INDEX

Sr. No.

Contents

Page no.

1. 2.

Acknowledgments Transwarranty Background) Finance Limited (Intro &

2 3-4

3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

History Vision And Mission Membership And Licence Financial Outlook Transactions Business Model Services Offered Financial Statements Suggestions Conclusion Bibliography

5-7 8 9-10 11-15 16-17 18 19-40 41-44 45 46 47

TRANSWARRANTY FINANCE LIMITED ACKNOWLEDGEMENTS

The Project on TRANSWARRANTY FINANCE LIMITED is a result of co-operation, hard work and good wishes of many peoples. I student of S.I.E.S. Of Commerce & Economics, Sion, would like to thanks the project guide Prof. Rahul Shah for his involvement in my project work and timely assessment that provided me with valued guidance throughout my studies. I express my gratitude to all my college friends and my family members whose efforts and creativity has helped me giving a final shape and structure to the project. I am also thankful to all those seen and unseen hands and heads which have been of director help in the completion of this project.

TRANSWARRANTY FINANCE LIMITED

TRANSWARRANT FINANCE LIMITED

Transwarranty Finance Limited (TFL) is a Mumbai (India) head quartered full service Investment Bank providing a wide range of Financial Services to over 400 large and mid cap companies and thousands of retail clients all over India since 1994.

Since the activities are diverse and governed by different regulatory authorities, the businesses are structured under Transwarranty Finance Limited as the flagship company and its subsidiary companies. Transwarranty Finance Limited is a Reserve Bank of India (RBI) registered Non Banking Finance Company (NBFC) with active business in Investment Banking, Corporate Finance, Project Finance, Real Estate & Infrastructure and Trade Finance.

The board of directors of TFL comprises of eminent professionals like solicitor Mr. S. N. Talwar (Chairman), banker and author Mr. Raghu Palat, former Executive
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TRANSWARRANTY FINANCE LIMITED

Director (Finance) of Godrej Industries Ltd Mr. K. K. Dastur, former director of Goldman Sachs Mr. Pravin Khatau and Mr. Kumar Nair (Managing Director), who was part of the core management team in Kotak Mahindra Finance Limited till 1994.

All the retail branches distribute and service the entire suite of retail finance products, which include Equity Broking, Commodity Broking, Mutual Funds, IPOs, Other investment products like RBI Bonds etc. Other products like Insurance, Personal Loans, Forex Money Changing, Money Transfer etc shall be launched in due course. Over the past 12 years, Transwarranty Group has developed a strong client base comprising of majority of the large and mid cap companies, most of the banks and financial institutions, Mutual funds and Asset Management Companies and thousands of retail clients.

BACKGROUND (IN A NUTSHELL)

Transwarranty Finance Limited : is a full service Investment Bank head quartered in Mumbai comprising of 6 companies out of which 2 are listed companies with 8000 shareholders, around 200 offices across India, 250 employees, more than 500 corporate clients and over 15,000 retail clients.

TRANSWARRANTY FINANCE LIMITED HISTORY

Our Company was incorporated on August 09, 1994 as a public limited company under the Companies Act, 1956 with Registration No. 11 - 80220 under the name of Trans Warranty Finance Limited and obtained certificate of commencement of business on August 30, 1994 from the Registrar of Companies, Maharsahtra. The name of our Company was changed to Transwarranty Finance Limited with effect from July 08, 2005. Our Company was incorporated with the object of providing various financial services to corporate, financial institutions and retail. Being a NBFC, our Company got registered with the Reserve Bank of India (RBI) as a deposit accepting company on August 06, 1998 bearing registration number 13.00971 and commenced our operations as a fund based financial services company along with fee based financial services. Our sources of funds were bank finance, fixed deposit and securitization of receivables by foreign companies for the fund based business. Subsequently, from the year 2002 -03, we exited fund based business on account of reducing interest spreads and increased focus on fee based advisory services and commenced offering a wide range of feebased services. In the year 2005 our Company also ventured in the area of business process outsourcing by entering into agreement with Citi Financial Consumer Finance India Limited for retail banking products. In the year 2005 our company requested RBI to convert our Company from Category "'A" to Category "B" NBFC (i.e., from eligible for acceptance of public deposits to not eligible for acceptance of public deposits), since our Company had stopped fund based activities and acceptance of public deposits and
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TRANSWARRANTY FINANCE LIMITED

