NOTICE Notice is hereby given that the Eighteenth Annual General Meeting of S.M.I.L.E. MICROFINANCE LIMITED will be held on Friday, the 23 rd August, 2013 at 10.00 A.M. at Aspni Inn, No.77, Jawaharlal Nehru Road, 100 Feet Road, Vadapalani, Chennai 600 026, to transact the following business: ORDINARY BUSINESS 1) To receive, consider and adopt the Audited Profit and Loss Account for the year ended 31 st March 2013, the Balance Sheet as at that date and the Auditors and the Directors Report thereon; 2) To appoint a Director in the place of Mr. A. Tamilarason, Director, who retires by rotation and being eligible, offers himself for re-appointment; 3) To appoint Statutory Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, and to authorize the Board of Directors of the Company to fix their remuneration. M/s Victoria Mathews & Santhakumar, Chartered Accountants, Chennai, the retiring Statutory Auditors are eligible for reappointment. SPECIAL BUSINESS 4) To consider and pass with or without modification, the following Resolution as an ORDINARY RESOLVED THAT pursuant to Section 228 and other applicable provisions, if any, of the Companies Act, 1956, the Board of Directors of the Company be and are hereby authorized to appoint external Auditors, from time to time, to carry out the audits in respect of the Company s accounts at its Branches, in consultation with the Company s Statutory Auditors, on such terms and conditions and on such remuneration as may be fixed by the Board. 5) To consider and pass with or without modification, the following Resolution as an ORDINARY RESOLVED that Mr. Rajan Samuel, who was appointed as an Additional Director (in the capacity of Independent Director) of the Company under Section 260 of the Companies Act, 1956, by the Board of Directors at its meeting held on 30 th November, 2012, whose term expires at this Annual General Meeting and in respect of whom the company has received a notice under Section 257 of the Companies Act, 1956 from a member proposing his candidature for the office of Director be and is hereby appointed as a Director (in the capacity of Independent Director) of the Company liable to retire by rotation. 6) To consider and pass with or without modification, the following Resolution as an ORDINARY RESOLVED that Mr. P. Murali Srinivas, who was appointed as an Additional Director (in the capacity of Independent Director) of the Company under Section 260 of the Companies Act, 1956, by the Board of Directors at its meeting held on 7 th March, 2013, whose term expires at this Annual General Meeting and in respect of whom the company has received a notice under Section 257 of the Companies Act, 1956 from a member proposing his candidature for the office of Director be and is hereby appointed as a Director (in the capacity of Independent Director) of the Company liable to retire by rotation. 4
7) To consider and pass with or without modification, the following Resolution as an ORDINARY RESOLVED THAT pursuant to Sections 198, 269, 309 and Section 310 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956 (including any Statutory modification(s) or reenactment thereof for the time being in force) consent of the Company be and is hereby accorded to the Board of Directors for the revision in remuneration of Mr. M. Sathiyamoorthi, Chairman & Managing Director of the Company with effect from 01-04-2013 as detailed below: Salary: Rs.1,34,000 /- p.m. Rent free accommodation: Rs.11,000 /- p.m. RESOLVED FURTHER THAT the Performance Incentive of Rs..1,50,000/- for the Financial Year 2012 2013 to Mr. M. Sathiyamoorthi, Chairman & Managing Director of the Company be and is hereby approved. RESOLVED FURTHER THAT all other terms and conditions as approved by the Board of Directors at their meeting held on 15 th September, 2009 and confirmed by the Shareholders at their Annual General Meeting held on 10 th October, 2009 shall remain unchanged. RESOLVED FURTHER THAT in the event of absence or inadequacy of profits in any financial year, Mr. M. Sathiyamoorthi, Chairman & Managing Director shall be paid the same remuneration as stated herein above, as minimum remuneration subject to the upper limit, if any, prescribed under Schedule XIII to the Companies Act, 1956, (including any statutory modification or re-enactment thereof, for the time being in force), as may be applicable from time to time. RESOLVED