Mar 31, 2018
Dear Members,
The Directors present the Twenty Fourth Annual Report of your Company and the Audited Financial Statements for the year ended 31st March, 2018.
1. FINANCIAL RESULTS
An overview of the financial performance of your Company along with its Subsidiaries for the year 2017-18 is as under:
(Amount in lac)
Particulars |
Standalone |
Consolidated |
||
Year ended |
Year ended |
|||
31.03.2018 |
31.03.2017 |
31.03.2018 |
31.03.2017 |
|
Total Income |
13298.37 |
9662.41 |
15656.71 |
10,884.15 |
EBITDA |
2975.03 |
1,710.15 |
4551.57 |
2,373.54 |
Less : Depreciation and Amortization |
452.61 |
403.06 |
468.12 |
411.53 |
Less : Finance Costs |
238.73 |
223.33 |
430.08 |
319.67 |
Profit Before Exceptional Item & Tax |
2283.69 |
1,083.77 |
3653.37 |
1,642.35 |
Exceptional Item |
- |
335.00 |
- |
- |
Profit Before Tax |
2283.69 |
748.77 |
3653.37 |
1,642.35 |
Less : Tax Expense |
489.46 |
287.18 |
787.57 |
423.17 |
Profit after Tax |
1794.23 |
461.59 |
2865.80 |
1,219.18 |
Less : Share of Loss of Associate |
- |
- |
4.39 |
- |
Profit/(Loss) attributable to Shareholders of the Company |
1794.23 |
461.59 |
2861.41 |
1,219.18 |
Opening balance in Statement of Profit and Loss |
713.85 |
252.26 |
1418.46 |
253.96 |
Amount available for Appropriation |
2508.07 |
713.85 |
4279.87 |
1,473.14 |
Appropriations* |
||||
Dividend Paid on Equity Shares for FY 2016-17 |
245.09 |
- |
245.09 |
- |
Dividend Distribution Tax-on Dividend for FY 2016-17 |
49.90 |
- |
49.90 |
- |
Transfer to Special Reserve u/s 45-IC of RBI Act |
- |
- |
183.78 |
54.68 |
Closing balance in Statement of Profit and Loss |
2213.08 |
713.85 |
3801.10 |
1,418.46 |
*As per the requirements of pre-revised AS 4-âContingencies and Events occurring after the balance sheet dateâ, the Company used to create a liability for dividend proposed /declared after the balance sheet date for dividend related to periods covered by the financial statements. As per AS 4 (Revised), with effect from April 2016, the Company is not required to provide for dividend proposed/declared after the balance sheet date.
2. DIVIDEND
The Board of Directors are pleased to recommend a final dividend at the rate of Rs. 1.50 (15 %) per equity share and one time special dividend of Rs. 0.50 (5%) per equity share totaling to Rs. 2 (20%) per equity share of the face value of Rs. 10 for the year ended 31st March, 2018 (Previous year - Rs. 1 per equity share). This would involve a payout of Rs. 591.54 lac including dividend distribution tax (previous year - Rs. 294.99 lac) based on the number of shares as on 31st March, 2018. The dividend would be paid to all the shareholders, whose names appear in the Register of Members/Beneficial Holders list on the
Book Closure date. This Dividend is subject to approval of the Members at the forthcoming 24th Annual General Meeting.
3. REVIEW OF OPERATIONS
Standalone
During the year under review, your Company recorded a total income of Rs.13298.37 lac as against Rs. 9662.41 lac in the previous Financial Year, marking an increase of 37.62%. The profit for the same period stood at Rs. 1794.23 lac vis-a-vis the profit of Rs. 461.59 lac in the previous Financial Year.
Consolidated
During the year under review, your Company recorded a total income of Rs. 15656.71 lac as compared to Rs. 10,884.15 lac in the previous Financial Year, marking an increase of 43.85%. The Profit for the same period stood at Rs. 2865.80 lac vis-a-vis the Profit of Rs. 1219.18 lac in the previous Financial Year.
4. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Companies Act, 2013 (Act), the extract of annual return is given in Annexure A in the prescribed form MGT-9, which forms part of this report.
5. LAUNCH OF EMKAY EMERGING STARS FUND, A CATEGORY III ALTERNATIVE INVESTMENT FUND (AIF)
Emkay Emerging Stars Trust, sponsored by Emkay Global Financial Services Ltd and managed by Emkay Investment Managers Ltd. (EMIL), a wholly owned subsidiary of the Company launched âEmkay Emerging Stars Fundâ, a Category III Alternative Investment Fund (AIF) on 11th October, 2017 after receipt of approval from the Securities and Exchange Board of India (SEBI). Emkay Emerging Stars Fund is a five-year closed ended fund, focused on enabling long term capital appreciation for investors. In a short span of three months from the date of launch, the fund attained the milestone of crossing Rs. 200 crore in Assets Under Management (AUM).
6. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2017-18, 5 meetings were held on 24th May, 2017, 6th July, 2017, 11th August, 2017, 13th November, 2017 and 29th January, 2018.
The details of the attendance of Directors at the meetings are as under:
Name of the Director |
Category |
Board Meetings during Financial Year 2017-18 |
|
Held |
Attended |
||
Mr. G. P Gupta |
NED (I) |
5 |
5 |
Mr. S. K. Saboo |
NED |
5 |
5 |
Mr. R. K. Krishnamurthi |
NED (I) |
5 |
4 |
Mr. G. C. Vasudeo |
NED (I) |
5 |
5 |
Mr. Krishna Kumar Karwa |
ED |
5 |
5 |
Mr. Prakash Kacholia |
ED |
5 |
5 |
Mrs. Preeti Kacholia |
NED |
5 |
5 |
Dr. Satish Ugrankar |
NED (I) |
5 |
5 |
Dr. Bharat Kumar |
NED (I) |
- |
- |
Singh (appointed |
|
||
w.e.f. 29.01.2018) |
|
7. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for the year under review;
c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The Directors have prepared the annual accounts on a going concern basis;
e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
8. AUDIT COMMITTEE
The Audit Committee comprises of Mr. G. C. Vasudeo as the Chairman and Mr. G. P. Gupta, Mr. R. K. Krishnamurthi, Dr. Satish Ugrankar and Mr. Prakash Kacholia as the members of the committee. More details pertaining to the Audit Committee are included in the Corporate Governance Report, which forms a part of this report.
9. NOMINATION, REMUNERATION AND COMPENSATION COMMITTEE
The Nomination Remuneration and Compensation Committee constituted by the Board in compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 comprises
Mr. G. C. Vasudeo, an Independent Director as the Chairman and Mr. R. K. Krishnamurthi, Mr. G. P. Gupta, Dr. Satish Ugrankar and Mr. S. K. Saboo as the members of the Committee.
The Committee consists of only Non-Executive Directors as its members. All the members of the Committee are Independent Directors except for Mr. S. K. Saboo who is a Non-Executive, Non-Independent Director.
The Remuneration Policy of the Company is available on the Companyâs website i.e. www.emkayglobal.com/ Investor relations. The details of the composition, terms of reference of the Nomination, Remuneration and Compensation Committee, number and dates of meetings held, attendance of the Directors and remuneration paid to them are given separately in the attached Corporate Governance Report forming part of the Directorsâ Report.
10. PERFORMANCE EVALUATION
In terms of provisions of the Companies Act, 2013, read with Rules issued thereunder and Regulation 25 of SEBI (LODR) Regulations, 2015 and further circular no. SEBI/HO/CFD/ CMD/CIR/P/2017/004 dated 05/01/2017 issued by SEBI on âGuidance note on Board Evaluationâ, evaluation process was carried out internally for the performance of the Board, its committees and of Individual Directors.
The Independent Directors met on 26th March, 2018 to review performance evaluation of Non-Independent Directors and the Board as a whole including the Chairman.
The Nomination, Remuneration and Compensation Committee carried out evaluation of performance of each Director in their meeting held on 28th May, 2018. The Board of Directors carried out performance evaluation of the Board, each Director and the Committees for the Financial Year ended 31st March, 2018 in their meeting held on 28th May, 2018 based on various aspects which, inter alia, included the level of participation in the Board Meetings, understanding of their roles and responsibilities and of the business of the Company, along with the effectiveness of their contribution.
11. AUDITORS AND THEIR REPORT
Pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 (âthe Actâ) read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), S. R. Batliboi & Co. LLP, Chartered Accountants bearing Firm Registration Number 301003E/E300005 with the Institute of Chartered Accountants of India (ICAI) were appointed as the Statutory Auditors of the Company at the 23rd Annual General Meeting held on 11th August, 2017 for a period of five years commencing from the conclusion of the 23rd Annual General Meeting (AGM) till the conclusion of the 28th Annual General Meeting of the Company to be held for the Financial Year 20212022 subject to ratification of their appointment by members at every subsequent AGM. In accordance with the amendment made to section 139 of the Act, the requirement of ratification of appointment by members every year is done away.
M/s. S. R. Batliboi & Co LLP have confirmed their eligibility and qualification required under section 139 and 141 and other applicable provisions of the Companies Act, 2013 and Rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof) for the time being in force.
There are no qualifications or observations or remarks made by the Auditors in their report.
Reporting of Fraud
The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.
12. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, Mumbai to carry out Secretarial Audit of the Company for the Financial Year 2017-2018. The Secretarial Audit Report received from them is appended as Annexure B and forms part of this report.
There are no qualifications or adverse comments made by the Secretarial Auditors in their report.
13. INTERNAL AUDIT
As per the requirements of Section 138 of the Companies Act, 2013 and rules made thereunder, M/s. Lovi Mehrotra & Associates, Chartered Accountants, Mumbai were appointed as Internal Auditors of the Company for the Financial Year 2017-2018.
The internal control systems are supplemented by extensive internal audits, regular reviews by management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data. The Management Information System (MIS) forms an integral part of the Companyâs control mechanism. The Company has regular checks and procedures through internal audit periodically. The reports are deliberated and executive summary of the same, along with Action Taken Report (ATR), for steps taken by the Management to address the issues are placed before the Audit Committee Meeting/ Board Meeting for their review. Reports of internal auditors are reviewed by the Audit Committee, and corrective measures, if any, are carried out towards further improvement in systems and procedures in compliance with Internal Control System. The Board also recognizes the work of the auditors as an independent check on the information received from the management on the operations and performance of the Company.
14. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND ANNUAL GENERAL MEETINGS
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.
15. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management Discussion and Analysis, which forms part of the Annual Report.
16. PUBLIC DEPOSITS
During the year, your Company has not accepted and/or renewed any public deposits in terms of the provisions of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees or Investments covered under Section 186 of the Companies Act, 2013, are given under notes to the Financial Statements.
18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013
The details of the related party transactions, as per the requirement of Accounting Standards-18 are disclosed in notes to the financial statements of the Company for the Financial Year 2017-18. All the Directors have disclosed their interest in Form MBP-1 pursuant to Section 184 of the Companies Act, 2013 and as and when any changes in their interest take place, such changes are placed before the Board at its meetings. None of the transactions with any of the related parties was in conflict with the interest of the Company. The particulars of contracts or arrangements with related parties referred to in Section 188 (1), in prescribed Form AOC - 2 under Companies (Accounts) Rules, 2014 are appended as Annexure C
19. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has constituted an Internal Complaint Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year no complaint was filed before the said Committee.
20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo required under Section 134 (3) (m)read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 are attached as Annexure D and forms part of this Report of Directors.
21. LEVERAGING DIGITAL TECHNOLOGY
During the year under review, the Company achieved substantial performance enhancements in its trading and back-office platforms through implementation of cutting edge hyper-converged infrastructure. The software defined storage not only enabled the Company to consolidate and reduce the physical foot-print of its IT infrastructure, but this approach also helped it to dynamically distribute computing resources and improve the overall availability and uptime for its core applications. The Company has been one of the early adaptors of hyper converged technology among Indian brokerages.
The Company, during the year, also launched a revolutionary charting and trading platform EmTrade. The platform combines unparalleled analytics and execution capabilities and is equipped with unique features and benefits. EmTrade gives real time data across markets and offers several indicators, in-built modules for strategy creation, extensive drawing tools, heat map, global indices, buy-sell alerts among other features.
22. BUSINESS RISK MANAGEMENT
Pursuant to section 134(3) (n) of the Companies Act, 2013 and as per provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adhered to the principles of sound risk management and already has a Risk Management Policy in place. An exercise is being carried out to identify, evaluate, manage and monitor both business and non-business risk on an ongoing basis. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.
The details of the same are set out in the Corporate Governance Report forming part of the Boardsâ Report.
23. CORPORATE SOCIAL RESPONSIBILITY
In view of applicability of Corporate Social Responsibility (CSR) provisions in the year 2016-2017, in compliance with the requirements of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014, the Board at its meeting held on May 23, 2016, had constituted a Corporate Social Responsibility Committee comprising three Directors of the Company including one Independent Director. The members of the Committee are Mr. G. C. Vasudeo, Mr. Krishna Kumar Karwa and Mr. Prakash Kacholia. The Company has evolved a Corporate Social Responsibility Policy and is actively practicing the same. The objectives of the CSR Policy are to contribute to social and economic development of the communities in which the Company operates, to improve the quality of life of the communities through long term value creation for stakeholders and to generate, through its CSR initiatives, a community goodwill for the Company and help reinforce a positive and socially responsible image of the Company as a corporate entity. The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided in Annexure E and forms an integral part of this report.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has implemented a Vigil Mechanism Policy to deal with instances of fraud and mismanagement, if any. The policy also provides for adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee in all cases. The details of the policy are posted on the website of the Company under the link http://www. emkayglobal.com/investorrelations.There were no complaints received during the year 2017-18.
25. DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment & Qualification of Directors) Rules, 2014 and Articles of Association of the Company, Mrs. Preeti Kacholia (DIN: 03481747), Non-Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment. Your Board recommends her re-appointment.
During the year, Dr. Bharat Kumar Singh (DIN: 00274435) was appointed as an Additional Director of the Company with effect from 29th January, 2018. As per provisions of Section 161 of the Companies Act, 2013 and Articles of Association of the Company, Dr. Bharat Kumar Singh holds office up to the date of the forthcoming 24th Annual General Meeting and is eligible for appointment.
Pursuant to the provisions of Section 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule IV of the Companies Act, 2013, your Directors are seeking appointment of Dr. Bharat Kumar Singh as an Independent Director for a term of five consecutive years from the date of the 24th Annual General Meeting. Details of the proposal for appointment of Dr. Bharat Kumar Singh are mentioned in the Explanatory Statement of the Notice of the 24th Annual General Meeting, under Section 102 of the Companies Act, 2013.
The Nomination, Remuneration and Compensation Committee at its meeting held on 28th May, 2018 has recommended the appointment of Dr. Bharat Kumar Singh as an Independent Director of the Company for a period of five years. The Company has received a notice from a Member of the Company under section 160(1) of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. Members are requested to consider the appointment of Dr. Bharat Kumar Singh as an Independent Director.
Brief profiles of Mrs. Preeti Kacholia and Dr. Bharat Kumar Singh, Directors of the Company, as required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015, are given in the Notice of the 24th Annual General Meeting.
The Company has received declaration from all the Independent directors that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 read with the Schedule and Rules issued thereunder.
During the year, at the request of Mr. Krishna Kumar Karwa, Managing Director, he was relinquished from the additional responsibility of Chief Financial Officer of the Company w.e.f. 1st June, 2017. Mr. Saket Agarwal, Vice President, Finance & Accounts was appointed as the Chief Financial Officer (CFO) of the Company w.e.f. 1st June, 2017.
The following four persons were formally noted as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013.
- Mr. Krishna Kumar Karwa - Managing Director
- Mr. Prakash Kacholia - Managing Director
- Mr. Saket Agrawal - Chief Financial Officer (Appointed w.e.f. 1st June, 2017)
- Mr. B. M. Raul - Company Secretary
26. PARTICULARS OF REMUNERATION
Details of the ratio of remuneration of each Director to the median employeeâs remuneration is provided in Annexure F
27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
Pursuant to the provisions of Section 134 (5) (f) of the Act, the Company has devised proper systems to ensure compliance with the provisions of all applicable laws. Each department of the organization ensured that it had complied with the applicable laws and furnished its report to the Head of department who then along with the Company Secretary discussed on the compliance status of the department. Any matter that required attention was immediately dealt with. The Company Secretary reported to the Audit Committee and the Board on the overall compliance status of the Company. In effect, such compliance system was largely found to be adequate and operating effectively. The Directors have in the Directorsâ Responsibility Statement under paragraph (f) also confirmed the same to this effect.
28. SUBSIDIARY/ ASSOCIATE COMPANIES
The Company has 4 subsidiaries as on 31st March, 2018. There are no associate companies within the meaning of Section 2(6) of the Act.
Pursuant to the provisions of Section 129 (3) of the Act, a statement containing the salient features of financial statements of the Companyâs subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
Emkay Commotrade Limited (ECL) - a 100% subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its clients. It is a member of three major commodity exchanges viz. Multi Commodity Exchange of India Limited (MCX), National Commodity and Derivatives Exchange Limited (NCDEX) and National Spot Exchange Limited (NSEL). As on date, the Companyâs Paid up Capital is Rs. 8.50 crore divided into Rs. 6 crore in Equity Shares and Rs. 2.50 crore in Preference Shares. The Company has a net worth of Rs. 497.28 lac as on 31st March, 2018.
Emkay Fincap Limited (EFL) - a 100% subsidiary:
Emkay Fincap Limited is a RBI registered Non Deposit taking Non - Banking Financial Comapny. EFL has a net worth of Rs. 4934.69 lac as on 31st March, 2018.
Emkay Insurance Brokers Limited (EIBL) - a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with Insurance Regulatory and Development Authority (IRDA) as a Direct Insurance Broker and focuses on life and non-life insurance businesses. EIBL has a net worth of Rs. 72.81 lac as on 31st March, 2018. The Company is pursuing proposals for sale of Insurance Broking Business to another Company.
Emkay Investment Managers Limited (EIML) - a 100% subsidiary:
Emkay Investment Managers Limited is registered with Securities and Exchange Board of India (SEBI) for conducting the business of Portfolio Management Services and has commenced the business of Portfolio Management Services with effect from 1st January, 2011. During the year, the Company has issued 25,00,000 Equity shares of Rs. 10/- each. As on date Companyâs Paid up Capital is Rs. 5,00,00,000/divided into 50,00,000 equity shares of Rs.10/- each. EIML has a net worth of Rs. 871.46 lac as on 31st March, 2018.
The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies. The Company will make available the annual accounts of the Subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the said Subsidiary Companies are also available for inspection by any member of the Company at its Administrative Office situated at Paragon Centre, C-6, Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400 013 during business hours on all days except Saturdays, Sundays and Public holidays upto the date of the AGM. The Annual Report of the Company and all its Subsidiary Companies are also available on the website of the Company www.emkayglobal.com.
29. EMPLOYEE STOCK OPTION SCHEMES
With a view to remain a preferred employer, the Company had granted Stock Options under two Schemes viz. ESOP 2007 and Employee Stock Option Plan - 2010 - through trust route to the employees of the Company and the employees of the Subsidiary Companies. The Company has also introduced new ESOP 2018 scheme approved by the shareholders through the process of Postal Ballot on 21st March, 2018.
Details of the shares issued under Employees Stock Option Plan (ESOP), as also disclosure in compliance with SEBI (Share Based Employees Benefits) Regulations, 2014 are uploaded on the website of the Company, under the link https://www. emkayglobal.com/key-annocuments . No employee has been issued share options during the year equal to or exceeding one percent of the issued capital of the Company at the time of grant.
(a) ESOP 2007
The Nomination, Remuneration and Compensation Committee of the Company had granted options under ESOP-2007 scheme to the eligible employees (each option carrying entitlement for one share of the face value of Rs. 10/- each). Summary of the same as on 31.03.2018 is as under.
Summary of ESOP 2007 as on 31st March 2018:
Total no. of stock options approved |
24,26,575 |
|
under the Scheme |
||
No. of Options |
Date of Grant |
Exercise Price Per Option |
14,42,000 |
17.01.2008 |
Rs. 63/- |
2,44,000 |
19.06.2009 |
Rs. 63/- |
2,07,500 |
24.07.2009 |
Rs. 61/- |
1,00,000 |
04.05.2010 |
Rs. 93/- |
6,11,500 |
27.07.2010 |
Rs. 77/- |
2,00,000 |
21.01.2012 |
Rs. 37/- |
|
||
Exercise Period |
3 years |
|
Re-Issued Options |
3,78,425 |
|
Total no. of stock options granted under |
28,05,000 |
|
the scheme |
||
Stock Options lapsed |
25,26,470 |
|
Stock Options vested but not exercised |
87,000 |
|
Stock Options exercised |
1,91,530 |
|
Outstanding Stock Options |
87,000 |
During the Financial Year 2017-18, the Nomination, Remuneration and Compensation Committee allotted 1,15,880 Equity Shares to the employee(s) under the ESOP 2007 (including 35,000 Options exercised during the Financial Year 2017-2018 but allotted in next Financial Year i.e. 2018-2019). These shares are listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. After allotment of the said 1,15,880 equity shares of Rs. 10/- each, Companyâs paid-up Share Capital increased to Rs. 24,53,40,300/-.