on said requisition RBI had issued new certificate bearing Registration no. B13.00971 to convert our company into category "B" NBFC w.e.f. May 12, 2005. Subsequently, to give effect to change of name of the Company from "Tans Warranty Finance Limited" to "Transwarranty Finance Limited", the RBI has issued fresh certificate of registration dated May 12, 2006. In the year 2005-06 in order to become an integrated financial service provider, our company acquired a minimum of 51% shareholding in Transwarranty Capital Pvt. Ltd, Transwarranty Forex & Commodities Pvt. Ltd. and Transwarranty Credit Care Pvt. Ltd. and converted these into our subsidiaries. Major events in the history of our Company since inception Year Key Events, Milestones and Achievement: 1994 Incorporation of Trans Warranty Finance Limited 1994 Received Certificate of Commencement of Business from RoC, Maharashtra, Mumbai 1998 Received NBFC Registration from Reserve Bank of India 2005 Commenced BPO business by entering into an agreement with Citi Financial Consumer Finance India Limited for retail banking products. 2005 Received certificate for changing category from "A" to "B" NBFC (i.e., converting from accepting Public Deposits to non accepting Public Deposits) 2005 Changed the name our Company from Trans Warranty Finance Limited to Transwarranty Finance Limited 2006 Acquired 54.90% stake in Transwarranty Capital Pvt. Ltd and converted it into our subsidiary company, which is registered with - BSE,
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TRANSWARRANTY FINANCE LIMITED

Cochin Stock Exchange and OTCEI as stock broker for Cash Market Segment, - NSE as a Stock Broker in both, cash and futures and options segments. - SEBI for carrying out Merchant Banking Activities - AMFI for carrying activity of Mutual Fund Distribution 2006 Acquired 51% stake in Transwarranty Forex & Commodities Pvt. Ltd and converted it into our subsidiary company, which is registered with the Multi Commodity Exchange (MCX) and proposes to acquire membership of National Commodities & Derivatives Exchange (NCDEX) 2006 Acquired minimum 51% stake in Transwarranty Credit Care Pvt. Ltd and converted it into our subsidiary company, which proposes to launch private equity/venturefund. 2007 Transwarranty Finance Limited has appointed Mr. G K Prem Kumar as Associate Vice President & Company Secretary w.e.f. 01.03.2007. Further, Mr. G K Prem Kumar will be the Compliance Officer of the Company for compliance of all regulatory matters. 2009 Transwarranty Finance Ltd has informed that Mr. Kersi Kaikhushru Dastur has been appointed as an Independent Director by the Board of Directors in their meeting held on June 10, 2009.

TRANSWARRANTY FINANCE LIMITED VISION

The Vision of Transwarranty Group is

To be amongst the preferred provider of Investment Banking, Wealth Management and the entire range of Financial Services including Equity / Commodity / Forex Broking services to corporate, retail and institutional clients across various cities and towns in India and Internationally.

Mission
The Mission of Transwarranty Group is

To build an Institution, which would be the top ten Investment Banking and Financial Services Group from India

To keep growing the committed team of professional who share this vision

To protects the interests of all the stake holders including clients, employees, shareholders, bankers, regulators etc

To provide value added service to maximize client delight

To build and strengthen lasting bonds with all the stake holders

To be continuously proactive and innovative for delivering newer markets.

TRANSWARRANTY FINANCE LIMITED

MEMBERSHIP & LICENCE

Reserve Bank of India (RBI) Registration for Financial Services

Securities and Exchange Board of India (SEBI) Registration for Merchant Banking

SEBI registration for Securities Broking

Foreign Exchange Dealers Association of India (FEDAI) accreditation for Inter Bank Foreign Exchange Broking

Association of Mutual Funds of India (AMFI) Registration for Mutual Funds Distribution

Forward Market Commission (FMC) registration for Commodities Broking

Member of the Association of Merchant Bankers of India (AMBI)

Membership of the National Stock Exchange (NSE) for broking in both Equities and Derivatives segments

Membership of the Bombay Stock Exchange (BSE) for broking in Equities segment

TRANSWARRANTY FINANCE LIMITED

Membership of the Cochin Stock Exchange (CSE) for broking in Equities segment

Membership of the Over The Counter Exchange of India (OTCEI) for broking in Equities segment

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TRANSWARRANTY FINANCE LIMITED FINANCIAL OUTLOOK

I.
Year

Dividend
Month Dividend (%)

2012

May

2009

May

2008

Jun

10

2007

Jun

10

II.

Share holding
30/06/2012 31/03/2012 31/12/2011

Share holding pattern as on :

Face value

10.00

10.00

10.00

No. Of Shares

% Holding

No. Of Shares

% Holding

No. Of Shares

% Holding

Promoter's holding

Indian Promoters

13090260

53.52

13090260

53.52

13081551

53.48

Foreign Promoters

22717

0.09

22717

0.09

22717

0.09

Sub total

13112977

53.61

13112977

53.61

13104268

53.57

Non promoter's holding

Institutional investors

Sub total

Other investors

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TRANSWARRANTY FINANCE LIMITED

No. Of Shares % Holding No. Of Shares % Holding No. Of Shares % Holding

Private Corporate Bodies

1784790

7.30

1791464

7.32

1796672

7.35

NRI's/OCB's/Foreign Others

1364918

5.58

1364354

5.58

685294

2.80

Direcctors/Employees

26500

0.11

26500

0.11

26500

0.11

Others

5418135

22.15

5391157

22.04

6065474

24.80

Sub total

8594343

35.14

8573475

35.05

8573940

35.05

General public

2753248

11.26

2774116

11.34

2782360

11.37

Grand total

24460568

100.00

24460568

100.00

24460568

100.00

III.
From Year

Capital structure
To Year Class Of Share Authorized Capital Issued Capital Paid Up Shares (Nos)