FURTHER THAT in the event of any statutory amendment(s) or modification(s) or relaxation(s) by the Central Government to Schedule XIII of the Companies Act, 1956, the Board of Directors be and is hereby authorised to vary or increase the remuneration including salary, commission, perquisites, allowances, etc, within such prescribed limit of ceiling in order to give effect to such modification(s), relaxation(s) or variation(s) without any further reference to the Company in General Meeting. RESOLVED FURTHER THAT Mr. M. Sathiyamoorthi, Chairman & Managing Director and the Company Secretary of the Company be and are hereby authorized severally to file necessary forms with Registrar of Companies and to do all acts and deeds in this connection. RESOLVED FURTHER THAT the Board of Directors or a Committee thereof be and is hereby authorised to vary or modify any of the above terms & conditions including alter, vary or increase the salary, grade and other remuneration or Perquisites by whatever name called within the limits prescribed under Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 without requiring any further resolution or consent of or reference to the Members and to take all necessary steps, actions, which are incidental and consequential to give effect to the above Resolution. 8) To consider and pass with or without modification, the following Resolution as an ORDINARY RESOLVED that pursuant to Sections 198, 269, 309 and Section 310 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956 (including any Statutory modification(s) or reenactment thereof for the time being in force) consent of the Company be and is hereby accorded to the Board of Directors for the revision in remuneration of Mr. A. Tamilarason, Whole-Time Director of S.M.I.L.E. MICROFINANCE LIMITED with effect from 01-04-2013 at a salary of Rs.1,00,000 /- per month. 5
RESOLVED FURTHER THAT the Performance Incentive of Rs.1,12,500/- for the Financial Year 2012 2013 to Mr. A. Tamilarason, Director be and is hereby approved. RESOLVED FURTHER THAT in the event of absence or inadequacy of profits in any financial year, Mr. A. Tamilarason, Whole-time Director shall be paid the same remuneration as stated herein above, as minimum remuneration subject to the upper limit, if any, prescribed under Schedule XIII to the Companies Act, 1956, (including any statutory modification or re-enactment thereof, for the time being in force), as may be applicable from time to time. RESOLVED FURTHER THAT in the event of any statutory amendment(s) or modification(s) or relaxation(s) by the Central Government to Schedule XIII of the Companies Act, 1956, the Board of Directors of the Company be and is hereby authorised to vary or increase the remuneration including salary, commission, perquisites, allowances, etc, within such prescribed limit of ceiling in order to give effect to such modification(s), relaxation(s) or variation(s) without any further reference to the Company in General Meeting. RESOLVED FURTHER THAT Mr. M. Sathiyamoorthi, Chairman & Managing Director and the Company Secretary of the Company be and are hereby authorized severally to file necessary forms with Registrar of Companies and to do all acts and deeds in this connection. RESOLVED FURTHER THAT the Board of Directors or a Committee thereof be and is hereby authorised to vary or modify any of the above terms & conditions including alter, vary or increase the salary, grade and other remuneration or Perquisites by whatever name called within the limits prescribed under Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 without requiring any further resolution or consent of or reference to the Members and to take all necessary steps, actions, which are incidental and consequential to give effect to the above Resolution. - By order of the Board For S.M.I.L.E. MICROFINANCE LIMITED Chennai - 600083 Date: 30/05/2013 Sd/- M. SATHIYAMOORTHI CHAIRMAN & MANAGING DIRECTOR NOTES: 1. The relative Explanatory Statement in respect of business under Item No. 4 to 8 of the Notice is annexed hereto. 2. A member entitled to attend and vote is entitled to appoint a proxy to attend and on poll, to vote instead of himself. Such a proxy need not be a member of the Company. Proxies in order to be effective must be received by the Company not less than 48 hours before the meeting. 