The disclosures required to be made in the Directorsâ Report in respect of the aforesaid ESOP Schemes, in terms of the SEBI (Share Based Employee Benefits) Regulations, 2014 are contained in Annexure G forming part of the Directorsâ Report.
(b) EMPLOYEE STOCK OPTION PLAN - 2010 THROUGH TRUST ROUTE
The Nomination, Remuneration and Compensation Committee of the Company had granted total no. of 6,47,000 options under ESOP-2010 scheme through trust route to the eligible employees (each option carrying entitlement for one share of the face value of Rs.10/- each till date). Summary of the same as on 31.03.2018 is as under.
Summary of ESOP 2010 (through trust route) as on 31st March 2018:
Total no. of stock options approved under the Scheme |
24,41,995 |
|
No. of options |
Date of Grant |
Exercise Price Per Option |
5,55,000 |
21.10.2010 |
Rs. 93/- per option |
27,000 |
02.05.2011 |
Rs. 63/- per option |
15,000 |
22.10.2011 |
Rs. 48/- per option |
50,000 |
21.01.2012 |
Rs. 37/- per option |
Exercise Period |
3 years |
|
Total no. of stock options |
6,47,000 |
|
granted under the scheme |
||
Stock Options lapsed |
5,91,000 |
|
Stock Options vested but not exercised |
15,500 |
|
Stock Options exercised |
40,500 |
|
Outstanding Stock Options |
15,500 |
During the Financial Year 2017-18, the Nomination, Remuneration and Compensation Committee, through the ESOP trust, transferred 40,500/- Equity Shares to the employee(s) on exercise of options under ESOP 2010 (Through Trust Route).
Details required to be provided are set out in Annexure G to this report.
30. TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS AND SUCH SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, the Company has transferred on due dates, the unpaid or unclaimed dividends up to the Financial Year 2009-2010 to the Investor Education and Protection Fund (IEPF) established by the Central Government. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded on its website the details of unpaid and unclaimed amounts lying with the Company.
Further, in terms of the provisions of section 124(6) of the Companies Act, 2013 read with The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs, New Delhi w.e.f. 7th September, 2016, and further notifications issued by Ministry of Corporate Affairs, amending the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 which has come into force w.e.f. 28.02.2017, all the shares in respect of which dividend has not been paid or claimed for seven consecutive years or more as provided under subsection (6) of Section 124 were transferred to the special Demat Account of IEPF Authority.
The details of the unclaimed/unpaid dividends are available on the Companyâs website www.emkayglobal.com and also on the website of the Ministry of Corporate affairs www.mca.gov.in.
31. PARTICULARS OF EMPLOYEES
The particulars of employees required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended are enclosed hereto in Annexure H
32. CORPORATE GOVERNANCE REPORT
The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange Board of India and has implemented all the prescribed stipulations thereof. As stipulated in Regulation 27 of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, a detailed report on Corporate Governance and the requisite Auditorâs Certificate confirming compliance with the conditions of Corporate Governance, is appended as Annexure I and forms a part of this Report.
33. SIGNIFICANT AND MATERIAL ORDERS PASSSED BY THE COURTS OR REGULATORS
During the year no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future.
34. LISTING WITH STOCK EXCHANGES
The Equity shares of the Company are listed on the National Stock Exchange of India Ltd. and BSE Ltd.
35. ACKNOWLEDGEMENT
Your Directors would like to take this opportunity to express sincere gratitude to the customers, bankers and other business associates for the continued co-operation and patronage. Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Government, Regulatory Bodies and the Stock Exchanges. Your Directors place on record their deep appreciation for the exemplary contribution made by the employees at all levels. The Directors also wish to express their gratitude to the valued shareholders for their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director Managing Director
Place : Mumbai
Date : 28th May, 2018
Mar 31, 2017
Dear Members,
The Directors present the Twenty Third Annual Report of your Company and the Audited Financial Statements for the year ended 31st March, 2017.
1. FINANCIAL RESULTS
An overview of the financial performance of your Company along with its Subsidiaries for the financial year 2016-17 is as under:
(Amount in Lac)
Particulars |
Standalone Year ended 31.03.2017 31.03.2016 |
Consolidated Year ended 31.03.2017 31.03.2016 |
||
Total Income |
9662.41 |
9505.54 |
10,884.15 10,532.58 |
|
EBITDA |
1,710.15 |
1,860.11 |
2,373.54 |
2,376.97 |
Less : Depreciation and Amortization |
403.06 |
356.67 |
411.53 |
359.46 |
Less : Finance Costs |
223.33 |
207.71 |
319.67 |
351.78 |
Profit Before Exceptional Item & Tax |
1,083.77 |
1,295.73 |
1,642.35 |
1,665.73 |
Exceptional Item |
335.00 |
- |
- |
- |
Profit Before Tax |
748.77 |
1,295.73 |
1,642.35 |
1,665.73 |
Less : Tax Expense |
287.18 |
314.88 |
423.17 |
462.37 |
Profit after Tax |
461.59 |
980.85 |
1,219.18 |
1,203.36 |
Less : Minority Interest |
- |
- |
- |
- |
Profit/(Loss) attributable to Shareholders of the Company |
461.59 |
980.85 |
1,219.18 |
1,203.36 |
Opening balance in Statement of Profit and Loss |
252.26 |
(456.86) |
253.96 |
(597.67) |
Amount available for Appropriation |
713.85 |
523.99 |
1,473.14 |
605.68 |
Appropriations * |
||||
Interim Dividend |
- |
244.38 |
- |
244.38 |
Tax on Interim Dividend |
- |
27.36 |
- |
49.75 |
Transfer to Special Reserve u/s 45-IC of RBI Act |
- |
- |
54.68 |
57.60 |
Closing balance in Statement of Profit and Loss |
713.85 |
252.26 |
1,418.46 |
253.96 |
- As per the requirements of pre-revised AS 4-''Contingencies and Events occurring after the balance sheet date'', the Company used to create a liability for dividend proposed /declared after the balance sheet date if dividend related to periods covered by the financial statements. As per AS 4 (Revised), with effect from April 2016, the Company is not required to provide for dividend proposed/declared after the balance sheet date.
2. DIVIDEND
The Board of Directors are pleased to recommend a dividend at the rate of Rs. 1 /- (10 %) per equity share of the face value of Rs. 10/- for the year ended 31st March, 2017 (Previous year Rs. 1/- per equity share (Interim dividend). This would involve a payout of Rs. 294.13 Lac including dividend distribution tax (previous year Rs. 271.74 Lac) based on the number of shares as on 31st March, 2017. The dividend would be paid to all the shareholders, whose names appear in the Register Members/Beneficial Holders list on the Book Closure date. This Dividend is subject to approval of the Members at the forthcoming 23rd Annual General Meeting.
3. REVIEW OF OPERATIONS
Standalone
During the year under review, your Company recorded a total income of Rs. 9662.41 Lac as compared to Rs. 9505.54 Lac in the previous financial year, higher by 1.65%. The Profit for the same period stands at Rs. 461.59 Lac as compared to the Profit of Rs. 980.85 Lac in the previous financial year.
Consolidated
During the year under review, your Company recorded a total income of Rs. 10,884.15 Lac as compared to Rs. 10532.58 Lac in the previous financial year, higher by 3.34%. The Profit for the same period stood at Rs. 1219.18 Lac as compared to the Profit of Rs. 1203.36 Lac in the previous financial year.
4. AWARDS AND ACCOLADES
World Consulting & Research Corporation (WCRC), India''s leading consulting, research and knowledge firm has awarded the title of "India''s Most Trusted Financial Brand - 2016-17" to the Company. India''s Most Trusted Financial Brand recognizes nominations in each industry category namely Banking, Financial Services and Insurance that have created a genuine impact on the Indian Economy. The Company was commemorated with the Award at the Pride of India Summit hosted by WCRC on 21st December, 2016 at Mumbai.
5. TIE UP WITH DBS BANK FOR KNOWLEDGE SHARING
During the year, the Company signed an agreement with DBS Bank in Singapore on 23rd January, 2017 to collaborate on research expertise. The alliance will be beneficial to both Indian and Global Investors since it will offer a holistic view of the Asian Market. The integrated reports will be shared in different countries including India, Singapore, Bangkok, Jakarta, London, Dubai and New York.
6. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Companies Act,
2013 (the Act) the extract of annual return is given in "Annexure A" in the prescribed form MGT-9, which forms part of this report.
7. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2016-17, 4 meetings were held on 23rd May, 2016, 10th August, 2016, 9th November, 2016 and 30th January, 2017.
The details of the attendance of Directors at the meeting are as under:
Name of the Director |
Category |
Board Meetings during Financial Year 2016-17 |
|
Held |
Attended |
||
Mr. G. P. Gupta |
NED (I) |
4 |
2 |
Mr. S. K. Saboo |
NED |
4 |
4 |
Mr. R. K. Krishnamurthi |
NED (I) |
4 |
2 |
Mr. G. C. Vasudeo |
NED (I) |
4 |
4 |
Mr. Krishna Kumar Karwa |
ED |
4 |
4 |
Mr. Prakash Kacholia |
ED |
4 |
4 |
Mrs. Preeti Kacholia |
|||
|
NED |
4 |
4 |
Dr. Satish Ugrankar (Appointed as an Independent Director w.e.f. 10th August, 2016) |
NED (I) |
4 |
4 |
8. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;
c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The Directors have prepared the annual accounts on a going concern basis;
e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
9. AUDIT COMMITTEE
The Board has reconstituted the Audit Committee which comprises Mr. G. C. Vasudeo as the Chairman and Mr. G. P. Gupta, Mr. R. K. Krishnamurthi, Dr. Satish Ugrankar and Mr. Prakash Kacholia as the members of the Committee. More details pertaining to the Audit Committee are included in the Corporate Governance Report, which forms part of this report.
10. NOMINATION, REMUNERATION AND COMPENSATION COMMITTEE
The Board has constituted Nomination, Remuneration and Compensation Committee in compliance with Section 178 of the Companies Act, 2013 and Regulation
19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which comprises Mr. G. C. Vasudeo, an Independent Director as the Chairman and Mr. R. K. Krishnamurthi, Mr. G. P. Gupta and Mr. S. K. Saboo as the members of the Committee.
The Committee consists of only Non-Executive Directors as its members. All the members of the Committee are Independent Directors except Mr. S. K. Saboo who is Non-Executive Non- Independent Director.
The Company''s Remuneration Policy is available on the Company''s website i.e. www.emkayglobal.com/ Investor relations. The details of composition, terms of reference of the Nomination, Remuneration and Compensation Committee, numbers and dates of meeting held, attendance of the members and remuneration paid to them are given separately in the attached Corporate Governance Report forming part of the Directors'' Report.
11. PERFORMANCE EVALUATION
In terms of provisions of the Companies Act, 2013 read with Rules issued there under and Regulation 25 of SEBI (LODR) Regulations, 2015 and further circular no. SEBI/ HO/CFD/CMD/CIR/P/2017/004 dated 05/01/2017 issued by SEBI on "Guidance note on Board Evaluation", evaluation process was carried out internally for the performance of the Board, its committees and Individual Directors.
The Independent Directors met on 24th March, 2017 to review performance evaluation of Non-Independent Directors and the Board as a whole including the Chairman.
The Nomination, Remuneration and Compensation Committee carried out evaluation of performance of each Directors in their meeting held on 24th May, 2017. The Board of Directors carried out performance evaluation of the Board, each Director and the Committees for the financial year ended 31st March, 2017 in their meeting held on 24th May, 2017 based on various aspects which, inter alia, included the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company along with the effectiveness of their contribution.
12. AUDITORS AND THEIR REPORT
M/s B. L. Sarda & Associates, Chartered Accountants, Mumbai, bearing Firm Registration Number 109266W with the Institute of Chartered Accountants of India (ICAI) were appointed as the Statutory Auditors of the Company at the Annual General Meeting held on 9th October, 1995 and thereafter each year till the year 2014. Subsequently, pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act,
2013 ("the Act") read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Company had appointed M/s. B. L. Sarda & Associates, as the Statutory Auditors of the Company to hold office from the conclusion of Twentieth Annual General Meeting (AGM) held on 13th August, 2014 until the conclusion of Twenty Third Annual General Meeting of the Company to be held for the financial year 2016-17. Accordingly, the present Statutory Auditors, M/s B.. L. Sarda & Associates have completed their tenor of two terms of five consecutive years and will be completing the additional period of 3 years as stipulated under Section 139 of the Act and the Rules framed there under. They will be holding the office of the Statutory Auditors up to the conclusion of the forthcoming Annual General Meeting.
The Company is proposing to appoint M/s. S. R. Batliboi & Co. LLP, Chartered Accountants bearing Firm Registration Number 301003E/E300005 with the Institute of Chartered Accountants of India (ICAI) as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of the 23rd Annual General Meeting (AGM) till the conclusion of the 28th Annual General Meeting of the Company to be held for the financial year 2021-2022.
S.R. Batliboi & Co. LLP have consented to the said appointment and confirmed that they are eligible for appointment as auditors and are not disqualified for appointment under section 141 and other relevant provisions of the Companies Act, 2013 ("the Act"), the Chartered Accountants Act,1949, or the rules and regulations made there under and the proposed appointment would be within the limits stipulated under the Companies Act, 2013. They have also confirmed that they hold a valid certificate issued by the ''Peer Review Board'' of The Institute of Chartered Accountants of India (ICAI).
The Audit Committee and the Board of Directors recommend the appointment of S.R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the 23rd Annual General Meeting till the conclusion of 28th Annual General Meeting.
The Board places on record its appreciation for the contribution made by M/s B.L. Sarda & Associates, Chartered Accountants, during their tenure as the Statutory Auditors of the Company.
There are no qualifications or observations or remarks made by the Auditors in their report.
Reporting of Fraud
The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.
13. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, Mumbai to carry out Secretarial Audit of the Company for the financial year 2016-2017. The Secretarial Audit Report received from them is appended as Annexure B and forms part of this report.
There are no qualifications or adverse comments made by the Secretarial Auditors in their report.
14. INTERNAL AUDIT
As per the requirements of Section 138 of the Companies Act, 2013 and rules made there under, M/s Lovi Mehrotra & Associates, Chartered Accountants, Mumbai were appointed as Internal Auditors of the Company for the financial year 2016-2017.
The internal control systems are supplemented by extensive internal audits, regular reviews by management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data. The Management Information System (MIS) forms an integral part of the Company''s control mechanism. The Company has regular checks and procedures through internal audit periodically. The reports are deliberated and executive summary of the same along with action taken report (ATR) for steps taken by the Management to address the issues are placed before the Audit Committee meeting/ Board meeting for their review. Reports of internal auditors are reviewed by the Audit Committee, and corrective measures, if any, are carried out towards further improvement in systems and procedures in compliance with Internal Control System. The Board also recognizes the work of the auditors as an independent check on the information received from the management on the operations and performance of the Company.
15. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND ANNUAL GENERAL MEETINGS
The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.
16. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management Discussion and Analysis, which forms part of the Annual Report.
17. PUBLIC DEPOSITS
During the year, your Company has not accepted and/or renewed any public deposits in terms of the provisions of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of Loans, Guarantees or Investments covered under Section 186 of the Companies Act, 2013, are given under Notes to the Financial Statements.
19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013
The details of the related party transactions, as per requirement of Accounting Standards-18 are disclosed in Notes to the financial statements of the Company for the financial year 2016-17. All the Directors have disclosed their interest in Form MBP-1 pursuant to Section 184 of the Companies Act, 2013 and as and when any changes in their interest take place, such changes are placed before the Board at its meetings. None of the transactions with any of the related parties was in conflict with the interest of the Company. The particulars of contracts or arrangements with related parties referred to in Section 188(1), in prescribed Form AOC - 2 under Companies (Accounts) Rules, 2014 are appended as "Annexure C"
20. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has constituted an Internal Complaint Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year no complaint was filed before the said Committee.
21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo required under Section 134 (3) (m) read with Rule 8 (3) of the Companies (Accounts) Rules,2014 is attached as "Annexure D "and forms part of this Report of Directors.
22. BUSINESS RISK MANAGEMENT
Pursuant to section 134(3) (n) of the Companies Act, 2013 and as per provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adhered to the principles of sound risk management and already has a Risk Management Policy in place. An ongoing exercise is being carried out to identify, evaluate, manage and for monitoring of both business and nonbusiness risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. The details of the same are set out in the Corporate Governance Report forming part of the Boards'' Report.
23. CORPORATE SOCIAL RESPONSIBILITY
In view of applicability of Corporate Social Responsibility (CSR) provisions in the year 2016-2017, in compliance with the requirements of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014, the Board at its meeting held on May 23, 201 6, had constituted a Corporate Social Responsibility Committee comprising three Directors of the Company including one Independent Director. The members of the Committee are Mr. G. C. Vasudeo, Mr. Krishna Kumar Karwa and Mr. Prakash Kacholia. The Company has evolved a Corporate Social Responsibility Policy and is actively practicing the same. The objectives of the CSR Policy are to contribute to social and economic development of the communities in which the Company operates, provide opportunities to employees to contribute to society through service and contributions, monetary and otherwise and to generate, through its CSR initiatives, a community goodwill for the Company and help reinforce a positive and socially responsible image of the Company as a corporate entity.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has implemented a Vigil Mechanism Policy to deal with instances of fraud and mismanagement, if any. The policy also provides for adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee in all cases. The details of the policy are posted on the website of the Company under the link http://www.emkayglobal.com/investorrelations.There were no complaints received during the year 2016-17.
25. DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules,
2014 and Articles of Association of the Company, Mr. S. K. Saboo (DIN 00373201), Non-Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. Your Board recommends his reappointment.
A brief profile of Mr. S. K. Saboo, as required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015 is given in the Notice of the 23rd Annual General Meeting.
All Independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013.
The following three persons were formally noted as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013.
- Mr. Krishna Kumar Karwa - Managing Director & CFO
- Mr. Prakash Kacholia - Managing Director
- Mr. B. M. Raul - Company Secretary
26. PARTICULARS OF REMUNERATION
Details of the ratio of remuneration of each Director to the median employeeâs remuneration are provided in Annexure - E.
27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
Pursuant to the provisions of Section 134(5)(f) of the Act, the Company has devised proper systems to ensure compliance with the provisions of all applicable laws. Each department of the organization ensured that it complied with the applicable laws and furnished its report to the Head of department, who then, along with the Company Secretary discussed on the compliance status of the department. Any matter that required attention was immediately dealt with. The Company Secretary reported to the Audit Committee and the Board on the overall compliance status of the Company. In effect, such compliance system was largely found to be adequate and operating effectively. The Directors have in the Directors'' Responsibility Statement under paragraph (f) also confirmed the same to this effect.
28. SUBSIDIARY COMPANIES
The Company had 4 subsidiaries as on 31st March, 2017. There are no associate companies within the meaning of Section 2(6) of the Act.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
Emkay Commotrade Limited (ECL) - a 100% subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its clients. It is a member of three major commodity exchanges viz. Multi Commodity Exchange of India Limited (MCX), National Commodity and Derivatives Exchange Limited (NCDEX) and National Spot Exchange Limited (NSEL). During the year, the Company issued 15,00,000 - 9% Redeemable Non-Cumulative Preference Shares of Rs. 10/- each for a period of five years. As on date the Company''s Paid up Capital is Rs. 8.50 crore divided into Rs. 6 crore in Equity Shares and Rs. 2.50 crore in Preference shares. The Company has a net worth of Rs. 414.70 Lac as on 31st March, 2017.
Emkay Fincap Limited (EFL) - a 100% subsidiary:
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC. EFL has a net worth of Rs. 4015.80 Lac as on 31st March, 2017.
Emkay Insurance Brokers Limited (EIBL) - a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with Insurance Regulatory and Development Authority (IRDA) as a Direct Insurance Broker and focuses on life and non-life businesses. EIBL has a net worth of Rs. 78.72 Lac as on 31st March, 2017.
Emkay Investment Managers Limited (EIML) - a 100% subsidiary:
Emkay Investment Managers Limited is registered with Securities and Exchange Board of India (SEBI) for conducting the business of Portfolio Management Services and had commenced the business of Portfolio Management Services with effect from 1st January, 2011. EIML has a net worth of Rs. 544.10 Lac as on 31st March, 2017.
The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies. The Company will make available the annual accounts of the Subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the said Subsidiary Companies are also available for inspection by any member of the Company at its Corporate Office situated at Paragon Centre, C-6, Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai
- 400 013 during business hours on all days except Saturdays, Sundays and Public holidays upto the date of the AGM. The Annual Report of the Company and of all its subsidiary Companies are also available on the website of the Company i.e. www.emkayglobal.com.
29. EMPLOYEE STOCK OPTION SCHEMES
With a view to remain a preferred employer, the Company had granted Stock Options under two Schemes viz. ESOP 2007 and another scheme Employee Stock Option Plan - 2010 through trust route to the employees of the Company and the employees of the Subsidiary Companies.
