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Directors Report of Emkay Global Financial Services Ltd.

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 employee’s 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 “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 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. 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 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 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 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 (“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 (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 ‘Peer 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 “Annexure F”

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 “Annexure E ”and 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 employee’s 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 “Annexure C“ 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 “Annexure C” 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 Auditors’ 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 “Annexure D”-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 – 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) – 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) – 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) – 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. MANAGEMENT’S DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and future outlook of your Company and its businesses is given in the Management’s 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) – 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) – 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) – 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 ‘Emkay Investment Managers Limited’ 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 Auditors’ 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 ‘1’ and Annexure ‘2’ 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 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 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 ‘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 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

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