3. Your Company supports Green Initiatives of the Ministry of Corporate Affairs (MCA) and proposes to send documents like Notices of General Meeting, Audited Financial Statements, Directors Report, Auditors Report and other documents / communications through electronic mode to the E-mail address(es) provided by the Shareholders. Shareholders opting to receive the communication to their E-mail ID may please furnish their E-mail ID to the Company Secretary s E-mail ID: cosec@smileltd.in Please note that the Annual Report will also be available on the Company s Website: www.smileltd.in for your ready reference. While sending your request for receiving the Company s communication to your E-mail ID, please mention clearly your Folio Number, Name and Number of Shares held. 6
4. EXPLANATORY STATEMENT PURSUANT TO SECTION 173 (2) OF THE COMPANIES ACT, 1956 SPECIAL BUSINESS Item No. 4 This is an enabling resolution to appoint External Auditors to conduct Audit of our Company s accounts at its Branches, in consultation with Statutory Auditors of the Company for the Financial Year 2013-14. The Board recommends passing of this Resolution. None of the Directors is concerned or interested in the proposed Resolution. Item No.5 The Board of Directors at its meeting held on 30 th November, 2012 appointed Mr. Rajan Samuel, as an Additional Director (in the capacity of Independent Director) on the Board of the Company. Mr. Rajan Samuel, qualified as a Bachelor of Commerce & Administration and holding Diploma and done Certificate Programs in Organisational Development, Microfinance and Islamic Finance is a strategic, international specialist in Microfinance and experienced in managing economic development & Microfinance programs in Asia, Africa, Eastern / Central Europe by working at senior levels for nearly 30 years and has undertaken assignments in 25 Countries. Mr. Rajan Samuel s extensive experience includes work for the, World Bank for NRF, Habitat for Humanity, Opportunity International, USA and Malaysia, USAID IRC, Tbilisi, Georgia, DANIDA, BRC, Baku, Azerbaijan and provision of services as Independent Consultant. Mr. Rajan Samuel has established 15 independent microfinance institutions in 10 Countries including Rural Banks, Cooperatives & Credit Unions and Non-Bank Finance Companies. The Board of Directors of the Company had appointed Mr. Rajan Samuel as an Additional Director of the Company (in the capacity of Independent Director) with effect from 30th November, 2012. As per the provisions of Section 260 of the Companies Act, 1956, Mr. Rajan Samuel will hold office only upto the date of the forthcoming Annual General Meeting of the Company and is eligible for appointment as Director. The Company has received notice under Section 257 of the Companies Act, 1956 from a Member of the Company along with the requisite amount, proposing appointment of Mr. Rajan Samuel as Director of the Company (in the capacity of Independent Director) liable to retire by rotation. A brief resume of Mr. Rajan Samuel including nature of his expertise has been provided above. The Board recommends the passing of this Resolution. None of the Directors, except Mr. Rajan Samuel is concerned or interested in the Resolution. Item No.6 The Board of Directors at its meeting held on 7 th March, 2013 appointed Mr. P. Murali Srinivas, as an Additional Director (in the capacity of Independent Director) on the Board of the Company. Mr. P. Murali Srinivas, qualified as a Bachelor in Physics, Master in Political Science and done his Leadership program at Harvard Business School, USA has got 20 years of rich experience in, Corporate & Development Sector viz., Microfinance; Insurance, Bottled Water and Business Process Outsourcing across many Indian States, developing Operational excellence in Organisations & Building New Markets and creating economics based business models. He is a successful Entrepreneur and was a Co-Promoter, Director and COO of Mimo Finance and Co-Founder & Director of Acer Engineers Pvt. Ltd., He has worked as a, COO in Healing Fields Foundation, GM in OSI Technologies Pvt. Ltd., etc., 7