(a) ESOP 2007
The Company had granted 1,442,000 Options on 17th January, 2008 to the eligible employees (each option carrying entitlement for one share of the face value of Rs. 10 each) at an exercise price of Rs. 363 per option which was later reprised at Rs. 63 per option. Further, the Company granted 244,000 Options on 19th June, 2009, 207,500 Options on 24th July, 2009, 1,00,000 Options on 4th May, 2010 , 6,11,500 Options on 27th July, 2010 and 2,00,000 Options on 21st January, 2012 at an exercise price of Rs. 63, Rs. 61, Rs. 93, Rs. 77 and Rs. 37 per option respectively.
During the Financial Year 2016-17, the Nomination, Remuneration and Compensation Committee allotted 400 Equity Shares on 9.11.2016 to the employee/s under the ESOP 2007. These shares are listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. After allotment of the said 400 equity shares of Rs. 10/- each, Company''s paid-up Share Capital has increased to Rs. 24,43,81,500/-.
Summary of ESOP 2010 (through trust route) as on 31st March 2017:
Total no. of stock options granted under the Scheme |
24,41,995 |
|
Exercise Price |
No. of Options |
per option |
5,55,000 Options |
Rs. 93 |
27,000 Options |
Rs. 63 |
15,000 Options |
Rs. 48 |
50,000 Options |
Rs.'' 37 |
Exercise Period |
3 years |
Total no. of stock options granted under |
6,47,000 |
the scheme |
|
Stock Options lapsed |
5,82,000 |
Stock Options vested but not exercised |
65,000 |
Stock Options exercised |
Nil |
Outstanding Stock Options |
65,000 |
Details required to be provided are set out in "Annexure F" to this report.
Summary of ESOP 2007 as on 31stMarch 2017:
Total no. of stock options granted under the Scheme |
24,26,575 |
No. of Options |
Exercise Price per option |
14,42,000 Options |
'' 63 |
2,44,000 Options |
'' 63 |
2,07,500 Options |
'' 61 |
1,00,000 Options |
'' 93 |
6,11,500 Options |
'' 77 |
2,00,000 Options |
'' 37 |
Exercise Period |
3 years |
Re- Issued Options |
3,78,425 |
Total no. of stock options granted under the scheme |
28,05,000 |
Stock Options lapsed |
23,76,300 |
Stock Options vested but not exercised |
3,68,050 |
Stock Options exercised |
60,650 |
Outstanding Stock Options |
3,68,050 |
30. TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS AND SUCH SHARES TO INVESTOR EDUCATION AND 1 PROTECTION FUND
The paid up Equity Capital of the Company is Rs. 24, 43,81,500/- as of date. The disclosures required to be made in the Directors'' Report in respect of the aforesaid ESOP Schemes, in terms of the SEBI (Share Based Employee Benefits) Regulations, 2014 are contained in "Annexure F" forming part of the Directors'' Report.
(C) Employee Stock Option Plan - 2010 through Trust Route
On the recommendation of the Nomination, Remuneration and Compensation Committee of your Company, the trustees of Emkay Employee Welfare Trust had granted 5,55,000 Options on 21st October, 2010 to the eligible employees (each option carrying entitlement for one share of the face value of Rs. 10 each) at an exercise price of Rs. 93/- per option. Further, the Nomination, Remuneration and Compensation Committee/Emkay Employees Welfare Trust granted 27,000 Options on 2nd May, 2011, 15,000 Options on 22nd October, 2011 and 50,000 Options on 21st January, 2012 at an exercise price of Rs. 63, Rs. 48, and Rs. 37 per option respectively.
- Pursuant to the provision of Section 124 and 125 of the 1 Companies Act, 2013, the Company has transferred on due dates, the unpaid or unclaimed dividends upto the financial year 2007-2008 to the Investor Education and Protection Fund (IEPF) established by the Central Government. Pursuant to the provisions of Investor i Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with I Companies) Rules, 2012, the Company has uploaded on , its website the details of unpaid and unclaimed amounts lying with the Company. Members who have not yet encashed dividend for the financial year 2009-2010 and subsequent years must claim the same as early , as possible failing with it would be transferred to IEPF as per the dates mentioned herein below. In terms of 1 Section 125 of the Companies Act, 2013, no claim shall lie against the Company after the said transfer. It is in the! Shareholders'' interest to claim any unclaimed dividends and for future, opt for Electronic Clearing Services, so
that dividends paid by the Company are credited to the investor''s account on time. The balance amount lying in Unpaid Dividend Account for the financial year 20092010 is due for transfer to the IEPF, during the month of November, 2017.
Pursuant to the provisions of section 124(6) of the Companies Act, 2013 read with The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs, New Delhi w.e.f. 7th September, 2016, and further notification dated 28.02.2017 issued by Ministry of Corporate Affairs, amending the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 which has come into force w.e.f. 28.02.2017, all the shares in respect of which dividend has not been paid or claimed for seven consecutive years or more as provided under subsection (5) of Section 124 during the period from 7.9.2016 to 31.05.2017 are required to be transferred to the special Demat Account of IEPF Authority by 31.05.2017. All the shareholders who have not claimed their unpaid dividend are requested to claim their unclaimed dividends, otherwise the unclaimed dividend and such shares will be transferred to IEPF account by the respective due date.
Members are requested to contact M/s. Link Intime India Private Limited, the Registrar & Share Transfer Agent of the Company, for claiming the dividend for the aforesaid years. The details of the unclaimed dividends of the aforesaid years are available on the Company''s website at www.emkayglobal.com and also on Website of Ministry of Corporate affairs at www.mca.gov.in.
31. CORPORATE GOVERNANCE REPORT
The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange Board of India and has implemented all the prescribed stipulations thereof. As stipulated in Regulation 27 of the Securities and Exchange Board of India (Listing Obligations & Disclosure requirements) Regulations, 2015, a detailed report on Corporate Governance and the requisite Auditor''s Certificate confirming compliance with the conditions of Corporate Governance, forms part of this Annual Report.
32. SIGNIFICANT AND MATERIAL ORDERS PASSSED BY THE COURTS OR REGULATORS
During the year no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.
33. PARTICULARS OF EMPLOYEES
The particulars of employees required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended are enclosed hereto in "Annexure G".
34. PUBLIC SHAREHOLDING
The public shareholding as required under Rule 19A of the Securities Contract (Regulation) Rules, 1957 (as amended) as on date of this Report is at the level of 25%.
35. LISTING WITH STOCK EXCHANGES
The Equity shares of the Company are listed on National Stock Exchange of India Ltd. and Bombay Stock Exchange of India Ltd.
36. ACKNOWLEDGEMENT
Your Directors would like to take this opportunity to express sincere gratitude to the customers, bankers and other business associates for their continued cooperation and patronage. Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Government, Regulatory Bodies and the Stock Exchanges.
Your Directors place on record their deep appreciation for the exemplary contribution made by the employees at all levels. The Directors also wish to express their gratitude to the valued shareholders for their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place: Mumbai
Date: 24th May, 2017
Mar 31, 2016
Dear Members,
The Directors presents the Twenty Second Annual Report of your Company and the Audited Financial Statements for the year ended on 31st March, 2016.
1. FINANCIAL RESULTS
An overview of the financial performance of your Company along with its Subsidiaries for the year 2015-16 is as under:
(Amount Rs. in Lac)
Particulars |
Standalone Year ended 31.03.2016 31.03.2015 |
Consolidated Year ended 31.03.2016 31.03.2015 |
||
Total Income |
9,505.54 |
10,380.32 |
10532.58 |
11,686.86 |
EBITDA |
1,860.11 |
2,690.97 |
2376.97 |
3,446.52 |
Less : Depreciation and Amortization |
356.67 |
427.61 |
359.46 |
432.00 |
Less : Finance Costs |
207.71 |
283.43 |
351.78 |
482.36 |
Profit/(loss) Before Exceptional Item & Tax |
1,295.73 |
1,979.92 |
1665.72 |
2,532.17 |
Exceptional Items |
- |
3,587.06 |
0 |
3,587.06 |
Profit/(Loss) Before Tax |
1,295.73 |
(1,607.13) |
1665.72 |
(1,054.89) |
Less : Tax Expense/(Benefit) |
314.88 |
(12.72) |
462.37 |
518.02 |
Profit/(Loss) After Tax |
980.85 |
(1,594.41) |
1203.35 |
(1,572.91) |
Less : Minority Interest |
- |
- |
0 |
- |
Profit/(Loss) attributable to Shareholders of the Company |
980.85 |
(1,594.41) |
1,203.35 |
(1,572.91) |
Opening balance in Statement of Profit and Loss |
(456.86) |
1,144.95 |
-597.68 |
1,040.10 |
AMOUNT AVAILABLE FOR APPROPRIATION |
523.99 |
(449.46) |
605.67 |
(532.81) |
Appropriations |
||||
- Proposed Dividend |
- |
- |
- |
- |
- Provision for Tax on Dividend |
- |
- |
- |
- |
- Interim Dividend |
244.38 |
- |
244.38 |
- |
- Tax on Interim Dividend |
27.36 |
- |
49.75 |
- |
- Other Adjustments relating to Fixed Assets |
- |
7.40 |
- |
7.72 |
- Transfer to Special Reserve u/s 45-IC of RBI Act |
- |
- |
57.6 |
57.15 |
Closing Balance in Statement of Profit and Loss |
252.26 |
(456.86) |
253.94 |
(597.68) |
2. DIVIDEND
During the financial year 2015-16, your Company declared and paid an interim dividend of Re. 1/- (Rupee one only) (10%) per equity share of the face value of Rs. 10 (Rupee Ten) each in the Board Meeting held on 11th March, 2016. This Interim Dividend will be considered as Final Dividend for the Financial Year 2015-2016 (Previous Year Rs.Nil).
Members are requested to consider the Interim Dividend paid during Financial Year 2015-2016 as a Final Dividend.
3. REVIEW OF OPERATIONS
Standalone
During the year under review, your Company recorded a total income of Rs.9505.54 Lacs as compared to Rs.10,380.32 Lacs in the previous financial year, lower by 8.43%. The Profit for the same period stand at Rs.980.85 Lacs as compared to the Net Loss of Rs.1594.41 Lacs in the previous financial year.
Consolidated
During the year under review, your Company recorded a total income of Rs.10532.58 Lacs as compared to Rs.11686.85 Lacs in the previous financial year, lower by 9.88%. The Profit for the same period stands at Rs.1203.35 Lacs as compared to the Net Loss of Rs.1572.91 Lacs in the previous financial year.
4. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act, the extract of annual return is given in âAnnexure Aâ in the prescribed form MGT-9, which forms part of this report.
5. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2015-16, 5 meetings were held on 22nd May, 2015, 12th August, 2015, 26th October, 2015, 29th January, 2016 and 11th March, 2016.
The details of the attendance of Directors at the meeting are as under:
Name of the Director |
Category |
Board Meetings during Financial Year 2015-16 |
|
|
Held Attended |
Mr. G. P. Gupta |
NED (I) |
5 3 |
Mr. S. K. Saboo |
NED |
5 5 |
Mr. R. K. Krishnamurthi |
NED (I) |
5 5 |
Mr. G. C. Vasudeo |
NED (I) |
5 5 |
Mr. Krishna Kumar Karwa |
ED |
5 5 |
Mr. Prakash Kacholia |
ED |
5 5 |
Mrs. Preeti Kacholia |
||
|
NED |
5 4 |
Dr. Satish Ugrankar (Appointed as an Additional Director w.e.f. 12th August, 2015) |
NED |
5 4 |
6. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;
c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The directors have prepared the annual accounts on a going concern basis;
e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
7. AUDIT COMMITTEE
The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report.
8. NOMINATION, REMUNERATION AND COMPENSATION COMMITTEE
The Company has constituted Nomination Remuneration and Compensation Committee in compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Mr. G. C. Vasudeo, an Independent Director has been appointed as a Chairman of the Committee.
The Committee comprises of only Non-Executive Directors as its members. All the members of the Committee are Independent Directors except Mr. S. K. Saboo who is Non-Executive Non Independent Director.
The Companyâs Remuneration Policy is available on the Company''s website i.e. www.emkayglobal.com/ Investor relations. The details of composition, terms of reference of the Nomination, Remuneration and Compensation Committee, numbers and dates of meeting held, attendance of the Directors and remuneration paid to them are given separately in the attached Corporate Governance Report forming part of the Directors'' Report.
9. PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board at its meeting held on 23rd May, 2016 carried out an annual evaluation of its own performance, the Directors individually as well as evaluation of the working of its committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
10. AUDITORS
Pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 (âthe Actâ) read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Company appointed M/s. B. L. Sarda & Associates, Chartered Accountants, bearing Firm Registration Number 109266W with the Institute of Chartered Accountants of India (ICAI), as the Statutory Auditors of the Company to hold office from the conclusion of Twentieth Annual General Meeting (AGM) held on 13th August, 2014 until the conclusion of Twenty Third Annual General Meeting of the Company to be held for the financial year 2016-17. However, such an appointment was subject to ratification at every AGM held after the Twentieth AGM. Hence, your Directors recommend ratification of the appointment of M/s. B. L. Sarda & Associates, Chartered Accountant, Mumbai, as Statutory Auditor of the Company in the ensuing Annual General Meeting.
Further, the Statutory Auditors have confirmed that they have subjected themselves to the peer review process of The Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the âPeer Review Board'' of the said Institute as required by Regulation 33(1) (d) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
There are no qualifications or observations or remarks made by the Auditors in their report.
11. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company. The Secretarial Audit Report received from them is appended as Annexure B and forms part of this report.
As stated in the said Report, the unpaid/unclaimed dividend amount on the unclaimed shares lying in suspense account for the dividend declared for the FY 2006-07 of Rs.1434/- and for FY 2007-08 of Rs.2013 has been transferred to Investor Education & Protection Fund on 19th May, 2016.
There are no other qualifications or adverse comments made by the Secretarial Auditors in their report.
12. INTERNAL AUDIT
As per the requirements of Section 138 of the Companies Act, 2013 and rules made there under, M/s Lovi Mehrotra & Associates, Chartered Accountants, Mumbai were appointed as Internal Auditors of the Company for the financial year 2015-2016.
The internal control systems are supplemented by extensive internal audits, regular reviews by management and standard policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data. The Management Information System (MIS) forms an integral part of the Company''s control mechanism. The Company has regular checks and procedures through internal audit periodically. The reports are deliberated and executive summary of the same along with action taken report (ATR) for steps taken by the Management to address the issues are placed before the Audit Committee meeting/ Board meeting for their review. Reports of internal auditors are reviewed by the Audit Committee, and corrective measures, if any, are carried out towards further improvement in systems and procedures in compliance with Internal Control System. The Board also recognizes the work of the auditors as an independent check on the information received from the management on the operations and performance of the Company.
13. MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed review of the operations, performance and future outlook of the Company and its businesses is given in the Management Discussion and Analysis, which forms part of the Annual Report.
14. PUBLIC DEPOSITS
During the year, your Company has not accepted and/or renewed any public deposits in terms of the provisions of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of Loans, Guarantees or Investments covered under Section186 of the Companies Act, 2013, are given under notes to the Financial Statements.
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013
The details of the related party transactions, as per requirement of Accounting Standards-18 are disclosed in notes to the financial statements of the Company for the financial year 2015-16. All the directors have disclosed their interest in Form MBP-1 pursuant to Section 184 of the Companies Act, 2013 and as and when any changes in their interest take place, such changes are placed before the Board at its meetings. None of the transactions with any of the related parties was in conflict with the interest of the Company. The particulars of contracts or arrangements with related parties referred to in Section 188(1), in prescribed Form AOC - 2 under Companies (Accounts) Rules, 2014 are appended as âAnnexure Fâ
17. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has constituted an Internal Compliant Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year no complaint was filed before the said Committee.
18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The prescribed particulars of Conservation of Energy, Technology, Absorption and Foreign Exchange Earning and Outgo required under Section 134(3)(m) read with Rule 8(3) of the Companies (Accounts) Rules,2014 is attached as âAnnexure E âand forms part of this Report of Directors.
19. BUSINESS RISK MANAGEMENT:
Pursuant to section 134(3) (n) of the Companies Act, 2013 and as per provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 , the Company has adhered to the principles of sound risk management and already has a Risk Management Policy in place. An ongoing exercise is being carried out to identify, evaluate, manage and for monitoring of both business and non business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. The details of the same are set out in the Corporate Governance Report forming part of the Boards'' Report.
20. CORPORATE SOCIAL RESPONSIBILITY
As per the provision of Sec 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014, your company was not required to comply with CSR norms as per the threshold limits up to FY 2015-16.
In view of improvement in the financial performance of the Company for FY 2015-16, the Board at its meeting held on May 23, 2016, has constituted a Corporate Social Responsibility Committee comprising three Directors of the Company including one Independent Director. The members of the Committee are Mr. G. C. Vasudeo, Mr. Krishna Kumar Karwa and Mr. Prakash Kacholia. The Company has evolved a Corporate Social Responsibility Policy and is actively practicing the same. The objectives of CSR Policy are to contribute to social and economic development of the communities in which the Company operates, provide opportunities to employees to contribute to society through service and contributions, monetary and otherwise and to generate, through its CSR initiatives, a community goodwill for the Company and help reinforce a positive and socially responsible image of the Company as a corporate entity.
21. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has implemented a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The policy also provides for adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the chairperson of the Audit Committee in all cases. The details of the policy are posted on the website of the Company under the linkhttp://www.emkayglobal.com/investorrelations.There were no complaints received during the year 2015-16.
22. DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mrs. Preeti Kacholia (DIN 03481747), Non-Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself for re-appointment. Your Board recommends her re-appointment.
During the year, Dr. Satish Ugrankar (DIN:00043783) was appointed as an Additional Director of the Company with effect from 12th August, 2015. As per provisions of Section 161 of the Companies Act, 2013 and Articles of Association of the Company, Dr. Satish Ugrankar holds office up to the date of the forthcoming 22nd Annual General Meeting and is eligible for appointment.
Pursuant to the provisions of Section 149,150,152 and other applicable provisions of the Companies Act, 2013 and the Rules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule IV of the Companies Act,
2013 and pursuant to SEBI Circular no CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014, your Directors are seeking appointment of Dr. Satish Ugrankar as an Independent Director for five consecutive years for a term up to 10th August, 2021. Details of the proposal for appointment of Dr. Satish Ugrankar are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 22nd Annual General Meeting.
The Company has received a notice along with requisite deposit from a member of the Company under section 160(1) of the Companies Act, 2013 proposing his candidature for the office of Director of the Company. Members are requested to consider appointment of Dr. Satish Ugrankar as an Independent Director.
The period of appointment of Mr. Krishna Kumar Karwa, Managing Director & CFO and Mr. Prakash Kacholia, Managing Director will be expiring on 31st August, 2016. On recommendation of the Nomination, Remuneration and Compensation Committee in their meeting held on 23rd May, 2016, the Board of Directors of the Company at its meeting held on 23rd May, 2016 has approved and recommended re-appointment of Mr. Krishna Kumar Karwa, Managing Director & CFO and Mr. Prakash Kacholia, Managing Director of the Company for a further term of three years on a revised remuneration with effect from 1st October, 2016 subject to approval of the Members at the ensuing Annual General Meeting and subject to approval of the Central Government, if required.
The above appointment/re-appointment forms part of the Notice of the forthcoming 22nd Annual General Meeting and the respective resolutions are recommended for your approval.
A brief profile of Directors as required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015 is given in the Notice of the 22nd Annual General Meeting.
All Independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013.
During the year, Company has appointed Mr. B. M. Raul as Company Secretary being a key managerial personnel w.e.f. 4th January, 2016.
The following three persons were formally noted as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013.
- Mr. Krishna Kumar Karwa - Managing Director & CFO
- Mr. Prakash Kacholia - Managing Director
- Mr. B. M. Raul - Company Secretary
23. PARTICULARS OF REMUNERATION:
Details of the ratio of remuneration of each Director to the median employeeâs remuneration is provided in Annexure - D.
24. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.
Pursuant to the provisions of the Section 134(5)(f) of the Act, the Company has devised proper systems to ensure compliance with the provisions of all applicable laws. Each department of the organization ensured that it had complied with the applicable laws and furnished its report to the Head of department who then along with the Company Secretary discussed on the compliance status of the department. Any matter that required attention was immediately dealt with. The Company Secretary reported to the Audit Committee and the Board on the overall compliance status of the Company. In effect, such compliance system was largely found to be adequate and operating effectively. The directors have in the Directors'' Responsibility Statement under paragraph (f) also confirmed the same to this effect.
25. SUBSIDIARY COMPANIES
Emkay Commotrade Limited (ECL) - a 100% subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its clients. It is a member of three major commodity exchanges viz. Multi Commodity Exchange of India Limited (MCX), National Commodity and Derivatives Exchange Limited (NCDEX) and National Spot Exchange Limited (NSEL). During the year, the Company has issued 10,00,000 - 9% Redeemable Non-Cumulative Preference Shares of Rs.10/- each for a period of five years. As on date Company''s Paid up Capital is Rs.7 crores divided into Rs.6 crores Equity Shares and Rs.1 crores Preference shares. The Company has a net worth of Rs.159.75 Lacs as on 31st March, 2016.
