee Directors have been appointed by SBI in terms of Articles 139 and 140 of the Articles of

Association of the Company.

The Non-Executive Independent Directors were appointed as Directors liable to retire by rotation under Section 255 of the

Companies Act 1956.

The Managing Director & CEO has been appointed by SBI in terms of Article 168 of the Articles of Association of the Company.

The Board of Directors focuses on monitoring the business operations and the development of business strategies, while the

task of reviewing matters such as status of overdues, status of litigations etc., are delegated to a Committee of Directors (COD)

constituted for the purpose by the Board.

The Board has evolved a Calendar of Reviews, which has identified the various reports/reviews to be submitted on a periodical

basis to the Board/COD/Audit Committee and the said Calendar of Reviews is strictly followed.

ii) Tenure

iii) Responsibilities

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Annexure B (contd.)

Smt. Arundhati Bhattacharya,

Chairman (SBI Nominee) - (appointed w.e.f. 25th October, 2013)

Shri Pratip Chaudhuri,

Chairman, (SBI Nominee) 2 (resigned w.e.f. 30th September, 2013)

Shri S. Vishvanathan,

Nominee Director, (SBI Nominee) 6

Smt. Bharati Rao,

Nominee Director, (SBI Nominee) 4

Shri Bansi S. Mehta,

Non Executive Independent Director 4

Shri D. Sundaram,


Shri Narayan K. Seshadri,


Shri Ashok Kini,


Shri P.K. Sarkar,


Smt. Aruna Jayanthi,


Smt. Arundhati Bhattacharya,

Managing Director & CEO, (SBI Nominee) 3 (resigned w.e.f. 2nd August, 2013)

Shri V. G. Kannan,

Managing Director & CEO, (SBI Nominee) 3 (appointed w.e.f. 8th October, 2013)

2013-14Name of the Director Number of Board Meetings attended

iv) Role of the Independent Directors

v) Board Meetings

The Independent Directors play a very crucial role in the Board meetings and their wide experience, expertise and knowledge of

economics, finance, capital markets, taxation, accounting, auditing etc., have benefited the Company immensely.

During the year under review, seven Board Meetings were held and the attendance record of each Director at the said Board

Meetings is given hereunder :-

vi) Composition and role of the Audit Committee and the scope of Internal Audit Function

vii) Strengthening of the compliance systems

The Audit Committee comprising of Shri D. Sundaram and Shri Narayan K. Seshdadri, Independent Directors and

Shri S. Vishvanathan, SBI Nominee Director, with Shri D. Sundaram, Independent Director being the Chairman. The composition

of the Audit Committee as well as its role and functions are broadly in conformity with the stipulations of the Kumar Mangalam

Birla Committee Report on Corporate Governance, and Section 292A of the Companies Act, 1956.

The Company has set in place an effective system to ensure compliance with all the applicable Laws/Statutes and the same

is monitored by the Compliance & Risk Management Dept.

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Annexure B (contd.)

viii) Compliance with SEBI 's Prohibition of Insider Trading Regulations

ix) Directors are duly qualified to act as such

With a view to preventing insider trading, a suitable Code of Conduct has been set in place to regulate the dealings in securities

by all the employees of the Company and compliance with the same is monitored by the Assistant Vice President (Compliance

& Risk Management). The Code of Conduct of the Company is in conformity with the SEBI (Prohibition of Insider Trading)

Regulations, 1992.

As per the declarations submitted to the Company, all the Directors are duly qualified to act as such and none of them is

disqualified under section 274(1)(g) of the Companies Act, 1956. This aspect has also been verified by the Statutory Auditors of

the Company.

______________________________________________________________________

DECLARATION

I confirm that all Board Members and Senior Management have affirmed compliance with the Company’s Code of Conduct

for the financial year ended 31st March, 2014.

(Rajnish Kumar)

Managing Director & CEO

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Annexure C

Name

STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND COMPANIES (PARTICULARS

OF EMPLOYEES) RULES, 1975

Designation/

Nature of duties

Remuneration

(Rs.)

Date of

commencement of

employment

Qualification and

Experience/

Age – years

Last Employment

held, Designation

(A) Employed throughout the year and are in receipt of remuneration aggregating not less than

Rs. 60,00,000/- per annum

Shri Supratim Sarkar

Shri Rakesh Joshi

Shri Sanjeev Kumar

Agarwal

Shri Rajat Misra

Shri Vishal Gupta

Shri Mukul Modi

Shri Gopal Agarwal

Shri Rajesh Kumar

Agarwal

Executive Vice

President & Group

Head – Infra

Sr. Vice President

– Debt Capital

Market

Sr. Vice President -

Infra


Infra


Infra


Infra

Sr. Vice President –

Infra

Sr. Vice President –

Infra

1,04,78,665/-

62,57,406/-

67,12,687/-

68,94,519/-

69,58,924/-

60,29,649/-

64,10,187/-

64,14,785/-

7th Nov. 2000

5th April 2011

16th March, 2006

1st June, 1999

9th October, 2006

10th March, 2005

11th April, 2005

19th May, 2005

B.E. (Mech.

Engg.) M. Tech,

MBA, - 23 / 48

B. Sc. (Hons.),

CAIIB– Part I,

- 30/52

B.Sc. , B. Tech.,

DBF, ICFAI

- 26 /48

B. Tech (Mech.

Engg.), PGDBM

(Finance)- 20 /44

B. Chem., Engg,

MFM, Gen.

Management

Course IIM- 22/46

BE (Production

Engg.), BIT,

Ranchi, PGDBM

(Finance &

Marketing), CAIIB

- 24/46

CAIIB CA, CS,

ICWA,

B.Com(Hons)

– 20/42

JAIIB,CS,CA,

B.Com. – 23/45

IDBI LTD, DGM

J. P. Morgan

Services India

Private Limited,

Executive Director

IDBI Ltd., DGM

Sr. Engineer, BHEL

Advance Research

Project Div.

Reliance

Industries Limited,

DGM

Sterlite Industries

(I) Ltd

IDBI

IFCI Ltd

(B) Employed for part of the year and are in receipt of remuneration aggregating not less than Rs. 5,00,000/- per month

Nil

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Annexure C (contd.)

NOTES :

1) The above remuneration includes salaries, allowances, arrears of salary, leave encashment, performance linked variable

pay, monetary value of perquisites as per Income Tax Rules, reimbursement of Leave Travel Allowance and Medical

expenses claimed during the year, Company's contribution to Provident and Superannuation Funds.

2) Other terms and conditions of service include Company's contribution to Gratuity Fund.

3) The nature of employment – all employments are non contractual.

4) % of equity shares held by the employee in the Company within the meaning of sub-clause (iii) of clause (a) of Section

217(2A) of the Companies Act, 1956 – Nil.

5) The employees are not related to any Directors of the Company.


(Arundhati Bhattacharya)

Chairman

Place : Mumbai :

ndDate : 2 August, 2014

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Independent Auditors' Report

To the Members of SBI Capital Markets Limited

Report on the Financial Statements

Management's Responsibility for the Financial Statements

Auditor's Responsibility

Opinion

Report on Other Legal and Regulatory Requirements

We have audited the accompanying financial statements of SBI Capital Markets Limited (“the Company”), which comprise the

Balance Sheet as at March 31, 2014, and 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 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 mis-statement, whether due to fraud or error.

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 mis-statement.

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 mis-

statement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers

internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of 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.

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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

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

1. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report Amendment)

Order, 2004 (together “the Order”), 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement

with the books of account ;

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d. in our opinion, the Balance Sheet, 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;

e. on the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the

Board of Directors, none of the Directors is disqualified as on March 31, 2014, from being appointed as a Director in

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

f. as the Central Government is yet to notify Cess payable under Section 441 A, the reporting requirement under

Section 227(3) (g) of the Companies Act, 1956 does not arise.

For SHAH AND TAPARIA

Chartered Accountants

Firm's Registration Number:-109463W

Rakesh Kumar Joshi

Partner

Membership Number:102880

Place: - MUMBAI

thDate: - 12 April, 2014

Independent Auditors' Report (contd.)

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Annexure To The Auditors’ Report

i. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and the

situation of fixed assets.

b. All fixed assets, except certain leased assets were physically verified by the management in the current year in

accordance with a planned programme of verifying them which, in our opinion, is reasonable having regard to the

size of the Company and the nature of its assets. Certain leased fixed assets have not been physically verified where,

as per the terms of the agreement, the Company obtains confirmation from the lessee on the regular basis. As

informed no material discrepancies were noted on such verification.

c. Fixed assets disposed off during the period were not substantial and therefore do not affect the going concern

assumption.

ii. In respect of inventories

a. The securities held as stock in trade and in custody of the Company have been physically verified by the

management at reasonable intervals. In our opinion, the frequency of such verification is reasonable.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in

relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory and no discrepancies were noticed on comparing the

physical securities/statement from the custodian with book records.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or

unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act.

Accordingly sub clauses (b), (c), (d), (e), (f) and (g) of clause (iii) of the Order are not applicable.

iv. The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register

maintained under Section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable.

v. In our opinion and according to the information and explanations given to us, there is adequate internal control system

commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and

sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses

in the internal control system of the Company.

vi. According to the information and explanations provided by the management, we are of the opinion that the particulars

of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained

under section 301 have been so entered. Accordingly, sub clause (b) of clause (v) of the Order is not applicable to the

Company for the current period.

vii. The Company has not accepted any deposits from the public.

vii. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

viii. The provisions of Section 209(1) (d) of the Companies Act, 1956 are not applicable to the Company.

ix. In respect of Statutory Dues:

a. According to the information and explanations given to us, the Company is regular in depositing with appropriate

authorities undisputed statutory dues including provident fund, income-tax, sales-tax, service tax and other

material statutory dues applicable to it. The provisions of Investor Education and Protection Fund, wealth tax,

customs duty, excise duty and cess are not applicable to the Company in the current year.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident

fund, income-tax, service tax, sales-tax, cess and other undisputed statutory dues were outstanding, at the year end,

for a period of more than six months from the date they became payable.

c. According to the records of the Company, the dues outstanding of income-tax , sales-tax, wealth-tax, service tax,,

custom duty, excise duty and cess on account of any dispute, are as follows:

(Referred to in our report of even date)

Re.: SBI CAPITAL MARKETS LIMITED

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Annexure To The Auditors’ Report (contd.)

x. The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current

and immediately preceding financial year.

xi. According to the information and explanations given to us, and based on checks carried out by us, the Company has not

defaulted in repayment of dues to financial institutions or banks. The Company has not issued any debentures during the

year.

xii. According to the information and explanations given to us, the Company has not granted any loans and advances on the

basis of security by way of pledge of shares, debentures and other securities.

xiii. According to the information and explanations given to us, the provisions of Chit Funds or Nidhi or mutual benefit fund or

society are not applicable to the Company; accordingly clause (xiii) of the Order is not applicable to the Company.

xiv. In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the

information and explanations given to us, proper records have been maintained of the transactions and contracts and

timely entries have been made therein. The shares, securities, debentures and other investments have been held by the

Company, in its own name.

xv. According to information and explanations given to us, the Company has not given any guarantee for loans taken by

others from bank or financial institutions.

xvi. The Company did not have any term loans outstanding during the year.

xvii. According to the information and explanations given to us, and on an overall examination of the balance sheet of the

Company, funds raised on short-term basis have, prima facie, not been used during the year for making long-

term investments.

xviii. The Company has not made any preferential allotment of shares during the year.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any money through a public issue.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements

and as per the information and explanations given by the management, we report that no fraud on or by the Company has

been noticed or reported during the course of our audit.

For SHAH AND TAPARIA CO.


Firm Registration No.109463W

RAKESH KUMAR JOSHI

Partner

Membership No. 102880

Place: Mumbai

Dated: April 12, 2014

Name of the Statute Nature of the Dues Amount Period to which the Forum where the

(Rs. in Lacs) amount relates dispute is pending

Income Tax Act, 1961 Issue relating to 605.47 AY 2006 – 2007 & Commissioner Income

disallowance of Expenses AY 2011 – 2012 Tax (Appeals)

3531.05 AY 1989 – 1990 to Income Tax Appellate

AY 2010 – 2011 Tribunal (ITAT)

Sales Tax Issues relating to 23.13 AY 1991 – 1996 Commissioner Sales

(Central and State) Lease Tax Tax

Bombay Sales Tax Issues relating to 8.59 AY 1998-1999 to Commissioner Sales

Act, 1959 Sales Tax AY 2000-2001 Tax

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CAG Comments

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES

ACT, 1956 ON THE ACCOUNTS OF SBI CAPITAL MARKETS LIMITED FOR THE YEAR ENDED 31 MARCH 2014

The preparation of financial statements of SBI Capital Markets Limited for the year ended 31 March 2014 in accordance with

the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the

Company. The Statutory Auditor appointed by the Comptroller and Auditor General of India under Section 619(2) of the

Companies Act, 1956 is responsible for expressing opinion on these financial statements under Section 227 of the Companies

Act, 1956 based on independent audit in accordance with the Standards on Auditing prescribed by their professional body, the

Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated

07 May 2014.

I, on behalf of the Comptroller and Auditor General of India, have decided not to review the report of the Statutory Auditor on

the accounts of SBI Capital Markets Limited for the year ended 31 March 2014 and as such have no comments to make under

Section 619(4) of the Companies Act, 1956.

For and on behalf of the

Comptroller and Auditor General of India

(Y. N. Thakare)

Principal Director of Commercial Audit &

ex-officio Member, Audit Board-I, Mumbai

Place: Mumbai

Date : 24 June 2014

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Balance Sheet As At 31st March 2014

EQUITY AND LIABILITIES

ASSETS

SHAREHOLDERS' FUNDS

Share capital 2.1 5,803 5,803

Reserves and surplus 2.2 92,255 83,379

98,058 89,182 NON-CURRENT LIABILITIES

Other long-term liabilities 2.3 283 259

Long-term provisions 2.4 932 913

1,215 1,172 CURRENT LIABILITIES

Trade payables 2.5 2,042 1,853

Other current liabilities 2.6 3,055 2,152

Short-term provisions 2.4 2,654 2,523

7,751 6,528

TOTAL 107,024 96,882

NON-CURRENT ASSETS

Fixed Assets 2.7

Tangible Assets 1,028 960

Intangible Assets 64 74

Non-current Investments 2.8 32,337 20,521

Deferred tax assets (net) 2.21 2,756 1,298

Long-term loans and advances 2.9 6,507 5,861

Trade receivables 2.10 19 19

42,711 28,733 CURRENT ASSETS

Current investments 2.8 - 5,000

Inventories 2.12 30,873 19,530

Trade receivables 2.10 22,902 25,333

Cash and cash equivalents 2.13 8,898 16,774

Short-term loans and advances 2.9 378 338

Other current assets 2.11 1,262 1,174

64,313 68,149

TOTAL 107,024 96,882

NOTES TO ACCOUNTS 1 & 2

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For SHAH & TAPARIA For and on behalf of Board of Directors

Firm Registration No. 109463W


Rakesh Kumar Joshi Arundhati Bhattacharya V.G.Kannan Nilesh N. Shah

Partner Chairman Managing Director & CEO Company Secretary

Membership No.: 102880

Mumbai

April 12, 2014

As at

31-Mar-13

As at

31-Mar-14Notes

(Rupees in lacs unless otherwise stated)

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Statement Of Profit And Loss For The Year Ended 31st March 2014

INCOME

EXPENDITURE

PROFIT BEFORE TAX

PROFIT FOR THE YEAR

Revenue from operations 2.14 57,862 52,806

Other income 2.15 1,600 2,171

59,462 54,977

Employee benefit expenses 2.16 9,113 7,586

Interest expense 2.17 - 1

Depreciation and amortisation expense 2.7 282 280

Other expenses 2.18 6,080 4,540

Provisions 2.19 5,117 731

20,592 13,138

38,870 41,839

Provision for current income-tax (13,800) (13,100)

Deferred tax credit 2.21 1,458 861

26,528 29,600

Earning per share (Basic and Diluted in Rs.)

(Face value Rs.10/- per share) 45.71 51.00

NOTES TO ACCOUNTS 1 & 2

The accompanying notes are an integral part of the Financial Statements.








Mumbai

April 12, 2014

Notes


For the year ended

31-Mar-13

For the year ended

31-Mar-14

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Cash Flow Statement

Cash flow from operating activities :-

I. Net cash from operating activities

Cash flow from investing activities :-

II. Net cash from investing activities

Cash flow from financing activities :-

Net profit before taxation 38,870 41,839

Adjustments for -

(Profit) / Loss on sale of assets(net) 3 (1)

Profit on sale of long term investments (39) 84

Interest on long term investments (2,626) (1,636)

Dividend income (2,306) (2,034)

Interest expenses - 1

Depreciation 282 280

Provision on investments (net of write-back) 572 273

Provision on stock-in-trade (net of write-back) 22 -

Provision for doubtful debts (net of write-back) 4,064 405

(28) (2,628)

Operating profit before working capital changes 38,842 39,211

Decrease /(increase) in trade receivables - current (1,633) (12,721)

Decrease /(increase) in interest / dividend accrued 441 416

Decrease /(increase) in short-term loans & advances 753 (941)

Decrease /(increase) in long-term loans & advances (646) 884

Decrease/(increase) in stock-in-trade (11,365) (1,112)

(Decrease)/increase in current liabilities 1,091 (2,207)

(Decrease)/increase in long-term liabilities 24 (472)

(Decrease)/increase in provision for gratuity (90) 77

(Decrease)/increase in provision for compensated absences 124 174

(11,300) (15,902)

Cash generated from operations 27,542 23,309

Income tax paid (14,593) (12,345)

(14,593) (12,345)

12,949 10,964

Purchase of fixed assets (388) (216)

Sale of fixed assets 44 38

Interest on long term investments 2,064 1,274

Dividend income 2,306 2,034

Purchase of investments (13,401) (5,752)

Sale of investments 6,053 2,416

(3,322) (206)

Interest expenses - (1)

Dividend payment (15,089) (15,089)

Tax on dividend payment (2,448) (1,883)


For the year ended

31-Mar-13

For the year ended

31-Mar-14

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Cash Flow Statement (contd.)

For the year ended

31-Mar-13

For the year ended

31-Mar-14








Mumbai

April 12, 2014


III. Net cash used in financing activities

Net change in cash & cash equivalents (I+II+III)

(17,537) (16,973)

(7,910) (6,215)

Cash & cash equivalents at the beginning of the year 16,773 22,988

Cash & cash equivalents at the end of the year 8,864 16,773

Cash and cash equivalent included in cash flow statement comprise the following balance sheet amounts :-

Cash on hand - -

Balances with scheduled banks current accounts 8,864 16,773

8,864 16,773

(Excludes amounts placed as deposits with scheduled

banks towards cash margin for various guarantees

issued by banks on behalf of the Company.) 34 1

The Cash flow statement and the notes to accounts form an integral part of the accounts.

As at

31-Mar-14

As at

31-Mar-13

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Notes To Financial StatementsFor The Year Ended 31st March 2014

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

b) Use of estimates

c) Fixed Assets and Depreciation

d) Intangible Assets

e) Impairment

f) Investments

The financial statements have been prepared to comply in all material respects with the standards notified by the

Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial

statements have been prepared under the historical cost convention on an accrual basis, except in case of assets for which

provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied

by the Company and are consistent with those used in the previous year.

The preparation of financial statements in conformity with generally accepted accounting principles requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent liabilities at the date of the financial statements and the results of operations during the reporting period

end. Although these estimates are based upon management’s best knowledge of current events and actions, actual

results could differ from these estimates.

Fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost comprises the purchase

price and any attributable cost of bringing the asset to its working condition for its intended use.

Depreciation on fixed assets, other than leased fixed assets, software, computers, mobile phones and hand held devices is

provided using the written down value at the rates prescribed in Schedule XIV to the Companies Act, 1956, on a pro-rata

basis. Computers, mobile phones and hand held devices are depreciated over a period of three years on straight line basis.

The rates applied for all assets are equal to or higher than the rates based on the useful lives.

In case of fixed assets leased prior to April 1, 2001, depreciation is provided using the straight-line method at the rates

prescribed in Schedule XIV to the Companies Act, 1956, on a pro-rata basis, or amount worked out in the ratio of lease

rentals accrued as per the agreement to the lease rentals for the entire primary period of lease, whichever is higher (on a

cumulative basis). This method is followed in preference to the recommendations made by the Institute of Chartered

Accountants of India, in its Guidance Note, ‘Accounting for Lease’. This Guidance Note is recommendatory in nature.

The leasehold improvements have been written off over the balance period of lease.

Software is amortised over a period of three years on a straight line basis.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on

internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its

recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing

value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Investments include equity shares, preference shares, debt instruments and units of mutual funds, which are intended to

be held to maturity or for a period of not less than one year are classified as long term investments. All other investments

are classified as Current investments.

Long-term investments are carried at cost arrived at on a weighted average basis and are stated net of provision. Cost

comprises purchase price, brokerage and stamp duty. Appropriate provision is made for, other than temporary

diminution in the value of investments.

Investment in Immovable property is valued at cost. Appropriate provision is made for, other than temporary diminution

in the value of investments.


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g) Stock-in-trade

h) Revenue recognition

i) Foreign currency transactions

j) Retirement and other employee benefits

Securities acquired and held, principally for the purpose of selling them in the near term, are classified as stock-in-trade.

Quoted securities are valued at lower of cost and market value. Unquoted equity shares are valued at the lower of cost and

break-up value. Unquoted debt instruments are valued in accordance with the valuation guidelines issued by the Fixed

Income Money Market and Derivatives Association of India (FIMMDA). Accordingly, stock of government dated securities,

corporate/FI debentures/bonds are valued at lower of cost or market/fair value. Appropriate provisions, as prescribed by

Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 are made for non-performing debt

instruments. The discount, if any, is amortised over the holding period of the instrument based on the original yields for

the residual maturities and the carrying value of the instrument is adjusted correspondingly. Units of mutual fund are

valued at lower of cost and net asset value.

Cost comprises purchase price, brokerage, stamp duty and any premium, if paid and is computed on weighted average

basis. The market value is the price at which the securities are traded in the market. In the absence of such market price, the

market value is derived based on market related spreads over the Government benchmark curve, as specified in FIMMDA

guidelines, for applicable securities.

Revenue is recognized to the extent that it is probable that economic benefits will flow to the Company and revenue can

be easily measured.

Fee-based Income:

• Issue management and advisory fees are recognised as per the terms of the agreement with the client, net of pass-

through.

• Fees for private placement are recognised on completion of assignment.

Income from securities:

• Gains and losses on the sale of securities are recognised on trade date.

• Dividend is accounted on an accrual basis where the right to receive the dividend is established.

• Interest is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable

except interest in respect of non-performing/doubtful assets which is recognised on cash basis.

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the

exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of

historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and

non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are

reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on the reporting date due to rates different from

those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as

income or as expenses in the year in which they arise except those arising from investments in non-integral operations.

Retirement benefits to employees comprise gratuity, superannuation, provident fund and pension fund. The Company's

employees are covered under the employees' gratuity scheme and superannuation scheme established by the Life

Insurance Corporation of India ('LIC').

Notes To Financial StatementsFor The Year Ended 31st March 2014 (contd.)

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Retirement benefits in the form of Provident Fund and Superannuation Fund are a defined contribution scheme and the

contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are

due. There are no other obligations other than the contribution payable to the respective trusts.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit

credit method made at the end of each financial year.

Short term compensated absences are provided for based on estimates. Long term compensated absences are provided

for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method made at the end of

each financial year.

Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

Tax expense comprises current and deferred taxes. Current income tax is measured at the amount expected to be paid to

the tax authorities in accordance with the Income Tax Act. Deferred income taxes reflect the impact of current year timing

differences between taxable income and accounting income for the year and reversal of timing differences of earlier

years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet

date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable

income will be available against which such deferred tax assets can be realised. Deferred tax assets are recognised on

carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty supported by convincing

evidence that such deferred tax assets can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises deferred tax assets

to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable

income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the

carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case

may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such

write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that

sufficient future taxable income will be available.

Basic and diluted earnings per share are reported in accordance with AS 20, “Earnings Per Share”. Basic earnings per equity

share has been computed by dividing net profit after tax by weighted average number of equity shares outstanding for

the year. Diluted earnings per equity share have been computed using the weighted average number of equity shares and

dilutive potential equity shares outstanding during the year.

A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an

outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to the present value and are determined based on the best estimate required to settle the

obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current

best estimates.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will

be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the

control of the company or when there is a present obligation that arises from past events where it is either not probable

that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are

classified as operating leases. Operating lease payments are recognised as an expense in the profit and loss account on a

straight line basis over the lease term.

k) Income taxes

l) Earnings per share

m) Provisions and Contingent Liabilities

n) Operating Lease

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o) Segment information – basis of preparation

p) Cash and cash equivalents

The Company’s primary segments are businesses, which are organised around the following service lines:

• Fee-based segment provides merchant banking and advisory services like issue management, underwriting

arrangement, project advisory and structured finance.

• Fund-based segment undertakes deployment of funds in leasing / hire purchase and dealing in various securities.

• ‘Other’ segment includes fee income and other corporate income and expenses, which are either not allocable to any

specific business segment or not material enough to warrant a separate disclosure as a reportable segment.

• The risk and returns of the business of the Company are neither associated with geographical segmentation nor are

the clients of the Company grouped geographically. Hence there is no secondary segment reporting based on

geographical segment. Common costs identifiable with each segment have been allocated, based on the relative

utilisation of such benefits by each segment, out of the total costs.

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an

original maturity of three months or less.

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NOTE - 2.1

SHARE CAPITAL

NOTE - 2.2

RESERVES AND SURPLUS

Securities premium account

Authorised

100,000,000 (2013: 100,000,000)

Equity shares of Rs.10/- each 10,000 10,000

1,000,000 (2013: 1,000,000)

Redeemable preference shares of Rs. 100/- each 1,000 1,000

11,000 11,000

Issued, subscribed and paid up

58,033,711 (2013: 58,033,711)

Equity shares of Rs.10/- each fully paid up 5,803 5,803

The Company is a wholly owned subsidiary of State Bank of India ('SBI') and along with its nominees and shareholders are

eligible for one vote per share held.

There has been no movement in the number of shares outstanding at the beginning of the period and at the end of

period, consequently the reconciliation of the number of the shares outstanding at the beginning and at the end of the

reporting period is not applicable.

6,347 6,347

General reserve

Balance as per the last financial statements 30,947 27,987

Add : amount transferred from surplus balance in the

statement of profit and loss 2,653 2,960

Closing balance 33,600 30,947

Surplus/(deficit) in the statement of profit and loss

Balance as per the last financial statements 46,086 36,983

Profit for the year 26,528 29,600

Less : Appropriations

Interim dividend 15,089 15,089

Dividend distribution tax 2,564 2,448

Transfer to general reserve 2,653 2,960

Total appropriations 20,306 20,497

Net surplus in the statement of profit and loss 52,308 46,086

TOTAL RESERVES AND SURPLUS 92,255 83,379

As at

31-Mar-13

As at

31-Mar-14

2. OTHER NOTES


As at

31-Mar-13

As at

31-Mar-14

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NOTE - 2.3

Other Long Term Liabilities

NOTE - 2.4

PROVISIONS

NOTE - 2.5

Trade Payables

NOTE - 2.6

Other Current Liabilities

Trade payables other than dues to Micro, Medium and

Small Enterprises 32 11

Lease Deposits 248 248

Other Deposits 3 -

283 259

Provision for employee benefits

Provision for gratuity 192 282 - -

Provision for compensated absences 740 631 90 75

Other provisions

Provision for dividend distribution tax - - 2,564 2,448

932 913 2,654 2,523

Other trade payables 2,042 1,853

2,042 1,853

Bonus payable 2,818 2,030

Advance received from customers 20 36

TDS payable 216 85

Professional tax payable 1 1

3,055 2,152

As at

31-Mar-13

As at

31-Mar-14


As at

31-Mar-13

As at

31-Mar-14

Long-term Short-term

As at

31-Mar-14

As at

31-Mar-14

As at

31-Mar-13

As at

31-Mar-13

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NOTE – 2.8

NON-CURRENT INVESTMENTS

Investment Property

Other investments

Investment in Equity Instruments (quoted)

Bonds (quoted)

(Long term, non trade, at cost unless otherwise stated)

Investment in Immovable Property 7,415 -

(Refer Note No. 2.32)

7,415 -

(Long term, non trade, at cost unless otherwise stated)

2,40,000 (2013: 2,40,000) shares of Re.1/- each 173 173

fully paid in Indian Hotels Ltd

(At cost less provision other than temporary diminution in

value Rs. 139 (2013: Rs. 139))

1,12,500 (2013:1,12,500) shares of Rs. 10/- each 345 345

fully paid in Hindustan Petroleum Corp. Ltd.


value Rs. 70 (2013: Rs.70))

Nil (2013: 2,00,000) shares of Rs.10/- each - 265

fully paid in Gateway Distriparks Ltd.


value Rs. Nil(2013: Rs.29))

Sub-total 518 783

Nil (2013 :5,000) 6.85% tax free bonds of India Infrastructure Finance - 5,000

Company Ltd of Rs. 1,00,000/- each fully paid

54,876 ( 2013 : 54,876) 8.20% bonds of National Highway Authority 549 549

of India Ltd (Tax free) of Rs. 1,000/- each fully paid

71,197( 2013 : 71,197) bonds of 8.20% Power Finance Corporation 712 712

Ltd (Tax free) of Rs. 1,000/- each fully paid

3,04,510 (2013 : 3,04,510) 8.10% bonds of India Railways Finance 3,045 3,045

Corporation Ltd (Tax free) of Rs. 1,000/- each fully paid

1,00,000 ( 2013 : 1,00,000) bonds of 7.38% Rural Electrification Corporation Ltd 1,000 1,000

(Tax free) of Rs. 1,000/- each fully paid

1,00,000 ( 2013 : 1,00,000) bonds of 7.34 % Indian Railways Finance 1,000 1,000

Corporation Ltd (Tax free) of Rs. 1,000/- each fully paid

As at

31-Mar-13

As at

31-Mar-14


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1,00,000 (2013 : Nil ) bonds of 8.63% Rural Electrification Corporation Ltd 1,000 -

(Tax free) of Rs. 1000/- each fully paid

1,00,000 (2013 : Nil ) bonds of 8.55% India Infrastructure Finance 1,000 -

Company Ltd (Tax free) of Rs. 1000/- each fully paid

Sub-total 8,306 11,306

Total quoted investments 8,824 12,089

19,50,000 (2013: 19,50,000) shares of Rs.10/- each 341 341

fully paid in National Stock Exchange of India Ltd

10,32,500 (2013: 10,32,500) shares of Rs.10/- each *- *-

fully paid in SBI Home Finance Ltd


value Rs. 103 (2013: Rs.103))

11,00,000 (2013: 11,00,000) shares of Rs.10/- each - 110

fully paid in OTC Exchange of India


value Rs. 110 (2013: Nil))

5,35,768 (2013: 5,35,768) shares of Rs.10/- each - 54

fully paid in Investor Services of India Ltd

(Refer Note No.2.33)

10,00,000 (2013: 10,00,000) shares of Rs.39.63/- each - 396

fully paid in ONGC Mittal Energy Ltd


value Rs. 396 (2013: Nil))

Sub-total 341 901

6,81,818 (2013: 6,81,818) shares of FV Rs. 100/- each 750 750

fully paid in SBI DFHI Ltd (formerly SBI Gilts Ltd)

(Percentage holding in the Company is 3.12% (2013 : 3.12%)

60,00,000 (2013: 60,00,000) shares of Rs. 10/- each 601 601

fully paid in SBI Pension Funds Pvt. Ltd

(Percentage holding in the Company is 20% (2013 : 20%))

Sub-total 1,351 1,351

Investment in Equity Instruments (un-quoted)

Investment in Equity Instruments - Associates (un-quoted)

As at

31-Mar-13

As at

31-Mar-14


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Investment in Equity Instruments - wholly owned subsidiaries (un-quoted)

Investment in Mutual Funds (un-quoted)

Total un-quoted investments

Aggregate of quoted investments:

Aggregate of un-quoted investments:

8,12,50,000 (2013: 6,56,25,000) shares of Rs. 10/- each 10,000 7,500

fully paid in SBICAP Securities Ltd

2,00,000 (2013: 2,00,000) shares of GBP 1 (Rs.85.93) each 172 172

fully paid in SBICAP UK Ltd

10,00,000 (2013: 10,00,000) shares of Rs. 10/- each 5 5

fully paid in SBICAP Trustee Co. Ltd

41,62,000 (2013: 41,62,000) shares of Rs. 10/- each 416 416

fully paid in SBICAP Ventures Ltd

50,00,000 (2013: 20,00,000) shares of SGD 1 (Rs. 47.11 (2013 : Rs. 43.45) 2,355 869

each fully paid in SBICAP Singapore Ltd

Sub-total 12,948 8,962

Nil (2013: 28,28,854) units of Rs. 10/- each - 695

fully paid SBI Magnum Balanced Fund Dividend Payout


value Rs. Nil (2013: Rs.305))

35,39,410 (2013: 35,39,410) units of Rs. 10/- each 642 642

fully paid FT India Balance Fund Dividend Payout


value Rs. 358 (2013:Rs.358))

1,00,00,000 (2013: 1,00,00,000) units of Rs. 10/- each 816 881

fully paid SBI PSU Fund Growth


value Rs. 184 (2013: 119))

Sub-total 1,458 2,218

16,098 13,432

Total investments 32,337 25,521

(i) Cost 9,033 12,328

(ii) Market Value 8,937 12,426

(iii) Book Value 8,824 12,089

(i) Cost 17,250 14,317

(ii) Book Value 16,098 13,432

Aggegrate of provision for diminution in value of investments 1,361 1,123

* Fully provided for.

As at

31-Mar-13

As at

31-Mar-14


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LOANS AND ADVANCES

Security Deposits

Loans and advances to related parties - - 38 16

Advances recoverable in cash or in kind or for value

to be received

Other loans and advances

(Unsecured and considered good unless otherwise stated)

415 562 36 17

Considered good 130 130 20 15

Considered doubtful - - - -

130 130 20 15

Less: Provision for doubtful advances - - - -

130 130 20 15

Advance tax and tax deducted at source [net of provision

for income-tax Rs 95,465 (2013: Rs.84,865)] 5,770 4,977 - -

Advance tax FBT [net of provision for FBT Rs 184 (2013: Rs.184)] - - - -

Advance interest tax [net of provision for interest tax Rs 139 152 152 - -

(2013: Rs 139)]

Prepaid expenses 3 3 88 86

Loans to employees 1 1 71 24

Advance for expenses - - 1 -

Balances with statutory/government authorities 36 36 124 180

Total 6,507 5,861 378 338

As at

31-Mar-14

As at

31-Mar-14

NOTE - 2.9


As at

31-Mar-13

As at

31-Mar-13

Non-current Current

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Notes To Financial Statements For The Year Ended 31st March 2014 (contd.)


NOTE - 2.10

Trade Receivables

NOTE - 2.11

Other Assets

Others

Unsecured, considered good unless stated otherwise

Debts outstanding for a period exceeding

six months from the date they

are due for payment 19 19 2,994 8,550

Other debts - - 19,908 16,783

19 19 22,902 25,333

Considered doubtful

Debts outstanding for a period exceeding

six months from the date they

are due for payment 121 121 4,606 541

Other debts - - - -

121 121 4,606 541

Less: Provision for doubtful debts 121 121 4,606 541

Total 19 19 22,902 25,333


Interest accrued on fixed deposits - - 152 626

Interest accrued on investments - - 224 257

Interest accrued - Downselling - - 886 291

- - 1,262 1,174

As at

31-Mar-14

As at

31-Mar-13

As at

31-Mar-14

As at

31-Mar-13

Non-current Current

Non-current Current

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STOCK-IN-TRADE

Stock-in-trade for Downselling (quoted)

Nil (2013:400) 8.87% Power Finance Corporation Ltd series FV Rs. 10,00,000/- each - 4,000

(At cost less provision for temporary diminution in value Rs. Nil (2013: Nil))

250 (2013:250) 10.38% Jindal Saw Ltd. 9 yrs series-1 Debentures of FV Rs. 10,00,000/- each 2,500 2,500


250 (2013:250) 10.38% Jindal Saw Ltd. 9 yrs series-2 Debentures of FV Rs. 10,00,000/- each 2,500 2,500


Nil (2012:30) 8.90% Power Finance Corporation Bonds FV Rs. 10,00,000/- each - 300






Nil (2013:10) 8.80% Food Corporation of India Bonds FV Rs. 10,00,000/- each - 100


Nil (2013:350) 9.70% Deepak Ferlilizers & Petrochemicals Corp Bonds FV Rs. 10,00,000/- each - 3,500


Nil (2013:50) 9.71% Deepak Ferlilizers & Petrochemicals Corp Bonds FV Rs. 10,00,000/- each - 500


Nil (2013:550) 8.85% Chennai Petrochemicals Corp Bonds FV Rs. 10,00,000/- each - 5,500


1000 (2013:Nil) 9.5% Business Broadcast News Pvt Ltd Bonds FV Rs. 10,00,000/- each 9,988 -

(At cost less provision for temporary diminution in value Rs. 12 (2013: Nil))

Nil (2013:3) 7.41% India Infrastructure Finance Corp. Ltd series IV-C 20 year - 30

Taxfree Bonds FV Rs. 10 ,00,000 each


Sub Total 14,988 19,530

Total quoted stock-in-trade 14,988 19,530

As at

31-Mar-13

As at

31-Mar-14

NOTE - 2.12


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Investment in Equity Instruments (un-quoted)

15,400 (2013: 15,400) shares of Rs.10/- each fully *- *-

paid in Cremica Agro Foods Ltd

(At cost less provision for Rs. 3 (2013: 3))

Sub-total - -

Preference Shares (un-quoted)

1,40,000 (2013: 1,40,000) 0.0001% shares of Rs.10/- each fully *- *-

paid in Pasupati Fabrics Ltd

(At cost less provision Rs. 14 (2013: 14))

Sub Total - -

Mutual Funds (un-quoted)

2,62,290 (2013: Nil) Units of Reliance Liquidity Fund Daily Dividend Reinvestment 2,624

2,68,067 (2013: Nil) Units of Religare Invesco Liquid Fund Daily Dividend Reinvestment 2,684

2,89,654 (2013: Nil) Units of SBI Premier Liquid Fund Daily Dividend Reinvestment 2,906

2,00,00,000 (2013:Nil ) Units of SBI Debt Fund Series A -14 380 days - Direct- Growth 2,000 -

87,39,137 (2013:Nil ) Units of SBI Magnum Fund long Term Plan 1,001

(At cost less provision for temporary diminution in value Rs.10 (2013: Nil))

2,04,04,024 (2013: Nil) Units of HDFC Cash Management Savings Plan 2,170

2,50,00,000 (2013: Nil) Units of HDFC FMP 372 D 14 Feb 2014 Series 29 Regular Growth 2,500

Sub-total 15,885 -

Total unquoted stock-in-trade 15,885 -

Total stock-in-trade 30,873 19,530

Aggregate of quoted stock-in-trade:

(i) Cost 15,000 19,530

(ii) Market/realisable value 15,030 19,666

(iii) Book Value 14,988 19,530

Aggregate of unquoted stock-in-trade:

(i) Cost 15,912 17

(ii) Book Value 15,885 -

Aggegrate provision for diminution in value of investments 38 17

* Fully provided for.

As at

31-Mar-13

As at

31-Mar-14

NOTE - 2.12


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NOTE - 2.13

CASH AND BANK BALANCES

Cash and Cash equivalents

On Current Accounts - - 1,603 414

Deposits with original maturity of less than three months - - - 3,750

Cheques / drafts on hand - - 131 34

Cash on hand - -

Other Bank balances

Deposits with original maturity of more than twelve months - - - 11,561

Deposits with original maturity of more

than three months but less than 12 months - - 7,130 1,014

Margin money deposit - - 34 1

- - 8,898 16,774

Note :

Deposit accounts amounting to Rs. 34 (2013: Rs. 1) are with scheduled banks towards the cash margin for various guarantees

issued by banks on behalf of the Company.

As at

31-Mar-14

As at

31-Mar-13


As at

31-Mar-14

As at

31-Mar-13

Non-current Current

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NOTE - 2.14

REVENUE FROM OPERATIONS

NOTE - 2.15

OTHER INCOME

NOTE - 2.16

EMPLOYEE BENEFIT EXPENSES

Merchant Banking and Advisory Fees

Issue management 954 1,298

Underwriting commission 238 -

Arranger's fees 1,413 670

Advisory fees 50,595 47,156

Sub-total 53,200 49,124

Other Operations (Income from Securities)

Interest Income 2,626 1,636

Profit/(loss) on sale of investments (net) 39 (84)

Trading profits/(loss) on stock-in-trade (net) (309) 96

Dividend 2,306 2,034

Sub-total 4,662 3,682

57,862 52,806

Profit on sale of fixed assets (net) - 1

Rental income 51 305

Bad debts recovered 5 15

Foreign exchange fluctuation (net) - -

Unrealised Foreign Fluctuation 98 -

Interest on deposit with Banks 843 1,772

Others 53 25

Write-back of provision on:

Contribution to Gratuity 90 -

Doubtful debts 460 53

1,600 2,171

Salaries, wages and bonus 8,154 6,671

Contribution to provident and pension funds 265 258

Contribution to Gratuity 79 117

Contribution to Superannuation 303 198

Compensated Absences 124 174

Staff welfare 188 168

9,113 7,586


For The Year Ended

31-Mar-14

For The Year Ended

31-Mar-13

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NOTE - 2.17

INTEREST EXPENSE

NOTE - 2.18

OTHER EXPENSES

NOTE - 2.19

PROVISIONS (Expense)

Bank and others - 1

- 1

Legal and professional fees 370 253

Conveyance and travelling 940 889

Rent 816 909

Rates and taxes 65 18

Royalty 531 591

Bad debts written off 1,417 203

Postage, telephone and telex 162 178

Advertisement 98 159

Printing and stationery 86 89

Electricity 140 138

Repairs and maintenance:

Building 71 69

Others 130 106

Insurance 115 69

Directors' sitting fees 6 6

Foreign exchange fluctuation (net) 39 13

Loss on sale of fixed assets (net) 3 -

Tax on perquisities - 37

Office Maintenance 73 72

Training Charges 185 189

Membership and Subscription 312 208

Filing Fees and other Charges (Issues) 285 44

Miscellaneous expenses 236 300

6,080 4,540

Provision for:

Diminution in value of investments 571 273

Fall in value of stock-in-trade 22 -

Doubtful debts 4,524 458

5,117 731

For The Year Ended

31-Mar-14

For The Year Ended

31-Mar-13

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NOTE - 2.20

NOTE - 2.21

Deferred taxes

Deferred tax assets

Deferred tax assets

Deferred tax credit / (expense) for the year

NOTE - 2.22

CONTINGENT LIABILITIES AND COMMITMENTS

NOTE - 2.23

Earnings per equity share (EPS)

I Basic and diluted EPS (Rs.) 45.71 51.00

II Nominal value per share (Rs.) 10 10

EPS has been calculated based on the net profit after taxation of Rs. 26,528 (2013: Rs. 29,600) and the weighted average

number of equity shares outstanding during the year of 5,803 (2013: 5,803).

Basic and diluted EPS has been computed by dividing net profit after tax by weighted average number of equity shares

outstanding during the year. There are no dilutive potential equity shares outstanding during the year.

Tax Assets/(Liabilities) due to temporary timing difference in respect of:

Depreciation on fixed assets 88 81

Provision on Gratuity 65 91

Provision on compensated leave 282 229

Provision for doubtful debts 1,607 215

Carry forward of Losses 714 682

2,756 1,298

Less : Opening Deferred Tax Asset 1,298 437

1,458 861

(I) Claims against the Company not acknowledged as debts 435 443

(ii) Guarantees issued 34 1

(iii) Capital Commitments 25 -

(iv) Underwriting Commitments 42,500 -

Based on the legal advice and favourable legal decisions by various authorities, no provision has been made in respect of

income tax demands aggregating to Rs.7,130 (2013: Rs.7,210) in excess of provision held. These demands have been

contested by the Company at various appellate authorities.

As at

31-Mar-14

As at

31-Mar-13

For The Year Ended

31-Mar-14

For The Year Ended

31-Mar-13

As at

31-Mar-14

As at

31-Mar-14

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NOTE - 2.24

SUPPLEMENTARY PROFIT AND LOSS DATA

NOTE - 2.25

RELATED PARTIES

Name of the Party

Name of the Party

(a) Managerial remuneration

(i) The Managing Director & Chief Executive Officer is on secondment from SBI and their remuneration,

which is in accordance with the service rules of SBI, has been charged in the books of accounts.

(ii) Remuneration to Managing Director & CEO

Salary and bonus 38 24

Contribution to provident and pension funds 5 1

Perquisites - 12

43 37

As the future liability for Gratuity and Compensated leave absences is provided on actuarial basis for the Company as a

whole, the amount pertaining to the directors is not ascertainable and therefore not included above.

There is no commission payable to any director of the Company. Consequently, the computation of profits as required

under Section 349 of the Companies Act, 1956 has not been included.