(Rs crore) Paid Up Face Value Paid Up Capital

2010

2011

Equity Share

31.00

21.60

21599663

10

21.60

2009

2010

Equity Share

15.00

14.00

14000000

10

14.00

2008

2009

Equity Share

15.00

14.00

14000000

10

14.00

2007

2008

Equity Share

15.00

14.00

14000000

10

14.00

2006

2007

Equity Share

15.00

14.00

14000000

10

14.00

2005

2006

Equity Share

8.00

8.00

8000000

10

8.00

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TRANSWARRANTY FINANCE LIMITED

IV.

Ratios
Mar ' 12 Mar ' 11 Mar ' 10

(Rs crore) Mar ' 09 Mar ' 08

Per share ratios

Adjusted EPS (Rs) 2.75 0.22 -0.75 0.49 1.70

Adjusted cash EPS (Rs)

2.81

0.28

-0.66

0.54

1.76

Reported EPS (Rs)

2.75

0.22

-0.56

0.48

1.68

Reported cash EPS (Rs)

2.81

0.28

-0.47

0.53

1.73

Dividend per share

0.50

0.30

1.00

Operating profit per share (Rs)

1.48

-0.22

-0.61

0.46

2.26

Book value (excl rev res) per share (Rs)

23.60

23.98

27.26

27.85

27.60

Book value (incl rev res) per share (Rs.)

23.60

23.98

27.26

27.85

27.60

Net operating income per share (Rs)

7.38

3.34

3.75

2.71

4.22

Free reserves per share (Rs)

-0.02

16.05

16.64

16.49

Profitability ratios
Operating margin (%) 20.00 -6.78 -16.47 17.27 53.55

Gross profit margin (%)

19.14

-8.32

-18.90

15.44

52.21

Net profit margin (%)

28.91

5.56

-14.53

15.39

35.68

Adjusted cash margin (%)

29.58

6.98

-16.90

17.29

37.34

Adjusted return on net worth (%)

11.64

0.94

-2.76

1.78

6.15

Reported return on net worth (%)

11.64

0.94

-2.08

1.74

6.07

Return on long term funds (%)

14.13

1.66

-2.02

3.12

9.53

Leverage ratios

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TRANSWARRANTY FINANCE LIMITED

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Long term debt / Equity

0.06

0.08

0.01

Total debt/equity

0.06

0.08

0.01

0.03

0.01

Owners fund as % of total source

94.17

91.94

98.40

96.70

98.29

Fixed assets turnover ratio

0.31

7.15

7.32

5.41

15.53

Liquidity ratios
Current ratio 5.42 11.47 4.99 3.58 3.91

Current ratio (inc. st loans)

5.42

11.47

3.75

2.51

3.76

Quick ratio

5.42

11.47

4.99

3.58

3.91

Inventory turnover ratio

Payout ratios
Dividend payout ratio (net profit) 21.13 72.14 69.75

Dividend payout ratio (cash profit)

20.65

65.44

67.49

Earning retention ratio

78.87

100.00

29.35

31.14

Cash earnings retention ratio

79.35

100.00

35.79

33.35

Coverage ratios
Adjusted cash flow time total debt 0.51 7.41 1.73 0.27

Financial charges coverage ratio

9.06

2.51

-1.98

10.02

37.76

Fin. charges cov.ratio (post tax)

8.07

2.45

-1.05

6.85

24.91

Component ratios
Material cost component (% earnings) -

Selling cost Component

1.33

2.62

1.80

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TRANSWARRANTY FINANCE LIMITED

Mar ' 12 Exports as percent of total sales 1.42 Mar ' 11 3.04 Mar ' 10 Mar ' 09 Mar ' 08 -

Import comp. in raw mat. consumed

Long term assets / total Assets

0.20

0.26

0.55

0.55

0.47

Bonus component in equity capital (%)

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TRANSWARRANTY FINANCE LIMITED TRANSACTIONS

Godrej Beverages & Foods Ltd : Private Equity

Aarey Drugs &Pharmaceuticals Ltd Marico Ltd Camlin Fine Chemicals Ltd Asian Electronics Ltd Killitch Drugs India Ltd KEC International Ltd Ginny & Johny Ltd : Valuation of shares & BSE listing

ESOP Certification

Takeover & Open offer

ESOP Certification

Take over & Open offer

ESOP Certification

Valuation of shares

Bells & Sons Ltd, United Kingdom : Company valuation

Hiranandani Realtors Pvt Ltd : Anil Products Ltd

SEZ Joint Development project

Valuation of shares & BSE Direct listing

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TRANSWARRANTY FINANCE LIMITED

Scotts Garments Ltd

Sole

advisor

for

acquisition

transaction Arora Fashions Ltd Sterling Holiday Resorts

Sole advisor for sale of the company

Advisor for Preferential Issue of Shares ESOP BSE Certification

Camlin Ltd.