Emkay Fincap Limited (EFL) - a 100% subsidiary:
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC. EFL has a net worth of Rs.3742.42 Lacs as on 31st March, 2016.
Emkay Insurance Brokers Limited (EIBL) - a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with Insurance Regulatory and Development Authority (IRDA) as a Direct Insurance Broker and focuses on life and nonlife businesses. EIBL has a net worth of Rs.88.72 Lacs as on 31st March, 2016.
Emkay Investment Managers Limited (EIML) - a 100% subsidiary:
EIML is registered with Securities and Exchange Board of India (SEBI) for conducting the business of Portfolio Management Services and has commenced the business of Portfolio Management Services with effect from 1st January, 2011.EIML has a net worth of Rs.487.85 Lacs as on 31st March, 2016.
The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies. The Company will make available the annual accounts of the Subsidiary Companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the said Subsidiary Companies are also available for inspection by any member of the Company at its Corporate Office situated at Paragon Centre, C-6, Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400 013 during business hours on all days except Saturdays, Sundays and Public holidays up to the date of the AGM.
The Statement containing financial information of the aforesaid Subsidiaries is included in the Consolidated Accounts forming part of the Annual Report of the Company.
26. EMPLOYEE STOCK OPTION SCHEMES
With a view to remain a preferred employer, the Company had granted Stock Options under two Schemes viz. ESOP 2007 and another scheme Employee Stock Option Plan - 2010 - through trust route to the employees of the Company and the employee of the Subsidiary Companies.
(a) ESOP 2007
The Company had granted 1,442,000 Options on 17th January, 2008 to the eligible employees (each option carrying entitlement for one share of the face value of Rs.10 each) at an exercise price of Rs.363 per option which was later reprised at Rs.63 per option. Further, the Company granted 2,44,000 Options on 19th June, 2009, 2,07,500 Options on 24th July, 2009, 1,00,000 Options on 4th May, 2010 , 6,11,500 Options on 27th July, 2010 and 2,00,000 Options on 21st January, 2012 at an exercise price of Rs.63, Rs.61, Rs.93, Rs.77 and Rs.37 per option respectively.
During the Financial Year 2015-16, the Nomination, Remuneration and Compensation Committee has not allotted any Equity Shares to the employees under the ESOP 2007.
Summary of ESOP 2007 as on 31st March 2016:
Total no. of stock options granted under the Scheme |
24,26,575 |
Exercise Price: |
|
14,42,000 Options |
Rs. 63/- per option |
2,44,000 Options |
Rs. 63/- per option |
2,07,500 Options |
Rs. 61/- per option |
1,00,000 Options |
Rs.93/- per option |
6,11,500 Options |
Rs. 77/- per option |
2,00,000 Options |
Rs. 37/- per option |
Exercise Period |
3 years |
Re Issued Options |
3,78,425 |
Total no. of stock options granted under |
28,05,000 |
the scheme |
|
Stock Options lapsed |
21,73,950 |
Stock Options vested but not exercised |
5,30,800 |
Stock Options exercised |
60,250 |
Outstanding Stock Options |
5,70,800 |
The paid up Equity Capital of the Company is Rs.24,43,77,500/- as of date. The disclosures required to be made in the Directors'' Report in respect of the aforesaid ESOP Schemes, in terms of the SEBI (Share Based Employee Benefits) Regulations, 2014 are contained in âAnnexure Câ forming part of the Directors'' Report.
(b) EMPLOYEE STOCK OPTION PLAN - 2010 THROUGH TRUST ROUTE
On the recommendation of the Nomination, Remuneration and Compensation Committee of your Company, the trustees of Emkay Employee Welfare Trust had granted 5,55,000 Options on 21st October, 2010 to the eligible employees (each option carrying entitlement for one share of the face value of Rs.10 each) at an exercise price of Rs.93/per option. Further, the Nomination, Remuneration and Compensation Committee/Emkay Employees Welfare Trust granted 27,000 Options on 2nd May, 2011, 15,000 Options on 22nd October, 2011 and 50,000 Options on 21st January, 2012 at an exercise price of Rs.63, Rs.48, and Rs.37 respectively per option.
Summary of ESOP 2010 (through trust route) as on 31st March 2016:
Total no. of stock options granted under the Scheme |
24,41,995 |
Exercise Price: |
|
5,55,000 Options |
Rs.93/- per option |
27,000 Options |
Rs. 63/- per option |
15,000 Options |
Rs. 48/- per option |
50,000 Options |
Rs.37/- per option |
Exercise Period |
3 years |
Total no. of stock options granted under |
6,47,000 |
the scheme |
|
Stock Options lapsed |
5,59,500 |
Stock Options vested but not exercised |
87,500 |
Stock Options exercised |
Nil |
Outstanding Stock Options |
87,500 |
Details required to be provided are set out in âAnnexure Câ to this report.
27. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205C of the Companies Act, 1956, the amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund (IEPF).
In compliance with the provisions of the Companies Act, 2013, Unclaimed Dividend amount of Rs.34,489/- for the year 2007-2008 being the dividend lying unclaimed for period of seven years was transferred to the Investor Education and Protection Fund (IEPF) of the Central Government on 21st October, 2015 after giving notice to the concerned shareholders.
Company has also transferred to IEPF the Unclaimed Dividend for the year 2006-2007 (Rs.1438/-) and 20072008 (Rs.2013/-) on Unclaimed Shares on 19th May, 2016.
28. CORPORATE GOVERNANCE REPORT
The Company adheres to the principles of Corporate Governance mandated by the Securities and Exchange
Board of India and has implemented all the prescribed stipulations thereof. As stipulated in Regulation 27 of the Securities and Exchange Board of India (Listing Obligations & Disclosure requirements) Regulations, 2015, a detailed report on Corporate Governance and the requisite Auditorsâ Certificate confirming compliance with the conditions of Corporate Governance, forms part of the Annual Report.
29. PARTICULARS OF EMPLOYEES
The particulars of employees required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed hereto in âAnnexure Dâ-1.
30. LISTING WITH STOCK EXCHANGES
The Equity shares of the Company are listed on National Stock Exchange of India Ltd. and BSE Ltd.
31. ACKNOWLEDGEMENT
Your Directors would like to take this opportunity to express sincere gratitude to the customers, bankers and other business associates for the continued cooperation and patronage. Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Government, Regulatory Bodies and the Stock Exchanges.
Your Directors place on record their deep appreciation for the exemplary contribution made by employees at all levels. The Directors also wish to express their gratitude to the valued shareholders for their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place: Mumbai
Date: 23rd May, 2016
Mar 31, 2015
Dear Members,
The Directors present the Twenty First Annual Report of your Company
and the Audited Financial Statements for the year ended on 31st March,
2015.
1. FINANCIAL RESULTS
An overview of the financial performance of your Company along with its
Subsidiaries for the year 2014-15 is as under:
(Rsin Lac)
Standalone Year ended
Particulars 31.03.2015 31.03.2014 Growth(%)
Total Income 10,380.32 6,828.41 52.02
EBITDA 2,690.97 316.74 749.58
Less : Depreciation and Amortization 427.61 415.83 -
Less : Finance Costs 283.43 415.09 -
Profit/(loss) Before Exceptional 1,979.93 (514.18) (485.07)
Item & Tax
Exceptional Items 3,587.06 - -
Profit/(Loss) Before Tax (1,607.13) (514.18) 212.56
Less : Tax Expense/(Benefit) (12.72) 6.92 -
Profit/(Loss) After Tax (1,594.41) (521.10) 205.97
Less : Minority Interest - - -
Profit/(Loss) attributable to
Shareholders of the Company (1,594.41) (521.10) 205.97
Opening balance in Statement of
Profit and Loss 1,144.95 1,666.05 -
AMOUNT AVAILABLE FOR APPROPRIATION (449.46) 1,144.95 -
Appropriations
- Proposed Dividend - - -
- Provision for Tax on Dividend - - -
- Other Adjustments relating to 7.40 - -
Fixed Assets
- Transfer to Special Reserve u/s - - -
45-IC of RBI Act
Closing Balance in Statement of (456.86) 1,144.95 -
Profit and Loss
Consolidated Year ended
31.03.2015 31.03.2014 Growth (%)
Total Income 11,686.86 8,267.43 41.36
EBITDA 3,296.60 595.34 453.73
Less : Depreciation and 432.00 424.88 -
Amortization
Less : Finance Costs 332.43 452.45 -
Profit/(loss) Before Exceptional 2,532.17 (281.99) (997.96)
Item & Tax
Exceptional Items 3.587.06 - -
Profit/(Loss) Before Tax (1,054.89) (281.99) 274.09
Less : Tax Expense/(Benefit) 518.02 112.78 -
Profit/(Loss) After Tax (1.572.91) (394.77) 298.44
Less : Minority Interest - - -
Profit/(Loss) attributable to (1.572.91) (394.77) 298.44
Shareholders of the Company
Opening balance in Statement of 1,040.50 1,483.36 -
Profit and Loss
AMOUNT AVAILABLE FOR APPROPRIATION
Appropriations (532.41) 1,088.59 -
- Proposed Dividend - - -
- Provision for Tax on Dividend - - -
- Other Adjustments relating to 7.72 - -
Fixed Assets
- Transfer to Special Reserve u/s 57.15 48.09 -
45-IC of RBI Act
Closing Balance in Statement of (597.28) 1,040.50 -
Profit and Loss
2. DIVIDEND
The Company has incurred loss during the year and hence your Directors
have decided not to recommend any Dividend for the year ended 31st
March, 2015.
3. REVIEW OF OPERATIONS
During the year under review, your Company recorded a total income of
Rs. 10,380.32 Lac as compared to Rs.6,828.41 Lac in the previous
financial year, up by 52.02%. The Loss for the same period stands at
Rs.1,594.41 Lac as compared to the Net Loss of Rs. 521.10 Lac in the
previous financial year.
4. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act, the extract of annual
return is given in "Annexure A" in the prescribed form MGT-9, which
forms part of this report.
5. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the Financial Year 2014-15, 4 meetings were held on 22nd May,
2014, 13th August, 2014, 31st October, 2014 and 23rd January, 2015.
Name of the Director Category Board Meetings during
Financial Year 2014-15
Held Attended
Mr. G. P. Gupta NED (I) 4 2
Mr. S. K. Saboo NED 4 4
Mr. R. K. Krishnamurthi NED (I) 4 4
Mr. G. C. Vasudeo NED (I) 4 4
Mr. Krishna Kumar Karwa ED 4 4
Mr. Prakash Kacholia ED 4 4
Ms. Preeti Kacholia NED 4 -
(Appointed w.e.f.
30.03.2015 as Woman
Director)
6. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act,
2013, the Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any;
b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the loss of the
Company for the year under review;
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
d) The Directors have prepared the annual accounts on a going concern
basis;
e) The Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
f) The Directors have devised proper system to ensure compliance with
the provisions of all applicable laws and that such system were
adequate and operating effectively.
7. AUDIT COMMITTEE
The details pertaining to composition of Audit Committee are included
in the Corporate Governance Report,which forms part of this report.
8. NOMINATION, REMUNERATION AND COMPENSATION COMMITTEE
The Company has already constituted Remuneration and Compensation
Committee. Pursuant to Section 178 of the Companies Act, 2013, the
nomenclature of the Remuneration / Compensation Committee has been
changed to Nomination, Remuneration and Compensation Committee at the
Board Meeting held on 22.05.2014.
As per the Clause 49 (IV) of the Listing Agreement, Chairman of the
Board shall not Chair the Nomination, Remuneration and Compensation
Committee. Accordingly, Mr. G. C. Vasudeo, being Independent Director,
has been appointed as a Chairman of the Committee in place of Mr. G. P.
Gupta and Mr. Gupta will continue as a member of the said Committee.
The Committeecomprisesof only Non-Executive Directors as its members.
All the members of the Committee are Independent Director except Mr. S.
K. Saboo who is Non- Executive Director.
In accordance with Section 178 of the Companies Act, 2013 and Clause 49
of the Listing Agreement, during the year, on the recommendations and
approval of the Nomination, Remuneration and Compensation Committee,
the Nomination and Remuneration Policy of the Company was adopted by
the Company.
The Company's Remuneration Policy is available on the Company's website
i.e. www.emkayglobal.
com/Investorrelations. The details of composition, terms of reference
of the Nomination, Remuneration and Compensation Committee, numbers and
dates of meeting held, attendance of the, Directors and remuneration
paid to them are given separately in the attached Corporate Governance
Report forming part of the Boards' Report.
9. PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board at its meeting held on 23rd January,
2015 carried out an annual evaluation of its own performance, the
Directors individually as well as the evaluation of the working of its
committees. The manner in which the evaluation has been carried out has
been explained in the Corporate Governance Report.
10. AUDITORS
Pursuant to the provisions of Section 139 and all other applicable
provisions of the Companies Act, 2013 ("the Act") read with Rule 3(7)
of the Companies (Audit and Auditors) Rules, 2014 (including any
statutory modification(s) or re-enactment(s) thereof for the time being
in force), the Company appointed M/s.B. L. Sarda & Associates,
Chartered Accountants, bearing Firm Registration Number 109266W with
the Institute of Chartered Accountants of India (ICAI), as the
Statutory Auditors of the Company to hold office from the conclusion of
Twentieth Annual General Meeting held on 13th August, 2014 until the
conclusion of Twenty Third Annual General Meeting of the Company to be
held for the financial year 2016-17. However, such an appointment was
subject to ratification at every AGM held after the Twentieth AGM.
Hence, your Directors recommend for ratification of the appointment of
M/s. B. L. Sarda & Associates, Chartered Accountant, Mumbai, as
Statutory Auditor of the Company in the ensuing Annual General Meeting.
Further, the Statutory Auditors have confirmed that they have subjected
themselves to the peer review process
of The Institute of Chartered Accountants of India (ICAI) and hold a
valid certificate issued by the 'Peer Review Board' of the said
Institute as required by Clause 41 of the Listing Agreement.
There are no qualifications or observation or remarks made by the
Auditors in their report.
11. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company appointed M/s. Parikh & Associates,
Company Secretaries, Mumbai to undertake the Secretarial Audit of the
Company. The Secretarial Audit Report received from them is appended as
"Annexure B" and forms part of this report.
There are no qualifications or adverse comments made by the Secretarial
Auditors in their report.
12. INTERNAL AUDIT
As per the requirements of Section 138 of the Companies Act, 2013 and
rules made thereunder, during the year, your Company appointed M/s Lovi
Mehrotra & Associates, Chartered Accountants, Mumbai as Internal
Auditors of the Company.
The internal control systems are supplemented by extensive internal
audits, regular reviews by management and standard policies and
guidelines to ensure reliability of financial and all other records to
prepare financial statements and other data. The Management Information
System (MIS) forms an integral part of the Company's control mechanism.
The Company has regular checks and procedures through internal audit
periodically. The reports are deliberated and executive summary of the
same along with action taken report (ATR) for steps taken by the
Management to address the issues are placed before the Audit Committee
meeting / Board meeting for their review. Reports of internal auditors
are reviewed by
the Audit Committee, and corrective measures, if any, are carried out
towards further improvement in systems and procedures in compliance
with Internal Control System. The Board also recognizes the work of
the auditors as an independent check on the information received from
the management on the operations and performance of the Company.
13. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of
the Company and its businesses is given in the Management Discussion
and Analysis, which forms part of the Annual Report.
14. PUBLIC DEPOSITS
During the year, your Company has not accepted and/or renewed any
public deposits in terms of the provisions of Section 73 and 76 of the
Companies Act, 2013 read with the Companies (Acceptance of Deposits)
Rules, 2014.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees or Investments covered under Section186 of
the Companies Act, 2013, are given under notes to the Financial
Statements.
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013
The details of the related party transactions, as per requirement of
Accounting Standards-18 are disclosed in notes to the financial
statements of the Company for the financial year 2014-15. All the
Directors have disclosed their interest in Form MBP-1 pursuant to
Section 184 of the Companies Act, 2013 and as and when any changes in
their interest take place, such changes are placed before the Board at
its meetings. None of the transactions with any of the related parties
was in conflict with the
interest of the Company. The particulars of contracts or arrangements
with related parties referred to in Section 188(1), in prescribed Form
AOC - 2 under Companies (Accounts) Rules, 2014 are appended as
"Annexure F".
17. MATERIAL CHANGES AND COMMITMENTS BETWEEN THE END OF FINANCIAL YEAR
AND DATE OF THE REPORT
With reference to the bonafide error trade executed on 5th October,
2012 and as per SAT order dated 26th March, 2015, the hon'ble SAT has
disposed off the appeal by giving Order to National Stock Exchange of
India Ltd. (NSE) to take on record the settlement proposed by the
appellants and release the withheld payment to the parties in terms of
the settlement.
Accordingly, your company has received from NSE, in compliance to the
hon'ble SAT's Order dated 26th March, 2015, a sum of Rs. 16.06 Crores
being 50% amount of the payout withheld and Rs. 3.08 Crores as interest
post TDS, a total Rs. 19.14 Crores has been received by your Company.
18. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has constituted an Internal Complaint Committee under
Section 4 of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. During the year no complaint was
filed before the said Committee.
19. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The prescribed particulars of Conservation of Energy, Technology,
Absorption and Foreign Exchange Earning and Outgo required under
Section 134(3)(m)read with Rule 8(3) of the Companies (Accounts) Rules,
2014 is attached as "Annexure E " and forms part of this Report of
Directors.
20. BUSINESS RISK MANAGEMENT
Pursuant to section 134(3)(n) of the Companies Act, 2013 and Clause 49
of the Listing Agreement, the Company has adhered to the principles of
sound risk management and already has a Risk Management Policy in
place. A detailed exercise is being carried out to identify, evaluate,
manage and monitor both business and non-business risk. The Board
periodically reviews the risks and suggests steps to be taken to
control and mitigate the same through a properly defined framework. The
details of the same are set out in the Corporate Governance Report
forming part of the Boards' Report.
21. CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 of the Companies Act, 2013 read
with Companies (Corporate Social Responsibility) Rules, 2014, your
Company is not required to comply with CSR norms as per the threshold
limits. However, the Company has evolved a Corporate Social
Responsibility Policy and is actively practicing the same. The
objectives of CSR Policy are to contribute to social and economic
development of the communities in which the Company operates, provide
opportunities to employees to contribute to society through service and
contributions, monetary and otherwise and to generate, through its CSR
initiatives, a community goodwill for the Company and help reinforce a
positive and socially responsible image of the Company as a corporate
entity.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has implemented a Vigil Mechanism Policy to deal with
instance of fraud and mismanagement, if any. The policy also provides
for adequate safeguards against victimization of persons who use such
mechanism and makes provision for direct access to the chairperson of
the Audit Committee in all cases. The details of the policy is posted
on the website of the Company under
the link http://www.emkayglobal.com/investorrelations. There were no
complaints during the year 2014-15.
23. DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act,
2013 read with Companies (Management & Administration) Rules, 2014 and
Articles of Association of the Company, Mr. S. K. Saboo (DIN 00373201),
Non- Executive Director of the Company, retires by rotation at the
ensuing Annual General Meeting and being eligible, has offered himself
for re-appointment and your Board recommends his re-appointment.
During the year, Ms. Preeti Kacholia has been appointed as an
Additional Director (Woman Director) of the Company with effect from
30th March, 2015. As per provisions of Section 161 of the Companies
Act, 2013 and Articles of Association of the Company, Ms. Kacholia
holds office upto the date of the forthcoming 21st Annual General
Meeting and is eligible for appointment. The Company has received a
notice along with requisite deposit from a member of the Company under
Section 160 of the Companies Act, 2013 proposing her candidature for
the office of Director of the Company. Your Board recommends her
appointment.
The above appointment / re-appointment forms part of the Notice of the
forthcoming 21st Annual General Meeting and the respective resolution
is recommended for your approval.
A brief profile of Directors as required under Clause 49 of the Listing
Agreement is given in the Notice of the 21st Annual General Meeting.
All independent directors have given declarations that they meet the
criteria of independence as laid down under section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
The following three persons were formally noted as Key Managerial
Personnel of the Company in compliance with the provisions of Section
203 of the Companies Act, 2013.
- Mr. Krishna Kumar Karwa - Managing Director & CFO
- Mr. Prakash Kacholia - Managing Director
- Mr. Vaibhav Purohit - Company Secretary
24. PARTICULARS OF REMUNERATION:
Details of the ratio of remuneration of each Director to the median
employee's remuneration is provided in "Annexure - D".
25. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The Internal Auditors monitor
and evaluate the efficacy and adequacy of internal control system in
the Company, its compliance with operating systems, accounting
procedures and policies at all locations of the Company. Based on the
report of internal audit function, process owners undertake corrective
action in their respective areas and thereby strengthen the controls.
Significant audit observations and recommendations along with
corrective actions thereon are presented to the Audit Committee of the
Board.
Pursuant to the provisions of the Section 134(5)(f) of the Act, the
Company during the year devised proper systems to ensure compliance
with the provisions of all applicable laws. Each department of the
organization ensured that it had complied with the applicable laws and
furnished its report to the head of department who then along with the
Company Secretary discussed on the compliance status of the department.