(b) Payments to auditors (excluding service tax) (included in Legal and professional fees)

As auditors 12 12

For tax audit 1 1

For other matters 5 5

For out-of-pocket expenses 1 1

19 19

(c) Expenditure in foreign currency

Travel and other expenses 460 362

(d) Earnings in foreign currency

Advisory fees from overseas clients and reimbursement

of expenses 5,297 1,957

The following is the list of parties related due to control criteria as per

AS-18, Related Party Disclosure:

Relationship

State Bank of India Holding Company

The following is the list of parties related due to significant influence criteria as per AS-18 with whom the transactions

have taken place during the year:

Relationship

State Bank of Bikaner & Jaipur Fellow Subsidiary

State Bank of Hyderabad Fellow Subsidiary

State Bank of Mysore Fellow Subsidiary

State Bank of Patiala Fellow Subsidiary

State Bank of Travancore Fellow Subsidiary

SBI DFHI Limited Fellow Subsidiary

SBI Funds Management Pvt. Limited Fellow Subsidiary

SBI Life Insurance Company Limited Fellow Subsidiary

SBI Global Factors Ltd. Fellow Subsidiary

SBI Pension Funds Pvt. Ltd Fellow Subsidiary

SBI General Insurance Co Ltd Fellow Subsidiary

SBICAP Securities Limited Subsidiary

SBICAP Ventures Limited Subsidiary

SBICAP Trustee Company Limited Subsidiary

SBICAP (UK) Limited Subsidiary

SBICAP Singapore Ltd Subsidiary

Smt. Arundhati Bhattacharya, Managing Director & Chief Executive

Officer upto 02 August 2013 Key Management Personnel

Shri V.G.Kannan, Managing Director

& Chief Executive Officer from 08 October 2013 Key Management Personnel


For The Year Ended

31-Mar-14

For The Year Ended

31-Mar-13

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Details of Transactions with the above related parties are as under :

Particulars Holding Company Subsidiaries Fellow Subsidiaries

Mar 14 Mar 13 Mar 14 Mar 13 Mar 14 Mar 13

Deputation of Employees* 250 268 - - - -

State Bank of Hyderabad - - - - - 6

Interest Expenses - 1 - - - -

Rent 54 45 - - - -

Bank & Other Charges 3 3 - - - -

SBI DFHI Limited - - - - - -

SBICAP Securities Ltd. - - - - - -

Legal & Professional Charges - - - - - -

SBICAP Securities Ltd. - - 12 35 - -

Royalty Expense 531 590 - - - -

Insurance Mediclaim - - - - - -

SBI Life Insurance Company Limited - - - - 25 10

SBI General Insurance Co Ltd - - - - 2 -

Office Maintenance 1 1 - - - -

Filing Fees & Other Charges - - - - - -

SBICAP Securities Ltd. - - - 8 - -

Issue Management Fees 267 10 - -

SBICAP Securities Ltd. - - 8 -


State Bank of Mysore - - - - 20 -

SBI Funds Management Pvt. Ltd. - - - 15

Private Placement Fees 100 1 - - - -


Arranger's Fees - - - - - -

SBICAP Securities Ltd. - - 11 - - -

Advisory Fees 149 893 - -

SBI Global Factors Ltd - - - - - 10

State Bank of Patiala - - - - 11 8

State Bank of Hyderabad - - - - 2 -

Bank Interest 556 618 - - - -

State Bank of Bikaner & Jaipur - - - - 54 195


State Bank of Travancore - - - - 1 332

Rent - - - - - -

SBI Funds Management Pvt. Ltd. - - - - 51 305

Dividend - - - - -

SBI DFHI Limited - - - - 123 65

SBICAP Trustee Company Ltd. - - 13 10 - -

Expenses during the year ended

Income during the year ended



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Details of Transactions with the above related parties are as under :

Particulars Holding Company Subsidiaries Fellow Subsidiaries

Mar 14 Mar 13 Mar 14 Mar 13 Mar 14 Mar 13

Debtors 454 28 - - -

State Bank of Patiala - - - - 9 -



Cash at Bank 1,734 448 - -

Deposit with Bank 5,994 10,163 - - - -

State Bank of Bikaner & Jaipur - - - - - 2,277

State Bank of Patiala - - - - 1,170 1,089

State Bank of Travancore - - - - - 297

Loans & Advances 8 11 - - -

SBICAP Securities Ltd. - - 3 1 -

SBICAP Trustee Company Ltd. - - 1 - -

SBICAP Ventures Ltd - - 25 - - -

SBICAP Singapore Ltd - - - 4 -

Other Current Assets 126 184 - - - -


State Bank of Travancore - - - - - 38

State Bank of Bikaner & Jaipur - - - - - 152

Investments - - -

SBI Pension Funds Pvt. Ltd - - 601 601

SBI DFHI Limited - - 750 750

SBICAP Securities Ltd. - 10,000 7,500 -

SBICAP Ventures Ltd - 416 416 -

SBICAP Trustee Company Ltd. - 5 5 -

SBICAP UK Ltd - 172 172 -

SBICAP Singapore Ltd - 2,355 869 -

Creditors 548 598 - - - -


SBICAP UK Ltd - - - 1 - -

Dividend paid 15,089 15,089 - - - -

Fees Shared (netted from Income) - - - - - -


SBI DFHI Limited - - - - - -

Expenses shared


Guarantees 34 1 - - - -

I. Included in expenses relating to deputation of employees are amounts aggregating to Rs. 43 (2013: Rs. 37) pertaining

to salaries paid to key management personnel.

Balance receivable as at

Balance payable as at

Others transactions during

the year ended


II. * - Fully provided for

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Ext

ern

al s

ale

s 5

,50

3

5,4

52

53,7

63

49,1

93

197

332

59,4

62

54,9

77

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-

-

-

-

-

-

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-

To

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5,5

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52

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197

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59,4

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4,8

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40,6

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-

-

-

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38,8

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41,8

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Inte

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exp

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-

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-

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12,3

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-

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Net pro

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26,5

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Segm

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64,2

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582

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589

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8,9

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388

216

Depre

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280

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NOTE - 2.27

Gratuity and other post-employment benefit plans: (AS 15 120 (b))

Profit and Loss account

Net employee benefit expense (recognised in Employee Cost)

Balance sheet

Details of Provision for gratuity

Changes in the present value of the defined benefit obligation are as follows:

Closing defined benefit obligation 593 593

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a

gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an

insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the

funded status and amounts recognised in the balance sheet for the respective plans.

[AS15 Revised (c) (i) to (x)]

Gratuity

2014 2013

Current service cost 76 77

Interest cost on benefit obligation 53 45

Expected return on plan assets (24) (21)

Net actuarial (gain) / loss recognised in the year (117) 15

Past service cost - -

Net benefit expense (13) 117

Actual return on plan assets 32 23

Gratuity

2014 2013

Defined benefit obligation 593 593

Fair value of plan assets (402) (312)

Less: Unrecognised past service cost - -

Plan asset / (liability) (191) (281)

[AS15 Revised 120(e) (i) to (viii)]

Gratuity

2014 2013

Opening defined benefit obligation 593 464

Interest cost 53 45

Current service cost 76 77

Benefits paid (20) (11)

Actuarial (gains) / losses on obligation (109) 18

Past Service Cost - -


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Changes in the fair value of plan assets are as follows:

Closing fair value of plan assets 402 312

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

The principal assumptions used in determining gratuity for the Company's plans are shown below:

Amounts for the current and previous period are as follows: [AS15 Revised 120(n)]

Gratuity

2014 2013

Opening fair value of plan assets 312 260

Expected return 24 21

Contributions by employer 78 39

Benefits paid (20) (11)

Actuarial gains / (losses) 8 3

The Company expects to contribute Rs.60 (2012-13: Rs. 60) to gratuity in 2013-14.

[AS15 Revised Para (h)]

Gratuity

2014 2013

% %

Investments with insurer 100 100

{AS15 Revised 120 (l) (i) to (v)}

2014 2013

% %

Discount rate 9.10 8.20

Expected rate of return on assets 7.50 7.50

Employee turnover

Age (Years) 21-44 8% 8%

Age (Years) 45-57 3% 3%

Healthcare cost increase rate N.A. N.A.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion

and other relevant factors, such as supply and demand in the employment market.

Gratuity

2014 2013

Defined benefit obligation 593 593

Plan assets 402 312

Surplus / (deficit) (191) (281)

Experience adjustments on plan liabilities (32) (6)

Experience adjustments on plan assets 8 3


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NOTE - 2.29

NOTE - 2.30

NOTE - 2.31

NOTE - 2.32

NOTE - 2.33

NOTE - 2.34

PRIOR YEAR COMPARATIVES

Based on information available with the Company, there are no suppliers who are registered as micro, small or medium

enterprise under "The Micro, Small and Medium Enterprise Development Act, 2006" as at March 31, 2014

The Company has cheques in hand aggregating Rs. 131 (2013: Rs. 34), which have been included in the respective bank

accounts.

Office premises obtained on operating lease are cancellable and no restrictions are imposed by the lease agreement, hence no

disclosure is required. Lease rent paid during the year is disclosed in Note 2.18 to the Financial Statements.

During the year company has purchased a property for the purpose of giving it on lease to its wholly owned subsidiary. The

same is shown as Long term Investments as defined in Para 3 of Accounting Standard 13 issued by Institute of Chartered

Accountants of India and notified by Companies Act, 1956. Hence depreciation on Invesment Property is not charged to

Statement of Profit & Loss Account.

During the year company has received from liquidator of Investor Services of India Limited an amount of Rs. 54 lacs

representing full cost of investment. The Investor Services of India Ltd is in voluntary liquidation. Any amount received in

future will be recognised as income in the year of receipt.

The financial statements for the year have been presented as per the Revised Schedule VI. The figures of the previous year have

been regrouped/reclassified as appropriate, to correspond with those of the current year.








Mumbai

April 12, 2014

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SBICAP SECURITIES LIMITED

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Directors' Report For The Year 2013 -14

To,

The Members,

thYour Directors have pleasure in presenting the 9 Annual Report together with the Profit and Loss Account for the year ended st31 March 2014 and the Balance Sheet as on that date.

Operating Results

Gross Income 69.60 79.03

Profit before Provisions, Depreciation, Interest and Tax 5.41 0.70

Provisions 0.31 0.52

Depreciation 1.41 9.02

Interest - -

Profit/(Loss) before Tax 3.69 (8.85)

Profit/(Loss) after Tax 2.42 (8.19)

Financial Position

Equity Share Capital 65.63 81.25

Reserves 41.09 42.28

Debt Funds - -

Other Selected Data

Earnings per Share (Rs.) 0.38 (1.13)

Return on Equity (%) 2.27 (6.63)

Dividend per Share (Rs.) - -

Book Value per Share (Rs.) 16.26 16.82

(Rs. in crs)

Year ended March 31 2013 2014

Performance Highlights (Rs. in crores)

I Market Environment:

The financial year began on an ominous note, with the decision of the US Federal Reserve to wind down its asset purchase

program weighing heavily on global markets and economic sentiments. The prospect of reduced stimulus and interest

rate cycle reversal triggered sell-off in stocks, bonds and currencies across the emerging markets, including India.

Emerging market economies with structural issues (high current account deficit, low growth, high inflation and ballooning

fiscal deficit etc) were more vulnerable. The currencies of Indonesia, South Africa, Brazil, Thailand, Turkey, Argentina and

India were thus hammered down to multi years low.

Owing to these global macro factors and unfavorable domestic environment, Indian markets underperformed in the first

half of fiscal with Sensex and Nifty touching lows of 17448.71 and 5118.85 in the month of August 2013. Sectoral indices

like Capital Goods, Banks, Realty, Power and Metal indices were badly hit, touching lows of between 2 to 5 years.

As the year came to a close, the macroeconomic environment improved, as the government contained the current

account deficit & inflation. RBI intervention helped reverse the slide of the rupee. The weak beginning to the financial year

was followed by strong FII inflows in February and March 2014 leading to an upsurge in the Indian Equity Markets. Nifty

and Sensex hit their all time high of 6730.05 and 22253.78 on March 31, 2014. Major contributors to this rally, on the back

of rupee depreciation and an uptick in global demand environment, were IT, Pharmaceuticals and Auto stocks

The SENSEX returned 18.7% and the NIFTY increased 17.5% during the year.

DII cash market volumes, from where your Company sources most of its broking business, showed a modest growth and

the Retail investor continued to stay away from the markets, for a better part of the year.

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Directors' Report (contd.)

II Operations:

III Financial Results:

IV. Dividend:

V. Personnel:

VI. Deposits:

VII. Directors:

Your Company aims to focus on expanding brand value and presence in the broking space and has undertaken various

growth initiatives, considered of critical importance towards an accelerated growth path for the Company. One of the

critical growth initiatives which came to fruition in the year was the development and launch of the new trading portal of

your company.The portal with several new features, will enhance the execution capabilities of your Company substantially

and enable it to serve the entire spectrum of capital market investors more efficiently.

Even as the benchmark indices clocked record highs during the year, total trading volumes in the cash segment of the

stock exchanges were around their lowest point in seven years. The lack-lustre performance of small and mid-cap stocks,

also affected retail volumes, as stocks in this segment have not yet reached their 2008 peak levels and investors have been

unable to book profits and get out.

Despite a decline in the overall retail market volumes in the current financial year, your Company with an expanded client

base and enhanced client servicing through advisory and call centre interactions, was able to grow its retail broking top

line by about 9% with an increase of close to 70%, in the number of new retail clients acquired in the previous year.

On the Institutional business side, your Company ramped up its sales and research capabilities and set up an exclusive FII

desk to cater to institutional investors. Your Company's research now covers all key sectors and most of the NIFTY stocks.

Gross Income of your Company stood at Rs.79.03 crores during the year under review, Income from broking activity

contributed Rs.46.55 crores, Sales and Distribution Rs.17.65 crores and the balance Rs.14.83 crores came from interest,

depository services fees, account opening charges and other income. The corresponding figures last year were Rs.45.33

crores, Rs.15.48 crores and Rs.8.79 crores respectively.

The investments in building capacity through various initiatives & the burden of depreciation on the new web platform,

resulted in a loss of Rs.8.19 crores for the year. The operations of your Company however continue to be cash positive and

despite the escalated level of front ended costs, the returns from which will be available over the next few years, your

company generated a small cash profit of Rs.0.17 crore While the investments made in building technology & teams

have lowered the PAT this year, these have enhanced wherewithal for future growth and your company intends to continue

its efforts in the next year for building business capabilities and market presence, that will lay the ground for future growth

of the Company.

No dividend is proposed, as the Company has not earned any profit during the year under review.

The company continues to lay great stress on human resources as the most valuable asset. As on 31st March 2014, the

strength of its workforce was 615 as compared to 555 as at the previous year's close and teams in various verticals have

been enhanced both quantitatively and qualitatively. Continuous learning and skill up-gradation is ensured through

interventions like induction and orientation programmes as also external training programmes.

The Company has not accepted any deposits from the public, during the period under review.

During the year under review, the following changes took place in the Board of Directors of the Company:-

nd1) Smt. Arundhati Bhattacharya resigned as Director & Chairman w.e.f. 2 Agust, 2013 consequent to her resignation as

Managing Director & CEO of SBI Capital Markets Limited.

th2) Shri V.G. Kannan was appointed as the Managing Director & CEO of SBI Capital Markets Ltd. w.e.f 8 October, 2013 and by

virtue of Article 155(a) of the Articles of Association of the Company, the Managing Director & Chief Executive Officer of

SBI Capital Markets Limited is the ex-officio Director of the Company and the Chairman of the Board of Directors.

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st3) Smt. Swati B. Desai resigned as the Director & Managing Director w.e.f 31 October, 2013 consequent to her

superannuation from the services of State Bank of India.

4) Shri Abhay C. Chaudhari, President & Chief Operating Officer, SBI Capital Markets Ltd. was appointed as Additional thDirector of the Company w.e.f 5 December, 2013.

th5) Shri Mani Palvesan was appointed as the Managing Director of the Company w.e.f 25 November, 2013.

In accordance with the provisions of the Companies Act, 1956 Shri Abhay C. Chaudhari, Director, holds office up to the thdate of the 9 Annual General Meeting. The Company has received Notice from a member under section 257 of the

Companies Act, 1956, proposing him as candidate for the office of Director liable to retire by rotation.

Shri Abhay C. Chaudhari has conveyed his consent for being appointed as Director liable to retire by rotation.

thShri M.P. Mehrotra and Shri H.N. Varma, Directors, retire by rotation at the 9 Annual General Meeting of the Company and

being eligible, offers themselves for re-appointment. The Board extended a hearty welcome to Shri Abhay C. Chaudhari

and Shri Mani Palvesan to the Board and placed on record its deep appreciation to Smt. Arundhati Bhattacharya and Smt.

Swati B. Desai for their valuable contributions during their tenure as Directors of the Company.

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

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

ii appropriate accounting policies have been selected and applied consistently, and the judgments and estimates that have

been made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on 31st

March 2014 and of the profit or loss of the company for the period ended 31st March 2014;

iii proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the

provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting frauds and

other irregularities;

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

The Directors also wish to draw the kind attention of the Shareholders to the report of the Auditors to the Shareholders issued

by M/s. Sudit K. Parekh & Co. the Statutory Auditors, on the financial accounts for the year ended March 31, 2014.

M/s Sudit K. Parekh & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the conclusion of the Ninth

Annual General Meeting of the Company.

st thThe Board of Directors at their 41 Meeting held on 12 April, 2014, has recommended the reappointment of M/s Sudit K.

Parekh & Co. Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of the Ninth

Annual General Meeting up to the conclusion of the Tenth Annual General Meeting of the Company. The Company has

received a Certificate from M/s Sudit K. Parekh & Co. to the effect that they are eligible to be appointed as Statutory Auditors in

accordance with the provisions of Section 141(3) of the Companies Act, 2013.

In terms of the above Rules issued by the Central Government, the following information is furnished:-

Conservation of Energy and Technology Absorption:

As the Company is engaged only in the business of stock broking activities and other financial services during the period under

review, there is no information to report under this head.

Foreign Exchange Earnings and Outgo:

During the year under review, the Company had foreign exchange earnings of Rs. 0.89 lac on account of research income.

The total foreign exchange expended amounted to Rs.0.91 lac on account of selling & distribution sub-commission, Rs. 2.53

lacs on travelling and Rs. 15.84 lacs on account of operating expenditure.

VIII. Directors' Responsibility Statement:

IX. Auditors:

X. Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988:

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XI. Particulars of Employees:

XII. Acknowledgement:

The information as required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of

Employees) Amendment Rules, 2011, as amended, is given in Annexure A.

The Board of Directors would like to express its thanks to SEBI, the Company's Regulator, the National Stock Exchange of India

Limited and Bombay Stock Exchange Limited, Central Depository Services (India) Limited for their advice and guidance

received.

The Board is grateful to the State Bank of India and the SBICAPS family for their invaluable support and guidance to the

Company. The Board also records its appreciation of the unstinted support extended by all its staff members.


V. G. Kannan

Chairman

thDate: 12 April, 2014

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Independent Auditor’s Report

To the Members of SBICAP Securities Limited



We have audited the accompanying financial statements of SBICAP Securities Limited (“the Company”), which comprise the

Balance Sheet as at March 31, 2014 and 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


position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under

the Companies Act, 1956 (“the Act”) read with the General Circular No. 15/2013 dated 13th September 2013 of the Ministry of

Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation


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



financial statements are free from material misstatement.


statements. The procedures selected depend on the auditor's judgement, 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, but not for the purpose of expressing an opinion on the

effectiveness of the entity's internal control. 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.


Opinion





(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on thatdate; and


1. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment)

Order, 2004 (together 'the Order'), 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.


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, 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, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting

Standards notified under the Companies Act, 1956 read with the General Circular No. 15/2013 dated 13 September

2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board

of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of

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

For SUDIT K PAREKH & CO.


Firm Registration No.: 110512W

(D.S. Khatri)

Partner

Membership Number: 16306

Mumbai, dated: April 12, 2014

Independent Auditor’s Report (contd.)

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Annexure To The Auditor’s Report

i. In respect of its fixed assets :

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of

fixed assets.

b. Fixed assets have been physically verified by the management during the year. The frequency of verification is

reasonable with regards to size of the Company and the nature of its business and fixed assets. According to

information and explanation given to us, no material discrepancies were noticed on such verification.

c. Fixed assets disposed off during the year were not substantial and, therefore, do not affect the going concern

assumption.

ii. The Company is primarily in brokerage industry and it was not holding any inventory during the year.Hence, sub-clauses

(a) to (c) of clause (ii) are not applicable to the company.

iii. According to the information and explanations given to us, the Company has not granted/taken any loan secured or

unsecured to/from the company, firm or other parties covered in the register maintained under section 301 of the

Companies Act, 1956. Hence sub-clauses (a) to (g) of clause (iii) are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there exists adequate internal control

system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets

and with regard to the sale of services. During the course of our audit, we have not observed any continuing failure to

correct major weakness in internal control system of company in respect of these areas.

v. According to the information and explanations given to us, there are no contracts and arrangementsthat needs to be

entered in the register to be maintained in pursuance of Section 301 of the Companies Act, 1956. Hence, sub-clauses (a)

and (b) of clause (v) is not applicable to the Company.

vi. According to the information and explanations given to us, the Company has not accepted any deposits from the public

within the meaning of provisions of sections 58A and 58AA and other relevant provisions of the Companies Act, 1956 and

the Companies (Acceptance of Deposit) Rules, 1975 made there under.

vii. The Company has an internal audit system commensurate with its size and the nature of its business.

viii. In our opinion, the central government has not prescribed the maintenance of the cost records under section 209(1) (d) of

the Companies Act, 1956 for the Company and hence this clause is not applicable to the Company.

ix. In respect of Statutory Dues:

a. According to the information and explanations given to us, the Company is generally regular in depositing

undisputed statutory dues in respect of income tax, service tax, provident fund, cess and other statutory dues as

applicable to it with appropriate authorities.

As informed to us, the provisions of Investor education and protection fund, sales tax, wealth tax, excise duty and

customs duty are currently not applicable to the Company.

According to the information and explanations given to us, there are no undisputed amounts payable in respect of

income tax, service tax, provident fund, cess and other statutory dues as applicable to it, that were in arrears, as at

March 31, 2014 for a period of more than six months from the date they became payable.

As informed to us, the provisions of Investor education and protection fund, sales tax, wealth tax, excise duty and

customs duty are currently not applicable to the Company.

b. According to the information and explanations given to us, there are no dues of income tax, service tax, provident

fund, cess and other statutory dues as applicable to the company, which have not been deposited on account of any

dispute.

As informed, the provisions of Investor education and protection fund, sales tax, wealth tax, excise duty and customs

duty are currently not applicable to the company.

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

in the financial year and in the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion

that the Company has not defaulted in repayment of dues to banks. The company does not have any outstanding dues to

financial institutions nor does it have any debentures outstanding during the financial year.

xii. According to the information and explanations given to us, the Company has not granted loans and advances on the basis

of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of chit fund are not applicable to the Company; hence clause xiii is not applicable to the Company.

xiv. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities,

debentures and other investments. Therefore the provisions of this clause of the Order are not applicable to the Company.

xv. In our opinion and according to information and explanations provided to us, the Company has not provided guarantees

for loans taken by others from banks and financial institutions.

xvi. The Company has not taken any term loans during the year and hence clause (xvi)is not applicable to the Company.

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

Company, funds raised on short-term basis have not been used during the year for making long-term investments.

xviii. According to the information and explanations given to us, during the year 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.

xix. According to the information and explanation given to us, the company has not raised any money by way of issue of

debentures and hence clause xix is not applicable to the Company.

xx. The Company has not made any public issue of securities during the year.

xxi. According to the information and explanations given to us, no fraud on or by the Company was noticed or reported during

the year.

For SUDIT K PAREKH & CO.



(D.S. Khatri)

Partner

Membership Number: 16306


Annexure To The Auditor’s Report (contd.)

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ASSETS

Shareholders' funds

Share capital 3 812,500,000 656,250,000

Reserves and surplus 4 422,765,693 410,917,602

1,235,265,693 1,067,167,602

Non-current liabilities

Long term borrowings 5 2,019,863 1,451,812

Other long term liabilities 6 385,067 2,099,875

Long-term provisions 7 11,819,748 8,708,673

14,224,678 12,260,360

Current liabilities

Trade payables 8 500,004,936 569,991,968

Other current liabilities 9 141,467,881 74,182,336

Short-term provisions 7 4,834,964 4,237,883

646,307,781 648,412,187

TOTAL 1,895,798,152 1,727,840,149

Non-current assets

Fixed assets

Tangible assets 10 171,687,452 18,932,536

Intangible assets 11 273,632,395 8,975,780

Capital work-in-progress - 194,200,420

Intangible assets under development 250,001 125,234,994

Deferred tax assets (net) 12 15,674,869 9,101,829

Long term loans and advances 13 167,007,076 128,033,790

628,251,793 484,479,349

Current assets

Trade receivables 14 553,728,895 521,458,054

Cash and bank balances 15 691,200,544 710,032,356

Short term loans and advances 13 22,616,920 11,870,390

1,267,546,359 1,243,360,800

TOTAL 1,895,798,152 1,727,840,149

Summary of significant accounting policies 2.1



For Sudit K Parekh & Co. For and on behalf of the Board of Directors of

Firm Registration No.: 110512W SBICAP Securities Limited


D. S. Khatri V. G. Kannan Mani Palvesan Dhanashri Kenkre

Partner Chairman Managing Director Company Secretary

Membership No. : 16316

Mumbai Mumbai

Date: April 12, 2014 Date: April 12, 2014

Balance Sheet NotesAs at

31-Mar-14

As at

31-Mar-13

(Amount in Rs.)