ESOP Certification

HOW HOT IS THIS STOCK?

17

TRANSWARRANTY FINANCE LIMITED BUSINESS MODEL

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TRANSWARRANTY FINANCE LIMITED

SERVICES OFFERED
A. INVESTMENT BANKING Mergers and Acquisitions
The economic reforms have altered old equations and the corporate sector is witnessing lot of re-structuring. Mergers and Acquisitions have become the order of the day. Expansion through new acquisitions and achieving focus through hiving off non- core, loss making business / divisions is the prevailing strategy. The scope of the companys services covers right from the initial negotiation stage to the final deal conclusion. We add tremendous value to clients because we also help them in funding these operations.

Venture Capital & Private Equity

i. Venture Capital Funds Entrepreneurship is a critical element for the growth of economy and India is poised to witness an unprecedented entrepreneurial boom in the coming years. Our company acknowledges such entrepreneurial spirit, and assists them in raising funds for their innovative ventures.

A venture capital fund is a pooled investment vehicle that primarily invests the financial capital of third-party investors in enterprises that are at any early stage. ii. Private Equity Private equity is medium to long-term finance provided in return for an equity stake in potentially high growth listed / unlisted company. Private equity provides long-term, committed share capital, to help these companies
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TRANSWARRANTY FINANCE LIMITED

grow and succeed. Our company helps our clients in strategizing and reviewing their business models, negotiate and finalize Private Equity from different Private Equity / Strategic / Financial Institutions or Funds. iii. Capital infusion from Financial / Strategic Investors Capital infusion refers to the process whereby funds are injected into startup companies or ailing companies by an investor with a financial interest in the company. Capital infusion also refers to the process of transferring money from a successful unit, division or subsidiary of a company to another unit that is not doing well with the aim of injecting new life into that unit. This type of capital infusion applies to big organizations where the operations are split into different subsidiaries with their own stake in the company, all working toward the common goal of profitability for the organization. iv. Foreign Capital raising through FCCB / ADR / GDR / AIM listing Capital markets across the world are getting increasingly interconnected. Not only multinational companies access global capital market, there is an increasing trend among not-so-big companies from emerging economies to tap international capital market to raise debt and equity capital. While debt capital in terms of Foreign bonds, Eurobonds, FCCBs (Foreign Currency Convertible Bonds) etc have dominated the scene, equity fund raising has come through Depository Receipts (DRs). American Depository Receipts (ADRs) and Global depository Receipts (GDRs) are two categories of DRs. The size of the DR market can be judged from the fact that during 1983 to 2010, 3274 companies have issued DRs both in sponsored and unsponsored form representing wide array of industries from countries like Romania,

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TRANSWARRANTY FINANCE LIMITED

Ukraine and Nigeria, Hong Kong, Vienna and Lisbon etc. v. Joint Ventures (Indian / International)

This area of business focuses mainly on identification of joint venture partners for domestic as well as international players. The scope of work includes assessment of the need of corporate i.e. in terms of expertise in technical, infrastructural, financial, etc. and then identifying a suitable Joint Venture partner to give the necessary impetus to the company. vi.

Entry strategies for foreign Companies

The company has been planning entry strategies in India for foreign Companies. The business and the products of the foreign companies are properly studied and the entry strategies are meticulously planned for such companies. The scope of work includes a clear and thorough analysis of the Indian market for the products / services of the foreign company and its adaptability to the environmental / market factors prevailing in India. Then a conscious decision is taken regarding the timing of entry and the scope of operations, i.e., manufacturing, importing, joint venture with an Indian company, if necessary etc.

Corporate Advisory Services

Our bouquet of Corporate Advisory services includes general corporate advice and project management services, both for listed and unlisted entities. We provide endto-end services to companies in deal structuring, valuation and pricing, liaising with the regulators, Initial Public Offer (IPOs), Corporate Governance Services, India Entry Strategies, Debt and Equity Financing, Private equity, Mergers and acquisitions and ESOP certifications.

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TRANSWARRANTY FINANCE LIMITED

Business Re-Structuring
Companies need to restructure their businesses in response to the continuous changes in the business environment globally and in India. Divestitures, Mergers, Amalgamations, Closures, and Joint Ventures etc. are taking place at a very rapid pace. We, provide advisory services to companies that are required to restructure their businesses. The scope of work includes different strategies through Internal Financial Reconstruction, Divestiture, Joint Ventures, Marketing tie-ups, etc.

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TRANSWARRANTY FINANCE LIMITED B. CORPORATE FINANCE Structured Finance

For us, each of our clients is unique and so is their financial requirement. Our products are non-standardized and structured to meet the specific financial objectives of our clients. Our products and services are designed specifically for companies, banks, financial institutions and their clients. We have a dedicated team of professionals who leverage their expertise on specialized areas like collateral debt obligations, administration of special purpose vehicles involved in securitizations, and likes.