Any matter that required attention was immediately dealt with. The
Company Secretary reported to the Audit Committee and the Board on the
overall compliance status of the Company. In effect, such compliance
system was largely
found to be adequate and operating effectively. The Directors have in
the Directors Responsibility Statement under paragraph (f) also
confirmed the same to this effect.
26. SUBSIDIARY COMPANIES
Emkay Commotrade Limited (ECL) - a 100% subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its
clients. It is a member of major commodity exchanges viz. Multi
Commodity Exchange of India Limited (MCX), National Commodity and
Derivatives Exchange Limited (NCDEX) and National Spot Exchange Limited
(NSEL) and has a net worth of Rs. 44.25 Lac as on 31st March, 2015.
Emkay Fincap Limited (EFL) - a 100% subsidiary:
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC. EFL
has a net worth of Rs.3,586.81 Lac as on 31st March, 2015.
Emkay Insurance Brokers Limited (EIBL) - a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with Insurance Regulatory
and Development Authority (IRDA) as a Direct Insurance Broker and
focuses on life and non- life businesses. EIBL has a net worth of Rs.
100.69 Lac as on 31st March, 2015.
Emkay Investment Managers Limited (EIML) - a 100% subsidiary:
EIML is registered with Securities and Exchange Board of India (SEBI)
for conducting the business of Portfolio Management Services and has
commenced the business of Portfolio Management Services with effect
from 1st January, 2011. EIML has a net worth of Rs.446.28 Lac as on
31st March, 2015.
The Consolidated Financial Statements presented by the Company include
financial results of its Subsidiary Companies. The Company will make
available the annual accounts of the Subsidiary Companies and the
related
information to any member of the Company who may be interested in
obtaining the same. The annual accounts of the said Subsidiary
Companies are also available for inspection by any member of the
Company at its Corporate Office situated at Paragon Centre, C-6, Ground
Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400 013.
The Statement containing financial information of the aforesaid
Subsidiaries is included in the Consolidated Accounts forming part of
the Annual Report of the Company.
27. EMPLOYEE STOCK OPTION SCHEMES
With a view to remain a preferred employer, the Company had granted
Stock Options under two Schemes viz. ESOP 2005 & ESOP 2007 and another
scheme Employee Stock Option Plan - 2010- through trust route to the
employees of the Company and the Subsidiary Companies.
(a) ESOP 2005
During the year 2014-2015, ESOP Scheme-2005 has been exercised by the
employees and whatever options remain unexercised have been lapsed and
as on 31st March, 2015 the balance is nil.
Summary of ESOP 2005 as on 31st March 2015:
Total no. of stock options available under the Scheme 3,81,250
Exercise Price Rs. 20/- per option
Exercise Period 3 years
Total no. of stock options granted under the scheme 3,81,250
Stock Options lapsed 1,53,750
Stock Options vested but not exercised 00
Stock Options exercised 2,27,500
Outstanding Stock Options 00
(b) ESOP 2007
The Company had granted 1,442,000 Options on 17th January, 2008 to the
employees (each option carrying entitlement for one share of the face
value of Rs. 10 each) at an exercise price of Rs. 363 per option which
was later reprised at Rs. 63 per option. Further, the
Company granted 244,000 Options on 19th June, 2009, 207,500 Options on
24th July, 2009, 1,00,000 Options on 4th May, 2010, 6,11,500 Options on
27th July, 2010 and 2,00,000 Options on 21st January, 2012 at an
exercise price of Rs. 63, Rs. 61, Rs. 93, Rs. 77 and Rs. 37 per option
respectively.
During the Financial Year 2014-15, the Nomination, Remuneration and
Compensation Committee has not allotted any Equity Shares to the
employees under the ESOP 2007.
Summary of ESOP 2007 as on 31stMarch 2015:
Total no. of stock options granted under the Scheme 2425.575
Exercise Price:
14,42,000 Options Rs.63/- per option
2,44,000 Options Rs.63/- per option
2.07.500 Options Rs.61/- per option
1.00. 000 Options Rs.93/- per option
6.11.500 Options Rs.77/- per option
2.00. 000 Options Rs.37/- per option
Exercise Period 3 years
Re Issued Options 3,78,425
Total no. of stock options granted under the scheme 28,05,000
Stock Options lapsed 19,49,450
Stock Options vested but not exercised 5,29,100
Stock Options exercised 50,250
Outstanding Stock Options 7,95,300
The paid up Equity Capital of the Company is Rs.24,43,77,500/- as of
date. The disclosures required to be made in the Directors' Report in
respect of the aforesaid ESOP Schemes, in terms of the SEBI (Share
Based Employee Benefits) Regulations, 2014 are contained in "Annexure
C" forming part of the Directors' Report.
(c) EMPLOYEE STOCK OPTION PLAN - 2010 THROUGH TRUST ROUTE
On the recommendation of the Nomination,
Remuneration and Compensation Committee of your Company, the trustees
of Emkay Employee Welfare Trust have granted 5,55,000 Options on 21st
October, 2010 to the eligible employees (each option carrying
entitlement for one share of the face value of Rs. 10 each) at an
exercise price of Rs.93/- per option. Further, the Nomination,
Remuneration and Compensation Committee/Emkay Employees Welfare Trust
granted
27.000 Options on 2nd May, 2011, 15,000 Options on 22nd October, 2011
and 50,000 Options on 21st January, 2012 at an exercise price of Rs.
63, Rs. 48, and Rs. 37 respectively per option.
Summary of ESOP 2010 (through trust route) as on 31st March 2015:
Total no. of stock options granted under the Scheme 24,41,995
Exercise Price:
5.55.000 Options Rs.93/- per option
27.000 Options Rs. 63/- per option
15.000 Options Rs. 48/- per option
50.000 Options Rs. 37/- per option
Exercise Period 3 years
Total no. of stock options granted under the scheme 6,47,000
Stock Options lapsed 5,59,500
Stock Options vested but not exercised 48,750
Stock Options exercised Nil
Outstanding Stock Options 87,500
Details required to be provided are set out in "Annexure C" to this
report.
28. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205C of the Companies Act, 1956,
the amounts which remained unpaid or unclaimed for a period of 7 years
have been transferred by the Company to the Investor Education and
Protection Fund (IEPF).
In compliance with the provisions Companies Act, 2013, a sum of Rs.
38,605/- being the dividend lying unclaimed was transferred to the
Investor Education and Protection Fund (IEPF) of the Central Government
on 19th September, 2014 after giving notice to the concerned
shareholders.
29. CORPORATE GOVERNANCE REPORT
The Company adheres to the principles of Corporate Governance mandated
by the Securities and Exchange Board of India and has implemented all
the prescribed stipulations thereof. As stipulated in Clause 49X of the
Listing Agreement, a detailed report on Corporate Governance and the
requisite Auditor's Certificate confirming compliance with the
conditions of Corporate Governance, forms part of the Annual Report.
30. PARTICULARS OF EMPLOYEES
The particulars of employees required under Section 197 of the
Companies Act, 2013 read with Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is enclosed hereto in "Annexure
D".
31. LISTING WITH STOCK EXCHANGES
The Equity shares of the Company are listed on National Stock Exchange
of India Ltd. and BSE Ltd.
32. ACKNOWLEDGEMENT
Your Directors would like to take this opportunity to express sincere
gratitude to the customers, bankers and other business associates for
the continued cooperation and patronage. Your Directors gratefully
acknowledge the ongoing co-operation and support provided by the
Government, Regulatory Bodies and the Stock Exchanges.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. The Directors
also wish to express their gratitude to the valued shareholders for
their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place: Mumbai
Date: 22nd June, 2015
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Twentieth Annual Report
of your Company and the Audited Financial Statements for the year ended
on 31st March, 2014.
1. Financial Results
An overview of the financial performance of your Company along with its
Subsidiaries for the year 2013-14 is as under:
(Rs. in lac)
Name Revenue Profit/ Profit/
(Loss) before (Loss)
Interest, after Tax
Depreciation
and Tax
Emkay Global Financial 7170.27 316.74 (521.10)
Services Limited
Emkay Fincap Limited 523.55 400.07 240.44
Emkay Commotrade Limited 812.24 (28.49) (153.85)
Emkay Insurance Brokers 173.55 13.07 9.44
Limited
Emkay Investment 121.91 41.85 30.34
Managers Limited
Aggregate (Before 8801.52 743.24 (394.73)
Elimination of Inter
Company Transactions)
An overview of the standalone financial performance of your Company for
the year 2013-14 is as under:
(Rs. in lac)
Particulars 31.03.2014 31.03.2013
Total Income 7170.27 7986.82
Profit before Interest, Depreciation and Tax 316.74 490.59
Depreciation and Amortization 415.83 529.39
Finance Cost (Interest) 415.09 283.43
Profit /(Loss) before Taxation (514.18) (322.23)
Provision for Taxation
* Current Tax - -
* Deferred Tax Charges/(Benefit) - 467.67
* Short Provision for Taxation of earlier 6.92 -
years
Profit /(Loss) after Taxation (521.10) (789.90)
Add: Balance brought forward 1666.05 2455.95
Amount available for Appropriations 1144.96 1666.05
Appropriations
* Proposed Dividend (Current and - -
Earlier year)
* Provision for Tax on Dividend (Current - -
and Earlier year)
* Transfer to General Reserves - -
Balance carried forward 1144.96 1666.05
2. Dividend
The Company has incurred a loss during the year and hence your
Directors have decided not to recommend any Dividend for the year ended
31st March, 2014. (Previous year also no Dividend was declared on
equity share).
3. Review of Operations
During the year under review, your Company recorded a total income of
Rs. 7170.27 lac as compared to Rs. 7986.82 lac in the previous
financial year, down by 10.22%. The Loss for the same period stands at
Rs. 521.10 lac as compared to the Net Loss of Rs. 789.90 lac in the
previous financial year.
4. Surrender of Clearing Membership of Futures & Options Segment (F&O)
of MCX Stock Exchange Limited/MCX Clearing Corporation Limited(MCX CCL)
The Company is registered as a Trading cum Clearing Member for Futures
& Options Segment of MCX Stock Exchange Limited. As there has been no
business activity in this segment during the year under review, the
Company surrendered Clearing membership of Future & Options segment of
MCX Stock Exchange Limited/MCX Clearing Corporation Limited. SEBI
approved the same vide their letter No. MIRSD-1/ vp/9889/2013 dated
25.4.2013.
5. Appointment of IL&FS Securities Services Limited (ISSL) as Clearing
Member for Futures & Options segment of MCX Stock Exchange Limited
During the year under review your Company has appointed IL&FS
Securities Services Limited (ISSL) as Clearing Member for futures &
Options segment of MCX Stock Exchange Limited.
6 Registration as Trading Member in Currency Derivative Segment of
Bombay Stock Exchange Limited (BSE)
During the year under review, your Company made an application to BSE
for registration as a trading member of Currency Derivative Segment.
Your Company has received approval from the BSE for registration as
Trading Member in Currency Derivative Segment of BSE Ltd.
7. Appointment of IL&FS Securities Services Limited (ISSL) as Clearing
Member for Currency Derivative segment of Bombay Stock Exchange Limited
(BSE)
During the year under review, your Company has appointed IL&FS
Securities Services Limited (ISSL) as Clearing Member for currency
derivative segment of BSE Ltd.
8. Management Discussion and Analysis
A detailed review of the operations, performance and future outlook of
the Company and its businesses is given in the Management Discussion
and Analysis, which forms part of the Annual Report.
9. Public Deposits
During the year, your Company has not accepted and/ or renewed any
public deposits in terms of the provisions of Section 58A of the
Companies Act, 1956 read with the Companies (Acceptance of Deposits)
Rules, 1975.
10. Subsidiary Companies
Emkay Commotrade Limited (ECL) - a 100% subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its
clients. It is a member of four major commodity exchanges viz. Multi
Commodity Exchange of India Limited (MCX), National Commodity and
Derivatives Exchange Limited (NCDEX), National Spot Exchange Limited
(NSEL) and Indian Commodity Exchange Ltd (ICEX). ECL has a net worth of
Rs. 419.36 lac as on 31st March, 2014.
Emkay Fincap Limited (EFL) - a 100% subsidiary:
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC. EFL
has a net worth of Rs. 3301.08 lac as on 31st March, 2014.
Emkay Insurance Brokers Limited (EIBL) - a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with Insurance Regulatory
and Development Authority (IRDA) as a Direct Insurance Broker and
focuses on life and non-life businesses. EIBL has a net worth of Rs.
64.45 lac as on 31st March, 2014.
Emkay Investment Managers Limited (EIML) - a 100% subsidiary:
EIML is registered with Securities and Exchange Board of India (SEBI)
for conducting the business of Portfolio Management Services and has
commenced the business of Portfolio Management Services with effect
from 1st January, 2011. EIML has a net worth of Rs. 371.79 lac as on
31st March, 2014.
In accordance with the General Circular issued by the Ministry of
Corporate Affairs, the Balance Sheet, Profit and Loss Account and other
documents of the Subsidiary Companies are not being attached with the
Balance Sheet of the Company. However the financial information of the
Subsidiary Companies is disclosed in the Annual Report in compliance
with the said circular.
The Consolidated Financial Statements presented by the Company include
financial results of its Subsidiary Companies. The Company will make
available the annual accounts of the Subsidiary Companies and the
related information to any member of the Company who may be interested
in obtaining the same. The annual accounts of the said Subsidiary
Companies are also available for inspection by any member of the
Company at the Corporate Office situated at Paragon Centre, C-6, Ground
Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400 013.
The Statement containing financial information of the aforesaid
Subsidiaries is included in the Consolidated Accounts forming part of
the Annual Report of the Company.
11. Employee Stock Option Schemes
With a view to remain a preferred employer, the Company had granted
Stock Options under two Schemes viz. ESOP 2005 & ESOP 2007 to the
employees of the Company and the Subsidiary Companies.
(a) ESOP 2005
During the Financial Year 2013-14, the Remuneration/ Compensation
Committee has not allotted any Equity Shares to the employees under
ESOP 2005.
Summary of ESOP 2005 as on 31st March 2014:
Total no. of Stock Options available under the 3,81,250
Scheme
Exercise Price Rs. 20/- per Option
Exercise Period 3 years
Total no. of Stock Options granted under the 3,81,250
scheme
Stock Options lapsed 1,53,750
Stock Options vested but not exercised 0
Stock Options exercised 2,27,500
Outstanding Stock Options 0
(b) ESOP 2007
The Company had granted 1,442,000 Options on 17th January, 2008 to the
employees (each Option carries entitlement for one share of the face
value of Rs. 10 each) at an exercise price of Rs. 363 per Option which
was later repriced at Rs. 63 per Option. Further, the Company granted
244,000 Options on 19th June, 2009, 207,500 Options on 24th July, 2009,
1,00,000 Options on 4th May, 2010 , 6,11,500 Options on 27th July, 2010
and 2,00,000 Options on 21st January, 2012 at an exercise price of Rs.
63, Rs. 61, Rs. 93, Rs. 77 and Rs. 37 per Option respectively.
During the Financial Year 2013-14, the Remuneration/ Compensation
Committee has not allotted any Equity Shares to the employees under
ESOP 2007.
Summary of ESOP 2007 as on 31st March 2014:
Total no. of Stock Options granted under the 24,26,575
Scheme
Exercise Price:
14,42,000 Options Rs. 63/- per Option
2,44,000 Options Rs. 63/- per Option
2,07,500 Options Rs. 61/- per Option
1,00,000 Options Rs. 93/- per Option
6,11,500 Options Rs. 77/- per Option
2,00,000 Options Rs. 37/- per Option
Exercise Period 3 years
Re-issued Options 3,78,425
Total no. of Stock Options granted under the 28,05,000
scheme
Stock Options lapsed 15,76,600
Stock Options vested but not exercised 7,13,450
Stock Options exercised 60,250
Outstanding Stock Options 11,68,150
The paid up Equity Capital of the Company is Rs. 24,43,77,500/- as of
date. The disclosures required to be made in the Directors'' Report in
respect of the aforesaid ESOP Schemes, in terms of the SEBI (ESOP
Scheme) Guidelines, 1999 are contained in Annexure A forming part of
the Directors'' Report.
12. Employee Stock Option Plan - 2010 through trust route
On the recommendation of the Remuneration/Compensation Committee of
your Company, the trustees of Emkay Employee Welfare Trust have granted
5,55,000 Options on 21st October, 2010 to the eligible employees (each
Option carrying entitlement for one share of the face value of Rs. 10
each) at an exercise price of Rs. 93/- per Option. Further, the
Remuneration/Compensation Committee/Emkay Employees Welfare Trust
granted 27,000 Options on 02nd May, 2011, 15,000 Options on 22nd
October, 2011 and 50,000 Options on 21st January, 2012 at an exercise
price of Rs. 63, Rs. 48, and Rs. 37 per Option respectively.
Summary of ESOP 2010 (through trust route) as on 31st March 2014:
Total no. of Stock Options granted under the 24,41,995
Scheme
Exercise Price:
5,55,000 Options Rs. 93/- per Option
27,000 Options Rs. 63/- per Option
15,000 Options Rs. 48/- per Option
50,000 Options Rs. 37/- per Option
Exercise Period 3 years
Total no. of Stock Options granted under the 6,47,000
scheme
Stock Options lapsed 319500
Stock Options vested but not exercised 94500
Stock Options exercised Nil
Outstanding Stock Options 327500
Details required to be provided under the Securities and Exchange Board
of India (Employees Stock Options Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are set out in Annexure "A" to this report.
13. Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 205A(5) and 205 (c) of the
Companies Act, 1956 and relevant provisions of the Companies Act, 2013,
relevant amounts which remained unpaid or unclaimed for a period of 7
years have been transferred by the Company to the Investor Education
and Protection Fund (IEPF).
14. Directors
At the 20th Annual General Meeting, Mr. S. K. Saboo (DIN No. 00373201)
retires by rotation and being eligible, offers himself for
re-appointment.
The above re-appointment forms part of the Notice of the forthcoming
20th Annual General Meeting and the respective resolution is
recommended for your approval.
A brief profile of Director as required under Clause 49 of the Listing
Agreement is given in the Notice of the 20th Annual General Meeting.
Impending notification of Section 149 and other applicable provisions
of the Companies Act, 2013, your Directors are seeking appointment of
Mr. G. P. Gupta, Mr. R. K. Krishnamurthi and Mr. G. C. Vasudeo as
Independent Directors for five consecutive years for a term upto 12th
August, 2019. Details of the proposal for appointment of Mr. G. P.
Gupta, Mr. R. K. Krishnamurthi and Mr. G. C. Vasudeo are mentioned in
the Explanatory Statement under Section 102 of the Companies Act, 2013
of the Notice of the 20th Annual General Meeting.
15. Directors'' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed consistently and proper explanation
relating to material departures, if any, have been made;
b) appropriate accounting policies have been selected and applied
consistently and that judgments and estimates 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 its profit for the year ended
on that date;
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
d) the annual accounts have been prepared on a going concern basis.
16. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information as required under Section 217(1) (e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 is given in Annexure B to
this report.
17. Corporate Governance
The Company adheres to the principles of Corporate Governance mandated
by the Securities and Exchange Board of India and has implemented all
the prescribed stipulations thereof. As stipulated in Clause 49 VI of
the Listing Agreement, a detailed report on Corporate Governance and
the requisite Auditor''s Certificate confirming compliance with the
conditions of Corporate Governance, forms part of the Annual Report.
The declaration regarding compliance with Company''s Code of Conduct for
Directors and Senior Management Personnel and CEO/CFO certification are
furnished in Annexure ''1'' and Annexure ''2'' to the Corporate Governance
Report respectively.
18. Particulars of Employees
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975 as amended by the
Companies (Particulars of Employees) Amendment Rules, 2011, the names
and other particulars of employees are to be set out in the Directors''
Report, as an addendum thereto. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
accounts as therein set out, are being sent to all members of the
Company excluding the aforesaid information about the employees. Any
member, who is interested in obtaining such particulars about
employees, may write to the Company Secretary at the Corporate Office
of the Company.
19. Auditors
Messrs. B. L. Sarda & Associates, Chartered Accountants, retire as the
Statutory Auditors of the Company at the ensuing Annual General Meeting
and offer to be re-appointed as Statutory Auditors of the Company for a
period of three years from the financial year 2014-2015 to 2016-2017 to
hold office from the conclusion of this Annual General Meeting until
the conclusion of the 23rd Annual General Meeting of the Company,
subject to ratification at every Annual General Meeting, on such
remuneration and other terms and conditions as may be fixed by the
Board of Directors/Audit Committee.
A certificate from them has been received to the effect that their
appointment as Statutory Auditors of the Company, if made, would be
within the limits prescribed under Section 139 (1) and 141 of the
Companies Act, 2013.
Further, the Statutory Auditors have confirmed that they have subjected
themselves to the peer review process of The Institute of Chartered
Accountants of India (ICAI) and hold a valid certificate issued by the
''Peer Review Board'' of the said Institute as required by Clause 41 of
the Listing Agreement.
