DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to present the 18th Annual Report along with the Audited Accounts for the Financial Year ended on 31st March, 2012. INFORMATION ON STATUS OF AFFAIRS OF THE COMPANY Information on the operational, financial performance, etc. of the Company is given in the Management Discussion and Analysis Report, which is annexed to this Report and it has been prepared in accordance with Clause 49 of the Listing Agreement. DIVIDEND Keeping in mind, the lower volumes and the resultant lower profitability for the year and the consequent need to maintain the liquid funds of the Company, the Directors have decided not to recommend any dividend this year. FIXED DEPOSITS As on 31st March, 2012, the company has neither any unclaimed nor any overdue amount of any deposit pursuant to the provisions of Non-Banking Financial Companies (Reserve Bank) Directions, 1997 and the company has not accepted any deposits during the financial year. ISSUE OF BONUS SHARES, SUB-DIVISION/SPLIT IN FACE VALUE OF EQUITY SHARES: The Board of Director at its meeting held on 18th June, 2012, has decided to sub-divide/split the face value of equity shares of face value of Rs. 10/- each into 5 (Five) equity shares of the face value of Rs. 2/- each in order to enhance the liquidity in the capital market, widen shareholder base and to make the shares affordable to the small investors. If sub-division of face value of share as recommended by the Board of Directors is approved at the Annual General Meeting, the effect will be given to those shareholders whose names appear as beneficial owner as on Record Date (End of the Day) as per the beneficial owners position to be downloaded from NSDL & CDSL in respect of the shares held in electronic form and as members in the Register of Members of the Company after giving effect to all valid share transfer in physical form lodged with the Company/RTA on or before the Record Date (End of the Day) to be determined by the Board for the said purpose. Further, the Board of Directors of your Company has approved to issue fully paid up bonus share to the members of the company in ratio of one equity share for every one equity share held by members, by capitalizing Reserve and Surplus/Securities Premium Reserve or such other accounts as are permissible to be utilized for the purpose, as per the audited accounts of the Company for the financial year ended March 31st, 2012, of the Company to such Members whose name shall appear on its Register of Members or in the respective beneficiary account with their respective Depository Participants on the 'Record Date' to be determined by the Board for the said purpose. CHANGE IN SHARE CAPITAL On 30th November, 2011, the Company has issued and allotted 4,67,371 equity shares to Sanlam International Investment Partners Limited of face value of Rs. 10/-each at a premium of Rs. 992.95/- each through Private Placement on Preferential basis. Consequently, the Paid up equity share capital of the Company rose to 10,945,758 equity shares of face value of Rs. 10/-each from 1 0,478,387 equity shares of face value of Rs. 10/- each. On 29th June, 2012, the Company has issued and allotted further 3,67,687 equity shares to Sanlam International Investment Partners Limited of face value of Rs.10/- each at a premium of Rs. 1105.10/- each through Private Placement on Preferential basis. Consequently, the paid up equity share capital of the Company rose to 11,313,445 equity shares of face value of Rs. 10/- each from 10,945,758 equity shares of face value of Rs. 10/- each. DIRECTORS Mr. Rakesh Gupta, Whole time Director of the Company, has resigned from the office of Whole-time Director including Directorship thereof w.e.f. 9th March, 2012. Mr. Deba Prasad Roy, Independent and Non- Executive Director of the company, has resigned from the office of the Director w.e.f. 19th October, 2011. Mr. Johannes Hendrik Petrus Van Der Merwe, appointed as Non-Executive Director of the Company w.e.f. 16th November, 2011. Mr. K. M. Agarwal, Independent & Non Executive Director of the company, who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Ajay Garg, Whole-time Director of the company, who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Mr. Anurag Bansal, Whole-time Director of the company, who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, your Directors, based on the representation received from the Operating Management, and after due enquiry, confirm that: (i) In the preparation of the annual accounts for the financial year ended on 31st March, 2012, the applicable Accounting Standards have been followed and there are no material departures from the same; (ii) The selected accounting policies were applied consistently and the Directors 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 as at 31st March, 2012 and of the profit of the Company for that period. (iii) 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 fraud and other irregularities; (iv) The annual accounts have been prepared on a 'going concern' basis. CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement, the report on Corporate Governance together with the Auditors' Certificate on compliance in this regard and Managing Director's declaration regarding compliance of Code of Conduct by Board Members and Senior Management Personnel is attached and forms part of this Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report as required under the Listing Agreements with the Stock Exchanges is annexed and forms part of the Directors' Report. AUDITORS