Balance Sheet as at March 31, 2014

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Statement Of Profit And LossFor The Year Ended March 31, 2014

Revenue from operations

Expenses

Brokerage 465,482,960 432,002,666

Selling and distribution 16.1 176,543,449 176,159,744

Depository services income 16.2 42,927,700 26,633,621

Other operating income 16.3 66,385,466 22,167,110

Total Revenue from operations 751,339,575 656,963,141

Other non-operating income 17 38,954,421 39,078,446

Total Revenue 790,293,996 696,041,587

Employee benefit expenses 18 263,111,784 240,798,150

Operating expenses 19 298,122,977 206,653,272

Administration expenses 20 220,559,842 190,666,580

Depreciation and amortization expense 21 90,192,808 14,096,328

Finance costs 22 3,851,938 4,346,970

Total expense 875,839,349 656,561,300

Profit before prior period adjustments (85,545,353) 39,480,287

Add/Less: Prior period income/(expenses) 29 (2,929,596) (2,520,009)

Profit before tax (88,474,949) 36,960,278

Tax expenses

Current tax - 15,000,000

Deferred tax (6,573,040) (2,287,667)

Total tax expense (6,573,040) 12,712,333

Profit for the year from continuing operations (81,901,909) 24,247,945

Earnings per equity share [Nominal value of share Rs.10

(Previous year Rs.10)]

(Basic and diluted EPS computed on the basis of

total profit for the year) 35 (1.13) 0.38

Balance Sheet NotesAs at

31-Mar-14

As at

31-Mar-13

(Amount in Rs.)










Mumbai Mumbai


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Cash Flow Statement For The Year Ended March 31, 2014

Cash flow from operating activities :-

Cash Flow from investing activities :-

Cash Flow from financing activities :-

Profit before tax after prior period expenses (88,474,949) 36,960,278

Non-cash adjustments

Depreciation and amortization 90,192,808 14,096,328

Provision for performance linked variable payments (PLVP) 12,500,000 14,000,000

Excess provision for PLVP written back (1,820,523) (2,020,179)

Excess provision for selling and distribution written back (1,599,163) (5,345,587)

Provision for doubtful debts 5,238,974 3,059,999

Loss on sale of fixed assets 83,050 359,836

Provision for leave encashment / gratuity 3,708,156 3,484,177

Operating profit before working capital changes 19,828,353 64,594,852

Movements in working capital:

Increase/(decrease) in current trade payables (69,987,032) 169,067,984

Increase/(decrease) in non-current trade payables - (346,846)

Increase/(decrease) in other current liabilities (421,461) 3,468,674

Increase/(decrease) in other long term liabilities (1,146,756) 105,360

Decrease/(increase) in non-current trade receivables (5,238,973) (3,059,999)

Decrease/(increase) in current trade receivables (32,270,841) (245,617,105)

Decrease/(increase) in margin and other deposits 34,373,933 (48,960,016)

Decrease/(increase) in long term loans and advances (25,228,885) (6,514,081)

Decrease/(increase) in short term loans and advances (10,746,530) (4,123,020)

Decrease/(increase) in other non-current assets - 1,211,732

Cash generated from operations before tax (90,838,191) (70,172,466)

Direct tax refund received - 2,495,343

Direct taxes paid (13,744,400) (19,014,893)

I. Net cash generated from operating activities (104,582,591) (86,692,016)

Purchase of fixed assets (129,902,621) (68,066,610)

Sale of fixed assets 27,335 511,944

II. Net cash used in investing activities. (129,875,286) (67,554,666)

Proceeds from issue of shares 250,000,000 250,000,000

III. Net cash provided by financing activities 250,000,000 250,000,000

Net change in cash & cash equivalents (I+II+III) 15,542,123 95,753,318

Cash & cash equivalents at the beginning of the year 422,210,878 326,457,560

Cash & cash equivalents at the end of the year 437,753,001 422,210,878

Balance Sheet NotesFor the year

ended 31-Mar-14

For the year

ended 31-Mar-13

(Amount in Rs.)

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Components of cash and cash equivalents

Balance with banks :

On current accounts 331,363,224 422,198,878

Deposits with original maturity less than 3 months - -

Investment in units of Liquid fund 106,386,426

Cash on hand 3,351 12,002

Total cash and cash equivalents (Note 15) 437,753,001 422,210,878

Balance Sheet NotesFor the year

ended 31-Mar-14

For the year

ended 31-Mar-13

(Amount in Rs.)










Mumbai Mumbai


Cash Flow Statement For The Year Ended March 31, 2014 (contd.)

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Summary Of Significant Accounting Policies For The Year Ended March 31, 2014

1. Corporate information

2. Basis of preparation

d. Intangible assets

SBICAP Securities Ltd ('the Company') is a wholly-owned subsidiary of SBI Capital Markets Ltd., incorporated in 2005. It is a

member of the two premier stock exchanges of India, the National Stock Exchange of India Ltd and Bombay Stock

Exchange Ltd. The Company is engaged in the business of broking (retail and institutional) and third party distribution of

financial products.

The financial statements of the Company have been prepared in accordance with generally accepted accounting

principles in India ('Indian GAAP'). The Company has prepared these financial statements to comply in all material respects

with the accounting standards notified under Companies (Accounting Standards) Rules 2006 read with General Circular

15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act,

2013. The financial statements have been prepared on an accrual basis and under the historical cost convention. The

accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified and disclosed as current or non-current as per the Company’s normal

operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of

products and the time between the acquisition of assets for trading and their realisation in cash and cash equivalents, the

Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets

and liabilities.

2.1 Summary of significant accounting policies

"The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments,

estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the

disclosure of contingent liabilities at the end of the reporting period. Although these estimates are based on the

management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could

result in the outcomes requiring an adjustment to the carrying amounts of assets or liabilities in future periods."

"Fixed assets are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. The cost

comprises purchase price and directly attributable cost of bringing the asset to its working condition for its intended

use.Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal

proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is

derecognised."

Depreciation on fixed assets is calculated on a written down value basis using the rates arrived at based on the useful lives

estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is

higher. The Company has used the following rates to provide depreciation on its fixed assets:

Rates (WDV)

Office equipments (except mobile phones) 13.91%

Furniture & fixtures 18.1%

Computers 40%

Mobile phones are depreciated on a straight-line basis over a period of three years.Leasehold improvements are depreciated

on a straight-line basis over the primary lease period.

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible

assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.

Intangible assets are amortized on a straight line basis over the estimated useful economic life of 3 years.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal

proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is

derecognised.

a. Use of estimates

b. Tangible fixed assets

c. Depreciation on tangible fixed assets

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e. Leases

f. Impairment of tangible and intangible assets

g. Cash and cash equivalents

h. Investments

i. Inventories

j. Revenue recognition

Leases where the lessor effectively retains substantially all the risks and the benefits of ownership of the leased term are

classified as operating leases. Operating lease payments, in respect of non-cancellable leases are recognised as an

expense in the Statement of Profit and Loss on a straight-line basis over the lease term.


internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its

recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) net selling

price and its value in use. The recoverable amount is determined for an individual asset unless the asset does not generate

cash inflows that are largely independent of those from other assets or groups of assets. In assessing value in use, the

estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset.In determining net selling price, recent market

transactions are taken into account if available. If no such transactions can be identified, an appropriate valuation model

is used.

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term

investments with an original maturity of three months or less.

"Investments which are readily realizable and intended to be held for not more than one year from the date on which such

investments are made, are classified as current investments. All other investments are classified as long-term

investments.On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly

attributable acquisition charges such as brokerage, fees and duties.Current investments are carried in the financial

statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are

carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the

value of the investments.On disposal of an investment, the difference between its carrying amount and net disposal

proceeds is charged or credited to the statement of profit and loss."

The securities acquired with the intention of holding for short-term and trading are classified as stock-in-trade. The

securities held as stock-in-trade are valued at lower of cost arrived at on first-in first-out (FIFO) basis or marketable fair

value.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the

revenue can be reliably measured. The following specific recognition criteria have been followed before revenue is

recognised:

Brokerage income in relation to stock broking activity is recognised on the trade date of transaction and includes stamp

duty, transaction charges and is net of scheme incentives paid. Amounts receivable from and payable to clients/stock

exchanges for broking transactions are disclosed separately as trades executed but not settled.

Commission relating to public issues is accounted for on finalization of allotment of the public issue/receipt of information

from intermediary. Brokerage Income relating to public issues / mutual fund / other securities is accounted for based on

mobilisation and intimation received from clients / intermediaries.

Depository income - Annual Maintenance Charges are recognised on accrual basis and transaction charges are

recognised on trade date of transaction.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate

applicable.

Summary Of Significant Accounting Policies For The Year Ended March 31, 2014 (contd.)

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k. Foreign currency transactions

l. Retirement and other employee benefits

m. Income taxes

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the

exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are restated using the exchange rate prevailing at the reporting date. Non-monetary

items, which are measured in historical cost denominated in a foreign currency, are reported using the exchange rate at

the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated

in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange Differences

All exchange differences are recognised as income or as expenses in the period in which they arise.

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident

fund are charged to the statement of profit and loss for the year when the contributions are due. The Company has no

obligation, other than the contribution payable to the provident fund.

The Company operates a gratuity plan for its employees, which is a defined benefit plan. The costs of providing benefits

under this plan is determined on the basis of actuarial valuation at each year-end, using the projected unit credit method.

Actuarial gains and losses are recognised in full in the period in which they occur in the statement of profit and loss.

"Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit.

The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of

the unused entitlement that has accumulated at the reporting date.The Company treats accumulated leave expected to

be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term

compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the

year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. "

"Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to

the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to

compute the amount are those that are enacted or substantively enacted, at the reporting date.Deferred income taxes

reflect the impact of timing differences between taxable income and accounting income originating during the current

year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws

enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing

differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable

certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In

situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are

recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future

taxable profits."

At each reporting date, the company re-assesses unrecognised deferred tax assets. It recognizes unrecognised deferred

tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future

taxable income will be available against which such deferred tax assets can be realised.

"The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying

amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be,

that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-

down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient

future taxable income will be available.Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable

right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate

to the same taxable entity and the same taxation authority."


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n. Segment reporting

o. Earning per share

p. Provisions

q. Contingent liabilities

The Company's primary business segments are reflected based on the principal business carried out, i.e. share and stock

broking on the National Stock Exchange of India Limited,Bombay Stock Exchange Limited and other related ancillary

services and third party distribution of financial products.

The risk and returns of the business of the Company is neither associated with geographical segmentation nor the clients

of the Company are grouped geographically.

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders

by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity

shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all

dilutive potential equity shares.

A provision is recognised when the Company has a present obligation as a result of past event, it is probable that an

outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be

made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on

the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting

date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the

occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present

obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the

obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised

because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence

in the financial statements.


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Notes To Financial Statement For The Year Ended March 31, 2014

3. Share capital

As at

31-Mar-14

As at

31-Mar-13

(Amount in Rs.)

Authorised share capital

100,000,000 (Previous year: 100,000,000) Equity Shares of Rs. 10 each 1,000,000,000 1,000,000,000

Issued, subscribed and paid-up share capital

81,250,000 (Previous year: 65,625,000) Equity Shares of Rs. 10 each 8,125,000,00 656,250,000

Total issued, subscribed and paid-up share capital 8,125,000,00 656,250,000

a. Reconciliation of shares outstanding as at March 31, 2014 and at March 31, 2013

March 31, 2014 March 31, 2013

Equity shares No. of shares Rupees No. of shares Rupees

Outstanding at the beginning of the year 65,625,000 656,250,000 50,000,000 500,000,000

Add: Issued during the year for cash 15,625,000 156,250,000 15,625,000 156,250,000

Outstanding at the end of the year 81,250,000 812,500,000 65,625,000 656,250,000

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to

one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining

assets of the Company, after distribution of all preferential amounts in proportion to their shareholdings.

c. Shares held by holding/ultimate holding company and/or their subsidiaries/associates

March 31, 2014 March 31, 2013

SBI Capital Market Ltd., the holding company & its nominees

81,250,000 (Previous year: 65,625,000) Equity Shares of

Rs. 10 each fully paid up 812,500,000 656,250,000

d. Details of shareholders holding more than 5% shares capital in aggregate in the Company

March 31, 2014 March 31, 2013

No. of shares % of holding No. of shares % of holding

Equity shares of Rs.10 each fully paid up

SBI Capital Market Ltd., the holding

Company & its nominees 81,250,000 100% 65,625,000 100%

(Amount in Rs.)

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(Amount in Rs.)

(Amount in Rs.)

e. The Company does not have any shares reserved for issue under options, contract/commitments for sale of shares /

disinvestment as at 31st March 2014 and also as at 31st March 2013.

f. During the period of five years immediately preceding 31st March, 2014 as well as 31st March, 2013, the Company has

not issued any bonus shares or shares for consideration other than cash and also the Company has not bought back any

shares during this period.

g. The Company does not have any securities as at 31st March 2014 and as at 31st March 2013 which are convertible into

equity/preference shares.

4. Reserves and surplus

5. Long-term borrowings

6. Other long-term liabilities

March 31, 2014 March 31, 2013

Securities premium account

Opening Balance 9,37,50,000 -

Add: premium on issue of shares received during the year 93,750,000 9,37,50,000

Closing Balance 187,500,000 93,750,000

General Reserves

Opening Balance 3,051,832 3,051,832

Add : amount transferred from surplus balance in the statement

of profit and loss - -

Closing Balance 3,051,832 3,051,832

Surplus in the statement of profit and loss

Opening Balance 314,115,770 289,867,825

Add: Profit for the year (81,901,909) 24,247,945

Net surplus in the statement of profit and loss 232,213,861 314,115,770

Total 422,765,693 410,917,602

March 31, 2014 March 31, 2013

Deferred Payment Liabilities

Retention money for capital items 2,019,862 1,451,812

Total 2,019,862 1,451,812

March 31, 2014 March 31, 2013

Franchisee security deposits 385,067 2,099,875

Total 385,067 2,099,875

Notes To Financial Statement For The Year Ended March 31, 2014 (contd.)

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9. Other current liabilities

10. Tangible assets

March 31, 2014 March 31, 2013

Sundry creditors 102,499,594 38,293,462

Other payables 38,968,287 35,888,874

141,467,881 74,182,336

Office Furniture & Computers Leasehold Total

Equipments Fixtures Improvements

Cost or valuation

At April 1, 2012 12,758,448 4,049,516 49,947,727 2,172,827 68,928,518

Additions 1,113,752 237,648 2,591,927 36,690 3,980,017

Disposals (1,753,607) - (26,011) - (1,779,618)

At March 31, 2013 12,118,593 4,287,164 52,513,643 2,209,517 71,128,917

Additions 1,100,694 223,907 190,272,762 - 191,597,363

Disposals (281,748) (30,888) (126,266) - (438,902)

At March 31, 2014 12,937,539 4,480,183 242,660,139 2,209,517 262,287,378

7. Provisions

8. Trade Payables

Non-Current Current

March 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

Provision for employee benefits

Provision for gratuity 5,570,178 2,968,127 - -

Provision for leave benefits 6,249,569 5,740,546 4,834,964 4,237,883

Total 11,819,747 8,708,673 4,834,964 4,237,883

March 31, 2014 March 31, 2013

Trade payables

Trades executed not settled (exchanges) 3,838,238 -

Trade payables (relating to Brokerage business) 421,742,744 541,384,078

Trade payables (Selling and Distribution and others) 74,423,954 28,607,890

500,004,936 569,991,968

(Amount in Rs.)

(Amount in Rs.)

(Amount in Rs.)

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10. Tangible assets

11. Intangible assets

Office Furniture & Computers Leasehold Total

Equipments Fixtures Improvements

Depreciation

At April 1, 2012 4,975,892 2,173,110 36,093,016 2,150,125 45,392,143

Charge for the year 1,121,615 485,902 6,045,168 59,392 7,712,077

Disposals (883,098) (443) (24,296) - (907,837)

At March 31, 2013 5,214,409 2,658,569 42,113,888 2,209,517 52,196,383

Charge for the year 1,045,559 374,070 37,312,430 - 38,732,059

Disposals (187,393) (20,583) (120,540) - (328,516)

At March 31, 2014 6,072,575 3,012,056 79,305,778 2,209,517 90,599,926

Net block

At March 31, 2013 6,904,184 1,628,595 10,399,755 - 18,932,534

At March 31, 2014 6,864,964 1,468,127 163,354,361 - 171,687,452

Gross block Computer Software Total

At April 1, 2012 31,720,731 31,720,731

Additions 8,319,599 8,319,599

At March 31, 2013 40,040,330 40,040,330

Additions 316,117,362 316,117,362

At March 31, 2014 356,157,692 356,157,692

Amortization

At April 1, 2012 24,680,298 24,680,298

Charge for the year 6,384,250 6,384,250

At March 31, 2013 31,064,548 31,064,548

Charge for the year 51,460,749 51,460,749

At March 31, 2014 82,525,297 82,525,297

Net block

At March 31, 2013 8,975,782 8,975,782

At March 31, 2014 273,632,395 273,632,395

(Amount in Rs.)

(Amount in Rs.)


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12. Deferred tax asset (net)

13. Loans and advances

March 31, 2014 March 31, 2013

Deferred tax liability

Fixed assets : (Depreciation) 25,378,061 337,096

Gross deferred tax liability 25,378,061 337,096

Deferred tax asset


Provision for arbitrage deposit 78,592 80,463

Provision for gratuity 1,807,244 985,938

Provision for performance linked variable plan 4,055,625 1,798,424

Provision for other employee benefits 3,768,635 3,490,944

Unrealized profit 1,253,534 -

Business loss 25,378,061 -

Gross deferred tax asset 41,052,931 9,438,925

Net deferred tax asset 15,674,870 9,101,829

Non-Current Current

March 31, 2014 March 31, 2013 March 31, 2014 March 31, 2013

Advances recoverable in

cash or kind

Unsecured, considered good 562,159 602,274 22,615,420 11,536,390

562,159 602,274 22,615,420 11,536,390

Security deposits

Unsecured, considered good 57,737,565 53,468,565 1,500 334,000

57,737,565 53,468,565 1,500 334,000

Other loans and advances

Unsecured, considered good

Advance income-tax

(net of provisions for taxation) 51,857,352 38,112,951 - -

Deposits with stock exchanges/

clearing house 56,850,000 35,850,000 - -

Unsecured, considered doubtful

Arbitration deposit 242,230 242,230 - -

108,949,582 74,205,181 - -

Arbitration deposit provision (242,230) (242,230)

108,707,352 73,962,951 - -

167,007,076 128,033,790 22,616,920 11,870,390

(Amount in Rs.)

(Amount in Rs.)

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14. Trade receivables

15. Cash and bank balances

March 31, 2014 March 31, 201


Outstanding for a period exceeding six months

from the date they are due for payment

Secured, considered good 4,211,116 1,775,362

Unsecured, considered good 7,834,979 14,575,561

Doubtful 11,920,934 8,614,514

23,967,029 24,965,437

Provision for doubtful receivables 11,920,934 8,614,514

A) 12,046,095 16,350,923

Other receivables

Secured, considered good 186,939,950 318,693,218

Unsecured, considered good 354,742,850 187,081,124

Doubtful 2,599,763 667,209

544,282,563 506,441,551

Provision for doubtful receivables 2,599,763 667,209

(B) 541,682,800 505,107,131

Total (A+B) 533,728,895 521,458,054

March 31, 2014 March 31, 2013

Cash and cash equivalents

Balance with banks :

On current accounts 331,363,224 422,198,878

Deposits with original maturity less than 3 months - -

Investment in units of Liquid fund 106,386,426 -

Cash on hand 33,351 12,002

437,753,001 422,210,880

Other bank balances

Interest accrued on Deposits 4,147,543 3,821,476

Deposits with original maturity for less than 12 months 16,000,000 70,700,000

Deposits with original maturity for more than 12 months - -

Deposits with stock exchanges 233,300,000 213,300,000

253,447,543 287,821,476

Total 691,200,544 710,032,356

(Amount in Rs.)

(Amount in Rs.)

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16. Revenue from operations

17. Other non-operating income

18. Employee benefit expense

March 31, 2014 March 31, 2013

16.1 Selling and distribution commission(S&D)

Mutual Funds 8,788,972 39,082,314

Initial Public Offerings(IPO) 11,431,945 37,191,187

Bonds 131,493,258 59,281,343

Wholesale Debt 11,757,754 12,002,618

Others 13,071,520 28,602,282

Total 176,543,449 176,159,744

16.2 Depository service income

Annual maintenance charges 30,624,579 20,512,303

Transaction charges 11,931,866 5,994,110

Dematerialisation charges 234,445 119,399

Others 136,810 7,810

Total 42,927,700 26,633,622

16.3 Other operating Income

Account opening charges 60,643,555 12,955,968

Research Income 1,494,774 4,289,943

Miscellaneous Income 4,247,137 4,921,199

Total 66,385,466 22,167,110

Interest Income 23,565,518 31,712,680

Provisions written back:

Performance linked variable payment 1,820,523 2,020,179

S&D sub-commission payable 1,599,163 5,345,587

Other payables 5,494,782 -

Profit on redemption of mutual fund units 2,610,870 -

3,863,565 -

Total 38,954,421 39,078,446

Salaries, wages and bonus 234,868,792 216,970,005

Contribution to provident and other funds 9,609,051 8,922,670

Gratuity expense 2,602,051 2,993,783

Staff welfare expenses 16,031,890 11,911,692

Total 263,111,784 240,798,150

(Amount in Rs.)

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19. Operating expense

20. Administrative expense

March 31, 2014 March 31, 2013

Selling and distribution sub-commission 135,891,823 88,870,622

Stamp duty 12,953,453 12,275,290

Transaction charges 4,197,957 3,301,886

Depository charges 863,496 1,102,835

Insurance Charges-stock brokers Indemnity 656,370 609,445

Cost of outsourced staff 111,155,555 81,406,067

Other operating expenses 27,165,349 16,027,129


Total 298,122,977 206,653,273

Lease rent 56,242,986 54,628,801

Repairs and maintenance 24,528,065 11,319,221

Hiring charges 23,998,472 28,621,012

Advertisement 266,302 139,359

Travelling and conveyance 11,985,991 9,949,423

Communication 26,157,329 29,388,344

Printing and stationery 14,406,606 11,813,186

Legal and professional fees 4,741,792 2,374,677

Director's sitting fees 62,000 43,000

Payments to auditor 1,000,250 1,064,202

Electricity charges 6,416,865 5,971,521

Membership and subscriptions 7,404,256 7,550,791

Office maintenance 5,644,637 5,066,916

Staff recruitment 3,071,534 2,867,388

Books and periodicals 267,010 364,904

Business promotion 16,588,636 4,546,126

Courier charges 15,128,568 12,290,009

Insurance charges 730,621 1,015,233

Registration charges 17,705 50,000

Rates and taxes 127,714 21,377

Stamping and franking charges 1,473,124 1,017,514

Loss on sale of fixed assets/assets written off 83,051 359,837

Miscellaneous expenses 216,328 203,739

Total 220,559,842 190,666,580

Payments to auditor

As auditor :

Audit fee 675,000 675,000

Tax audit fee 40,000 40,000

Quarterly limited review 150,000 150,000

In other capacity :

Other services (certification fees) 100,000 160,000

Reimbursement of expenses 35,250 39,202

Total 1,000,250 1,064,202

(Amount in Rs.)

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23. Capital and other commitments

24. Contingent liabilities

25. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

26. Value of imports calculated on CIF basis

As at March 31, 2014, the Company has commitments of Rs. 39,79,750 (Previous year: Rs. 73,380,264) relating to mounts

payable on open purchase orders for fixed assets.