The Audit Committee and the Board of Directors of the Company recommend
the re-appointment of Messrs. B. L. Sarda & Associates, Chartered
Accountants. The appointment is subject to approval of the Members at
the forthcoming 20th Annual General Meeting.
The notes to the accounts referred to in the Auditor''s Report are self
explanatory and therefore do not call for any further comments.
20. Corporate Social Responsibility
The Ministry of Corporate Affairs released a set of Voluntary
Guidelines on Corporate Social Responsibility (CSR) in December, 2009.
The Company has evolved a Corporate Social Responsibility Policy and is
actively practicing the Policy. The CSR Committee comprises of some
Heads of Departments viz. Mr. Rajesh Sharma - Chief Operating Officer,
Ms. Divya Gandhi - Head-General Insurance and Principal Officer(EIBL)
and Ms. Ruth Singh - Head-Human Resources. The objectives of the CSR
Policy are to contribute to social and economic development of the
communities in which the Company operates, provide opportunities to
employees to contribute to the society through service and
contributions, monetary and otherwise and to generate, through its CSR
initiatives, a community goodwill for the Company and help reinforce a
positive and socially responsible image of the Company as a corporate
entity.
21. Acknowledgement
Your Directors would like to take this opportunity to express sincere
gratitude to the customers, bankers and other business associates for
their continued cooperation and patronage. Your Directors gratefully
acknowledge the ongoing co-operation and support provided by the
Government, Regulatory Bodies and the Stock Exchanges.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. The Directors
also wish to express their gratitude to the valued shareholders for
their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place: Mumbai
Date: 22nd May, 2014
Mar 31, 2013
Dear Members,
The Directors have pleasure in presenting the Nineteenth Annual Report
of your Company and the Audited Financial Statements for the year ended
on 31st March, 2013.
1. Financial Results
An overview of the financial performance of your Company along with its
Subsidiaries for the year 2012-13 is as under:
(Rs. in lac)
Profit/
(Loss)
before Profit/
Name Revenue Interest, (Loss)
Depreciation after
Tax
and Tax
Emrvace Global Financial 7986.82 (322.23) (789.90)
Services Limited
Emkay Fincap Limited 587.78 (281.23) (188.79)
Emkay Commotrade Limited 1238.79 (517.54) (387.27)
Emkay Insurance Brokers 133.34 (27.49) (125.59)
Limited
Emkay Investment Managers 173.06 15.63 11.98
Limited
Aggregate (Befoce Elimination 10119.79 (1132.86) (1479.57)
of Inter Company Transactions)
An overview of the standalone financial performance of your Company for
the year 2012-13 is as under:
(Rs. in lac)
Particulars 31.03.2013 31.03.2012
Total Income 7986.82 9,024.55
Profit before Interest, Depreciation and Tax 490.59 591.55
Depreciation and Amortization 529.39 487.93
Finance Cost (Interest) 283.43 219.89
Profit /(Loss) before Taxation (322.23) (116.26)
Provision for Taxation
-Current Tax - -
-Deferred Tax Charges/(Benefit) 467.67 (38.75)
-Short Provision for Taxation of earlier years - (0.46)
Profit /(Loss) after Taxation (789.90) (77.06)
Add: Balance brought forward 2455.95 2,675.06
Amount available for appropriations 1666.05 2,598.00
Appropriations
-Proposed Dividend ( Current and Earlier - 122.22
year)
-Provision for Tax on Dividend ( Current and - 19.83
Earlier year)
-Transfer to General Reserves - -
Balance carried forward 1666.05 2,455.95
2. Dividend
The Company has incurred a loss during the year and hence your
Directors have decided not to recommend any Dividend for the year ended
31st March, 2013 (Previous year Rs. 0.50 per equity share).
3. Review of Operations
During the year under review, your Company recorded a total income of
Rs. 7986.82 lac as compared to Rs. 9024.55 lac in the previous
financial year, down by 11.50 %. The Loss for the same period stands at
Rs. 789.90 lac as compared to the Net Loss of Rs. 77.06 lac in the
previous financial year.
4. Surrender of Membership of Wholesale Debt Market Segment of NSE
The Company is registered as a Trading cum Clearing Member for
Wholesale Debt Market (WDM) Segment of National Stock Exchange of India
Limited. As there has been no business activity in this segment during
the year under review, the Company surrendered membership of Wholesale
Debt Market segment of National Stock Exchange of India Limited.
5. Membership of Cash and F&O Segment of MCX Stock Exchange Limited.
During the year under review, your Company has acquired a membership of
Cash and Derivatives segment of MCX Stock Exchange Limited.
6. Membership as Qualified Depository Participant (QDP) of Central
Depository Services (India) Limited.
During the year under review your Company has received a Membership for
Qualified Depository Participant (QDP) of Central Depository Services
(India) Limited.
7. Management Discussion and Analysis
A detailed review of the operations, performance and future outlook of
the Company and its businesses is given in the Management Discussion
and Analysis, which forms part of the Annual Report.
8. Public Deposits
During the year, your Company has not accepted and/or renewed any
public deposits in terms of the provisions of Section 58A of the
Companies Act, 1956 read with the Companies (Acceptance of Deposits)
Rules, 1975.
9. Subsidiary Companies
Emkay Commotrade Limited (ECL) - a 100% subsidiary
Emkay Commotrade Limited offers commodity futures trading to its
clients. It is a member of four major commodity exchanges viz. Multi
Commodity Exchange of India Limited (MCX), National Commodity and
Derivatives Exchange Limited (NCDEX), National Spot Exchange Limited
(NSEL) and Indian Commodity Exchange Ltd (ICEX). ECL has a net worth of
Rs. 573.22 lac as on 31st March, 2013.
Emkay Fincap Limited (EFL) - a 100% subsidiary
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC. EFL
has a net worth of Rs. 3060.64 lac as on 31st March, 2013.
Emkay Insurance Brokers Limited (EIBL) - a 100% subsidiary
Emkay Insurance Brokers Limited is registered with Insurance Regulatory
and Development Authority (IRDA) as a Direct Insurance Broker and
focuses on life and non-life businesses. EIBL has a net worth of Rs.
45.01 lac as on 31st March, 2013.
Emkay Investment Managers Limited (EIML)
- a 100% Subsidiary
EIML is registered with Securities and Exchange Board of India (SEBI)
for conducting the business of Portfolio Management Services and has
commenced the business of Portfolio Management Services with effect
from 1st January, 2011. EIML has a net worth of Rs. 341.46 lac as on
31st March, 2013.
In accordance with the General Circular issued by the Ministry of
Corporate Affairs, the Balance Sheet, Profit and Loss Account and other
documents of the Subsidiary Companies are not being attached with the
Balance Sheet of the Company. However the financial information of the
Subsidiary Companies is disclosed in the Annual Report in compliance
with the said circular.
The Consolidated Financial Statements presented by the Company include
financial results of its Subsidiary Companies. The Company will make
available the annual accounts of the Subsidiary Companies and the
related information to any member of the Company who may be interested
in obtaining the same. The annual accounts of the said Subsidiary
Companies are also available for inspection by any member of the
Company at the Corporate Office situated at Paragon Centre, C-6, Ground
Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400 013.
The Statement containing financial information of the aforesaid
Subsidiaries is included in the Consolidated Accounts forming part of
the Annual Report of the Company.
10. Employee Stock Option Schemes
With a view to remain a preferred employer, the Company has granted
Stock Options under two Schemes viz. ESOP 2005 & ESOP 2007 to the
employees of the Company and the Subsidiary Companies.
(a) ESOP 2005
During the Financial Year 2012-13, the Remuneration/ Compensation
Committee has not allotted any Equity Shares to the employees under the
ESOP 2005.
Summary of ESOP 2005 as on 31st March 2013:
Total no. of stock options available under the Scheme 3,81,250
Exercise Price Rs. 20/- per option
Exercise Period 3 years
Total no. of stock options granted under the scheme 3,81,250
Stock Options lapsed 1,53,750
Stock Options vested but not exercised 00
Stock Options exercised 2,27,500
Outstanding Stock Options 00
(b) ESOP 2007
The Company had granted 1,442,000 Options on 17th January, 2008 to the
employees (each option carrying entitlement for one share of the face
value of Rs. 10 each) at an exercise price of Rs. 363 per option which
was later reprised at Rs. 63 per option. Further, the Company granted
244,000 Options on 19th June, 2009, 207,500 Options on 24th July, 2009,
1,00,000 Options on 4th May, 2010 , 6,11,500 Options on 27th July, 2010
and 2,00,000 Options on 21st January, 2012 at an exercise price of Rs.
63, Rs. 61, Rs. 93, Rs. 77 & Rs. 37 per option respectively.
During the Financial Year 2012-13, the Remuneration/ Compensation
Committee has not allotted any Equity Shares to the employees under the
ESOP 2007.
Summary of ESOP 2007 as on 31st March 2013:
Total no. of stock options granted under the Scheme 24,26,575
Exercise Price:
14,42,000 Options Rs. 63/- per option
2,44,000 Options Rs. 63/- per option
2.07.500 Options Rs. 61/- per option
1.00.000 Options Rs. 93/- per option
6.11.500 Options Rs. 77/- per option
2.00.000 Options Rs. 37/- per option
Exercise Period 3 years
Re Issued - Options 3,78,425
Total no. of stock options granted under the scheme 28,05,000
Stock Options lapsed 10,73,750
Stock Options vested but not exercised 8,73,700
Stock Options exercised 60,250
Outstanding Stock Options 16,71,000
The paid up Equity Capital of the Company is Rs. 24,43,77,500/- as of
date. The disclosures required to be made in the Directors'' Report in
respect of the aforesaid ESOP Schemes, in terms of the SEBI (ESOP
Scheme) Guidelines, 1999 are contained in Annexure "A" forming part of
the Directors'' Report.
11. Employee Stock Option Plan - 2010 Through Trust Route
On the recommendation of the Remuneration/Compensation Committee of
your Company, the trustees of Emkay Employee Welfare Trust have granted
5,55,000 Options on 21st October, 2010 to the eligible employees (each
option carrying entitlement for one share of the face value of Rs. 10
each) at an exercise price of Rs. 93/- per option. Further, the
Remuneration - Compensation Committee/Emkay Employees Welfare Trust
granted 27,000 Options on 2nd May, 2011, 15,000 Options on 22nd
October, 2011 and 50,000 Options on 21st January, 2012 at an exercise
price of Rs. 63, Rs. 48, and Rs. 37 respectively per option.
Summary of ESOP 2010 (through trust route) as on 31st March 2013:
Total no. of stock options granted under the Scheme 24,41,995
5,55,000 Options Exercise Price:
27.000 Options Rs. 93/- per option
15.000 Options Rs. 63/- per option
50.000 Options Rs. 48/- per option
Rs. 37/- per option
Exercise Period 3 years
Total no. of stock options granted under the scheme 6,47,000
Stock Options lapsed 79,500
Stock Options vested but not exercised Nil
Stock Options exercised Nil
Outstanding Stock Options 5,67,500
Details required to be provided under the Securities and Exchange Board
of India (Employees Stock Options Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are set out in Annexure "A" to this report.
12. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 205A(5) of the Companies Act,
1956, relevant amounts which remained unpaid or unclaimed for a period
of 7 years have been transferred by the Company to the Investor
Education and Protection Fund (IEPF).
13. Directors
At the 19th Annual General Meeting, Mr. G. P. Gupta and Mr. S. K.
Saboo retire by rotation and being eligible, offer themselves for
re-appointment.
The above re-appointments form part of the Notice of the forthcoming
19th Annual General Meeting and the respective resolutions are
recommended for your approval.
Brief profiles of these Directors as required under Clause 49 of the
Listing Agreement are given in the Notice of the 19th Annual General
Meeting.
14. Directors'' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that:
a. In the preparation of the annual accounts, the applicable
accounting standards have been followed consistently and proper
explanation relating to material departures, if any, have been made;
b. Appropriate accounting policies have been selected and applied
consistently and that judgments and estimates 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, 2013 and of its profit for the year ended
on that date;
c. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
d. The annual accounts have been prepared on a going concern basis.
15. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The information as required under Section 217(1) (e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 is given in Annexure "B"
to this report.
16. Corporate Governance
The Company adheres to the principles of Corporate Governance mandated
by the Securities and Exchange Board of India and has implemented all
the prescribed stipulations thereof. As stipulated in Clause 49 VI of
the Listing Agreement, a detailed report on Corporate Governance and
the requisite Auditor''s Certificate confirming compliance with the
conditions of Corporate Governance, forms part of the Annual Report.
The declaration regarding compliance with Company''s Code of Conduct for
Directors and Senior Management Personnel and CEO/CFO certification are
furnished in Annexure ''1'' and Annexure ''2'' to the Corporate Governance
Report respectively.
17. Particulars of Employees
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975 as amended by the
Companies (Particulars of Employees) Amendment Rules, 2011, the names
and other particulars of employees are to be set out in the Directors''
Report, as an addendum thereto. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
accounts as therein set out, are being sent to all members of the
Company excluding the aforesaid information about the employees. Any
member, who is interested in obtaining such particulars about
employees, may write to the Company Secretary at the Corporate Office
of the Company.
18. Auditors
Messrs. B. L. Sarda & Associates, Chartered Accountants, retire as the
Statutory Auditors of the Company at the ensuing Annual General Meeting
and offer themselves for re-appointment. A certificate from them has
been received to the effect that their re-appointment as Statutory
Auditors of the Company, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956. Further, the
Statutory Auditors have confirmed that they have subjected themselves
to the peer review process of The Institute of Chartered Accountants of
India (ICAI) and hold a valid certificate issued by the ''Peer Review
Board'' of the said institute as required by Clause 41 of the Listing
Agreement.
The Audit Committee and the Board of Directors of the Company recommend
the re-appointment of Messrs. B. L. Sarda & Associates, Chartered
Accountants. The appointment is subject to approval of the Members at
the forthcoming 19th Annual General Meeting.
The notes to the accounts referred to in the Auditor''s Report are self
explanatory and therefore do not call for any further comments.
19. Corporate Social Responsibility
The Ministry of Corporate Affairs has released a set of Voluntary
Guidelines on Corporate Social Responsibility (CSR) in December, 2009.
The Company has evolved a Corporate Social Responsibility Policy and is
actively practicing the Policy. The CSR Committee comprises of some
Heads of Departments viz. Mr. Rajesh Sharma - Chief Operating Officer,
Ms. Divya Gandhi - Head-General Insurance and Principal Officer(EIBL)
and Ms. Ruth Singh - Head- Human Resources. The objectives of CSR
Policy are to contribute to social and economic development of the
communities in which the Company operates, provide opportunities to
employees to contribute to society through service and contributions,
monetary and otherwise and to generate, through its CSR initiatives, a
community goodwill for the Company and help reinforce a positive and
socially responsible image of the Company as a corporate entity.
20. Acknowledgement
Your Directors would like to take this opportunity to express sincere
gratitude to their customers, bankers and other business associates for
their continued cooperation and patronage. Your Directors gratefully
acknowledge the ongoing co-operation and support provided by the
Government, Regulatory Bodies and the Stock Exchanges.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. The Directors
also wish to express their gratitude to the valued shareholders for
their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place: Mumbai
Date : 18th May, 2013
Mar 31, 2012
The Directors have pleasure in presenting the Eighteenth Annual Report
of your Company and the Audited Accounts for the year ended 31st March,
2012.
1. Financial Results
An overview of the financial performance of your Company along with its
subsidiaries for the Financial Year 2011-12 is as under:
(Rs in Lac)
Name of the
Company Revenues Profit/(Loss)
Before Interest, Profit/
Depreciation (Loss)
And Tax after Tax
Emkay Global 9024.55 591.55 (77.06)
Financial Services
Limited
Emkay Fincap
Limited 581.04 363.74 238.00
Emkay Commotrade
Limited 1528.89 (93.15) (95.17)
Emkay Insurance
Brokers Limited 139.33 8.60 5.25
Emkay Investment
Managers Limited 221.67 54.27 34.12
Aggregate (Before 11,495.48 925.01 105.14
Elimination of
Inter Company
Transactions)
An overview of the standalone financial performance of your Company for
the Financial Year 2011-12 is as under:
(Rs in Lac)
Particulars 31.03.2012 31.03.2011
Total Income 9,024.55 11,476.46
Profit before Interest, 591.55 1,975.89
Depreciation and Tax
Depreciation and Amortization 487.93 385.89
Finance Cost (Interest) 219.89 304.62
Profit before Taxation (116.26) 1,285.38
Provision for Taxation
-Current Tax - 350.00
-Deferred Tax Charges/(Benefit) (38.75) 98.15
-Short Provision for Taxation of (0.46) 4.41
earlier years
Profit after Taxation (77.06) 832.81
Add: Balance brought forward 2,675.06 2,207.31
Amount available for appropriations 2,598.00 3,040.12
Appropriations
-Proposed Dividend 122.22 245.26
-(Current and Earlier year)
-Provision for Tax on Dividend 19.83 39.79
(Current and Earlier year)
-Transfer to General Reserves - 80.00
Balance carried forward 2,455.95 2,675.06
2. Dividend
The Board of Directors are pleased to recommend a Dividend at the rate
of Rs 0.50 per equity share of the face value ofRs 10/-for the year ended
31st March, 2012 (Previous year Rs1/- per equity share). This Dividend
is subject to approval of the Members at the forthcoming 18th Annual
General Meeting.
3. Review of Operations
During the year under review, your Company recorded a total income of Rs
9024.55 Lac as compared to Rs 11476.46 Lac in the previous financial
year, down by 21.36 %. The Net Loss for the same period stands atRs
77.06 Lac as compared to the Net Profit ofRs 832.81 Lac in the previous
financial year.
4. Change in Registered Office of the Company During the year, your
Company shifted its Registered Office from 4D, Hamam House, Ambalal
Doshi Marg, Fort, Mumbai- 23 to The Ruby, 7th Floor, Senapati Bapat
Marg, Dadar (West), Mumbai-400028 with effect from 14th September,
2011.
5. Membership of Currency Derivative Segment of MCX Stock Exchange
Limited
During the year, your Company commenced operations in the Currency
Derivative Segment of MCX Stock Exchange Limited, as a Member and has
conducted business of Rs 4,73,692 (Revenue) and Rs 460.16 crore (Volume).
6. Activation of Membership of Wholesale Debt Market Segment of BSE
Limited
During the year, your Company has activated the Membership of Wholesale
Debt Market Segment of BSE Limited.
7. Membership of Wholesale Debt Market Segment of National Stock
Exchange of India Limited
On 8th February 2012, your Company has acquired membership of Wholesale
Debt Market segment of National Stock Exchange of India Limited.
8. Membership as Qualified Depository Participant (QDP) of Central
Depository Services (India) Limited
During the year under review, the Securities and Exchange Board of
India specified that all the Qualified Foreign Investors (QFI) will be
allowed to invest in the scheme of Indian Mutual Funds and Indian
Equity Shares. Such QFIs are required to maintain Demat Account only
with Qualified Depository Participant registered with Securities and
Exchange Board of India (SEBI).
In compliance with same, your Company has made an application to
Central Depository Services (India) Limited for registration as a
Qualified Depository Participant (QDP).
9. Management Discussion and Analysis
A detailed review of the operations, performance and future outlook of
the Company and its businesses is given in the Management Discussion
and Analysis, which forms part of the Annual Report.
10. Incorporation of Section 25 Company
Emkay Charitable Foundation was incorporated on 25th June, 2012 as a
Company under Section 25 of the Companies Act, 1956 for providing
medical aid and medical assistance and to provide support, encourage
and promote education among the masses and other charitable activities.
Your Company has formed a CSR Committee to identify charity projects to
be funded by the Foundation. The said committee will undertake the
funded projects which includes education, skill development and
vocational training, scholarships to meritorious students belonging to
low income and disabled categories and health & family welfare.
11. Public Deposits
During the year, your Company has not accepted and/or renewed any
public deposits in terms of the provisions of Section 58A of the
Companies Act, 1956 read with the Companies (Acceptance of Deposits)
Rules, 1975.
12. Subsidiary Companies
Emkay Commotrade Limited (ECL) - a 100%
subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its
clients. It is a member of four major commodity exchanges viz. Multi
Commodity Exchange of India Limited (MCX), National Commodity and
Derivatives Exchange Limited (NCDEX), National Spot Exchange Limited
(NSEL) and Indian Commodity Exchange Ltd. (ICEX). It has shifted its
Registered Office from 4D, Hamam House, Ambalal Doshi Marg, Fort,
Mumbai-400023 to The Ruby, 7th Floor, Senapati Bapat Marg, Dadar
(west), Mumbai-400028 with effect from 2lst November,2011.ECL has a net
worth of Rs 9,60,49,074 as on 31st March,2012.
