(Amount in Rs.)

Particulars                    Current Year       Previous Year

facility extended to a subsidiary ESI demand in dispute 31,06,450 31,06,450 (Amount Paid under protest Rs. 12,42,581 (P.Y. Rs. 7,76,613)

1.1 In the opinion of the board of Directors and to the best of their knowledge and belief the realizable value of Current Assets, Loans and Advances in ordinary course of business is not less than the value stated in the Balance Sheet.

1.2 Fixed Deposit with Schedule Banks includes Rs. 120,65,88,885 (P.Y. Rs. 101,71,42,220) under lien in favor of the bank as margin deposit for the guarantees issued/credit facilities or otherwise. And Rs. 46,38,75,000 (P.Y. Rs. 66,15,00,000) pledge with stock exchanges as margin, which does not include margins paid by client constituents on their own behalf.

1.3 Provision for doubtful debts of Rs. 10,45,093 (Previous Year Rs. 1,33,786) is net of bad debts written off Rs. 4,16,25,106 (Previous Year Rs. 1,75,23,970). No provision has been made in respect of certain overdue sundry debtors amounting to Rs. 35,68,90,982 (P. Y. Rs. 30,82,29,412) since the company has taken suitable measures to recover the said dues including filling of legal cases wherever considered appropriate.

1.4 SEGMENTACCOUNTING

a. Business Segment

i) The business segment has been considered as the primary segment.

ii) The GroupRs.s primary business segments are reflected based on principal business activities, the nature of service, the differing risks and returns, the organization structure and the internal financial reporting system.

iii) The CompanyRs.s primary business comprises of dealing in shares, securities and derivatives either on its own or on behalf of its constituents and other related ancillary services.

Accordingly the primary business segment has been identified as below:

- Capital Markets: comprises of brokerage income earned on secondary market transactions done on behalf of clients, services rendered as depository participant and proprietary trading in securities and derivatives.

b. Geographical Segment

The Company operates in one Geographical Segment namely "within India" and hence no separate information for geographic segment wise disclosure is required

1.5 RELATED PARTY DISCLOSURES

The following are the details of transactions with related parties as defined in the Accounting Standard - 18 of Related Party Disclosures issued by the Institute of Chartered Accountants of India.

1) Name of Related Parties and description of relationship:

A. Key Management Personnel

a) Sh. S.C Aggarwal (Chairman & Managing Director)

b) Sh. Mahesh C. Gupta (Vice-Chairman & Managing Director)

c) Sh. Ajay Garg (Whole time Director)

d) Sh. Pradeep Kumar (Whole time Director)

e) Sh. Anurag Bansal (Whole time Director)

f) Sh. Rakesh Gupta* (Whole time Director)

*resigned during the year

B. Companies where control exists:

a) SMC Comtrade Limited (Subsidiary)

b) SMC Insurance Brokers Private Limited (Subsidiary)

c) SMC ARC Limited (Subsidiary)

d) SMC Investments and Advisors Ltd. (Subsidiary)

e) Moneywise Financial Services Private Limited (Subsidiary)

f) SMC Capitals Limited (Subsidiary)

g) SMC Comex International DMCC (Subsidiary)

h) Moneywise Finvest Ltd. (Subsidiary)

(Control the composition of Board of Directors)

i) SMC Finvest Ltd. (Subsidiary)

(Control the composition of Board of Directors)

1.5 During the year, the company has invested Rs. 4,00,00,000 (P.Y. Rs. 1,00,00,000) in its wholly owned subsidiary SMC Capitals Ltd by way of subscribing to 40,00,000 equity shares(P.Y. 5,00,000 equity shares) of face value of Rs. 10 each at par (Previous year at share premium of Rs. 10 each)

1.6 Statement of Stock in Trade as at the Balance sheet dated is annexed and marked as "Annexure - A"

1.7 Previous yearRs.s figures have been rearranged and re-grouped to confirm to classification as suggested by the Revised Schedule VI notified under the companies act, 1956. Figures have been rounded off to the nearest rupees.

1.8 The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956 subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.