M/s Atul & Rajinder, Chartered Accountants, who retire at the ensuing Annual General Meeting, are being eligible, for re-appointment as Statutory Auditors of the Company. They have furnished a Certificate to the effect that their re-appointment if made, would be within the limits prescribed under section 224 (1B) of the Companies Act, 1956. The Board of Directors recommended appointment of M/s Atul & Rajinder, Chartered Accountants, as Statutory Auditors of the Company for the financial year 2012-13. LISTING AGREEMENT(S) The securities of the Company are listed on Delhi Stock Exchange Ltd. (DSE), The Calcutta Stock Exchange Limited (CSE), Ludhiana Stock Exchange Ltd. (LSE), Ahmedabad Stock Exchange Ltd. (ASE) and The Gauhati Stock Exchange Limited (GSE). The Company has paid Annual Listing Fee of all the five stock exchanges. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS As on 31st March, 2012 following nine companies are the subsidiaries of the Company: 1. SMC Comtrade Ltd. (Commodity Broking) 2. SMC Insurance Brokers Private Ltd. (Direct Insurance Broker) 3. SMC Comex International DMCC (Commodity Broking) 4. SMC Investments and Advisors Ltd. (Formerly Sanlam Investments and Advisors (India) Ltd. prior to that SMC Wealth Management Services Ltd.) (Wealth Management & PMS) 5. Moneywise Financial Services Private Ltd. (NBFC - Margin Financing in Secondary Market and in Public Offerings of IPOs, FPOs , Bonds etc.) 6. SMC Capitals Ltd. (Category-I Merchant Banker) 7. SMC ARC Ltd. (Proposed ARC Business) 8. SMC Finvest Limited (Erstwhile Sanlam Investment Management (India) Limited became subsidiary w.e.f. 16th February,2012 9. Moneywise Finvest Limited (Erstwhile Sanlam Trustee Company (India) Limited became subsidiary w.e.f. 11th January, 2012 There has been no material change in the nature of business of the subsidiaries. The Company has prepared Consolidated Financial Statement in strict compliance with the accounting standards and listing agreement(s) executed with the stock exchanges where the shares of the Company are currently listed. In compliance with Clause 32 of the Listing Agreement, audited consolidated financial statements form part of this annual report. As per Section 212 of the Companies Act, 1956, we are required to attach the Directors' Report, Balance Sheet and Profit and Loss Account of our subsidiaries to our annual report. The Ministry of Corporate Affairs, Government of India vide its General Circular No. 2/2011 dated 8th February, 2011 has provided an exemption to companies from complying with Section 212 provided such companies publish the audited consolidated financial statements in the annual report. As we have published the annual consolidated financial statements in the annual report 2011-12, therefore it does not contain the financial statements of our subsidiaries. The statement pursuant to Section 212 of the Companies Act, 1956 read with General Circular No. 2/2011 dated 8th February, 2011, containing information on brief financial details of the each subsidiary for the financial year ended on 31-03-2012 has been disclosed in this annual report. The accounts of the subsidiary companies and the related detailed information will be made available to any shareholder of the holding as well as subsidiary companies seeking such information at any point of time and are also available for inspection by the members of the Company as well as its subsidiary companies at the registered office of the Company and its subsidiaries concerned. DETAILS AND INFORMATION AS REQUIRED UNDER SECTION 217 (1) (d) OF THE COMPANIES ACT, 1956 No material changes and commitments, have taken place between the end of the financial year of the company to which the balance sheet relates and the date of report, which affects the financial position of the company. CON SERVATI ON OF ENERGY, TECH N OLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO There are no foreign exchange earnings during the year under review. However, foreign exchange outgo of Rs. 44,310,000 has been reported during the year on account of Management and Advisory Services. PARTICULARS OF EMPLOYEES Statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 and the rules framed there under forms part of this report. However, as per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the reports and accounts are being sent to all the members and others entitled thereto excluding the statement of particulars of employees under section 217(2A) of the Companies Act, 1956. Any member interested in obtaining a copy of the statement may write to the Company Secretary of the Company at the registered office of the Company. ACKNOWLEDGMENT Your Board of Directors wish to express its grateful appreciation for the valuable support and co-operation received from sub-brokers, business associates, vendors, bankers, financial institutions, investors, shareholders, registrar and share transfer agent, media and other business affiliates. The Board places on record its sincere appreciation towards the Company's valued customers for the support and confidence reposed by them in the organization and the stakeholders for their continued co-operation and support to the Company and looks forward to the continuance of this supportive relationship in future. Your Directors also place on record their deep sense of appreciation for the devoted services of the employees during the year under review. For and on Behalf of the Board sd/- S. C. Aggarwal (Chairman & Managing Director) Place: New Delhi Date: 29th June, 2012 |