Emkay Fincap Limited (EFL) - a 100% subsidiary: Emkay Fincap Limited is
a RBI registered Non Deposit taking NBFC. Your Company had subscribed
to 50,00,000 9% Non Convertible Redeemable Preference Shares ofRs 10
each of EFL on 25th July, 2007 for a period of five years. EFL had
redeemed 40,00,000 9% Non Convertible Redeemable Preference Shares of Rs
10 each in the FY 2010-2011 and the balance 10,00,000 9% Non
Convertible Redeemable Preference Shares of Rs 10 each were redeemed on
3rd June, 2011. After redemption of the said preference shares , EFL's
Paid up Share Capital is Rs 22 Crore comprising of 2,20,00,000 Equity
shares of Rs 10 each. It has shifted its Registered Office from 4D,
Hamam House, Ambalal Doshi Marg, Fort, Mumbai-400023 to The Ruby, 7th
Floor, Senapati Bapat Marg, Dadar (west), Mumbai-400028 with effect
from 21st November, 2011. EFL has a net worth of Rs 32,49,43,695 as on
31st March, 2012.
Emkay insurance Brokers Limited (EIBL) - a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with Insurance Regulatory
and Development Authority (IRDA) as a Direct Insurance Broker and
focuses on life and non-life businesses. It has a net worth ofRs
1,70,59,638 as on 31st March, 2012.
Emkay Investment Managers Limited (IIIML) - a 100% subsidiary
EIML is a Securities and Exchange Board of India (SEBI) registered
Portfolio Manager and has commenced the business of Portfolio
Management Services with effect from 1st January, 2011. It has shifted
its Registered Office from 4D, Hamam House, Ambalal Doshi Marg, Fort,
Mumbai-400023 to The Ruby, 7th Floor, Senapati Bapat Marg, Dadar(west),
Mumbai-400028 with effect from 21st November, 2011. EIML has a net
worth ofRs 3,29,47,520 as on 31st March, 2012.
In accordance with the general circular issued by the Ministry of
Corporate Affairs, the Balance Sheet, Profit and Loss Account and other
documents of the subsidiary companies are not being attached with the
Balance Sheet of the Company. However the financial information of the
subsidiary companies is disclosed in the Annual Report in compliance
with the said circular.
The Consolidated Financial Statements presented by the Company include
financial results of its subsidiary companies. The Company will make
available the annual accounts of the subsidiary companies and the
related information to any member of the Company who may be interested
in obtaining the same. The annual accounts of the said subsidiary
companies are also available for inspection by any member of the
Company at the Corporate Office situated at Paragon Centre, C-06,
Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai-400013.
The statement containing financial information of the aforesaid
subsidiaries is included in the Consolidated Accounts forming part of
the Annual Report of the Company.
13. Employee Stock Option Schemes
With a view to remain a preferred employer, the Company has granted
stock options under two schemes viz. ESOP 2005 & ESOP 2007 to the
employees of the Company and subsidiary companies.
a. ESOP 2005
During the Financial Year 2011-12, the Remuneration / Compensation
Committee allotted 7,000 equity shares to 3 employees under the ESOP
2005. These shares are listed on the BSE Limited and the National Stock
Exchange of India Limited.
Summary of ESOP 2005 as on 31st March 2012:
Total no. of stock options 3,81,250
available under the Scheme
Exercise Price Rs 20/- per option
Exercise Period 3 years
Total no. of stock
options granted 3,81,250
Stock options lapsed 1,47,000
Stock options vested
but not exercised 6,750
Stock options exercised 2,27,500
Outstanding stock options 6,750
b. ESOP 2007
The Company had granted 1,442,000 options on 17th January, 2008 to the
employees (each option carrying entitlement for one share of the face
value ofRs 10 each) at an exercise price ofRs 363 per option which was
later reprised at Rs 63 per option. Further, the Company granted
244,000 options on 19th June,2009,207,500 options on 24th July,
2009,1,00,000 options on 4th May, 2010,6,11,500 options on 27th July,
2010 and 2,00,000 options on 21st January, 2012 at an exercise price
ofRs 63, Rs 61, Rs 93, Rs 77 and Rs 37 respectively per option.
During the Financial Year 2011-12, the Remuneration /Compensation
Committee has not allotted any equity shares to the employees under the
ESOP 2007.
Summary of ESOP 2007 as on 31st March 2012:
Total no. of stock options granted 24,26,575
under the Scheme
Exercise price:
14.42.000 options Rs 63/-per option
2.44.000 options Rs 63/-per option
2.07.500 options Rs 61/- per option
1.00.000 options Rs 93/- per option
6.11.500 options Rs 77/- per option
2.00.000 options Rs 37/-per option
Exercise period 3 years
Re-issued options 3,78,425
Total no. of stock options granted 28,05,000
Stock options lapsed 7,14,250
Stock options vested but not exercised 5,41,500
Stock options exercised 60,250
Outstanding stock options 20,30,500
Consequent to the above allotments made under the aforesaid ESOP
Schemes, the paid up equity capital of the Company has increased from Rs
24,43,07,500/- (as on 1st April, 2011) to Rs24,43,77,500/- as of date.
The disclosures required to be made in the Directors' Report in respect
of the aforesaid ESOP Schemes, in terms of the SEBI (ESOP Scheme)
Guidelines, 1999 are contained in Annexure "A" forming part of the
Directors' Report.
14. Employee Stock Option Plan 2UiO through trust route
On the recommendation of the Remuneration/Compensation Committee of
your Company, the trustees of the Emkay Employee Welfare Trust have
granted 5,55,000 options on 21st October, 2010 to the eligible
employees (each option carrying entitlement for one share of the face
value of Rs 10 each) at an exercise price of Rs 93/- per option. Further,
the Company granted 27,000 options on 2nd May, 2011, 15,000 options on
22nd October, 2011 and 50,000 options on 21st January, 2012 at an
exercise price ofRs 63, Rs 48, and Rs 37 respectively per option.
Summary of ESOP 2010 (through trust route) as on 31st March 2012:
Total no. of stock options granted 24,41,99
Under the Scheme
Exercise price:
5.55.000 options Rs 93/-per option
27.000 options Rs 63/-per option
15.000 options Rs 48/-per option
50.000 options Rs 37/- per option
Exercise period 3 years
Total no. of stock options granted 6,47,000
Stock options lapsed 7,500
Stock options vested but not exercised Nil
Stock options exercised Nil
Outstanding stock options 6,39,500
Details required to be provided under the Securities and Exchange Board
of India (Employees Stock Options Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are set out in Annexure "A" to this report.
15. Directors
At the 18th Annual General Meeting, Mr. R. K. Krishnamurthi and Mr. G.
C. Vasudeo retire by rotation and being eligible, offer themselves for
re-appointment.
The above re-appointments form part of the notice of the forthcoming
18th Annual General Meeting and the respective resolutions are
recommended for your approval.
Brief profiles of these Directors as required under Clause 49 of the
Listing Agreement are given in the notice of the 18th Annual General
Meeting.
16.Directors' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that:
a. In the preparation of the annual accounts, the applicable
accounting standards have been followed consistently and proper
explanation relating to material departures, if any, have been made;
b. Appropriate accounting policies have been selected and applied
consistently and that judgments and estimates 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, 2012 and of its profit for the year ended
on that date;
c. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
d. The annual accounts have been prepared on a going concern basis.
17. Conservation of Energy, Technology Absorption, Foreign Exchange
Earning - and Outgo
The information as required under Section 217(1) (e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 is given in Annexure B to
this report.
18. Corporate Governance
The Company adheres to the principles of Corporate Governance as
mandated by the Securities and Exchange Board of India and has
implemented all the prescribed stipulations thereof. As stipulated in
Clause 49 VI of the Listing Agreement, a detailed report on Corporate
Governance and the requisite Auditor's Certificate confirming
compliance with the conditions of Corporate Governance, forms part of
the Annual Report.
The declaration regarding compliance with Company's Code of Conduct for
Directors and Senior Management Personnel and CEO/CFO certification are
furnished in Annexure '1' and Annexure '2' respectively to the
Corporate Governance Report.
19. Particulars of Employees
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975 the names and other
particulars of employees are to be set out in the Directors' Report, as
an addendum thereto. However, as per the provisions of Section
219(l)(b)(iv) of the Companies Act, 1956, the report and accounts as
therein set out, are being sent to all members of the Company excluding
the aforesaid information about the employees. Any member, who is
interested in obtaining such particulars about employees, may write to
the Company Secretary at the Corporate Office of the Company.
20. Auditors
Messrs. B. L. Sarda & Associates, Chartered Accountants, retire as the
Statutory Auditors of the Company at the ensuing Annual General Meeting
and offer themselves for re- appointment. A certificate from them has
been received to the effect that their re-appointment as Statutory
Auditors of the Company, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956. Further, the
Statutory Auditors have confirmed that they have subjected themselves
to the peer review process of The Institute of Chartered Accountants of
India and hold a valid certificate issued by the 'Peer Review Board' of
the said institute as required by Clause 41 of the Listing Agreement.
The Audit Committee and the Board of Directors of the Company recommend
the re-appointment of Messrs. B. L. Sarda & Associates, Chartered
Accountants. The appointment is subject to approval of the Members at
the forthcoming 18th Annual General Meeting.
The notes to the accounts referred to in the Auditor's Report are self
explanatory and therefore do not call for any further comments.
21. C orate Social Responsibility
The Ministry of Corporate Affairs has released a set of Voluntary
Guidelines on Corporate Social Responsibility (CSR) in December, 2009.
The Company has evolved a Corporate Social Responsibility Policy and is
actively practicing the policy. The CSR Committee comprises of some of
the Heads of Departments viz. Mr. Rajesh Sharma - Chief Operating
Officer, Ms. Divya Gandhi - Head-General Insurance and Principal
Officer and Ms. Ruth Singh - Head-Human Resources. The objectives of
CSR Policy are to contribute to social and economic development of the
communities in which the Company operates, provide opportunities to
employees to contribute to society through service and contributions,
monetary and otherwise and to generate, through its CSR initiatives, a
community goodwill for the Company and help reinforce a positive and
socially responsible image of the Company as a corporate entity.
22. Acknowledgement
Your Directors would like to take this opportunity to express sincere
gratitude to their customers, bankers and other business associates for
their continued cooperation and patronage. Your Directors gratefully
acknowledge the ongoing co-operation and support provided by the
Government, Regulatory Bodies and the Stock exchanges.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. The Directors
also wish to express their gratitude to the valued shareholders
for their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place: Mumbai
Date :19th May, 2012
Mar 31, 2011
The Directors have pleasure in presenting the Seventeenth Annual Report
of your Company and the Audited Accounts for the year ended on 31st
March, 2011.
1. Financial results
An overview of the financial performance of your Company along with its
subsidiaries for the year 2010-11 is as under:
(Rs. in lac)
Name of the Revenues Profit/(Loss) Profit/
Company before Interest, (Loss)
Depreciation and after
Tax Tax
Emkay Global Financial 11826.44 1828.07 832.81
Services Limited
Emkay Fincap Limited 364.34 321.22 193.30
Emkay Commotrade 935.29 255.72 160.31
Limited
Emkay Insurance 112.28 (60.17) (44.14)
Brokers Limited
Emkay Investment 106.70 70.62 45.35
Managers Limited
Aggregate 13345.05 2415.46 1187.63
An overview of the standalone financial performance of your Company for
the year 2010-11 is as under:
(Rs. in lac)
Particulars 31.03.2011 31.03.2010
Total income 11826.44 11671.57
profit before interest,
Depreciation 1828.07 1964.19
and Tax
Depreciation and Amortization 385.89 463.30
interest 156.16 151.64
profit before Taxation 1286.02 1349.25
provision for Taxation
-Current Tax 350.44 600.00
-Deferred Tax Charges/(Benefit) 98.15 (91.76)
-Short provision for Taxation of earlier 4.62 1.40
years
profit after Taxation 832.81 839.61
Add: Balance brought forward 2207.31 1731.30
Amount available for appropriations 3040.12 2570.91
Appropriations
-proposed Dividend 245.26 243.21
(Current and earlier year)
-provision for Tax on Dividend 39.79 40.39
(Current and earlier year)
-Transfer to General Reserves 80.00 80.00
Balance carried forward 2675.07 2207.31
2. Dividend
The Board of Directors are pleased to recommend a dividend at the rate
of Rs. 1/- per equity share of the face value of Rs. 10/- for the year
ended 31st March, 2011 (previous year Rs. 1/- per equity share). This
Dividend is subject to approval of the Members at the forthcoming 17th
Annual General Meeting.
3. Transfer to Reserves
The Company proposed to transfer an amount of Rs. 80 lac to the General
Reserve out of the amount available for appropriation. An amount of Rs.
467.75 lac is proposed to be retained in the profit & Loss Account.
4. Review of Operations
During the year under review, your Company recorded a total income of
Rs. 11826.44 lac as compared to Rs. 11671.57 lac in the previous
financial year, up by 1.33 %. The Net profit for the same period stands
at Rs. 832.81 lac compared to Rs. 839.61 lac in the previous financial
year.
5. Change in Office of Company Secretary
Mr. Manish Jain à Company Secretary & Compliance officer of the Company
has resigned with effect from 6th August, 2010. The Board of Director
places on record its appreciation for the services rendered by Mr. Jain
during his tenure as the Company Secretary & Compliance officer.
Consequent to the resignati on of Mr. Manish Jain, Mr. Rahul
Sahasrabuddhe was appointed as the Company Secretary & Compliance
officer of the Company with effect from 27th August, 2010.
6. Cancellation of Membership of Currency Derivative Segment of Bombay
Stock Exchange Limited
During the year under review, your Company had applied for cancellation
of Currency Derivative Membership Certificate of Bombay Stock exchange
Limited. The same has been cancelled by SEBI with effect from 31st
March, 2010.
7. Membership of Currency Derivative Segment of United Stock Exchange
of India Limited
During the year under review, the Company had applied for the
membership of Currency Derivative segment of United Stock exchange of
India Limited and acquired the membership on 7th February, 2011.
8. Management Discussion and Analysis
A detailed review of the operations, performance and future outlook of
the Company and its businesses is given in the Management Discussion
and Analysis, which forms part of the Annual Report.
9. Incorporation of Wholly-owned Subsidiary Company
The Company has floated a Wholly-owned Subsidiary in the name of Emkay
investment Managers Limited on 8th June, 2010 to carry on the business
of portfolio Management Services (PMS). Emkay Investment Managers
Limited obtained its Business Commencement Certificate on 23rd August,
2010.
10. Transfer of Portfolio Management Services Division of the Company
The Company had sought the approval of members through postal ballot
process for transfer of portfolio Management Services division of the
Company to its wholly-owned Subsidiary viz. Emkay investment Managers
Limited on 30th July, 2010. The Company has also obtained requisite
approval from Securities and exchange Board of India (SEBI) in this
regard and accordingly the Company has transferred its portfolio
Management Services Division to its wholly owned subsidiary company
viz. Emkay Investment Managers Limited at a consideration of Rs. 5 lac
with effect from 1st January, 2011.
11. Public Deposits
During the year, your Company has not accepted and/or renewed any
public deposits in terms of the provisions of Section 58A of the
Companies Act, 1956 read with the Companies (Acceptance of Deposits)
Rules, 1975.
12. Subsidiary Companies
Emkay Commotrade Limited (ECL) Ã a 100% subsidiary:
Emkay Commotrade Limited offers commodity futures trading to its
clients. it is member of four major commodity exchanges viz. Multi
Commodity exchange of India Limited (MCX), National Commodity and
Derivatives exchange Limited (NCDEX), National Spot exchange Limited
(NSEL) and Indian Commodity exchange Limited (ICEX). ECL has a net
worth of Rs. 10,55,65,729/- as on 31st March, 2011.
Emkay Fincap Limited (EFL) Ã a 100% subsidiary:
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC
Company. Your Company had subscribed to 50,00,000 9% Non Convertible
Redeemable preference Shares of Rs. 10 each of EFL on 25th July, 2007
for a period of five years. EFL has redeemed
40,00,000 9% Non Convertible Redeemable preference Shares of Rs. 10
each out of 50,00,000 9% Non Convertible Redeemable preference Shares
on 9th June, 2010z
After the above redemptions, the paid up capital of EFL is now Rs.
23,00,00,000/- divided into 2,20,00,000 equity shares of Rs. 10 each
and 10,00,000 9% Non-Convertible Redeemable preference Shares of Rs. 10
each. EFL has a networth of Rs. 31,11,43,847/- as on 31st March, 2011.
Emkay Insurance Brokers Limited (EIBL) Ã a 100% subsidiary:
Emkay Insurance Brokers Limited is registered with insurance Regulatory
and Development Authority (IRDA) as a Direct insurance Broker and
focuses on life and non-life businesses.
The Company has subscribed to 10,00,000 equity Shares of Rs. 10 each
issued by EIBL and EIBL has redeemed 10,00,000 9% optionally
Convertible Redeemable preference Shares of Rs. 10 each during the year
under review which was subscribed by the Company. The paid-up capital
of EIBL is now Rs. 4,00,00,000/- divided into 40,00,000 equity shares
of Rs.10 each. EIBL has a net worth of Rs. 1,65,34,725/- as on 31st
March, 2011.
Emkay Investment Managers Limited (EIML) - a 100% subsidiary
Your Company has incorporated a wholly owned subsidiary Company viz.
Emkay Investment Managers Limited on 8th June, 2010. EIML has obtained
its Business Commencement Certificate on 23rd August, 2010. EIML
commenced the business of portfolio Management Services with effect
from 1st January, 2011.
Your Company had subscribed to 25,00,000 equity Shares of the face
value of Rs. 10 each during the year under review. The paid-up capital
of EIML is now Rs. 2,50,00,000/- divided into 25,00,000 equity shares
of Rs. 10 each. EIML has a networth of Rs. 2,95,35,466/- as on 31st
March, 2011.
Ministry of Corporate Affairs, Government of India, New Delhi has
granted General exemption under Section 212 (8) of the Companies Act,
1956 vide their circular No. 5/12/2007-CL-III dated 8th February, 2011
subject to fulfillment of certain conditions as mentioned in their said
circular for not attaching the Balance Sheet of the Subsidiary
Companies for the year ended on 31st March, 2011.
Accordingly, the Board of Directors of the Company has passed a
resolution on 20th May, 2011 giving consent for not annexing the
balance sheet of the Subsidiary Companies i.e. Emkay Fincap Limited,
Emkay Commotrade Limited, Emkay Insurance Brokers Limited and Emkay
investment Managers Limited for the year ended 31st March, 2011.
The Consolidated Financial Statements presented by the
Company include financial results of its Subsidiary Companies. The
Company will make available the annual accounts of the Subsidiary
Companies and the related information to any member of the Company who
may be interested in obtaining the same. The annual accounts of the
said Subsidiary Companies are also available for inspection by any
member of the Company at the Corporate office situated at paragon
Centre, C-6, Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400
013.
The Statement containing financial information of the aforesaid
Subsidiaries is included in the Consolidated Accounts forming part of
the Annual Report of the Company.
13. Purchase of Office Premises:
The Company has been exploring various options for out right purchase
of premises for office use considering the heavy rental outflow
incurred on leased office premises. The Company has identified a
property situated at Ruby House, Senapati Bapat Marg, Dadar (W),
Mumbai-400 028. The Company has proposed to purchase the office
premises in two tranches by executing two agreements. The Company has
executed the first agreement with M/s. Mindset estates private Limited
and M/s. Ruby Mills Limited for purchase of office premises admeasuring
8531 sq.ft. carpet area situated at 7th floor, South east Wing, The
Ruby, Senapati Bapat Marg, J. K. Sawant Marg, Dadar (West), Mumbai-400
028. The Company will be executing the second agreement with M/s.
Mindset estates private Limited and M/s. Ruby Mills Limited for the
purchase of other part of the office premises situated at 7th floor,
South east Wing, The Ruby, Senapati Bapat Marg, J. K. Sawant Marg,
Dadar (West), Mumbai-400 028 at a later stage.
14. Employee Stock Option Schemes
With a view to remain a preferred employer, the Company has granted
Stock options under two Schemes viz. ESOP 2005 & ESOP 2007 to the
employees of the Company as well as that of the Subsidiary Companies.
(a) ESOP 2005
During the year 2006, the Company granted 381,250 options to the
employees on 28th January, 2006 (each option carrying entitlement for
one equity share of the face value of Rs. 10 each) at an exercise price
of Rs. 20 per option. These stock options shall vest on expiry of one
year from the date of grant and can be exercised during a period of
three years from the date of vesting.
During the Financial Year 2010-11, the Remuneration/ Compensation
Committee allotted 51,500 equity Shares to 46 employees under the ESOP
2005. These shares are listed on the Bombay Stock exchange Limited and
the National Stock exchange of India Limited.
Summary of ESOP 2005 as on 31st March 2011:
Total no. of stock options available 3,81,250
under the Scheme
exercise price Rs. 20/- per option
exercise period 3 years
Total no. of stock options granted under 3,81,250
the scheme
Stock options lapsed 1,42,000
Stock options vested but not exercised 18,750
Stock options exercised 2,20,500
outstanding Stock options 18,750
(b) ESOP 2007
The Company had granted 1,442,000 options on 17th January, 2008 to the
employees (each option carrying entitlement for one share of the face
value of Rs. 10 each) at an exercise price of Rs. 363 per option which
was later repriced at Rs. 63 per option. Further, the Company granted
244,000 options on 19th June, 2009, 207,500 options on 24th July, 2009,
1,00,000 options on 4th May, 2010 and 6,11,500 options on 27th July,
2010 to the employees under the said Scheme (each option carrying
entitlement for one equity share of the face value of Rs. 10 each) at
an exercise price of Rs. 63, Rs. 61, Rs. 93 and Rs. 77 respectively per
option.