As at As at

March 31, 2014 March 31, 2013

Claims against the company not acknowleged as debts * 4,622 105,899

4,622 105,899

*Claims against the Company comprise action taken against the Company by certain customers in respect of transactions

related to purchase/sale of securities on behalf of these customers. The case for the current year is outstanding with Arbitration

Tribunal of National Stock Exchange at Delhi (during previous year, there were number of cases which were outstanding with

various appellate authorities). The Company has been advised by its legal counsel that it is possible, but not probable, that the

action will succeed and accordingly no provision for liability has been recognized in the financial statements.

Based on information available with the Company, there are no suppliers included in sundry creditors who are registered as

micro, small or medium enterprise under “The Micro, Small and Medium Enterprise Development Act, 2006” as at March 31,

2014.

March 31, 2014 March 31, 2013

Capital expenditure for Software licenses 17,044,326 -

17,044,326 -

21. Depreciation and amortization expense

22. Finance costs

March 31, 2014 March 31, 2013

Depreciation on tangible assets 38,732,059 7,712,077

Amortization of intangible assets 51,460,749 6,384,252

Total 90,192,808 14,096,329

March 31, 2014 March 31, 2013

Bank charges 3,851,938 4,346,970

Total 3,851,938 4,346,970

(Amount in Rs.)

(Amount in Rs.)

(Amount in Rs.)

(Amount in Rs.)

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27. Expenditures in foreign currency (accrual basis)

28. Earnings in foreign currency (accrual basis)

29. Prior period expenses

March 31, 2014 March 31, 2013

Selling and distribution sub-commission 90,738 -

Other operating expense 1,584,080 1,426,414

Travelling Expense 252,549 181,791

1,927,367 1,608,205

Research income 89,874 48,126

89,874 48,126

Membership & subscription - 346,030

Lease line charges - 2,173,979

Transaction charges 2,929,596 -

2,929,596 2,520,009

(Amount in Rs.)

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30. Gratuity

The Company has a defined benefit gratuity plan. Under this plan, every employee who has completed atleast five years of

service gets a gratuity on departure at the rate of 15 days of last drawn salary for each completed year of service. The scheme

is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss, the

funded status and amounts recognised in the balance sheet.

March 31, 2014 March 31, 2013

Statement of Profit and Loss

Net employee benefit expense (recognised in Employee Cost)

Current service cost 2,693,312 1,821,468

Interest cost on benefit obligation 873,028 627,694

Expected return on plan assets (522,498) (360,689)

Net actuarial (gain) / loss recognised in the year (441,791) 639,848


Net benefit expense 2,602,051 2,728,321

Actual return on plan assets 624,976 455,208

Balance Sheet

Present value of defined benefit obligation 11,924,708 9,241,837

Fair value of plan assets (6,354,530) (6,273,710)

5,570,178 2,968,127

Less: Unrecognised past service cost - -

Plan asset / (liability) 5,570,178 2,968,127

Changes in the present value of the defined benefit obligation are as follows:

Opening defined benefit obligation 9,241,837 6,310,366

Interest cost 873,028 627,694

Current service cost 2,693,312 1,821,468


Benefits paid (544,156) (252,058)

Actuarial (gains) / losses on obligation (339,313) 734,367

Closing defined benefit obligation 11,924,708 9,241,837

Changes in the fair value of plan assets are as follows:

Opening fair value of plan assets 6,273,710 4,841,681

Expected return on plan assets 522,498 360,689

Contributions by employer - 1,228,879

Benefits paid (544,156) (252,058)

Actuarial gains / (losses) 102,478 94,519

Closing fair value of plan assets 6,354,530 6,273,710

The major categories of plan assets as a percentage of the fair value of total

plan assets are as follows:

Investments with insurer (in %) 100% 100%

Total 100% 100%

The overall expected rate of return on assets is determined based on the market prices prevailing at the beginning of the

period, applicable to the period over which the obligation is to be settled.

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The principal assumptions used in determining gratuity obligation for the Company's plan are shown below :

March 31, 2014 March 31, 2013

Discount rate 8.85% p.a 7.80% p.a

Expected rate of return on assets 8.00% p.a 8.00% p.a

Employee turnover 20.00% p.a 20.00% p.a

Increase in compensation cost 8.00% p.a 8.00% p.a

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion

and other relevant factors, such as supply and demand in the employment market.

Amounts for the current and previous four periods are as follows:

March 31, 2014 March 31, 2013 March 31, 2012 March 31, 2011 March 31, 2010

Plan assets 6,354,530 6,273,710 4,841,681 4,458,961 2,793,800

Surplus / (deficit) (5,570,178) (2,968,127) (1,468,685) (222,067) (837,135)

Experience adjustments

on plan liabilities 277,496 (163,061) (40,426) (369,907) (574,971)

Experience adjustments

on plan assets 102,478 94,519 167,581 41,375 110,658

The principal assumptions used in determining Leave encashment obligation for the Company's plan are shown below :

March 31, 2014 March 31, 2013

Discount rate 8.85% p.a 7.80% p.a

Increase in compensation cost 8.00% p.a 8.00% p.a

The Company's operations falls under a single business segment of agency/commission based services. The Company is

engaged in the business of securities broking and its allied services and third party distribution of financial products.

Further, all the transactions and the assets of the Company are recorded/located in India. Since the Company's business

activities primarily falls within a single business and geographical segment, no additional disclosure is to be provided

under AS 17 - Segment Reporting, other than those already provided in the financial statements.

Names of related parties and related party relationships

Names of related parties where control exists:

Name of the Party Relationship

State Bank of India Ultimate Holding Company

SBI Capital Markets Limited Holding Company

Related parties with whom transactions have taken place during the year:

Name of the Party Relationship

SBI Life Insurance Company Limited Fellow Subsidiary

SBI Mutual Funds Fellow Subsidiary

SBI DFHI Ltd. Fellow Subsidiary

State Bank of Bikaner and Jaipur Fellow Subsidiary

State Bank of Hyderabad Fellow Subsidiary

SBI Fund Management Ltd. Fellow Subsidiary

State Bank of Mysore Fellow Subsidiary

State Bank of Patiala Fellow Subsidiary

State Bank of Travancore Fellow Subsidiary

SBI Global Factors Ltd. Fellow Subsidiary

Swati B. Desai, Managing Director (upto 31st October 2013) Key Management Personnel

Mani Palvesan, Managing Director (from 1st November 2013) Key Management Personnel

Anil Bhandari, Whole-Time Director & Chief Operating Officer Key Management Personnel

Related parties defined under clause 3 of Accounting Standard – 18 “Related Party Disclosures” have been identified on

the basis of representation made by the management and information available with the Company.

31. Leave encashment

32. Segmental information

33. Related parties disclosures

(Amount in Rs.)


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SBICAP TRUSTEECOMPANY LIMITED

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To,

The Members,

SBICAP Trustee Company Limited

Your Directors have pleasure in presenting the 9th Annual Report and the Audited Accounts of SBICAP Trustee Company

Limited for the year ended 31st March 2014.

During the year 2013-14, the Company has once again established itself as a prominent player in the Trusteeship

Business/ Market, with a remarkable growth in the business, in terms of number of new assignments as well as revenues.

The Company has bagged 218 new accounts during the year, as against 381 in the previous year. The revenues from

operations during the year at Rs. 2074.46 lakhs were also 39% higher than the figure of Rs. 1495.85 lakhs recorded in the

financial year 2012-13. The Profit after tax at 881.08 lakhs are also higher than previous year’s profit of Rs. 752.00 lakhs.

During the year 2013-14, the Company has made its presence felt and established itself as a prominent player in the

Debenture Trusteeship Business. As on date, the Company has concluded 341 Debenture Trusteeship assignments, which

were secured in spite of tough competition from other players in the market. We are proud to mention that SBICAP Trustee

Company Limited is a preferred Debenture Trustee for many Government Companies/Enterprises for their Debenture

Issues. The noteworthy being appointment of SBICTCL as Debenture Trustee in case of NHAI, IRFC Ltd, NHPC, NPCIL, REC

Ltd, IREDA, etc. Also, as per the instructions from SEBI, the Debenture Trustee portfolio of State Bank of India (SBI) was

successfully transferred to SBICTCL. The Directors of the Company are confident that the Company will establish itself as a

leader in the Debenture Trusteeship business in the days to come.

Your Directors are pleased to inform that the Company’s operations are streamlined and the Company is poised to

improve its market share during the financial year 2014-15. Presently, your Company is undertaking various Corporate

Trusteeship activities viz. Security Trusteeship, Security Agent, Debenture/Bond Trusteeship, Escrow Agent, Escrow

Trusteeship, Share Pledge Trusteeship, etc.

Your Directors are also pleased to inform that SBICTCL has started new line of businesses as per the shareholder’s

approval obtained in the Extraordinary General Meeting held on 8th October 2013. SBICTCL has started offering its

services in the field of AIF Trusteeship. The management is confident that the Company will be able to generate good

business in other trusteeship activities such as Trustee for Private Trust, Will management, ESOP Trustee, etc in the years to

come.

Your Directors further inform you that the New Delhi, Kolkata and Bangalore branches are doing well in new business as

well as in ongoing work relating to the Security Trustee / Debenture Trustee and other Trusteeship assignments. The

management is planning to open further branches at Hyderabad, Chennai and Ahmedabad during the year 2014-15.

With the expected presence across the Country, the Directors are confident that we will be able to reach most of the

Corporate, intermediaries, bankers, etc and will be able to service the clients more efficiently.

During the period under review, the total Business Income of the Company was Rs. 1889.30 lakhs, apart from Other Income of

Rs. 185.16 lakhs. The Company incurred total Expenditure of Rs. 735.84 lakhs, with resultant Profit before Tax of Rs. 1338.63

lakhs before provision for income tax, as against the PBT of Rs. 1114.87 lakhs in the previous year.

During the year, the performance of the Company has been quite satisfactory, considering the growing intense

competition, with extremely low fees quoted by the competitors and offered by clients.

Out of the Current Year’s Profit, the Directors propose that a sum of Rs. 88.11 lakhs be transferred to the General Reserve. The

Directors have proposed a Dividend of Rs. 1.25 per share on the paid-up capital, subject to approval by the Members in the

Annual General Meeting.

The Company has not accepted any deposits from Public, during the year under review.

I. Operations

II. Financial Results

III. Dividend & Transfer to General Reserve

IV. Deposits

Directors' Report For The Year 2013-14

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V. Directors

VI. Directors' Responsibility Statement

VII. Auditors

VIII. Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988

IX. Particulars of Employees

During the year under review, Mr. V. G. Kannan – MD & CEO, SBI Capital Markets Limited resigned from the Directorship of

the Company and Mr. Abhay Chaudhari – President & COO was inducted in the Board. Also, Mr. V. Muralidharan was

posted as a Chief Executive Officer and Whole-time Director of the Company. Mr. Muralidharan was earlier working as SVP

&Group CFO of SBI Capital Markets Limited and was already on the Board of the Company as a Director.

During the year, as a good Corporate Governance measure, Mr. Dilip K Sheth was inducted on the Board as an

Independent Director. Mr. Sheth is a Chartered Accountant and he also possesses Doctorate in Law. For the past 40 years,

he is practicing in the field of Counseling in International Tax, Foreign Collaboration, etc and many other legal matters.

Also, Mr. J. Chandrasekaran was appointed by SBICAP as its nominee on the SBICTCL Board. He is a Bachelor of Technology

(B.Tech - Chemical) from I.I.T. Madras. He was working with State Bank of India for the past 35 years, in the field of Credit,

Treasury, Forex and many other areas of Banking. He is also representing SBI on the Board of SIDBI.

With the appointment of such reputed persons in the Board of Directors, the Company will be benefitted by their

knowledge and vast experience, which will surely help the Company in the years to come.

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

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

(ii) appropriate accounting policies have been selected and applied consistently, and the judgements and estimates

that have been made are reasonable and prudent so as to give a true and fair view of the state of affairs of the

Company as on 31st March 2014 and of the profit or loss of the Company for the year ended 31st March, 2014;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records, in accordance with

the provisions of the Companies Act, for safeguarding the assets of the Company and for preventing and detecting

frauds and other irregularities; and

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

The Directors also wish to draw the kind attention of the Shareholders to the Report of the Auditors to the Shareholders

issued by M/s. Sudit K Parekh & Co. - the Statutory Auditors, on the financial accounts for the year ended 31st March 2014.

As per the provisions of the Companies Act, 2013, the Statutory Auditors of the Company may be appointed for a term of

5 years. M/s. Sudit K Parekh & Co., Chartered Accountants, the Statutory Auditors of the Company were appointed in the

8th Annual General Meeting, and hence they are eligible for a term of 5 years. The Companies Act, 2013, provides that

every year the members of the Company may ratify their appointment in the Annual General Meeting.

The Board of Directors, at their 34th Meeting held on 10th April 2014, have recommended for the ratification of the

appointment of M/s. Sudit K. Parikh & Co., Chartered Accountants, as the Statutory Auditors of the Company for the

financial year 2014-15. The Company has received a Certificate/ Consent from M/s. Sudit K. Parikh & Co. to the effect that

their appointment, if made, would be within the limits prescribed under the Companies Act.

In terms of the above Rules issued by the Central Government, the following information is furnished:

Conservation of Energy and Technology Absorption

Since the Company is engaged only in Trusteeship activities, there is no information to report under this head.


During the period under review, the Company has not earned or expended any foreign exchange.

The information, as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of

Employees) Rules, 1975, as amended, is furnished in Annexure ‘A’.

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X. Acknowledgement

The Board is grateful to the State Bank Group and SBICAP & its associates for providing all support to the Company. The

Board also conveys its appreciation to all employees of the Company for their sincere and hardworking these challenging

times and difficult environment.


Sd/- Sd/-

Abhay Chaudhari V. Muralidharan

Director Director

Date: 10th April 2014

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Annexure A

STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956, AND THE COMPANIES

(PARTICULARS OF EMPLOYEES) RULES, 1975

(A) Employed throughout the year and in receipt of remuneration aggregating not less than Rs. 60,00,000/- per annum

NIL

(B) Employed for the part of the year and are in receipt of remuneration aggregating not less than Rs. 5,00,000/- per month

NIL

Name

Designation/

Nature of

Duties

Remuneration

(Rs.)

Qualifications

&

Experience

Date of

commencement of

employment

Last Employment

held and

Designation

Age

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Independent Auditor’s Report

To the Members of SBICAP Trustee Company Limited


Management’s Responsibility for the Financial Statements

Auditor’s Responsibility

Opinion


We have audited the accompanying financial statements of SBICAP Trustee Company Limited (“the Company”), which

comprise the Balance Sheet as at March 31, 2014 and 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.


position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under

the Companies Act, 1956 (“the Act”) read with the General Circular No. 15/2013 dated 13September 2013 of the Ministry of

Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation


and fair view and are free from material misstatement, whether due to fraud or error.




financial statements are free from material misstatement.


statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material


considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to


effectiveness of the entity’s internal control. 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.






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


1. As required by the Companies (Auditor’s Report) Order, 2003 as amended by Companies (Auditor’s Report)

(Amendment) Order, 2004 (together ‘the Order’), 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.


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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement

with the books of account;

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

Accounting Standards notified under the Act read with the General Circular No. 15/2013 dated 13 September 2013 of the

Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013; and

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board

of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of

clause (g) of sub-section (1) of section 274 of the Act.

For SUDIT K. PAREKH & CO.



(Mayank Lakhani)

Partner

M. No.: 113732


Independent Auditor’s Report (contd.)

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Annexure To The Auditor’s Report

(Referred to in our report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of

fixed assets.

(b) The fixed assets of the Company have been physically verified by the management during the year and no material

discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency

of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has

not been disposed off by the Company during the year.

(ii) Since the Company is a service provider, the provisions of clause (ii) of paragraph 4 of the Order are not applicable to the

Company.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties

covered in the register maintained under section 301 of the Act. Accordingly, the provisions stated in paragraph 4 (iii)

(b), (c) and (d) of the Order are not applicable to the Company.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties

covered in the register maintained under section 301 of the Act. Accordingly, the provisions stated in paragraph 4 (iii)

(f) and (g) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control

system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets

and rendering of services. During the course of our audit, we have not observed any major weakness or continuing failure

to correct any major weakness in the internal control system of the Company.

(v) Based on the audit procedures applied by us and according to the information and explanations provided by the

management, we are of the opinion that there are no transactions required to be entered into the register maintained

under section 301 of the Act.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any

deposits from the public within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of

section 209 of the Act for any of the products of the Company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident

fund, investor education and protection fund, income-tax, service tax, excise duty, cess and other material statutory

dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident

fund, income-tax, service tax, excise duty, cess and other undisputed statutory dues were outstanding, at the year

end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax on account of any dispute are as

follows:

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current

and immediately preceding financial year.

(xi) The Company has not taken any loans from Financial Institutions, Banks and nor has it issued any debentures.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the

Company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other

securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause

(xiii) of paragraph 4 of the Orderare not applicable to the Company.

Name of the

Statute

Period to which the

amount relates

Forum where dispute

is pendingNature of the Dues

Amount

(Rs.)

Income-tax Act, Income Tax 1,910,547/- A.Y. 2012-2013 Assessing Officer,

1961 Income Tax Department

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Annexure To The Auditor’s Report (contd.)

(xiv) The Company has not dealt or traded in shares, securities, debentures and other investments during the year.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee

for loans taken by others from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the year.

(xvii) 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 investment.

(xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of

shares to parties and companies covered in the Register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, no debentures have been issued by the Company during the

year.

(xx) The Company has not raised money by way of public issue during the year.

(xxi) Based on our audit procedures performed and as per the information and explanations given to us by the management,

we report that no fraud on or by the Company has been noticed or reported during the year.

For SUDIT K. PAREKH & CO.



(Mayank Lakhani)

Partner

M. No.: 113732

Mumbai; dated: April 10, 2014

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For Sudit K. Parekh & Co. For and on behalf of the Board of Directors



Abhay C. Chaudhari V.Muralidharan

Director CEO & Whole Time Director

(Mayank Lakhani) Ajit Joshi

Partner Company Secretary


Place: Mumbai

Date: 10.04.2014

Summary of Significant Accounting Policies 1 & 2

The accompanying notes form an integral part of the financial statements.

As per our attached report of even date


ASSETS

Shareholders' Funds

Share Capital 3 10,000,000 10,000,000

Reserves and Surplus 4 271,650,076 185,004,248

281,650,076 195,004,248

Non-Current Liabilities

Deferred Tax Liabilities (Net) 5 - 117,543

Other Long Term Liabilities 6 852,174 522,172

Long-Term Provisions 7 1,007,709 -

1,859,883 639,715

Current Liabilities

Trade Payables 8 3,168,160 640,593

Other Current Liabilities 9 18,251,252 4,815,116

Short-Term Provisions 10 6,590,597 6,462,438

28,010,009 11,918,147

TOTAL 311,519,968 207,562,110

Non-Current Assets

Fixed Assets 11

(i) Tangible Assets 5,726,369 2,904,674

(ii) Intangible Assets 257,765 354,769

Non-current Investments 12 15,000,000 -

Deferred Tax Assets (Net) 5 2,127,981 -

Long Term Loans and Advances 13 24,859,705 14,875,621

Other non-current assets 14 168,700,000 104,600,000

216,671,820 122,735,064

Current Assets

Trade Receivables 15 38,975,720 19,890,016

Cash and Bank Balances 16 49,413,943 54,989,403

Short Term Loans and Advances 17 6,458,485 9,947,627

94,848,148 84,827,046

TOTAL 311,519,968 207,562,110

Note Ref.As at

31-Mar-14

As at

31-Mar-13

(Amounts in Indian Rupees)

Balance Sheet As At March 31, 2014

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Statement Of Profit And Loss For The Year Ended 31 March, 2014

Particulars









Place: Mumbai

Date: 10.04.2014

Summary of Significant Accounting Policies 1 & 2

The accompanying notes form an integral part of the financial statements.


INCOME

EXPENSES

Revenue from Operations 18 188,930,246 136,045,062

Other Income 19 18,516,124 13,539,640

Total Income 207,446,370 149,584,702

Employee Benefit Expenses 20 31,938,506 21,544,044

Depreciation and Amortisation Expenses 11 2,152,147 1,236,786

Administration and Other Expenses 21 38,150,530 15,316,684

Total Expenses 72,241,183 38,097,514

Profit before prior period items and tax 135,205,187 111,487,188

Prior period expense 27 1,342,445 -

Profit before tax 133,862,742 111,487,188

Tax Expense

- Current Tax 48,000,000 36,400,000

- Deferred Tax 5 (2,245,524) (112,358)

Profit after tax for the year 88,108,266 75,199,546

Earnings per equity share:

Basic and diluted 25 88.11 75.20

For the year ended

31 March 2013

For the year ended

31 March 2014Note Ref.


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Cash Flow Statement For The Year Ended 31 March, 2014









Place: Mumbai

Date: 10.04.2014


A. CASH FLOW FROM OPERATING ACTIVITIES

B. CASH FLOW FROM INVESTING ACTIVITIES

C. CASH FLOW FROM FINANCING ACTIVITIES

Net Profit Before Prior Period Items and Tax 135,205,187 111,487,188

Adjustment for :-

Depreciation 2,152,147 1,236,786

Provision for Doubtful Debts 6,089,460 602,758

Prior period expense (1,342,445) -

Interest income considered separately (17,903,754) (13,331,547)

Profit on sale of fixed assets considered separately (20,681) (93,453)

Operating Profit before Working Capital Changes 124,179,914 99,901,732

Increase in Trade Receivables (25,175,164) (14,323,840)

Increase in Loans and Advances and Other Current Assets (4,361,568) (664,663)

Increase in Current Liabilities and Provisions 17,099,571 3,662,255

Increase in Long term Liabilities 330,002 137,397

Income Tax paid (49,622,170) (38,666,818)

Net Cash Flow from Operating Activities 62,450,585 50,046,063

Purchase of Fixed Assets (5,034,885) (2,214,671)

Interest received 17,392,550 4,285,958

Proceeds from sale of fixed assets 178,728 341,132

Purchase of investments (15,000,000) -

Fixed Deposits placed during the year (164,500,000) (94,889,496)

Fixed Deposits matured during the year 125,937,896 45,089,496

Net Cash used in Investing Activities (41,025,711) (47,387,581)

Dividend & Dividend Distribution Tax Paid (1,462,438) (1,162,225)

Net Cash used in Financing Activities (1,462,438) (1,162,225)

Net change in Cash & Cash Equivalents (A+B+C) 19,962,436 1,496,257

Opening Balance of Cash & Cash Equivalents 4,551,507 3,055,250

Closing Balance of Cash & Cash Equivalents 24,513,943 4,551,507

For the year ended

31 March 2013

For the year ended

31 March 2014


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Notes To Financial Statements

1. Company background:

2. Significant accounting policies:

thThe Company was incorporated on 28 December 2005 as a wholly owned subsidiary of SBI Capital Markets Limited and is

registered with Securities and Exchange Board of India (SEBI) as a Debenture Trustee. The Company has been providing

services to various types of Borrowers and Investors for getting funds from lenders and debenture issuers.

The Company carries out various corporate trusteeship activities viz. security trusteeship, debenture trusteeship, security

agent, share pledge trusteeship, safe custody of documents etc.

2.1 Basis of Preparation of Financial Statements:

The financial statements of the Company have been prepared in accordance with generally accepted accounting

principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects

with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the

relevant provisions of the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the

Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate

Affairs). The financial statements have been prepared under the historical cost convention on an accrual basis, except in

case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have

been consistently applied by the Company and are consistent with those used in the previous year.

2.2 Use of estimates:

The preparation of the financial statements in conformity with generally accepted accounting principles (GAAP) requires

management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and

expenses and disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions

used in the accompanying financial statements are based upon management's evaluation of the relevant facts and

circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions

used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized

prospectively in current and future periods.

