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Directors Report of Emkay Global Financial Services Ltd.

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

 
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