During the Financial Year 2010-11, the Remuneration/ Compensation
Committee allotted 54,950 equity Shares to 27 employees under the ESOP
2007. These shares are listed on the Bombay Stock exchange Limited and
the National Stock exchange of India Limited.
Summary of ESOP 2007 as on 31st March 2011:
Total no. of stock options granted
under the Scheme 24,26,575
exercise price:
14,42,000 options Rs. 63/- per option
2,44,000 options Rs. 63/- per option
2,07,500 options Rs. 61/- per option
1,00,000 options Rs. 93/- per option
6,11,500 options Rs. 77/- per option
Exercise period 3 years.
Total no. of stock options granted
under the scheme 26,05,000
Stock options lapsed 5,35,500
Stock options vested but not exercised 2,59,500
Stock options exercised 60,250
outstanding Stock options 20,09,250
Further, the Remuneration/Compensation Committee allotted 1000 equity
Shares to one employee under the ESOP 2005 and 2,500 equity Shares to
an employee under the ESOP 2007 on 2nd May, 2011.
Consequent to the above allotments made under the aforesaid ESOP
Schemes, the paid up equity Capital of the Company has increased from
Rs. 24,32,08,000/- (as on 1st April, 2010) to Rs. 24,43,07,500/- as of
date. The disclosures required to be made in the Directors Report in
respect of the aforesaid ESOP Schemes, in terms of the SEBI (ESOP
Scheme) Guidelines, 1999 are contained in Annexure A forming part of
the Directors Report.
15. Employee Stock Option Plan - 2010 through trust route.
Your Company has introduced another ESOP Scheme viz. employee Stock
option Plan-2010 (ESOP-2010) through trust route. The said Scheme was
approved by the shareholders in the 16th Annual General Meeting of the
Company held on 30th August, 2010. Your Company has also set up an
employee welfare trust viz. "Emkay employee Welfare Trust (the Trust).
The new scheme will facilitate grant of option through Remuneration /
Compensation Committee and /or trust to the employees of the Company in
the form of stock options exercisable into equity shares. on the
recommendation of the Remuneration / Compensation Committee of your
Company, the trustee of the Emkay employee Welfare Trust have granted
5,55,000 stock options on 21st October, 2010 @ Rs. 93/- per option to
the eligible employees of the Company during the year under review.
Summary of ESOP 2010 (through trust route) as on 31st March 2011:
Total no. of stock options available under 24, 41,995
the Scheme
Exercise price -- 5,55,000 options Rs. 93/- per option
Exercise period 3 years
Total no. of stock options granted
under the 5,55,000
scheme
Stock options lapsed Nil
Stock options vested but not exercised Nil
Stock options exercised Nil
outstanding Stock options 5,55,000
Further, the Company granted 27,000 Stock options on 2nd May, 2011 to
the Employee(s) under the said Scheme (each option carrying entitlement
for one share of the face value of Rs. 10 each) at an exercise price of
Rs. 63 per option.
Details required to be provided under the Securities and exchange Board
of India (employees Stock options Scheme and employee Stock purchase
Scheme) Guidelines, 1999 are set out in Annexure "A" to this report.
16. Directors
At the 17th Annual General Meeting, Mr. G. p. Gupta and Mr. S. K.
Saboo retire by rotation and being eligible, offer themselves for
re-appointment.
The above re-appointments form part of the Notice of the forthcoming
17th Annual General Meeting and the respective resolutions are
recommended for your approval.
Porfiles of these Directors as required under Clause 49 of the Listing
Agreement are given in the Notice of the 17th Annual General Meeting.
17. Directors Responsibility Statement
pursuant to the provisions of Section 217 (2AA), of the Companies Act,
1956, the Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
policies and accounting standards have been followed consistently and
proper explanation relating to material departures, if any, have been
made;
b) Appropriate accounting policies have been selected and applied
consistently and that judgments and estimates 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, 2011 and of its profit for the year ended
on that date;
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
d) The annual accounts have been prepared on a going concern basis.
18. Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The information as required under Section 217(1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of particulars in the
Report of the Board of Directors) Rules, 1988 is given in Annexure B to
this report.
19. Corporate Governance
The Company adheres to the principles of Corporate Governance mandated
by the Securities and exchange Board of India and has implemented all
the prescribed stipulations. As required by Clause 49 VI of the Listing
Agreement, a detailed report on Corporate Governance forms part of this
Annual Report. The Auditors Certifcate on compliance with Corporate
Governance requirements by the Company is attached to the Corporate
Governance Report.
The declaration regarding compliance with Companys Code of Conduct for
Directors and Senior Management personnel and CEO/CFO certification are
furnished in Annexure 1 and Annexure 2 respectively to the
Corporate Governance Report.
20. Particulars of Employees
in accordance with the provisions of Section 217(2A) read with the
Companies (particulars of employees) Rules, 1975 as amended by the
Companies (particulars of employees) Amendment Rules , 2011, the names
and other particulars of employees are to be set out in the Directors
Report, as an addendum thereto. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
accounts as therein set out, are being sent to all members of the
Company excluding the aforesaid information about the employees. Any
member, who is interested in obtaining such particulars about
employees, may write to the Company Secretary at the Corporate office
of the Company.
21. Auditors
Messrs B. L. Sarda & Associates, Chartered Accountants, retire as the
Statutory Auditors of the Company at the ensuing Annual General Meeting
and offer themselves for re-appointment. A certificate from them has
been received to the effect that their re-appointment as Statutory
Auditors of the Company, if made, would be within the limits prescribed
under Section 224(1B) of the Companies Act, 1956. Further the Statutory
Auditors have confirmed that they have subjected themselves to the peer
review process of ICAI and hold a valid certificate issued by the Peer
Review Board of the said institute as required by Clause 41 of the
Listing Agreement.
The Audit Committee of the Board has recommended their re- appointment.
The appointment is subject to approval of the Members at the
forthcoming 17th Annual General Meeting.
22. Corporate Social Responsibility
The Ministry of Corporate Affairs has released a set of Voluntary
Guidelines on Corporate Social Responsibility (CSR) in December, 2009.
The Company has evolved a Corporate Social Responsibility policy and is
actively practicing the policy. The CSR Committee comprises of some of
Head of Departments viz. Mr. Rajesh Sharma - Chief operating officer,
Ms. Divya Gandhi - Head-General insurance and principal officer and Ms.
Ruth Singh - Head-Human Resources. The objectives of CSR policy are to
contribute to social and economic development of the communities in
which the Company operates, provide opportunities to employees to
contribute to society through service and contributions, monetary and
otherwise and to generate, through its CSR initiatives, a community
goodwill for the Company and help reinforce a positive and socially
responsible image of the Company as a corporate entity. provisions
will be made by CSR Committee from the annual allocation of the CSR
budget on the activities viz. Adoption of Village, education, Skill
Development, Vocational Training etc.
23. Acknowledgement
Your Directors would like to take this opportunity to express sincere
gratitude to their customers, bankers and other business associates for
the continued cooperation and patronage. Your Directors gratefully
acknowledge the ongoing co-operation and support provided by the
Government, Regulatory Bodies and the Stock exchanges.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. The Directors
also wish to express their gratitude to the valued shareholders for
their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Place : Mumbai
Date : 20th May, 2011
Mar 31, 2010
The Directors have pleasure in presenting the Sixteenth Annual Report
of your Company and the Audited Accounts for the year ended on 31st
March, 2010.
1. FINANCIAL RESULTS
An overview of the financial performance of your Company along with its
subsidiaries for the year 2009-10 is as under:
(Rs. in lac)
Name of the Revenues Profit/(Loss) Profit/
Company before (Loss)
Interest, after Tax
Depreciation
and Tax
Emkay Global
Financial
Services Ltd 11,556.36 1,964.19 839.61
Emkay Fincap
Limited 417.10 169.38 120.23
Emkay Commotrade
Limited 636.91 156.56 97.10
Emkay Insurance
Brokers
Limited 101.05 (163.13) (116.98)
Aggregate 12,711.42 2,127.00 939.96
An overview of the standalone financial performance of your Company for
the year 2009-10 is as under:
(Rs. in lac)
Particulars 31.03.2010 31.03.2009
Total Income 11,556.36 9,109.61
Profit before Interest,
Depreciation and Tax 1,964.19 90.18
Depreciation and Amortization 463.30 626.91
Interest 151.64 308.10
Profit /(Loss) before Taxation 1,349.25 (844.83)
Provision for Taxation
-Current Tax 600.00 93.00
-Deferred Tax Charges/(Benefit) (91.76) (372.11)
Particulars 31.03.2010 31.03.2009
-Fringe Benefit Tax - 33.14
-(Excess)/Short Provision for
Taxation of earlier years 1.40 (3.30)
Profit/(Loss) after Taxation 839.61 (595.56)
Add: Balance brought forward 1,731.30 2,326.86
Amount available for appropriations 2,570.91 1,731.30
Appropriations
-Proposed Dividend 243.21 -
-Provision for Tax on Dividend 40.39 -
-Transfer to General Reserves 80.00 -
Balance carried forward 2,207.31 1,731.30
2. DIVIDEND
Your Directors are pleased to recommend a dividend of Re. 1 per equity
share. This dividend is subject to approval of the members at the
forthcoming 16th Annual General Meeting.
3. TRANSFER TO RESERVES
Your Company proposed to transfer an amount of Rs 80 lac to the General
Reserve out of the amount available for appropriation. An amount of
Rs. 2,207.31 lac is proposed to be retained in the Profit & Loss
Account.
4. REVIEW OF OPERATIONS
The market environment in the financial year 2009 was challenging and
began in the midst of great uncertainty with regard to the likely
impact of the global financial crisis which had erupted in the second
half of 2008. The various stimulus measures which were introduced by
the Indian Government towards the end of 2008 played an important role
in maintaining liquidity in the financial system thereby restraining
the spill over impact on the Indian economy. Recovery signs made
themselves felt in the second half of the financial year 2009. Emerging
markets in general and India in particular, are leading the way on the
road to recovery, with strong growth rates based on robust economic
fundamentals.
Your Companys ability to neutralize cost increase, enhanced risk
management system and improved margins, together with revival of
financial markets particularly in India helped in increasing the
profitability. During the year under review, your Company recorded a
total income of Rs. 11,556.36 lac as compared to Rs. 9,109.61 lac in
the previous financial year, up by 26.86 %. The Net Profit for the same
period stands at Rs. 839.61 lac as against a Net Loss of Rs. 595.56
lac.
5. MEMBERSHIP OF CURRENCY DERIVATIVE SEGMENT OF MCX STOCK EXCHANGE
LIMITED
During the year under review, your Company had applied for the
membership of Currency Derivative segment of MCX Stock Exchange Limited
and acquired the membership on 29th October, 2009.
6. MANAGEMENTÃS DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of
your Company and its businesses is given in the ManagementÃs Discussion
and Analysis, which forms part of the Annual Report.
7. ALTERATION OF MAIN OBJECT CLAUSE OF THE COMPANY
During the year under review, your Company has altered its main object
clause of the Memorandum of Association to carry out the business of
Investment Banking with the view to diversify its business activities
in new areas of operation in addition to existing business activities.
Your Company had sought your approval through postal ballot and has
received the Certificate of Registration of the Special Resolution,
confirming Alteration of Object Clause from the Registrar of Companies,
Mumbai on 12th January, 2010.
8. PUBLIC DEPOSITS
During the year, your Company has not accepted and/or renewed any
public deposits in terms of the provisions of Section 58A of the
Companies Act, 1956 read with the Companies (Acceptance of Deposits)
Rules, 1975.
9. SUBSIDIARIES
Emkay Commotrade Limited (ECL) Ã a 100% subsidiary
Emkay Commotrade Limited offers commodity futures trading to
its clients. It is the member of three major commodity exchanges viz.
Multi Commodity Exchange of India Limited (MCX), National Commodity and
Derivates Exchange Limited (NCDEX) and National Spot Exchange Limited
(NSEL). ECL has a networth of Rs. 895.35 lac as on 31st March, 2010.
Emkay Fincap Limited (EFL) Ã a 100% subsidiary
Emkay Fincap Limited is a RBI registered Non Deposit taking NBFC
Company. EFL has a networth of Rs. 3318.14 lac as on 31st March, 2010.
Emkay Insurance Brokers Limited (EIBL) Ã a 100% subsidiary
Emkay Insurance Brokers Limited is registered with the Insurance
Regulatory and Development Authority (IRDA) as a Direct Insurance
Broker and focuses on life and non-life businesses. EIBL has a networth
of Rs. 109.49 lac as on 31st March, 2010 and has increased its
Authorised Capital from Rs. 200 lac to Rs. 500 lac. Your Company has
subscribed to 1,000,000, 9% Optionally Convertible Redeemable
Preference Shares of the face value of Rs. 10 each and 1,000,000 Equity
Shares of Rs. 10 each issued by EIBL. The paid-up capital of EIBL is
now Rs. 400 lac.
Your Company has obtained exemption from the Ministry of Corporate
Affairs, Government of India, New Delhi, under Section 212(8) of the
Companies Act, 1956, from annexing to this report, the Annual Reports
of the above subsidiary companies viz. Emkay Commotrade Limited, Emkay
Fincap Limited and Emkay Insurance Brokers Limited for the year ended
on 31st March, 2010. The Consolidated Financial Statements presented by
your Company include the financial results of its subsidiary companies.
Your Company will make available the annual accounts of its subsidiary
companies and the related information to any member of the Company who
may be interested in obtaining the same. The annual accounts of the
said subsidiary companies are also available for inspection by any
member of the Company at the Corporate Office situated at Paragon
Centre, C-6, Ground Floor, Pandurang Budhkar Marg, Worli, Mumbai - 400
013.
Pursuant to approval granted under Section 212(8), the Statement
containing financial information of the aforesaid subsidiaries is
included in the Consolidated Accounts forming part of the Annual
Report.
10. INCORPORATION OF WHOLLY-OWNED SUBSIDIARY COMPANY
Your Company has proposed to float a wholly-owned subsidiary in the
name of ÃEmkay Investment Managers Limitedà to carry on the business of
Portfolio Management Services (PMS)/Wealth Management Services (WMS).
Further, your Company has proposed to transfer its PMS/WMS division to
its proposed wholly-owned subsidiary i.e. Emkay Investment Managers
Limited with a view that the new company will be able to serve its
potential clients more effectively.
11. EMPLOYEE STOCK OPTION SCHEMES
With a view to remain a preferred employer, your Company has granted
Stock Options under two schemes viz. ESOP 2005 & ESOP 2007 to the
employees of the Company as well as that of the subsidiary companies.
(a) ESOP 2005
During the year 2006, your Company had granted 381,250 Options to the
employees on 28th January, 2006 (each Option carrying entitlement for
one share of the face value of Rs. 10 each) at an exercise price of Rs.
20 per option. These stock options shall vest on expiry of one year
from the date of grant and can be exercised during a period of three
years from the date of vesting.
During the Financial Year 2009-10, the Remuneration/ Compensation
Committee allotted 39,750 equity shares to 28 employees under the ESOP
2005. These shares are listed on the Bombay Stock Exchange Limited and
the National Stock Exchange of India Limited.
Summary of ESOP 2005 as on 31st March, 2010:
Total no. of Stock Options available
under the Scheme 3,81,250
Exercise price Rs. 20/- per Option
Exercise period 3 years
Total no. of Stock Options
granted under the Scheme 3,81,250
Stock Options lapsed 1,41,000
Stock Options vested but not exercised 53,000
Stock Options exercised 1,87,250
Outstanding Stock Options 53,000
(b) ESOP 2007
Your Company had granted 1,442,000 Options on 17th January, 2008 to the
employees (each Option carrying entitlement for one share of the face
value of Rs. 10 each) at an exercise price of Rs. 363 per Option which
was later repriced at Rs. 63 per Option. Further, your Company granted
244,000 Options on 19th June, 2009 and 207,500 Options on 24th July,
2009 to the employees under the said Scheme (each Option carrying
entitlement for one share of the face value of Rs. 10 each) at an
exercise price of Rs. 63 and Rs. 61 respectively per Option.
During the financial year 2009-10, the Remuneration/ Compensation
Committee allotted 2,800 Equity Shares to four employees under the ESOP
2007. These shares are listed on the Bombay Stock Exchange Limited and
the National Stock Exchange of India Limited.
Summary of ESOP 2007 as on 31st March, 2010:
Total no. of Stock Options granted
under the Scheme 24,26,575
Exercise Price:
14,42,000 Options Rs. 63/- per Option
2,44,000 Options Rs. 63/- per Option
2,07,500 Options Rs. 61/- per Option
Exercise period 3 years
Total no. of Stock Options granted
under the Scheme 18,93,500
Stock Options lapsed 3,15,500
Stock Options vested but not exercised 1,06,350
Stock Options exercised 11,300
Outstanding Stock Options 15,66,700
Further, the Remuneration/Compensation Committee allotted 45,500 equity
shares to 39 employees under the ESOP 2005 and 30,900 equity shares to
16 employees under the ESOP 2007 on 4th May, 2010.
Consequent to the above allotments made under the aforesaid ESOP
Schemes, the paid up equity capital of the Company has increased from
Rs. 24,27,82,500/- (as on 1st April, 2009) to Rs. 24,39,72,000/- as of
date. The disclosures required to be made in the Directors Report in
respect of the aforesaid ESOP Schemes, in terms of the SEBI (Employees
Stock Option Scheme) Guide lines, 1999 are contained in Annexure A
forming part of the Directors Report.
Further, your Company granted 1,00,000 Stock Options on 4th May, 2010
to the Employee(s) under the said Scheme (each Option carrying
entitlement for one share of the face value of Rs. 10 each) at an
exercise price of Rs. 93 per Option.
12. DIRECTORS
At the 16th Annual General Meeting, Mr. R. K. Krishnamurthi and Mr. G.
C. Vasudeo retire by rotation and being eligible, offer themselves for
re-appointment.
The above re-appointments form part of the Notice of the forthcoming
16th Annual General Meeting and the respective resolutions are
recommended for your approval.
Profiles of these Directors as required under Clause 49 of the Listing
Agreement are given in the Notice of the 16th Annual General Meeting.
13. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that:
a) in the preparation of the annual accounts, the applicable accounting
policies and accounting standards have been followed consistently and
proper explanation relating to material departures, if any, has been
made;
b) appropriate accounting policies have been selected and applied
consistently and that judgments and estimates made are
reasonable and prudent so as to give a true and fair view of the state
of affairs of your Company as on 31st March, 2010 and of its profit for
the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
d) the annual accounts have been prepared on a going concern basis.
14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information as required under Section 217(1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988 is given in Annexure B to
this report.
15. CORPORATE GOVERNANCE
Your Company adheres to the principles of Corporate Governance mandated
by the Securities and Exchange Board of India and has implemented all
the prescribed stipulations. As required by Clause 49 VI of the Listing
Agreement, a detailed report on Corporate Governance forms part of this
Annual Report. The Auditorsà Certificate on compliance with corporate
governance requirements by your Company is attached to the Corporate
Governance Report.
The declaration regarding compliance with your Companys Code of
Conduct for Directors and Senior Management Personnel and CEO/CFO
certification are furnished in Annexure Ã1Ã and Annexure Ã2Ã
respectively to the Corporate Governance Report.
16. PARTICULARS OF EMPLOYEES
In accordance with the provisions of Section 217(2A) read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are to be set out in the Directorsà Report, as
an addendum thereto. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956,
the Report and accounts as therein set out, are being sent to all
members of your Company excluding the aforesaid information about the
employees. Any member, who is interested in obtaining such particulars
about employees, may write to the Company Secretary at the Corporate
Office of the Company.
17. AUDITORS
Messrs B. L. Sarda & Associates, Chartered Accountants, retire as the
Statutory Auditors of your Company at the ensuing Annual General
Meeting and offer themselves for re-appointment. A certificate from
them has been received to the effect that their re-appointment as
Statutory Auditors of your Company, if made, would be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956. Further
the Statutory Auditors have confirmed that they have subjected
themselves to the peer review process of ICAI and hold a valid
certificate issued by the ÃPeer Review Boardà of the said Institute as
required by Clause 41 of the Listing Agreement.
The Audit Committee of the Board has recommended their re-appointment.
The appointment is subject to approval of the Members at the
forthcoming 16th Annual General Meeting.
18. ACKNOWLEDGEMENT
Your Directors would like to take this opportunity to express sincere
gratitude to their customers, bankers and other business associates for
continued cooperation and patronage. Your Directors gratefully
acknowledge the ongoing co-operation and support provided by the
Government, Regulatory Bodies and the Stock Exchanges.
Your Directors place on record their deep appreciation for the
exemplary contribution made by employees at all levels. The Directors
also wish to express their gratitude to the valued shareholders for
their unwavering trust and support.
On behalf of the Board of Directors
Krishna Kumar Karwa Prakash Kacholia
Managing Director & CFO Managing Director
Mumbai
Friday, 28th May, 2010