2.3 Recognition of Revenue:

Trusteeship Acceptance Fees are recognized on the acceptance of trusteeship assignment.

Trusteeship Service Charges are recognized / accrued on the basis of terms of Trusteeship Contracts / Agreements entered

into with clients.

Interest income is accounted for on time proportion basis taking into account the amount outstanding and the rate

applicable.

Dividend income is recognized when the right to receive dividend is established.

2.4 Fixed Assets and Depreciation:

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.

Cost comprises the purchase price and any attributed cost of bringing the asset to its working condition for its intended

use.

The Company provides depreciation on fixed assets, other than laptops mobile phones and leasehold improvements, on

Written Down Value Method, at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, on a

pro-rata basis.

Depreciation on laptops and mobile phones is provided on Straight Line Method, at 33.33% per annum on a pro-rata

basis.

The Leasehold Improvements are written-off over the remaining period of lease.

Assets individually costing less than Rs.5,000/- are fully depreciated in the year of acquisition.

(Amounts are in Indian Rupees, unless stated otherwise)

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Notes To Financial Statements (contd.)

2.5 Impairment:


internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable

amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the

estimated future cash flows are discounted to their present value at the weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life

2.6 Foreign currency transactions:

Transactions in foreign currencies are recorded at the prevailing rate at the date of the transactions. At the year end, monetary

assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevailing at the balance sheet

date. All foreign exchange gains and losses are taken to the statement of profit and loss.

2.7 Investments:

Investments are classified into Current Investments and Non-current Investments.

Current investments are stated at cost or net realisable value, whichever is lower.

Non-current investments are stated at cost. Provision for diminution is made to recognise a diminution, other than temporary,

determined separately for each individual investment.

2.8 Employee Benefits:

Short term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee

benefits. Undiscounted value of benefits such as salaries and incentives are recognized in the year in which the employee

renders the related service.

Long term employee benefits

(i) Defined contribution plans

The Company contributes to the employees approved provident fund scheme. The Company’s contribution paid or

payable under the scheme is recognized as an expense in the statement of profit and loss during the year in which the

employee renders the related service.

(ii) Defined benefit plans

The Company's gratuity scheme is a defined benefit plan. The Company makes annual contributions to funds

administered by LIC. The amount of contribution is determined by the LIC on the basis of actuarial valuation. Long term

compensated absences are provided for, based on actuarial valuation as determined by an independent actuary.

The actuarial valuation is based on projected unit credit method. The liability is measured at the present value of the

estimated future cash flows. The discount rate used for determining the present value of future obligation under the

defined benefit plan, is based on the market yield on government securities as at the balance sheet date. Actuarial gains

and losses are recognized immediately in the statement of profit and loss.

2.9 Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified

as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight

line basis over the lease term.

2.10 Earnings Per Share:


share have been computed by dividing net profit after tax by weighted average number of equity shares outstanding for the

year. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive

potential equity shares outstanding during the year.


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2.11 Income taxes:

Tax expense comprises current and deferred taxes. Current income tax is measured at the amount expected to be paid to the

tax authorities in accordance with the Income Tax Act. Deferred income taxes reflect the impact of current year timing

differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will

be available against which such deferred tax assets can be realized. Deferred tax assets are recognized on carry forward of

unabsorbed depreciation and tax losses only if there is virtual certainty supported by convincing evidence that such deferred

tax assets can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognizes deferred tax assets to the

extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be

available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying

amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that

sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is

reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable

income will be available.

2.12 Provisions & Contingent Liabilities:

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an

outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are

not discounted to the present value and are determined based on the best estimate required to settle the obligation at the

balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be

confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the

company or when there is a present obligation that arises from past events where it is either not probable that an outflow of

resources will be required to settle or a reliable estimate of the amount cannot be made.

2.13 Segment Reporting:

As the Company’s business activity falls within a single primary business segment namely, Corporate Trusteeship Activities, and

a single geographical segment, i.e. India, the disclosure requirement of Accounting Standard 17 on Segment Reporting as

under Companies (Accounting Standards) Rules, 2006 is not applicable.

2.14 Cash and Cash Equivalents:

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand, cheques in hand and short-term

investments with an original maturity of three months or less.

2.15 Provision for Doubtful Debts:

Provision for doubtful debts is made in the accounts based on the following management estimate:

Debts outstanding for period of Provisions for doubtful debts

More than 6 months but not exceeding 12 months 10%

More than 12 months 100%


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22. Auditor's Remuneration (excluding service tax):

ParticularsFor the year ended

31-Mar-14

For the year ended

31-Mar-13

As Statutory Auditor 150,000 150,000

As Tax Auditor 60,000 60,000

Other Services 35,000 30,000

23. Foreign currency expenditure and earnings:


31-Mar-14

For the year ended

31-Mar-13

a. Expenditure in Foreign Currency Nil Nil

b. Earning in Foreign Currency Nil 393,656

24. Related Party Information:

(i) Relationships:-

Where control exists: -

A Name of Party Relationship

State Bank of India Ultimate Holding Company

SBI Capital Markets Ltd. Holding Company

B Fellow Subsidiary and Associates Relationship

SBICAP Ventures Ltd. Fellow Subsidiary

SBICAP Securities Ltd. Fellow Subsidiary

SBICAP (UK) Limited Fellow Subsidiary

SBICAP (Singapore) Limited Fellow Subsidiary

State Bank of Patiala Associate of State Bank of India

State Bank of Bikaner and Jaipur Associate of State Bank of India

C Key Management Personnel Designation

Mr. V. Muralidharan CEO & Whole Time Director (from 07.11.2013)

Mr. Vishwas Pathak Sr. Vice President & COO.


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(iii) Details of transactions with Related Parties are as follows: -

Name of the Related

Party

For the year ended

31-Mar-14

For the year ended

31-Mar-13

SBI Capital Markets Ltd Payments made on behalf of the Company & 10,414,335 373,759

reimbursed

State Bank of India Royalty expenses 2,669,095 -

(Corporate Office) Reimbursement of expenses 730,407 -

Trade payables 2,732,085 -

State Bank of India Interest Income 1,478,617 23,946

(Cuffe Parade Branch, Fixed Deposits Balance 81,500,000 228,425

Mumbai) Accrued Interest on Fixed Deposits 1,315,682 43,048

State Bank of India Interest Income 13,713,520 12,743,173

(Fort Branch, Mumbai) Bank Balances 18,137,198 4,549,507

Fixed Deposits Balance 93,800,000 132,009,471

Accrued Interest on Fixed Deposits 10,157,207 13,366,661

Bank charges 20,292 10,591

State Bank of Bikaner Interest Income 1,603,193 547,386

and Jaipur Fixed Deposits Balance 16,500,000 16,500,000

(Fort Branch, Mumbai) Accrued Interest on Fixed Deposits 1,935,516 492,644

State Bank of Patiala Interest Income 604,782 17,042

(Colaba Branch, Mumbai) Fixed Deposits Balance 6,300,000 6,300,000

Accrued Interest on Fixed Deposits 559,640 15,337

SBI Cards & Payment Trusteeship Acceptance Fees 75,000 100,000

Services Pvt. Ltd. Trusteeship Service Charges 75,000 38,014

Trade Receivables 84,270 156,072

SBI Global Factors Ltd. Trusteeship Service Charges 36,448 -

Mr. Vishwas Pathak Gross Remuneration including allowances, 5,422,297 4,119,127

perquisites and contribution to Provident Fund

Gratuity payment made 318,482 -

Mr. V. Muralidharan Gross Remuneration including allowances, 1,166,687 -

perquisites and contribution to Provident Fund

Note: -

Related party relationships on the basis of Accounting Standard 18 as in (i) above are as given by the Company and relied upon

by the Auditors.

25. Earnings per equity share:


31-Mar-14

For the year ended

31-Mar-13

a. (Profit / Loss) attributable to equity shareholders’ (Rs.) 88,108,266 75,199,546

b. Weighted average number of equity shares outstanding during 1,000,000 1,000,000

the period (Nos.)

c. Basic/Diluted Earnings per equity share (a/b) (Rs.) 88.11 75.20

d. Face value of each equity share (Rs.) 10 10


Particulars

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26. Deferred Tax:

Components of Net Deferred Tax Assets / (Liabilities) are as under:

ParticularsAs at

31-Mar-14

As at

31-Mar-13

Deferred Tax Asset


Provisions for Long-term and Short-term Compensated Absences 386,082

Total 2,455,889 195,565

Deferred Tax Liability

Fixed Assets (Depreciation) 327,908 313,108

Net Deferred Tax Assets / (Liabilities) 2,127, 981 (117,543)

27. Employee Benefits:

Defined Contribution Plan

Employee Benefit Expenses includes Rs. 1,052,491 (PY: Rs. 737,048) recognized as an expense during the year in respect of

defined contribution plan.

Defined Benefit Plan

Gratuity:

The Company has adopted the Group Gratuity Scheme of Life Insurance Corporation of India and annual contributions,

determined by using actuarial valuation technique, have been paid to the scheme. Details of the same, to the extent available

from LIC of India, are as follows:

Valuation Method: Projected Unit Credit Method

Actuarial Assumptions

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and

other relevant factors.


31-Mar-14

For the year ended

31-Mar-13

Mortality Rate LIC (1994-96) LIC (1994-96)

ultimate ultimate

Withdrawal Rate 1% to 3% 1% to 3%

depending on age depending on age

Discount Rate 8% p.a. 8% p.a.

Salary Escalation 7% 4%


31-Mar-14

For the year ended

31-Mar-13

Present value of obligation, as at the beginning of the year 612,237 321,616

Change in present value of past service benefit 23,600 113,512

Current service cost 226,244 177,109

Actual benefits paid (318,482) -

Present value of obligation, as at the end of the year 543,599 612,237

Change in defined benefit obligation


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31-Mar-14

For the year ended

31-Mar-13

Fund value at the beginning of the year 612,237 321,616

Actual return on plan assets 31,624 20,891

Contribution by the Company 228,254 269,730

Actual benefits paid (318,482) -

Fund value at the end of the year 553,633 612,237

Change in plan assets

ParticularsAs at

31-Mar-14

As at

31-Mar-13

Asset (net) recognized in the Balance Sheet 10,034 -

Amount recognized in the Balance Sheet


31-Mar-14

For the year ended

31-Mar-13

Change in present value of past service benefit 23,600 113,512

Current service cost 226,244 177,109

Actual return on plan assets (31,624) (20,891)

LIC Premium 10,686 10,683

Net cost 228,906 280,413

Amount recognized in the Statement of Profit & Loss

Other employee benefits:

Other employee benefits comprise provision for long-term and short-term compensated absences (Sick Leave and Privilege

Leave). Actuarial assumptions used for determining the liability in respect of these benefits are as follows:

The Company has provided for long-term and short-term compensated absences, based on actuarial valuation, for the first

time during the year ended 31 March 2014. Out of the total leave expense of Rs.2,502,632 debited to the Statement of Profit

and Loss during the year, Rs.1,342,445 pertains to provision for earlier years omitted to be accrued in the books of account of

the Company. Accordingly, the same has been disclosed as prior period expense in the Statement of Profit and Loss for the year

ended 31 March 2014.


31-Mar-14

For the year ended

31-Mar-13

Discount rate 8.80% 8.05%

Rate of increase in compensation levels 8% 8%


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28. Operating Lease:

Where the Company is a lessee:

Rent

The Company has entered into various agreements for lease of office spaces which expire over a period upto April 2016. Gross

rental expenses for the year ended 31 March 2014 aggregate to Rs.14,857,391 (31 March 2013 - Rs.6,445,520).

Minimum obligation on lease rentals payable as per the lease agreement is as under:-

ParticularsAs at

31-Mar-14

As at

31-Mar-13

Not later than one year 7,830,400 3,151,920

Later than one year but not later than five years Nil 2,947,120

Above five years Nil Nil

Amount recognized in the Balance Sheet

29. Managerial Remuneration:

(i) The Whole Time Director & Chief Executive Officer is on secondment from SBI and his remuneration, which is in

accordance with the service rules of SBI, has been charged in the books of account.

(ii) Remuneration, including allowances, to CEO & Whole Time Director (since November 7, 2013):


31-Mar-14

For the year ended

31-Mar-13

Salary and bonus 825,239 Nil

Contribution to provident and pension funds 172,596 Nil

Perquisites 86,895 Nil

Other allowances 81,957 Nil

Total 1,166,687 Nil

As the future liability for gratuity and compensated leave absences is provided on actuarial basis for the Company as a whole,

the amount pertaining to the directors is not ascertainable and therefore not included above.

There is no commission payable to any director of the Company. Consequently, the computation of profits as required under

Section 349 of the Companies Act, 1956 has not been included.

ParticularsAs at

31-Mar-14

As at

31-Mar-13

Income tax demand under dispute (AY 2012-13) 1,910,547 Nil

30. Contingent Liabilities and Commitments :

31. Trade Receivables:

Trade Receivables balances as on 31 March 2014 are subject to confirmation and reconciliation, if any. However, the

management does not expect any material variation.


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32. Under Micro, Small and Medium Enterprises Development Act, 2006 which came into force from 2 October 2006, certain

disclosures are required to be made relating to Micro, Small and Medium Enterprises. Accordingly, information relating to

disclosure under the said Act has been given only to the extent such information is readily available with the Company. This

information has been relied upon by the auditors.

33. Previous year figures have been regrouped/reclassified/restated to correspond with the figures of the current year.

As per our attached report of even date For and on behalf of the Board of Directors

For Sudit K. Parekh & Co.



Abhay C. Chaudhari V. Muralidharan

Director CEO & Whole Time

Director

(Mayank Lakhani)

Partner

Membership No. 113732 Ajit Joshi

Company Secretary

Place: Mumbai

Date: 10.4.2014


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Notes To The Balance Sheet As At 31 March, 2014

As at

31 March 2013

As at

31 March 2014Particulars

NOTE "3"

SHARE CAPITAL

NOTE "4"

RESERVES AND SURPLUS

Authorised Capital

20,00,000 (previous year 20,00,000) Equity Shares of Rs.10/- each 20,000,000 20,000,000

20,000,000 20,000,000

Issued, Subscribed and Paid up capital

10,00,000 (previous year 10,00,000) Equity Shares of Rs. 10/- each fully paid up 10,000,000 10,000,000

at par. [10,00,000 Equity shares (previous year 10,00,000) of Rs.10/- each

fully paid are held by SBI Capital Markets Limited, the Holding Company.]

TOTAL 10,000,000 10,000,000

Details of shareholder holding more than 5% shares is set out below :

SBI Capital Markets Limited

No. of Shares held 999,880 999,880

% of shareholding 99.99 99.99

Reconciliation of the number of shares outstanding is set out below:

Number of shares at the beginning 1,000,000 500,000

Add: Bonus Shares issued on captialisation of reserves - 500,000

Number of shares at the end 1,000,000 1,000,000

Aggregate number of bonus shares issued during the period of five years immediately preceding the balance sheet

date

During the five-year period ended 31 March 2014, 950,000 (Previous year: 950,000) equity shares of Rs. 10 each, fully paid

up have been allotted as bonus shares by capitalisation of general reserve.

General reserve

Opening balance 10,214,210 7,694,255

Add: Transferred from surplus in the Statement of Profit & Loss 8,810,827 7,519,955

Less: Utilised for issue of bonus shares - (5,000,000)

19,025,037 10,214,210

Surplus/(Deficit) in Statement of Profit and Loss

Opening Balance 174,790,038 108,572,885

Add: Net profit after tax transferred from Statement of Profit & Loss 88,108,266 75,199,546

Amount available for appropriation 262,898,304 183,772,431

Appropriations:

Final Dividend 1,250,000 1,250,000

Tax on Dividend 212,438 212,438

Transfer to General reserve 8,810,827 7,519,955

Net Surplus/(Deficit) in the Statement of Profit and Loss 252,625,039 174,790,038

TOTAL 271,650,076 185,004,248

As at

31 March 2013

As at

31 March 2014Name of shareholder

As at

31 March 2013

As at



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Notes To The Balance Sheet As At 31 March, 2014 (contd.)

As at

31 March 2013

As at

31 March 2014

NOTE "5"

DEFERRED TAX (LIABILITIES) / ASSETS [NET]

NOTE "6"

OTHER LONG TERM LIABILITIES

NOTE "7"

LONG TERM PROVISIONS

NOTE "8"

TRADE PAYABLES

NOTE "9"

OTHER CURRENT LIABILITIES

NOTE "10"

SHORT TERM PROVISIONS

(a) Deferred Tax Assets


Provision for Long-term and Short-term Compensated Absences 386,082 -

2,455,889 195,565

(b) Deferred Tax Liabilities

Fixed Assets (Depreciation) 327,908 313,108

327,908 313,108

NET DEFERRED TAX (LIABILITIES) / ASSETS 2,127,981 (117,543)

Trust Settlement Fees 462,197 322,197

Retention monies 389,977 199,975

TOTAL 852,174 522,172

Provision for employee benefits:

Provision for Long-term Compensated Absences 1,007,709 -

TOTAL 1,007,709 -

Trade Payables to Micro, Small and Medium Enterprises (Refer note 32) - -

Others 3,168,160 640,593

TOTAL 3,168,160 640,593

Advances received from customers - 600,000

Advances received for CERSAI & Others 16,106,769 1,787,430

Income received in advance 617,129 1,696,366

Other Payables

(a) Statutory dues 882,296 309,291

(b) Provision for expenses 575,383 387,391

(c) Retention monies 36,975 9,938

(d) Trust Settlement Fees 31,700 24,700

(e) Other payables 1,000 -

TOTAL 18,251,252 4,815,116

Provision for employee benefits:

Performance linked variable pay 5,000,000 5,000,000

Provision for Short-term Compensated Absences 128,159 -

Proposed Dividend 1,250,000 1,250,000

Tax on Proposed Dividend 212,438 212,438

TOTAL 6,590,597 6,462,438

Particulars


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Fixed Assets As At 31 March, 2014

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As at

31 March 2013

As at

31 March 2014

NOTE "12"

NON - CURRENT INVESTMENTS

NOTE "13"

LONG TERM LOANS AND ADVANCES

NOTE "14"

OTHER NON - CURRENT ASSETS

NOTE "15"

TRADE RECEIVABLES

Bonds (quoted)

15,000 (2013: Nil) @8.01% tax free bonds of India Infrastructure 15,000,000 -

Finance Company Ltd of Rs.1,000/- each fully paid-up

TOTAL 15,000,000 -

Market value of quoted investment 12,924,000 -

Book value of quoted investment 15,000,000 -

Cost of quoted investment 15,000,000 -


Advance Income Tax (Net of Provisions) 7,495,476 5,873,306

Prepaid Expenses 262,540 -

Rental & Other Deposits 7,541,260 3,905,260

Accrued Interest on Fixed Deposits * 9,099,580 5,097,055

Accrued Interest on Investment (IIFCL Tax Free Bonds) 460,849 -

TOTAL 24,859,705 14,875,621

*Refer note 24 for related party disclosures

Other Bank Balance*

In Fixed Deposits (with maturity of more than 12 months from 168,700,000 104,600,000

the date of Balance sheet)

TOTAL 168,700,000 104,600,000


(Unsecured)

Debts Outstanding for period exceeding six months

- Considered Good 12,339,308 5,424,807

- Considered Doubtful 6,776,710 687,250

19,116,018 6,112,057

Less: Provision for doubtful debts 6,776,710 687,250

12,339,308 5,424,807

Others

- Considered Good 26,636,412 14,465,209

- Considered Doubtful - -

26,636,412 14,465,209

TOTAL 38,975,720 19,890,016

Particulars


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As at

31 March 2013

As at

31 March 2014

NOTE "16"

CASH AND BANK BALANCES

NOTE "17"

SHORT TERM LOANS & ADVANCES

Cash and Cash Equivalents

- Cash on hand 4,166 2,000

- Cheques in hand 1,872,579 -

- Balances with Banks*

In Current Account 1,927,359 2,762,077

In Current Account - Escrow accounts 16,209,839 1,787,430

In Deposit accounts (with maturity of less than 3 months) 4,500,000 -

Other Bank Balances*

In Fixed Deposits (with maturity of less than 12 months) 24,900,000 50,437,896

TOTAL 49,413,943 54,989,403


(Unsecured, Considered Good)

Balance with Government authorities:

Cenvat Credit Receivable 555,262 115,845

Service Tax paid in advance - 208,387

Others:

Prepaid Expenses 219,601 372,242

Expenses Recoverable from customers 806,393 430,518

Accrued Interest on Fixed Deposits * 4,868,465 8,820,635

Advance Paid to Suppliers 8,764 -

TOTAL 6,458,485 9,947,627


Particulars


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Notes To The Statement of Profit And Loss For The Year Ended 31 March, 2014

As at

31 March 2013

As at


NOTE "18”

REVENUE FROM OPERATIONS

NOTE "19”

OTHER INCOME

NOTE "20”

EMPLOYEE BENEFIT EXPENSES

NOTE "21”

ADMINISTRATION AND OTHER EXPENSES

Trusteeship Acceptance Fees 44,739,000 27,767,519

Trusteeship Service Charges 144,191,246 108,277,543

TOTAL 188,930,246 136,045,062

Interest Income 17,903,754 13,331,547

Miscellaneous Income 591,689 114,640

Profit on Sale of Fixed Asset 20,681 93,453

TOTAL 18,516,124 13,539,640

Employee Salary, Allowances and Benefits 27,819,673 19,728,341

Contribution to Gratuity Fund 228,906 280,413

Contribution to Provident Fund (Employer's) 1,052,491 737,048

Leave Expenses 1,160,187 -

Staff Welfare Expenses 1,677,249 798,242

TOTAL 31,938,506 21,544,044

Rent 14,965,339 6,485,468

Rates & Taxes 266,704 141,644

Insurance 149,858 143,985

Legal and Professional Fees 2,816,664 2,475,116

Payment to Auditor

a) for statutory audit 150,000 150,000

b) for tax audit 60,000 60,000

c) other services 35,000 30,000

Printing and Stationery 629,212 283,626

Conveyance 2,496,098 1,352,990

Advertisement and business development charges 1,598,016 295,535

Electricity Charges 1,451,759 620,212

House Keeping & Security Expenses 1,273,890 544,483

Repairs and Maintenance 1,241,051 396,592

Royalty Expenses 2,669,095 -

SEBI Application & Registration Fees 252,802 333,029

Communication Expenses 1,038,605 871,941


Bad Debt - 183,617

Miscellaneous Expenses 966,977 345,688

TOTAL 38,150,530 15,316,684


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SBICAPVENTURES LIMITED

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To,

The Members,

thYour Directors have pleasure in presenting the 9 Annual Report and the Audited Accounts of SBICAP Ventures Limited for stthe year ended 31 March 2014.

During the year under review, the Company has made a net loss of Rs. 34,75,948/- due to payment of stamp duty and

registration charges for increase of the authorised capital from Rs. 25 crs to Rs. 100 crs and employee cost.

The Authorised Capital of the Company was increased from Rs. 25 crs to Rs. 100 crs as the Company is in the process of acting

as Sponsor/Asset Management Company for Alternative Investment Funds being set up with DFID and SBI Mutual Fund.

No dividend is proposed for the Financial Year 2013-14.

The Company has not accepted any deposits from Public during the year under review.