Rupee Term Loans

We have been a dominant player in Term Loan Syndication for existing as well as new ventures. The term loans are structured in such a way so as to match the cash flows of the company and the debt servicing capacity of the project company. The Term Loans are syndicated through major Financial Institutions and Banks in India.

ECB / Foreign Currency Loans

We arrange foreign currency loans for companies. Borrowings under foreign currency route are recommended only for those corporate who have a natural hedge through exports. Furthermore, the route of raising the fund through foreign currency borrowings is recommended by us only after conducting an in-depth
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TRANSWARRANTY FINANCE LIMITED

analysis of the company vis--vis the conditions prevailing in the domestic as well as the international currency markets.

Working Capital Bank Limits

The Company uses its relationship network with all the banks and institutions to tie up working capital facilities for our clients. The limits would be arranged either through the multiple banking routes or through the consortium route, depending upon the size of the facility.

Asset Financing

The Company syndicates funds for financing capital asset acquisitions by companies. The funds are arranged through different instruments, which may be in the form of a term loan, lease, hire-purchase, suppliers credit, etc. The instrument of financing is selected based on the companys requirement.

Acquisition Finance both in India and abroad

We provide extensive support in acquisition financing for both domestic and cross border investments. Our position as professional investment bank with finance expertise covering all facets of debt, structured lending and securities issues, enables us to bring the appropriate skills and expertise to close every transaction successfully.

24

TRANSWARRANTY FINANCE LIMITED Stressed Assets Finance

Stressed Asset is defined as an account where principal and/or interest remains overdue for more than 30 days. In view of recent phase of recession, the incidence of stress in MSME Sector is showing an increasing trend. Several internal and external factors have put considerable pressure on the performance of the MSMEs, resulting in a number of them become stressed. In this background, effective follow up and supervision of borrowal accounts assumes significance. Authority structure for review of SMAs is already been placed in our Bank. . In case units facing temporary & medium liquidity problem, one of the tool for support is restructuring of the debt.

Debt Re-structuring

Transwarranty Finance Limited (TFL) is a dominant player in structured finance by designing and executing innovative structures using a wide variety of instruments and ideas including plain vanilla instruments & hybrid instruments. TFL arranges Indian Rupee loans, foreign currency loans and External Commercial Borrowings (ECB`s) for companies to meet their capital expenditure or to finance acquisitions / take over.

25

TRANSWARRANTY FINANCE LIMITED C. PROJECT FINANCE Financial Structuring

Transwarranty Finance Limited (TFL) has considerable expertise in Project Finance. We advice our clients right from the project conception stage followed by preparation of the project report and its techno commercial appraisal by accredited institutions with optimal financial structuring.

Project Report and Financial Feasibility Study

The feasibility study evaluates the projects potential for success; we here at Transwarranty finance together with our team of finance specialist prepare extensive and detailed Project Report including Market Research, Financial Feasibility & Commissioning Assistance to evaluate the viability of business or projects. It helps our clients and lenders or investors to evaluate the risks and returns associated with the project.

Raising Project Equity

Project equity is usually invested in a company restricted in its business to ownership of a project. This single purpose nature generally makes earnings relatively predictable. We specialize in raising project equity. We have significant experience in arranging and distributing a range of financing instruments in the Indian capital markets. We arrange subordinated, high yield, and private placement debt securities, as well as private equity issued by corporate and projects. The objective is to provide access to high quality, low risk returns investment
26

TRANSWARRANTY FINANCE LIMITED

opportunities.

Raising Project loans

TFL arranges project loans for green field as well as expansion projects. The scope of work ranges from negotiations with the lending agencies to obtaining the final loan sanctions, document execution and disbursement.

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TRANSWARRANTY FINANCE LIMITED D. REAL ESTATE AND INFRASTRUCTURE

India is in the midst of a massive growth phase in Real Estate and Infrastructure sector. After years of haphazard and unplanned development, this sector is now metamorphosing into an organized one with improved product offerings from corporate business structures. The development in the Real Estate sector is mirroring the rapid economic growth which the country is experiencing. The construction and the Real Estate sectors grew by 10.70 % and 10.60% respectively in the last financial year. Transwarranty Finance Limited helps reputed companies in this sector identify various land banks spread across the country and enter into Joint Development / outright sale transactions. We also provide financial advisory services to raise project funding and equity, private equity and debt at the enterprise level etc.

Private Equity
In investment finance, private equity real estate is an asset class consisting of equity and debt investments in property. Investments typically involve an active management strategy ranging from moderate reposition or releasing of properties to development or extensive redevelopment. Investments are typically made via private equity real estate fund, a collective investment scheme, which pools capital from investors. These funds typically have ten year life span consisting of a 2-3 year investment period during which properties are acquired and a holding period during which active asset management will be carried out and the properties will be sold.

