birla capital & financial services ltd share price Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS

(I) Industry structure and developments:

The world economy is passing through the recessionary mode wherein it is hard for Indian Economy and Indian Capital Market to remain unaffected.The weakening of rupee against the dollar and the slowdown on the Industrial Growth has put pressure on the Indian Economy resulting in slow down on Investment Banking activities. As per data published by SEBI, in the current year i.e. FY 2013 Rs. 30,859 Crs were mobilized out of 60 Public Issues in comparison to Rs. 48,468 Crs in FY 2012 from 71 Public Issues. This shows the decline in the industry as a whole. Also with an overall recession in the economy, the economy is not expected to do a turnaround and is likely to remain stagnant. The same is therefore likely to have an effect on the Companys core business i.e. Investment Banking.

(i) Opportunities and Threats:

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

(ii) Segment wise or product wise performance:

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

(iii) Outlook:

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

(iv) Risks and concerns:

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

(v) Internal control system and their adequacy:

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

(vi) Material development in Human Resources:

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