During the year under review, the following changes took place among Directors of the Company :-

nd• Smt. Arundhati Bhattacharya resigned as Director w.e.f. 2 August, 2013 consequent to her resignation as Managing ndDirector & CEO of SBI Capital Markets Ltd. with effect from the close of business hours on 2 August, 2013.

st• Shri Abhay C. Chaudhari was appointed as Director w.e.f. 31 October, 2013, in terms of Article 148(iii) of the Articles of


th•? Shri Rajat Misra was appointed as Director w.e.f. 18 December, 2013, in terms of Article 148(v) of the Articles of


The Board places on record its deep appreciation of the valuable contributions made by Smt. Arundhati Bhattacharya during

her tenure as Chairman and Director and extends a hearty welcome to Shri Abhay C. Chaudhari and Shri Rajat Misra as

Directors of the Company.

thFurther, consequent to appointment of Shri V.G. Kannan as Managing Director & CEO of SBICAP w.e.f. 8 October, 2013, he

now holds the office as ex-officio Director and also as ex-officio Chairman of the Company in terms of Article 148(ii) of the

Articles of Association of the Company.

thShri V. G. Kannan and Shri Rajat Misra, Directors, will retire by rotation at the ensuing 9 Annual General Meeting. Shri V. G.

Kannan, being eligible, has offered himself for re-appointment as Director liable to retire by rotation. Shri Rajat Misra, being

eligible, has offered himself for re-appointment as Director liable to retire by rotation.

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

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

(ii) appropriate accounting policies have been selected and applied consistently, and judgements and estimates that have stbeen made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31

stMarch 2014, including the profit or loss of the Company for the year ended 31 March, 2014;

(iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the

provisions of the Companies Act 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.

I. Financial Results

III. Dividend

IV. Deposits

V. Directors

VI. Directors' Responsibility Statement

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The Directors also wish to draw the attention of the Shareholders to the Report of the Auditors to the Shareholders by

M/s. D.S.K. & Associates, the Statutory Auditors, on the financial accounts for the year ended March 31, 2014.

thM/s. D. S. K. & Associates, Chartered Accountants, who are the Company's Statutory Auditors, retire at the conclusion of the 9 th thAnnual General Meeting of the Company. The Board of Directors, at its 37 Meeting held on 12 April, 2014, has recommended

for re-appointment of M/s. D. S. K. & Associates, Chartered Accountants, as the Statutory Auditors of the Company to hold th thoffice from the conclusion of the 9 Annual General Meeting upto the conclusion of the 10 Annual General Meeting of the

Company. The Company has received a Certificate from M/s. D.S.K. & Associates to the effect that their appointment, if made,

would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956/Section 139 of the Companies Act

2013.

In terms of the above Rules issued by the Central Government, the following information is furnished :-

Conservation of Energy and Technology

Absorption since the Company has not undertaken business activities during the year under review, there is no

information to report under this head.


During the year under review, the Company has neither earned nor expended any foreign exchange.

There is no information to report in terms of the Companies (Particulars of Employees) Rules, 1975.

The Board is grateful to State Bank of India and to the SBICAP family for providing every support during the year.


(V. G. Kannan) (Abhay C. Chaudhari)

Chairman Director

Place : Mumbai,

Date : 12th April, 2014

VII. Auditors

VIII. Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988

IX. Particulars of Employees

X. Acknowledgement


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Independent Auditor's Report For Year 2013-14

We have audited the accompanying financial statements of SBICAP Ventures Limited ('the Company'), which comprise the Balance Sheet as at 31March 2014 and the Statement of Profit and Loss and Cash flow statement for the year ended, a summary

of significant accounting policies and other explanatory information.


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,

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 mis-statement, whether due to fraud or error.




financial statements are free from material mis-statement.


statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material


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





a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

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


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

for the purposes 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;

a) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement

with the books of account.

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

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

c) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the

Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in

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

d) since the Central Government has not issued any notification as to the rate at which the cess is to be paid under

section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner

in which such cess is to be paid, no cess is due and payable by the Company

For D.S.K. & Associates


Firm Registration No.117710W

(Santosh T. Shinde)

Partner


Place : Mumbai,


To the Member’s of SBICAP Ventures Ltd.

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Annexure To The Auditors' Report

The Annexure referred to in paragraph 1 of the Auditors' report to the members of SBICAP Ventures Limited (the Company) for

the year ended March 31, 2014. We report that:

i. In respect of its Fixed Assets:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of

fixed assets.

b. As explained to us, the fixed assets have been physically verified by the management at reasonable intervals; no

material discrepancies were noticed on such verification.

c. In our opinion and according to the information and explanations given to us, no fixed asset has been disposed

during the year and therefore does not affect the going concern assumption.

ii. In respect of its inventories:

The company being an investing company, clause 4(ii) of the Order is not applicable to the company.

iii. In respect of Loans and advances given or taken:

a. The Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other

parties covered in the register maintained under section 301 of the Companies Act, 1956.

b. Therefore other sub-clauses under this para are not applicable.

iv. The Company has neither purchased inventory and Fixed Assets nor sold goods and services during the year; hence

clause 4(iv) is not applicable to the Company.

v. According to the information provided and explanation given by the management, the Company has not executed any

transaction which is required to be entered in the register maintained in pursuance of section 301 of the Act.

vi. The Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank

of India, the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder are not

applicable.

vii. In our opinion, the Company has an internal audit system commensurate with its size and the nature of its business.

viii. To the best of our knowledge and according to the information and explanations given to us, the Central Government has

not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act,

1956 in respect of services carried out by the Company.

ix. a) According to the information and explanations given to us and on the basis of our examination of the books of

account, the Company is generally regular in depositing undisputed statutory dues including provident fund,

income-tax, sales-tax, customs duty, investor education and protection fund, wealth and any other statutory dues

during the year with the appropriate authorities. As explained to us, the Company did not have any dues on account

of employee state insurance, excise duty and cess etc.

b) According to the information and explanations given to us, no undisputed dues payable in respect of income-tax,

sales tax, wealth tax, customs duty and cess were outstanding at 31 March 2014 for a period of more than six months

from the date they became payable

c) According to the information and explanations given to us, there are no dues in respect of sales tax, income tax, sales

tax, customs duty, wealth tax, excise duty, and cess that have not been deposited with the appropriate authorities on

account of any dispute.

x. The Company has no accumulated losses and the Company has incurred cash losses during the financial year covered by

our audit but not in preceding financial year.

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xi. On the basis of our examination and according to the information and explanations given to us, the Company has not

defaulted in repayment of dues to any bank or financial institution. The Company has not obtained any borrowings by way

of debentures.

xii. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and

other securities.

xiii. The Company is not a chit fund, nidhi, mutual benefit fund or a society.

xiv. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in

shares, securities, debentures and other investments.

xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by

others from banks or financial institutions.

xvi. The Company did not have any term loans outstanding during the year.

xvii. In our opinion, and on the basis of our examination and according to the information and explanations given to us, and on

overall examination of the balance sheet of the company, we report that the Company has not, prima facie, used the funds

borrowed on short term basis during the year for long term investment and vice versa.

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register

maintained under section 301 of the Act.

xix. The Company does not have any outstanding debentures during the year.

xx. The Company has not raised any money by public issues during the year.

xxi. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported

during the year.




(Santosh T. Shinde)

Partner


Place : Mumbai


Annexure To The Auditors' Report (contd.)

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Balance Sheet As At 31st March 2014


ASSETS

Shareholders' Funds

Share Capital 2.1 41,620,000 41,620,000

Reserves and Surplus 2.2 11,744,114 15,220,062

Current Liabilities

Other Current Liabilities 2.3 2,577,616 50,623

55,941,730 56,890,685

Non-current Assets

Fixed Assets

Tangible Assets 2.5 3,130 3,636

Long-term Loans and Advances 2.7 872,101 18,900

Other Non-Current Assets 2.8 13,182,346 14,691,084

14,057,577 14,713,620

Current Assets

Cash and Cash Equivalents 2.9 40,029,880 40,830,953

Other Current Assets 2.10 1,854,273 1,346,112

41,884,153 42,177,065

55,941,730 56,890,685

Significant Accounting Policies & Notes to Accounts 1 & 2

Notes referred to above form an integral part of the Accounts

NotesAs at

31-Mar-14

As at

31-Mar-13

(Amount in Rs.)



(Santosh T. Shinde)

Partner

FOR AND ON BEHALF OF THE BOARD

SBICAP Ventures Limited

V. G. Kannan Abhay Chaudhari

(Chairman) (Director)


Place : Mumbai


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Statement Of Profit And LossFor The Year Ended March 31, 2014

INCOME

EXPENSES

PROFIT/(LOSS) BEFORE TAXATION

NET PROFIT/(LOSS)

Revenue from Operations

Other Income 2.11 4,894,995 4,712,571

Total 4,894,995 4,712,571

Employee Benefit Expense 2.12 2,161,250 309,948

Depreciation and Amortisation expense 2.5 506 588

Other expenses 2.13 6,209,187 107,121

Total 8,370,943 417,657

(3,475,948) 4,294,914

Adjustment for :

Current Tax Expenses - 1,327,133

Shortfall of provision for tax in earlier years - 1,614,835

MAT Credit created - (2,165,633)

- 776,335

(3,475,948) 3,518,579

Earnings per Equity Share

Basic/Diluted Earning Per Share (EPS) (0.84) 0.85

Notes to Accounts


As per our attached audit report as on even date

Statement of Profit and Loss NotesFor the Period

ended 31-Mar-14

For the Year

ended 31-Mar-13

(Amount in Rs.)



(Santosh T. Shinde)

Partner






Place : Mumbai


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Statement of Cash Flow

A. CASH FLOW FROM OPERATING ACTIVITIES

B. CASH FLOW FROM INVESTMENT ACTIVITIES

C. CASH FLOW FROM FINANCING ACTIVITIES

Net Profit /(Loss) before Taxation (3475948) 4,294,914

Adjustment for :

Depreciation 506 588

Interest received during the year (4,860,571) (3,216,892)

Interest Accrued - 953,065

Operating Profit / (Loss) before Working Capital Changes (8,336,013) 2,031,675

(Increase)/Decrease in Current Assets (159,423)

Increase/(Decrease) in Current Liabilities 2,526,993 (34,899)

Cash generated from operations (5,968,443) 1,996,776

Tax paid during the year (693,201) (804,178)

NET CASH FROM OPERATING ACTIVITIES (6,661,644) 1,192,598

Investments in

Fixed Deposit (4,043,758) 1,868,152

Interest received during the year 4,860,571 3,216,892

Interest accrued during the year -

NET CASH FROM INVESTING ACTIVITIES 816,813 5,085,044

NET CASH FROM FINANCING ACTIVITIES - -

NET INCREASE IN CASH AND EQUIVALENT (5,844,831) 6,277,642

CASH AND CASH EQUIVALENT (OPENING BALANCE) 6,830,953 553,311

CASH AND CASH EQUIVALENT (CLOSING BALANCE) 986,122 6,830,953

Notes:

1) Cash and Cash equivalents include:

Balances with bank 986,122 6,830,953

Fixed Deposit - -

986,122 6,830,953

2) Fixed Deposits includes

More than 3 Months 51,043,758 47,000,000

Less than 3 Months - -

Total Fixed Deposits 51,043,758 47,000,000

3) Previous year's figures have been re-grouped/ rearranged to conform

to the current year's presentation, whenever necessary

(Amount in Rs.)

ParticularsFor the Period

ended 31-Mar-14

For the Year

ended 31-Mar-13



(Santosh T. Shinde)

Partner






Place : Mumbai


As per our attached audit report as on even date

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Notes To Financial StatementFor The Year Ended 31st March 2014

NOTE 2.1 : SHARE CAPITAL

NOTE 2.2 : RESERVES & SURPLUS

Authorised

10,00,00,000 (PY: 2,50,00,000) Equity Shares of Rs.10 each 1,000,000,000 250,000,000

Issued, Subscribed & Paid-up

41,62,000 (PY: 41,62,000) Equity Shares of Rs.10 each fully paid up 41,620,000 41,620,000

(Of the above shares, 100% (PY: 100%) held by the holding company

SBI Capital Markets Limited & its nominees)

41,620,000 41,620,000

The company has only one class of shares referred to as equity shares. Each holder of equity shares is entitled to one vote

per share.

a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period equity Shares

At the beginning of the period 4,162,000 41,620,000 4,162,000 41,620,000

Outstanding at the end of the period 4,162,000 41,620,000 4,162,000 41,620,000

Capital Redemption Reserve

Balance as per the last Financial Statement 9,380,000 9,380,000

Add : Transfer from Profit and Loss account


Profit and Loss account balance

Opening Balance 5,840,062 2,321,483

Profit during the year (3,475,948) 3,518,579

Less : Appropriations

Transfer to Capital Redemption Reserve - -


TOTAL RESERVES AND SURPLUS 11,744,114 15,220,062

ParticularsAs at

31-Mar-14

As at

31-Mar-13

(Amount in Rs.)

ParticularsNo. Rs. No. Rs.

31-Mar-14 31-Mar-13

ParticularsAs at

31-Mar-14

As at

31-Mar-13

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Notes To Financial StatementFor The Year Ended 31st March 2014 (contd.)

NOTE 2.3 : OTHER CURRENT LIABILITIES

NOTE 2.7 : LOANS AND ADVANCES

NOTE 2.8 OTHER NON-CURRENT ASSETS

NOTE 2.9 : CASH AND CASH EQUIVALENTS

NOTE 2.10 : OTHER CURRENT ASSETS

Sundry Creditors for Expenses 2,577,616 44,450

Others 6,173

2,577,616 50,623


Other loans and advances 160,000

Taxes Paid (Advance Tax and TDS)

Taxes Paid FY 11-12 - 1,308,728

Taxes Paid FY 12-13 825,088 801,848

Taxes Paid FY 13-14 690,836 -

Less: Provision for Tax 803,823 2,091,676

Taxes Paid (Net) 712,101 18,900

Deposits with maturity of more than twelve months 12,000,000 13,000,000

MAT Credit Entitlement 1,691,084 2,165,633

Less : MAT Credit availed for AY 2013-2014 508,738 474,549

1,182,346 1,691,084

Cash and cash equivalents

Balances with banks

Current Account 986,122 6,830,953

Deposits with original maturity of less than three months - -

986,122 6,830,953

Other Bank balances

Deposits with original maturity of more than 12 months 20,000,000 13,000,000

Deposits with original maturity of more than three months but less 31,043,758 34,000,000

than 12 months 51,043,758 47,000,000

Less : Amount disclosed under non-current assets 12,000,000 13,000,000

40,029,880 40,830,953

Interest Accrued 1,854,273 1,346,112

1,854,273 1,346,112

-

(Amount in Rs.)

ParticularsFor the Period

ended 31-Mar-14

For the Year

ended 31-Mar-13

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NOTE 2.11 : OTHER INCOME

NOTE 2.12 : EMPLOYEE COST

NOTE 2.13 : OTHER EXPENSE

Interest on FDR 4,860,571 4,712,571

Interest on Income Tax refund 34,424 -

4,894,995 4,712,571

Salaries and Allowances 1,939,642 281,808

Contribution to Provident and other Funds 86,280 11,945

Leave Travel Expenses 106,672 9,435

Contribution to Pension 8,656 2,042

Medical Expenses 20,000 4,718

2,161,250 309,948

Auditor's Remuneration 44,944 44,944

Travelling Expenses 169,583 -

Legal & Professional Fees 70,271 21,186

Profession Tax 2,500 2,500

Rates and Taxes 620,664 29,899

Bank Charges 2,391 163

Directors Sitting Fees 7,500 7,500

Other Expenses 2,899 929

Telephone 16,337 -

Licence Fees 21,667 -

Printing & Stationery 431 -

Share Issue Expenses 5,250,000 -

6,209,187 107,121

ParticularsAs at

31-Mar-14

As at

31-Mar-13

(Amount in Rs.)

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2.15) Payment to Auditors

2.16) As at 31 March 2014, no amount is outstanding in respect of the any enterprises covered under The

Micro, Small and Medium Enterprise Development Act, 2006.

2.17) Transactions with Related Party:

2.18) Earnings per Equity Share (EPS)

Audit Fees 30,000 30,000

For other matters 10,000 10,000

Service Tax 4,944 4,944

Total 44,944 44,944

a) SBI Capital Markets Ltd. Holding

b) State Bank of India Ultimate

1) Expenses

Deputation Cost 2,161,250 309,948

Bank Charges 2,391 163

2) Income

Dividend

Interest on FDR 4,860,571 4,712,571

3) Assets

a) Investments

b) Bank Account 986,122 6,830,953

Deposit with Bank 43,043,758 47,000,000

Interest Accrued 1,854,273 1,346,112

I Profit/(Loss) after tax (3,475,948) 3,518,579

II Basic and diluted EPS (Rs.) (0.84) 0.85

III Nominal value per share (Rs.) 10 10

IV Weighted average number of equity shares 4,162,000 4,914,970

(Amount in Rs.)

ParticularsAs at

31-Mar-14

As at

31-Mar-13

Name of Related PartyNature of

Nature of Transaction Ultimate Holding Company Holding Company

31-Mar-2014 31-Mar-2013 31-Mar-2014 31-Mar-2013

Particulars 31-Mar-2014 31-Mar-2013

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2.19) There is no contingent liability as at 31 March 2014 (Nil as at 31 March 2013).

2.20) Segment information

2.21) No other information under para 3, 4C and 4D of Part II of Schedule VI of The Companies Act, 1956 is

applicable to the Company and hence not given.

2.22) The figures for the previous year have been regrouped/rearranged wherever necessary.

2.23) The Company has not recognized Deferred Tax Asset on Carried Forward Losses on the basis of

prudence.

The operations of the Company fall under single business and geographical segment, hence no additional

disclosure is required other than those disclosed in financial statements.




(Santosh T. Shinde)

Partner




(CHAIRMAN) (DIRECTOR)


Place : Mumbai


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(1) Significant Accounting Policies

1. Accounting Convention

2. Use of Estimates

3. Revenue Recognition

4. Fixed Assets

5. Depreciation/ Amortisation

6. Investments

7. Translation of Foreign Currency Items

8. Retirement Benefits

The Financial Statements have been prepared under the historical cost convention on an accrual basis in compliance with

all material aspects of the applicable Accounting Standards in India and the relevant provisions of the Companies Act,

1956. Except otherwise mentioned, the accounting policies have been consistently applied by the Company and are

consistent with those used in the previous year.

The preparation of Financial Statements in conformity with generally accepted accounting principles requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent liabilities at the date of the Financial Statements and the results of operations during the reporting period

end. Although these estimates are based upon management’s best knowledge of current events and actions, actual

results could differ from these estimates.

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and revenue can be

easily measured. Dividend income on investments is accounted for when the right to receive the payment is established.

Fixed assets are stated at cost, less accumulated depreciation and impairment if any. Cost comprises the purchase price

and any attributable cost of bringing the asset to its working condition for its intended use.

Depreciation on fixed assets is provided on Written down Value Method at the rates and in the manner specified in the

Schedule XIV of the Indian Companies Act, 1956.

Depreciation in Fixed Assets added / disposed of / discarded during the year has been provided on pro rata basis with

reference to the date of addition / disposition / discardation.

Current Investments are stated at lower of cost and market/fair value. Long Term Investments are stated at cost after

deducting provision made, if any, for other than temporary diminution in the value.

Transactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. Foreign

currency monetary items are reported using closing rate of exchange at the year end. The resulting exchange gain/loss is

reflected in the profit and loss account. Other items, like fixed assets, investments in equity shares are carried in terms of

historical cost using the exchange rate at the date of transaction.

The Company makes defined contribution to Provident Fund which is recognized in the Profit and Loss Account on accrual

basis.

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9. Taxation

10. Contingent Liabilities

11. Earnings per Share

12. Provisions

13. Cash and Cash Equivalents

Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance

with the Income Tax Act, 1961.

Deferred tax for timing differences between the book and tax profits for the year is accounted for, using the prevailing

enacted or substantially enacted tax rates and laws as of the Balance Sheet date. Deferred tax assets arising from timing

differences are recognised to the extent there is reasonable certainty that these would be realised in future. Deferred tax

assets in case of unabsorbed losses and unabsorbed depreciation are recognised only if there is virtual certainty that such

deferred tax asset can be realised against future taxable profits.

Contingent liabilities are possible but not probable obligation as on Balance Sheet date, based on available evidences.

Provisions are recognised when there is a present obligation, as a result of past event, and it is probable that an outflow of

resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are

determined, based on best estimate required to settle the obligation at the Balance Sheet date.


share has been computed by dividing net profit after tax by weighted average number of equity shares outstanding for the

year. Diluted earnings per equity share have been computed using the weighted average number of equity shares and

dilutive potential equity shares outstanding during the year.

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow

of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not

discounted to its present value and are determined based on best estimate required to settle the obligation at the balance

sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an

original maturity of three months or less.

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SBICAP (UK) LIMITED

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Principal activity

Review of business

Directors

Statement of directors' responsibilities

The principal activity of the company in the year under review was that of the arrangement of Corporate Finance

and providing Advisory Services.

For the financial year 2013-14, the Company has achieved a Turnover of (excluding interest income) of

GBP330,050 against that of the previous year level of GBP1,903, 461 and loss of GBP32,971/- against PAT of

GBP1,164,337 booked during the previous year. Amongst all the assignments that the Company has handled

during this financial year, two major deals deserve mention. One was arranging syndication of acquisition

finance for a London Based company for acquisition of an integrated iron ore mine in Brazil. The other deal was

related to lead managing the Bond issuance of SBI along with other global banks. These two signature deals

contributed to SUL's income stream but were not adequate to cover the costs. On account of volatile markets

triggered by various economic events/factors like Fed tapering, Rupee depreciation and capital flight out of

India, slowing of the economy, twin deficits etc- had a negative impact on the investor sentiments, thus drying

up the deal pipeline in capital markets and syndications. Further, the impending elections only forced the

investors to have a wait and watch policy. We, however, hope to achieve better results as the markets improve

next year. The Company has arranged successful investor roadshows under OFS and QIP mandates though they

did not yield procurements for the reasons cited above. During the financial year 2014-15, the Company

proposes to concentrate on matched principal broking and managing international debt capital market

issuances for Indian Corporates including M&A Advisory services and maintaining investor connect.

The directors during the year under review were:

Madhumita Chatterjee

Mrutyunjay Mahapatra

Arundhati Bhattacharya - resigned 17/9/2013

V G Kannan

Bharati Rao

S Vishvanathan

Abhay C Chaudhari - appointed 21/11/2013

The directors holding office at 31 March 2014 did not hold any beneficial interest in the issued share capital of the

company at 1 April 2013 (or date of appointment if later) or 31 March 2014.

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with

applicable law and regulations.

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Directors' Report For The Year 2013 -14 (contd.)

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law

the directors must not approve the financial statements unless they are satisfied that they give a true and fair

view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing

these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain

the Company's transactions and disclose with reasonable accuracy at any time the financial position of the

Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They

are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the

Companies Act 2006) of which the Company's auditors are unaware, and each director has taken all the steps that

he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit

information and to establish that the Company's auditors are aware of that information.

This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006

relating to small companies.

On behalf of the board:


Director

8 April 2014

Statement of directors' responsibilities - continued

Statement as to disclosure of information to auditors

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Independent Auditor's Report For Year 2013 -14

We have audited the financial statements of SBICAP (UK) Limited for the year ended 31 March 2014 which comprise the Profit

and Loss Account, the Balance Sheet and the related notes. The financial reporting framework that has been applied in their

preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting

Practice).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to

state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this

report, or for the opinions we have formed.

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the

financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an

opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and

Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This

includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been

consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors;

and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in

the Directors' Report to identify material inconsistencies with the audited financial statements and to identify any information

that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of

performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the

implications for our report.

In our opinion the financial statements:

- give a true and fair view of the state of the Company's affairs as at 31 March 2014 and of its loss for the year then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

- have been prepared in accordance with the requirements of the Companies Act 2006.

In our opinion the information given in the Directors' Report for the financial year for which the financial statements are

prepared is consistent with the financial statements.