Project Equity

28

TRANSWARRANTY FINANCE LIMITED

Project Equity investment team has exceptional experience in infrastructure finance and development, private equity, project finance, public policy formation and business development gained internationally and within the Indian market. The team has extensive relationships with leading and emerging Indian business groups especially in the infrastructure sector. The team's collective influence and resources give it a competitive advantage to leverage the robust environment for infrastructure funding in India.

Joint Venture / Joint Development Agreements

At times, a company's strategic imperatives require neither a sale nor an acquisition, but rather the development of a relationship with another business. The creation of such a partnership requires an in-depth understanding of the industry segment, and detailed knowledge of industry trends and the interests of the two parties. In such cases, the operating and financial experience of our professionals is of great value. In particular instances, we originate the idea of bringing businesses together for a strategic advantage to all parties concerned. In other instances we help our clients identify and firm up relationships with suitable partners, both national and international. We are able to guide potential partners in developing the financial and management structures of the partnership, and help create a relationship that is long-lasting and mutually beneficial.

Outright sale of land / projects

We also arrange buyers for outright sale of land/projects.

29

TRANSWARRANTY FINANCE LIMITED Project loan

We arrange for the Term Loans and Non Convertible Debentures (NCDs) for projects in the industrial, Services & infrastructure sectors and diversification, modernization and expansion of existing projects. We have considerable expertise in Project Finance. We advice our clients right from the project conception stage followed by preparation of the project report and its techno commercial appraisal by accredited institutions with optimal financial structuring.

Securitization of rentals / receivables

Securitization is a funding and capital management technique that has grown in popularity in the recent years. Its primary use has been by businesses that are capital intensive, such as financial institutions. Receivables financing for

companies which have a rapid turnover of relatively homogeneous receivables has also proved popular. Securitization has also been widely applied in commercial real estate as well as distressed refinancing. We have considerable expertise in securitization of rentals/receivables.

Strategic / Financial Investments

Our company has been successful in structuring innovative strategic / financial investments for bringing financial closure for various real estate and infrastructure projects.

30

TRANSWARRANTY FINANCE LIMITED E. TRADE FINANCE LC bills discounting

Transwarranty Finance Limited (TFL) acts as a bill broker for facilitating discounting of bills of exchange accepted under Letters of Credit opened by reputed banks. We offer the finest rates at any point of time backed by excellent service.

Clean Bills discounting

TFL also acts as a bill broker for discounting Bills of Exchange accepted by good credit worthy Companies. Since these are unsecured transactions, our credit evaluation becomes very important for Investors. We act as market makers between investors and good creditworthy companies who wish to raise funds against bills of exchange.

Inter Corporate Deposits

We are one of the principal market makers in this over the counter market for Inter Corporate Deposits. This is a large volume business and requires very quick response to move funds from companies with surplus to companies requiring funds. The period of deposit varies from purely on call up to 180 days. In this area, we cater to over 100 Companies regularly and account for a large share of transacted volume of business in the market.

31

TRANSWARRANTY FINANCE LIMITED Unsecured working capital loan

A business cash advance is an effective substitute to small business loans, unsecured business loans or bad credit business loans. Our business cash advance is based on future credit card sales. We aid success by quickly providing cash in advance, unsecured working capital, without the strict requirements and formalities of a loans offered by banks and other lending institutions. Loans require security (collateral), good credit and a long business history. New businesses and businesses with bad credit may still qualify for our merchant cash advance.

Import and Export Finance (Suppliers / Buyers Credit)

The company arranges buyers / suppliers credit for financing import transactions including capital goods. Pricing for Buyers Credit / Suppliers Credit is linked to LIBOR

The pricing will depend upon the value of Import, country from where the goods are imported, beneficiaries, LC opening Bank and the tenure.

Best pricing from the country of origin is always secured.

By availing this facility, the importing Indian company saves considerable interest cost.

The foreign supplier is always supportive since they get the payment upfront from international banks providing the buyers / suppliers credit.
32

TRANSWARRANTY FINANCE LIMITED

RBI allows supplier credit / buyer credit for raw material up to the total usage period of 360 days and for capital goods up to the total usage period of 3 years.

33

TRANSWARRANTY FINANCE LIMITED F. MERCHANT BANKING

Our forte is to have an original approach to business and innovatively structure financial solutions for fund raising programs and also provide advisory services for corporate restructuring. Our strength lies in our team of professionals who can decipher complex transaction and unlock value through price discovery resulting in value enhancement.

Our scope of Merchant Banking services include:

Management of Initial Public Offers / Follow on Offers / Rights Issue

Management of debt (Bond) issues for Companies / Institutions / Corporations/ Government Undertakings / Any other entity eligible to make a bond issue

Placement of Equity Shares with QIP / Private Equity funds

Placements of Preference Shares

Corporate Restructuring

Valuations of Companies / Enterprises / Shares

Listing services on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

34

TRANSWARRANTY FINANCE LIMITED

Buy Back of Shares

Take over & Offer for sale

ESOPs

Mergers, De-mergers, Amalgamations

Strategy and execution for increasing promoters share holding

Issuance of all statutory certificates by a Merchant Bank

Institutional Broking
Transwarranty Capital Private Ltd undertakes broking services for Domestic Financial Institutions, FIIs, Banks, Mutual Funds, Insurance Companies. Institutional Broking is backed by solid fundamental research done by a well experienced team of analysts and efficient execution capabilities.

