Axis Capital Markets (India) Ltd

To

The Members,

Your Directors have pleasure in presenting the Eighteenth Annual Report of your Companytogether with the Audited Accounts for the year ended 31st March, 2012.

1. FINANCIAL RESULTS

2. DIVIDEND

With a view to deploy the profits into the existing operations of the company, Board ofDirectors has not recommended any dividend for the year.

3. OPERATIONS

During the year the company became the holding company of Axis Equities Pvt. Ltd.(AEPL), a company engaged in stock broking, arbitrage, depository services and portfoliomanagement.

AEPL has membership of the Bombay Stock Exchange, National Stock Exchange, CentralDepository Services Ltd and a

SEBI registered Portfolio Manager. Its subsidiary, Dipan Mehta Commodities Pvt. Ltd. isa member of the MuIti Commodity Exchange of India.

This was the first year of consolidated operations.

4. ISSUE OF SHARES

On 12th August the Company allotted 28,00,000 equity shares of Rs. 10 each at a premiumof Rs. 23.30 per share through conversion of 28,00,000 equity warrants. The said shareshave been listed at the Bombay Stock Exchange Limited (BSE). The Company has completed allformalities in respect of issue of shares and listing the same on BSE.

5. DIRECTORS

Mr. Anil Mehta, Director retires by rotation at the forthcoming Annual General Meetingand being eligible, offers himself for re-appointment.

The Board of Directors have at their Board Meeting held on 30th May, 2012, appointedMr. Dipan Mehta as Whole Time Director of the Company w.e.f. 1st June, 2012 for a periodof 5 years. He shall not draw any remuneration from the Company.

6. SUBSIDIARY COMPANIES

As on 31st March, 2012, the Company has following three subsidiaries:

i. Axis Equities Private Limited

ii. Dipan Mehta Commodities Private Limited

iii. Axis Wealth Management Private Limited

In terms of Section 212(a) of the Companies Act, 1956, the Central Government, Ministryof Corporate Affairs vide its General Circular 2/2011 dated 8th February, 2011 has granteda general exemption to the Company from the requirement of attaching to its annual report,the Balance Sheet, Profit and Loss Account and the report of the Directors and Auditorsthereon of its subsidiaries. Accordingly the same is not attached to the Balance Sheet ofthe Company. Shareholders who wish to have a copy of Annual Accounts of subsidiary companymay write to Mr. Dipan Mehta, Compliance Officer of the Company at the registered officeof the Company.

7. CONSOLIDATION OF FINANCIAL STATEMENTS

In accordance with the said above referred circular and with the Accounting StandardsAS - 21 notified by Companies (Accounting Standards) Rules, 2006, the ConsolidatedFinancial Statements covered in this report by the Company include financial informationof its above referred three subsidiary companies and forms part of this Annual Report.

8. CONSERVATION OF ENERGY, TECHNOLOGICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

In terms of Section 217 (1) (e) of the Companies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, yourDirectors wish to state that the same is not applicable to the Company.

9. FIXED DEPOSITS

The Company has not accepted any deposits from the public.

10. PARTICULARS OF EMPLOYEES

Particulars of Employees as required under Section 217 (2A) of the Companies Act, 1956read with Companies (Particulars of Employees) Rules, 1975, as amended is not given asthere was no employee drawing the salary as per the limits mentioned in that Section.

11. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956 withrespect to the Directors Responsibilities Statement, it is hereby confirmed;

i) That in the preparation of the Annual Accounts for the financial year 31st March,2012 the applicable accounting standards have been followed alpng with proper explanationrelating to material departures.

ii) That the Directors have selected such accounting policies and applied themconsistently and made judgment and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

iv) That the Directors have prepared the Accounts for the financial year ended 31 stMarch, 2012 on a going concern basis.

12. LISTING OF SHARES

The Company's shares are listed on Bombay Stock Exchange Limited. The company has paidthe listing fees for the same.

13. CORPORATE GOVERNANCE

A separate section on Corporate Governance is annexed to this report. The Certificatefrom the Auditors confirming the compliance of conditions on Corporate Governance asstipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is annexedhereto.

14. AUDITORS

M/s. R C. Surana & Co., Chartered Accountants retire at the forthcoming AnnualGeneral Meeting and being eligible offer themselves for re-appointment. The Company hasreceived a certificate from them to the effect that their re-appointment, if made would bewithin the prescribed limits specified under Section 224(1B) of the Companies Act, 1956.