The Board of Directors of the Company had appointed Mr. P. Murali Srinivas as an Additional Director of the Company (in the capacity of Independent Director) with effect from 7th March, 2013. As per the provisions of Section 260 of the Companies Act, 1956, Mr. P. Murali Srinivas will hold office only upto the date of the forthcoming Annual General Meeting of the Company and is eligible for appointment as Director. The Company has received notice under Section 257 of the Companies Act, 1956 from a Member of the Company along with the requisite amount, proposing appointment of Mr. P. Murali Srinivas as Director (in the capacity of Independent Director) of the Company liable to retire by rotation. A brief resume of Mr. P. Murali Srinivas including nature of his expertise has been provided above. The Board recommends the passing of this Resolution. None of the Directors, except Mr. P. Murali Srinivas is concerned or interested in the Resolution. Item No.7 Mr M. Sathiyamoorthi, M.A., BGL, a Retired IAS officer joined the Company on 07/02/2008 as Chief Executive Officer. Considering his vast and extensive administrative experience in the Government Service and illustrious performance in the Company, he was elevated as Director on whole-time basis to hold office as Managing Director with effect from 15.09.2009 and as CHAIRMAN and Managing Director with effect from 25/10/2011. At the general body meeting held on 22/08/2012, the Shareholders approved the revision in his remuneration at Rs.1,31,000/- (Salary Rs.1,20,000/- + Rent Free Accommodation = Rs.11,000/-) per month with effect from 1 st April 2012 which was given effect to by the Board at its Meeting held on 07/06/2012. Now, the Board, on the recommendation of Remuneration & Compensation Committee, taking in to account his efficiency in administering day-to-day affairs of, and his contributions to, the Company, at its meeting held on 29.05.2013 approved the increase in his remuneration from Rs.1,31,000/- (Salary Rs.1,20,000/- + Rent Free Accommodation Rs.11,000/-) per month to Rs.1,45,000 /- (Salary Rs.1,34,000 /- + Rent Free Accommodation Rs.11,000/-) which increase is to take effect from 01.04.2013. Further, the Board approves the Performance Incentive of Rs..1,50,000/- for the Financial Year 2012 2013 to Mr. M. Sathiyamoorthi, Chairman & Managing Director of the Company. Mr. M. Sathiyamoorthi is not holding any shares in the Company. This may also be treated as an abstract of the terms of the contract and memorandum of interest in relation to the appointment and fixing of remuneration of Mr. M. Sathiyamoorthi pursuant to Sec 302 of the Companies Act, 1956. The Board recommends passing of the above Resolution. None of the Directors except Mr. M. Sathiyamoorthi is concerned or interested in the proposed Resolution. Item No. 8 Mr. A. Tamilarason, a post-graduate in Commerce has served in the banking industry for a long time. Based on his experience in banking sector and performance in this Company, he was appointed as a Director by the shareholders at their meeting held on 03/09/2010. Considering his illustrious service, he was considered for appointment as a whole-time director by the Board. His designation was revised as General Manager, Risk Management, Funds Mobilisation & Cost Management as per Management Circular No..2/2012 dated 05.12.2012 and his appointment as a whole time Director was approved by the shareholders at their meeting held on 22/08/2012 for a tenure of 2 years w.e.f., 14.12.2012 at a remuneration of Rs.90,000/- per month 8
Now, the Board, on the recommendation of Remuneration & Compensation Committee, taking in to account his contributions to the Company and valuable services rendered, at its meeting held on 29.05.2013, increased the remuneration of Mr. A. Tamilarason from Rs.90,000/- to Rs.1,00,000/- per month which increase is to take effect from 1.4.2013. Further, the Board approved the payment of Performance Incentive of Rs.1,12,500/- for the Financial Year 2012 2013 to Mr. A. Tamilarason, Director. Mr. A. Tamilarason is not holding any shares in the Company. This may also be treated as an abstract of the terms of the contract and memorandum of interest in relation to the appointment and fixing of remuneration of Mr. A. Tamilarason pursuant to Sec 302 of the Companies Act, 1956. The Board recommends passing of this Resolution. None of the Directors except Mr. A. Tamilarason is concerned or interested in the proposed Resolution. - By order of the Board For S.M.I.L.E. MICROFINANCE LIMITED Chennai - 600083, Date: 30/05/2013 Sd/- M. SATHIYAMOORTHI CHAIRMAN & MANAGING DIRECTOR Registered Office: 4/22, Dr. Natesan Road, Ashok Nagar, Chennai - 600083. 9