Research based equity broking in BSE and NSE for : Mutual Funds Foreign Institutional Investors(FIIs) Banks Insurance Companies Companies Other Institutional Investors

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TRANSWARRANTY FINANCE LIMITED Arbitrage: Risk free arbitrage between cash & derivatives market for
Transwarranty Capital Pvt. Ltd. is a full service brokerage house with membership in BSE, NSE, and derivative segment of NSE. We manage funds for our clients using a fully hedged arbitrage strategy by buying equity shares for our clients with a simultaneous and matching sale position in derivative segment using futures.

In this investment model, we are following cost to carry investment strategy to earn the price difference / mismatch between these two segments of the market with absolutely no risk to the capital since investment is fully hedged and there is zero exposure to the market at any time, irrespective of the fact whether the market is going up or down. On the last Thursday of every month, i.e. on the expiry of the future series, the price of the underlying shares in futures converges with the cash market price of the same share. And due to this mechanism we reserve the respective positions in both the cash and derivatives segments without incurring any time or impact cost. Also from the initial investment date till the series expiry date, the volatility in the market gives ample opportunity to reverse and reinvest in the fully hedged model to improve the yield on the investment. Institutional Investors Companies High Net worth Individuals (HNIs)

Portfolio Management Services: Wealth management services for (subject to SEBI registration)
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TRANSWARRANTY FINANCE LIMITED

Institutional Investors Companies High Net worth Individuals (HNIs)

Depository Participant
Depository services on the Central Depository Services Limited (CDSL) for all clients

AMFI certified corporate agent/distributor for all the Mutual Funds

Institutional Investors Companies High Net worth Individuals (HNIs)

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TRANSWARRANTY FINANCE LIMITED G. MICRO FINANCE

Microfinance provides people with access to small loans at more manageable interest rates, and can lead to self-sufficiency and better quality of life. There are many models of Microfinance. Saving and borrowing are really different ways of turning small amounts of money into lump sums. Saving involves building a lump sum by first accumulating smaller amounts. Borrower is taking the lump sum first and then 'saving' afterwards in the form of loan repayments. Microfinance can be defined as small loans that help people who wish to start or expand their small businesses but are not able to get banks to lend to them. Micro credit is the extension of small loans to entrepreneurs, who do not qualify for traditional bank loans. It is helping millions of people, especially rural women, with tiny loans so they can start small, create self-employment and improve their lives.

People save all the time, although mostly in informal ways. They invest in assets such as gold, jewelry etc and things that can be easily exchanged for cash.

Microfinance has proved to be a powerful instrument that enables the people

To build assets, Increase incomes, and Reduce their vulnerability to economic stress. Access to Microfinance enables women to become economic agents of change by increasing their income and productivity, access to markets and information, and
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TRANSWARRANTY FINANCE LIMITED

decision-making power. It has improved the status of women within the family and the community. Making women responsible for loans, Ensuring repayment through women, Maintaining savings accounts for women, Providing insurance coverage through women etc.

Our products
Transwarranty provides Microfinance in the form of Gold Loans (Jewel Loans) to the weaker sections of the Society, which shall be classified as Priority Sector lending. A. Gold Loans Fast loans up to Rs.50,000 based on the market value of gold Easy and convenient terms for shorter periods Also repayment in equated monthly installments (EMI) of 12, 24 and 36 months Incomeproof/guarantorsnotrequired Foreclosure permitted

B. Gold Savings scheme Loans start from Rs.5000 to Rs.50,000 for purchasing of gold from select Jewelers Easy and quick processing for disbursal of loans, with convenient repayment terms
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TRANSWARRANTY FINANCE LIMITED

Gold can be bought at present prices and paid in installments of 12, 24 and 36 months

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TRANSWARRANTY FINANCE LIMITED FINANCIAL STATEMENTS

Cash flow

Mar ' 12

Mar ' 11

Mar ' 10

Mar ' 09

Mar ' 08

Profit before tax

7.69

0.49

-0.84

1.07

3.62

Net cashflow-operating activity

2.49

5.03

0.59

-1.14

-0.53

Net cash used in investing activity

-7.36

-9.56

1.93

-0.40

2.86

Netcash used in fin. activity

5.03

3.34

-1.04

0.03

-3.25

Net inc/dec in cash and equivlnt

0.17

-1.19

1.49

-1.50

-0.92

Cash and equivalnt begin of year

0.50

1.69

0.21

1.71

2.63

Cash and equivalnt end of year

0.67

0.50

1.69

0.21

1.71

Profit loss account

Mar ' 12 Mar ' 11 Mar ' 10

(Rs crore) Mar ' 09 Mar ' 08

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TRANSWARRANTY FINANCE LIMITED