15. MANAGEMENT DISCUSSION AND ANALYSIS

Forward Looking Statements:

This section contains forward-looking statements, which may be identified by their useof words, like 'plans', 'expects', 'wills', 'anticipates', 'believes', 'intends','projects', 'estimates', or other words of similar meaning. All statements that addressexpectations or projections about the future, including but not limited to statementsabout the company's strategy for growth, product developn,ent, market position,expenditures and financial results are forward-looking statements. Forward-Lookingstatements are based on certain assumptions and expectations of future events. The Companycannot guarantee that these assumptions are accurate or will be realized. The Company'sactual results, performance or achievements could thus differ materially from thoseprojected in any such forward looking statements. The company assumes no responsibility topublicly amend, modify or revise any forward looking statements, on the basis of anysubsequent developments, information or events.

During the year the company became the holding company of Axis Equities Pvt. Ltd.(AEPL), a company engaged in stock broking, arbitrage, depository services and portfoliomanagement.

AEPL has membership of the Bohnbay Stock Exchange, National Stock Exchange, CentralDepository Services Ltd and a SEBI registered Portfolio Manager. Its subsidiary, DipanMehta Commodities Pvt. Ltd. is a member of the MuIti Commodity Exchange of India.

This was the first year of consolidated operations.

a. Industry Structure and Development

The company, through its subsidiaries, is engaged in the business of broking,arbitrage, investment and trading in shares. This is a highly fragmented industry withintense competition and low margins. Problems have been compounded by low volumes, lack ofretail investors' participation and high level of taxes (Securities Transactions Tax).

b. Business Prospects and Future Plans

The prospects of the company are directly linked to the performance of the stockmarket. With a view to diversify and expand into the financial services industry, yourcompany has made a strategic investment in Axis Equities Private Limited (Formerly knownas Dipan Mehta Share & Stock Brokers Pvt. Ltd.). The endeavor shall be to scale up theoperations of this company so as to add value to all the stakeholders and derisk thebusiness model.

c. Opportunities and Threats

A prolonged bear phase in the stock markets is the main threat for the company. A bullmarket provides opportunities to earn profits from investment and trading activity.

d. Segment-Wise or Product-Wise Performance

Not Applicable

e. Outlook

The prospects of the company will depend upon how it is able to scale up the operationsof its subsidiary company Axis Equities Pvt. Ltd. (AEPL) During the year under review,AEPL has upgraded its infrastructure by acquiring a new office premises for providingbetter service to its clients and attracting new talent.

f. Risk and Concerns

A prolonged bear market and poor choice of investment and trading positions are themajor risk factors.

g. Internal Control Systems and their Adequacy

The company has adequate internal control systems and is well capitalized for its scaleof operations.

h. Discussions on Financial Performance with respect to Operational Performance

During the year, the company completed its plan to acquire a 74 % stake in AEPL. Themajor portion of the investments and stock in trade was liquidated to purchase shares ofAEPL.

i. Material Development in Human Resources / Industrial Relations Front, includingNumber of People Employed

During the year there were no material developments in Human Resources and IndustrialRelations.

j. Material Financial and Commercial Transactions

During the year, the company completed the acquisition of a 74 % share holding in AEPL.

In the previous year the company had acquired 80,000 shares from the promoters of AEPLat a price of Rs. 130. During the year under review, the company acquired a further 43,700shares from the promoters at the same price. AEPL also made a fresh issue of 11,75,000shares at a price of Rs. 130. Post these transactions, the company's present share holdingin AEPL is at 12,98,700 shares; which translates into a 74 % stake in the company.

During the previous year, the Company had made a preferential allotment of 28,00,000warrants at a price of Rs. 33.30 per warrant on 27th May, 2010, as per terms of specialresolution passed at the Extra Ordinary General Meeting held on 13th May, 2010. A sum ofRs. 2,33,24,000 being 25% of total price of such warrants was also received in that year.

On 12th August, 2011, company issued shares against conversion of the said thewarrants. The balance 75% of the amount aggregating to Rs. 6,99,72,000 was received whichresulted in the paid up capital of the company increasing from Rs. 3,00,32,000 to Rs.5,80,32,000. The share premium account increased from Rs. Nil to Rs. 6,52,40,000.

16. ACKNOWLEDGMENT

The Board wishes to place on records its appreciation to all its bankers, associatesand stakeholders.