Respective responsibilities of directors and auditors

Scope of the audit of the financial statements

Opinion on financial statements

Opinion on other matter prescribed by the Companies Act 2006

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Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in

our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches

not visited by us; or

- the financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit; or

- the directors were not entitled to take advantage of the small companies' exemption from the requirement to prepare a

Strategic Report or in preparing the Directors' Report.

Kalbinder Sanghera

(Senior Statutory Auditor)

for and on behalf of Haines Watts

177-181 Farnham Road

Slough SL1 4XP

177-181 Farnham Road

Slough

Berkshire

SL14XP

9 April 2014

Independent Auditor's Report For Year 2013 -14 (contd.)

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Turnover 330,050 1,903,461

Administrative expenses (422,252) (411,273)

Operating (loss)/profit (92,202) 1,492,188

Interest receivable and similar income 4 59,231 40,335

(Loss)/profit on ordinary activities before taxation 5 (32,971) 1,532,523

Tax on (loss)/profit on ordinary activities 6 (5,757) 368,186

(Loss)/profit for the financial year (27,214) 1,164,337

Continuing operations

None of the Company's activities were acquired or discontinued during the current year or previous year.

Total recognised gains and losses

The Company has no recognised gains or losses other than the loss for the current year and the profit for the previous

year.

Notes2014 2013

£ £

Profit And Loss AccountFor The Year Ended 31 March 2014

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Balance Sheet As On 31st March 2014

Fixed assets

Current assets

Creditors

Capital and reserves

Tangible assets 7 12,492 15,553

Debtors 8 38,710 36,909

Cash at bank 2,602,036 2,998,427

2,640,746 3,035,336

Amounts falling due within one year 9 53,986 424,423

Net current assets 2,586,760 2,610,913

Total assets less current liabilities 2,599,252 2,626,466

Called up share capital 11 200,000 200,000

Profit and loss account 12 2,399,252 2,426,466

Shareholders' funds 16 2,599,252 2,626,466

The financial statements were approved by the Board of Directors on 8 April 2014 and were signed on its behalf by:


Director

Notes2014 2013

£ ££ £

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Notes To The Financial StatementsFor The Year Ended 31st March 2014

Accounting policies

Accounting convention

The financial statements have been prepared under the historical cost convention.

Financial reporting standard number 1

Exemption has been taken from preparing a cash flow statement on the grounds that the Company qualifies as a small

company.

Turnover

Turnover represents amounts receivable for advisory and transaction services provided in the year and is stated net of VAT.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Short leasehold - Straight line over the life of the lease

Fixtures and fittings - Straight line over the life of the lease

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet

date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of

transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of

the lease.

Pension costs and other post-retirement benefits

The Company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme

are charged to the profit and loss account in the period to which they relate.

2014£

2013£

2014£

2013£

2. Staff costs

Wages and salaries 151,119 128,513

Social security costs 11,070 6,699

Other pension costs 1,251 10,748

163,440 145,960

The average monthly number of employees during the year was as follows:

Management 1 1

Operations 2 2

3 3

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3. Directors' emoluments

Directors' remuneration 78,480 62,256

2014£

2013£

4. Interest receivable and similar income

Deposit account interest 59,231 40,335

2014£

2013£

5. (Loss)/profit on ordinary activities before taxation

The loss on ordinary activities (2013 - profit on ordinary activities) is stated after charging/(crediting):

Other operating leases 53,982 53,982

Depreciation - owned assets 3,061 3,805

Auditors' remuneration 4,850 4,850

Foreign exchange differences 4,212 (652)

2014£

2013£

5. Taxation

Analysis of the tax (credit)/charge

The tax (credit)/charge on the loss on ordinary activities for the year was as follows:

Current tax:

UK corporation tax (5,757) 368,186

Tax on (loss)/profit on ordinary activities (5,757) 368,186

Factors affecting the tax (credit)/charge

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained

below:

(Loss)/profit on ordinary activities before tax (32,971) 1,532,523

(Loss)/profit on ordinary activities

multiplied by the standard rate of corporation tax

in the UK of 23% (2013 - 24%) (7,583) 367,806

Effects of:

Expenses not deductible for tax purposes 1,345 70

Depreciation in excess of capital allowances 481 310

Current tax (credit)/charge (5,757) 368,186

2014£

2013£

2014£

2013£

Notes To The Financial StatementsFor The Year Ended 31st March 2014 (contd.)

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7. Tangible fixed assets

Cost

At 1 April 2013

and 31 March 2014 39,487 2,712 42,199

Depreciation

At 1 April 2013 25,074 1,572 26,646

Charge for year 2,602 459 3,061

At 31 March 2014 27,676 2,031 29,707

Net book value

At 31 March 2014 11,811 681 12,492

At 31 March 2013 14,413 1,140 15,553

Fixtures and

fittings TotalShort leashold

£ £ £

8. Debtors: amounts falling due within one year

Trade debtors - 3,086

Other debtors 3,230 3,230

Tax 5,757 -

VAT 3,622 3,428

Prepayments and accrued income 26,101 27,165

38,710 36,909

2014£

2013£

9. Creditors: amounts falling due within one year

Corporation tax - 368,186

Social security and other taxes 37,102 26,085

Accruals and deferred income 16,884 30,152

53,986 424,423

2014£

2013£


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10. Operating lease commitments

The following operating lease payments are committed to be paid within one year:

Expiring:

Between one and five years 53,982 53,982

11. Called up share capital

Allotted, issued and fully paid:

200,000 Ordinary £1 200,000 200,000

2014£

Land and Building

2013£

2014£

Land and Building

2013£

Nominal

Value

£1Number : Class :

12. Reserves

At 1 April 2013 2,426,466

Deficit for the year (27,214)

At 31 March 2014 2,399,252

Profit and loss account

£

13. Ultimate parent company

14. Related party disclosures

15. Ultimate controlling party

The immediate parent company is SBI Capital Markets Limited, a company incorporated in India.

During the year, the company paid expenses of £Nil (2013: £3,044) on behalf of SBI Capital Markets Limited, its immediate

parent. At the year end, £Nil (2013: £2,099) was owed by SBI Capital Markets Limited to the company.

The ultimate parent company is State Bank of India, a company incorporated in India.

16. Reconciliation of movements in shareholders' funds

(Loss)/profit for the financial year (27,214) 1,164,337

Net (reduction)/addition to shareholders' funds (27,214) 1,164,337

Opening shareholders' funds 2,626,466 1,462,129

Closing shareholders' funds 2,599,252 2,626,466

2014£

2013£


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Sales 330,050 1,903,461

Other income

Deposit account interest 59,231 40,335

389,281 1,943,796

Expenditure

Wages 110,494 93,303

Social security 11,070 6,699

Pensions 1,251 10,748

Rent 53,982 53,982

Service charges 25,407 17,661

Insurance 516 1,086

Light and heat 3,963 2,989

Officers residence rent 58,763 58,231

Directors' salaries 40,625 35,210

News distribution 2,122 1,926

Telephone 5,959 7,095

Post and stationery 1,333 1,652

Travelling 23,402 21,675

Repairs and renewals 654 92

Canteen and cleaning 1,677 2,097

Sundry expenses (194) 593

Regulatory fees and levies 1,070 1,331

Subscriptions 21,375 24,275

Training 4,184 1,195

Professional fees 22,740 51,146

Work permit applications - 500

Auditors' remuneration 4,850 4,850

Foreign exchange losses 4,212 (652)

Entertainment 5,847 291

Seminars and conventions 13,653 9,322

418,955 407,297

(29,674) 1,536,499

Finance costs

Bank charges 236 171

Carried forward (29,910) 1,536,328

Brought forward (29,910) 1,536,328

Depreciation

Short leasehold 2,602 3,185

Fixtures and fittings 459 620

3,061 3,805

Net (loss)/profit (32,971) 1,532,523

2014 2013£ ££ £

Profit And Loss Account For The Year Ended 31st March 2014

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SBICAP (SINGAPORE) LIMITED

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We are pleased to submit this Annual Report to the members of the Company together with the audited financial

statements for the financial year ended 31 March 2014.

The directors in office at the date of this report are as follows:

M Rajaram

Ravi Shankar

VG Kannan (Appointed on 5 July 2013)

Abhay Chaudhari (Appointed on 5 July 2013)

According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter

50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those held by

their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related

corporation are as follows:

Directors

Directors’ interests

VG Kannan

State Bank of India – Ultimate Holding Company

- Ordinary shares INR 10.00 each 361 361

SBI Capital Markets Limited – Immediate Holding Company

- Ordinary shares INR 10.00 each (held as nominee of State Bank of India) 1 6

Abhay Chaudhari

State Bank of India – Ultimate Holding Company

- Ordinary shares INR 10.00 each 325 325

SBI Capital Markets Limited – Immediate Holding Company

- Ordinary shares INR 10.00 each (held as nominee of State Bank of India) – 1

Holdings

at end

of the year

Name of director and corporation

in which interests are held

Holdings at

beginning of the

year / date of

appointment

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures,

warrants or share options of the Company or of related corporations, either at the beginningof the financial year (or date of

appointment, if later) or at the end of the financial year.

Neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are,

or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in

or debentures of the Company or any other body corporate.

Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in note 12 to the financial

statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of

a contract made by the Company or a related corporation with the director, or with a firm of which he is a member or with a

company in which he has a substantial financial interest.

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Directors' Report For The Year 2013 -14 (contd.)

Auditors

The auditors, KPMG LLP, have expressed their willingness to accept appointment.

Signed by the Board of Directors

───────────────────M Rajaram

Director

───────────────────Ravi Shankar

Director

11 April 2014

Statement by Directors

In our opinion:

(a) the financial statements set out on pages FS1to FS16 are drawn up so as to give a true and fair view of the state of affairs of

the Company as at 31 March 2014 and the results, changes in equity and cash flows of the Company for the year ended on

that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial

Reporting Standards; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and

when they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

Signed by the Board of Directors

───────────────────M Rajaram

Director

───────────────────Ravi Shankar

Director

11April 2014

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Independent Auditors' Report

Member of the Company

We have audited the accompanying financial statements of (the “Company”), which comprise the statement of financial

position of the Company as at, the statement of comprehensive income, statement of changes in equity and statement of cash

flows for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out

on pages FS1 to FS16.

Management's responsibility for the financial statements

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

provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for

devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are

safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are

recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain

accountability of assets.

Auditors' responsibility


accordance with Singapore Standards on Auditing. 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.


statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material

mis-statement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity's preparation of financial statements that give a true and fair view in order to


effectiveness of the entity's internal control.An audit also includes evaluating the appropriateness of accounting policies used

and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the

financial statements.


Opinion

In our opinion, the financial statements are properly drawn up in accordance with the provisions of the Act and Singapore

Financial Reporting Standards to give a true and fair view of the state of affairs of the Company as at and the results, changes in

equity and cash flows of the Company for the year ended on that date.

In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in

accordance with the provisions of the Act.

KPMG LLP

Public Accountants and


Singapore

11April2014

Report on the financial statements

Report on other legal and regulatory requirements

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Particulars2014

S$

2013

S$

Non-current asset

Plant and equipment 4 – 1,535

Trade and other receivables 5 8,650 –

8,650 1,535

Current assets

Trade and other receivables 5 82,046 73,798

Cash and cash equivalents 6 3,403,825 1,015,726

3,485,871 1,089,524

Total assets 3,494,521 1,091,059

Equity

Share capital 7 5,000,000 2,000,000

Accumulated losses (1,532,831) (940,347)

Total equity 3,467,169 1,059,653

Current liability

Accrued operating expenses 27,352 31,406

Total liability 27,352 31,406

Total equity and liability 3,494,521 1,091,059

Note

Statement Of Financial Position As At 31st March 2014

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Statement Of Comprehensive Income Year Ended 31st March 2014

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Particulars2014

S$

2013

S$

Non-current asset

Revenue 8 281,250 –

Finance income 9 1,421 –

Operating expenses 10 (875,155) (691,198)

Loss before income tax (592,484) (691,198)

Income tax expense 11 – –

Loss for the year (592,484) (691,198)

Other comprehensive income, net of tax – –

Total comprehensive loss for the year (592,484) (691,198)

Note

Statement Of Comprehensive IncomeYear Ended 31st March 2014

Statement Of Changes In Equity Year Ended 31st March 2014

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ParticularsShare Capital

losses S$

Total

S$

At 1 April 2012 300,000 (249,149) 50,851

Loss for the year – (691,198) (691,198)

Other comprehensive income – – –

Total comprehensive loss for the year – (691,198) (691,198)

Transactions with owners, recorded

directly in equity

Contributions by owners

Issue of ordinary shares 7 1,700,000 – 1,700,000

Total transactions with owners 1,700,000 – 1,700,000

At 31 March 2013 2,000,000 (940,347) 1,059,653

At 1 April 2013 2,000,000 (940,347) 1,059,653

Loss for the year – (592,484) (592,484)

Other comprehensive income – – –

Total comprehensive loss for the year – (592,484) (592,484)

Transactions with owners, recorded directly

in equity contributions by owners

Issue of ordinary shares 7 3,000,000 – 3,000,000

Total transactions with owners 3,000,000 – 3,000,000

At 31 March 2014 5,000,000 (1,532,831) (3,467,169)

Accumulated

losses S$Notes

Statement Of Changes in Equity Year Ended 31st March 2014

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Statement Of Cash FlowsYear Ended 31st March 2014

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Particulars2014

S$

2013

S$

Cash flows from operating activities


Adjustments for:

Depreciation of plant and equipment 1,535 3,536

(590,949) (687,662)

Changes in working capital:

Trade and other receivables (16,898) (42,668)

Accrued operating expenses (4,054) 13,904

Net cash flows used in operating activities (611,901) (716,426)

Cash flows from investing activities

Acquisition of plant and equipment – (3,069)

Net cash flows used in investing activities – (3,069)

Cash flows from financing activities

Proceeds from issue of share capital 3,000,000 1,700,000

Net cash flows from financing activities 3,000,000 1,700,000

Net increase in cash and cash equivalents 2,388,099 980,505

Cash and cash equivalents at beginning of year 1,015,726 35,221

Cash and cash equivalents at end of year 3,403,825 1,015,726

Statement Of Cash FlowsYear Ended 31st March 2014

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Notes To The Financial Statements

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 6 May 2014.

(the “Company”) is incorporated in the Republic of Singapore and has its registered office at 9 Raffles Place #32-00

Republic Plaza' Singapore 048619.

The principal activities of the Company are those relating to business and management consultancy services.

On 30 November 2012, the Company obtained the Capital Markets Services Licence (the “CMSL”) under the Securities

and Futures Act (the “SFA”) issued by the Monetary Authority of Singapore (the “MAS”) to conduct the regulated activity

of dealing in securities as defined in the Second Schedule to the SFA.

The immediate holding company during the financial year is SBI Capital Markets Limited, which is incorporated in

Mumbai, India. The ultimate holding company during the financial year is the State Bank of India, which is also

incorporated in India.

2.1 Statement of compliance

The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies

below.

2.3 Functional and presentation currency

The financial statements are presented in Singapore dollars, which is the Company's functional currency.

2.4 Use of estimates and judgements

The preparation of the financial statements in conformity with FRSs requires management to make judgements,

estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions

are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates

are revised and in any future periods affected.

The Company adopted new/revised financial reporting standards/interpretations which became effective during the

year. The initial adoption did not have a material impact on the financial statements.

The accounting policies set out below have been applied consistently by the Company to all periods presented in these

financial statements.

3.1 Foreign currency transactions

Transactions in foreign currencies are translated to the functional currency of the Company at the exchange rates at the

dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are

re-translated to the functional currency at the exchange rate at the reporting date. Foreign currency differences arising on

r-etranslation are recognised in profit or loss.

Non-monetary assets and liabilities measured at cost in foreign currencies are re-translated using exchange rates at the

date of the transactions. Non-monetary assets and liabilities measured at fair values in foreign currencies are

re-translated to the functional currency at foreign exchange rates at the date the fair values were determined.

1 Domicile and activities

2 Basis of preparation

3 Significant accounting policy

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Notes To The Financial Statements (contd.)

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3.2 Plant and equipment

Plant and equipment are stated at cost' less accumulated depreciation and impairment losses. Depreciation is

recognised in the statement of comprehensive income on a straight-line basis over the estimated useful lives of each part

of an item of plant and equipment.

(i) Recognition and measurement

Plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost

includes expenditure that is directly attributable to the acquisition of the asset.

The gain or loss on disposal of an item of plant and equipment is determined by comparing the proceeds from disposal

with the carrying amount of the plant and equipment, and is recognised net within other income/other expenses in profit

or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of plant and equipment is recognised in the carrying amount of the item if it

is probable that the future economic benefits embodied within the component will flow to the Company, and its cost can

be measured reliably. The carrying amount of the replaced component is de-recognised. The costs of the day-to-day

servicing of plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset' less its residual value. Significant components of individual assets are

assessed and if a component has a useful life that is different from the remainder of that asset, that component is

depreciated separately.

Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each

component of an item of plant and equipment, unless it is included in the carrying amount of another asset.

Depreciation is recognised from the date that the plant and equipment are installed and are ready for use, or in respect of

internally constructed assets, from the date that the asset is completed and ready for use.

The estimated useful lives for the current and comparative period are as follows:

Cost

At 1 April 2012 4,003

Additions 3,069

At 31 March 2013, 1 April 2013 and 31 March 2014 7,072

Accumulated depreciation

At 1 April 2012 2,001

Depreciation charge for the year 3,536

At 31 March 2013 5,537

At 1 April 2013 5,537

Depreciation charge for the year 1,535

At 31 March 2014 7,072

Carrying amount

At 1 April 2012 2,002

At 31 March 2013 1,535

At 31 March 2014 –

Computer

Hardware

S$

4. Plant and equipment

Notes To The Financial Statements (contd.)

Notes To Financial StatementFor The Year Ended 31st March 2014

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Particulars

Particulars

Particulars

2014

S$

2014

S$

2014

S$

2013

S$

2013

S$

2013

S$

Amount due from immediate holding company – 7,041

Amount due from ultimate holding company 10,247 –

Deposits 46,850 55,950

GST 6,965 –

Accrued interest receivable 1,421 –

Loans and receivables 65,483 62,991

Prepayments 25,213 10,807

90,696 73,798

Amount due from immediate holding company – 7,041

Non-current 8,650 –

Current 82,046 73,798

90,696 73,798

Cash at bank and in hand 3,403,825 1,015,726

5 Trade and other receivables

6 Cash and cash equivalents

The amounts due from immediate and ultimate holding companies are unsecured, interest-free and repayable on demand.

There is no allowance for doubtful debts arising from the outstanding balance.

Particulars2014

S$

2013

S$

Fully paid ordinary shares, with no par value:

At 1 April 2,000,000 300,000

Issued during the financial year 3,000,000 1,700,000

At 31 March 5,000,000 2,000,000

7 Share Capital

The holder of ordinary shares is entitled to receive dividends as declared from time to time and is entitled to one vote per share

at meetings of the Company. All shares rank equally with regard to the Company's residual assets.

During the year, the Company issued 3,000,000 (: 1,700,000) ordinary shares of S$1.00 each. All issued shares are fully paid.

Capital management

The Company defines “capital” as including all components of equity plus any loans from its immediate holding company or its

related corporations with no fixed terms of repayment. Trading balances that arise as a result of trading transactions with other

group companies are not regarded by the Company as capital.

The Company's capital management policies are to diversify its sources of capital, to allocate capital efficiently, guided by the

need to maintain a prudent relationship between available capital and the risks of its underlying businesses and to meet the

expectations of key constituencies, including investors and regulators.

Notes To The Financial Statements For The Year Ended 31st March 2014

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8 Revenue

Revenue consists of fee income recognised for services rendered for corporate finance activities during the year.

Particulars2014

S$

2013

S$

Interest income from banks 1,421 -

9 Finance Income

Particulars2014

S$

2013

S$

Salaries and related costs 333,840 314,560

Contributions to defined contribution plans 18,299 12,075

Operating lease expense 243,927 237,963

Depreciation of plant and equipment 1,535 3,536

10 Operating Expenses

The capital management process, which is centrally supervised by senior management, includes periodic reviews of both the

demand for and supply of capital. To maintain or adjust the capital structure, the Company may take certain actions like

adjusting the amount of dividend payment and issuing new shares.

In obtaining the CMSL, the Company is also required to provide to MAS a Banker's Guarantee of S$100,000 which will remain in

force as long as the Capital Markets Services License remains valid.

The Company has complied with the above regulatory requirement during the year.

There were no significant changes in the Company's approach to capital management during the year.

The following items have been included in operating expenses:

Particulars2014

S$

2013

S$

Reconciliation of effective tax rate


Tax calculated using Singapore tax rate of 17% (100,722) (117,504)

Deferred tax assets not recognised 100,722 117,504

11 Income tax expense

Particulars2014

S$

2013

S$

Unutilised tax losses 1,532,781 940,297

Deferred tax assets have not been recognised in respect of the following items:

Notes To The Financial Statements For The Year Ended 31st March 2014 (contd.)


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12 Significant related party transactions

For the purpose of these financial statements, parties are considered to be related to the Company if the Company has the

ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and

operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant

influence. Related parties may be individuals or other entities.

Particulars2014

S$

2013

S$

Directors’ remuneration comprised:

- Short-term employee benefits 187,233 150,403

Other related party transactions

During the financial year, other than those disclosed elsewhere in the financial statements, there were the following significant

related party transactions carried out based on terms agreed between the parties:

Particulars2014

S$

2013

S$

Reimbursement of marketing expenses from immediate holding company – 7,041

Reimbursable payments made on behalf of ultimate holding company 10,247 –

Professional fees paid to Straits Law Practice (the legal firm where Mr. M Rajaram, 112,524 –

Secretary and Director of the Company, is a Partner)

13 Commitments

At 31 December, the Company has commitments for future minimum lease payments under non-cancellable operating lease

as follows:

Particulars2014

S$

2013

S$

Within 1 year 102,096 236,752

Within 2 to 5 years 30,400 56,496

132,496 293,248

The Company leases office and residential premises under operating lease. Lease terms do not contain restrictions on the

Company activities concerning dividends, additional debt or entering into other leasing agreements. The lease contains

renewal option at rental rates to be based on negotiations and prevailing market rates.

14 Financial risk management

Overview

The Company has exposure to the following risks from its use of financial instruments:

• credit risk

• currency risk

• liquidity risk

The exposure to each of the above risks arises in the normal course of the Company’s business. The financial risk management

approach of the Company seeks to minimise the potential material adverse effects from these exposures.

There are interest-bearing assets but no interest-bearing liabilities at the statement of financial position date.


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Currency Risk

The Company is not exposed to any significant currency risk at the date of the statement of financial position as most of its

financial assets and all financial liabilities are denominated in the Company’s functional currency.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its

contractual obligations. At the statement of financial position date, the maximum exposure to credit risk is represented by the

carrying amount of each financial asset on the statement of financial position.

Cash is placed with a financial institution which is regulated.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial

liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to

ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and

stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The following are the contractual maturities of the Company’s financial liability, including estimated interest payments and

excluding the impact of netting agreements:

Particulars

2014

Accrued operating expenses 27,352 27,352 27,352

2013

Accrued operating expenses 31,406 31,406 31,406

Contractual cash flowsCarrying

amount

S$Total

S$

Within 1 year

S$

Fair values

Cash and cash equivalents, current trade and other receivables and accrued operating expenses

The carrying amounts approximate fair values due to the relatively short term to maturity of these financial instruments.

Non-current financial assets

Financial assets not carried at fair value but for which fair values are disclosed:

Particulars

2014

Trade and other receivables 8,650 7,985 Level 2

Carrying

amount

S$

Level 2

Fair value

S$

Fair Value

hierachy

The fair value of non-current trade and other receivables is estimated at the present value of future cash flows, discounted at

the market rate of interest at the reporting date of 5% per annum.