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Income
Operating income 18.05 6.90 5.26 3.79 5.91

Expenses
Material consumed Manufacturing expenses Personnel expenses Selling expenses Administrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 5.74 3.87 4.83 14.44 3.61 5.21 8.82 0.97 0.16 7.69 0.96 6.72 6.72 7.24 1.22 0.20 5.82 0.62 3.04 3.70 7.37 -0.47 1.48 1.02 0.40 0.11 0.01 0.49 0.03 0.47 -0.05 0.41 0.61 0.61 0.43 2.48 0.07 3.13 6.12 -0.87 0.22 -0.64 0.33 0.13 -1.10 -0.04 -1.05 0.25 -0.03 -0.84 0.59 0.59 0.30 1.83 0.10 0.91 3.14 0.66 0.63 1.29 0.13 0.07 1.09 0.39 0.70 -0.02 0.68 2.16 0.42 0.07 1.67 0.04 1.66 0.11 0.94 2.75 3.17 0.67 3.83 0.10 0.08 3.65 1.27 2.38 -0.04 0.01 2.35 3.69 1.40 0.24 2.05

Balance sheet
Mar ' 12 Mar ' 11 Mar ' 10

(Rs crore) Mar ' 09 Mar ' 08

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TRANSWARRANTY FINANCE LIMITED

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Sources of funds
Owner's fund

Equity share capital

24.46

21.60

14.00

14.00

14.00

Share application money

Preference share capital

Reserves & surplus

33.26

27.91

24.16

24.99

24.80

Loan funds
Secured loans 1.22 1.34 0.62 1.08 0.12

Unsecured loans

2.35

3.00

0.25

0.55

Total

61.29

53.85

38.78

40.32

39.47

Uses of funds
Fixed assets

Gross block

1.04

0.96

0.85

0.82

0.50

Less : revaluation reserve

Less : accumulated depreciation

0.49

0.51

0.46

0.34

0.27

Net block

0.55

0.45

0.38

0.49

0.24

Capital work-in-progress

Investments

14.17

14.62

23.45

25.27

21.25

Net current assets

Current assets, loans & advances 57.11 42.48 18.70 20.20 23.97

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TRANSWARRANTY FINANCE LIMITED

Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Less : current liabilities & provisions

10.54

3.70

3.75

5.64

6.14

Total net current assets

46.57

38.78

14.95

14.56

17.83

Miscellaneous expenses not written

0.16

Total

61.29

53.85

38.78

40.32

39.47

Notes:
Book value of unquoted investments 3.37 4.87 23.40 2.04 20.25

Market value of quoted investments

19.02

61.55

0.16

0.17

1.30

Contingent liabilities

8.46

8.00

6.88

4.19

4.06

Number of equity shares outstanding (Lacs)

244.61

206.46

140.00

140.00

140.00

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TRANSWARRANTY FINANCE LIMITED SUGGESTIONS

i. Contract Sales Executive (CSE) should be trained to explain the product features and its value added services to make customers product selection convenient. ii. Contract Sales Executive (CSE) should recommend right fund to the right investor so as to ensure a high degree of satisfaction among the investors. iii. The company needs to make people aware about their products and the basic benefits they can derive out of it. And also the differential features of its product as compared to other compititors.70% of the people did not even know about the concept, benefits and features of their investments iv. The company should also focus on infrastructural funds as well as sector funds. v. Quality of service has been rated highly important by all demographic and psychographic factors as a reason for investment with a particular AMC, An AMC needs to improve the services provided to its existing customers before attracting more in the future and use word of mouth as a promotional tool to increase the sales potential of its products. vi. The company should also focus on the Promotional activities in North India region. It can be done by
-

Advertisement (T.V, Newspaper and etc.) Publicity Public Relations.

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TRANSWARRANTY FINANCE LIMITED CONCLUSION

The financial sector is in a process of rapid transformation. Reforms are continuing globally as part of the overall structural reforms aimed at improving the productivity and efficiency of the economy in the highly competitive world. The role of an integrated financial infrastructure is to stimulate and sustain economic growth. The US$ 28 billion Indian financial sector has grown at around 15 per cent and has displayed stabilityfor the last several years, even when other markets in the Asian region were facing a crisis. This stability has come through the resilience that the In-country system and the finance companies have built over these years. The financial sector has kept pace with the growing needs of corporate and other borrowers. Banks, capital market participants and insurers have developed a wide range of products and services to suit varied customer requirements.

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TRANSWARRANTY FINANCE LIMITED BIBLIOGRAPHY

INTERNET : www.transwarranty.com.com en.wikipedia.org/wiki/ financialservices.gov.in www.business-standard.com articles.economictimes.indiatimes.com www.moneycontrol.com

ARTICLES : ECONOMICS TIMES TIMES OF INDIA MINT

BOOKS : FINANCIAL SERVICES BY R S AGGARWAL BANKS OF INDIAN ECONOMY BY WHITE FEATHER PUBLISHERS

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