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Directors Report of Keynote Financial Services Ltd.

Mar 31, 2018

The Members of KEYNOTE CORPORATE SERVICES LIMITED

Dear Shareholder(s),

The Directors have pleasure in presenting their 25^th Annual Report together with the Audited Accounts of your Company for the year ended 31^st March, 2018.

FINANCIAL RESULTS

(Rs. In Lakhs)

Particulars	Year Ended 31-03-2018	Year Ended 31-03-2017
Total Income	1,071.95	763.98
Gross Operating Profit	524.69	278.09
Depreciation	38.63	41.24
Exceptional Items	(42.40)	â
Profit Before Tax Provision for :	443.66	236.85
Current Tax	120.36	48.32
Short/(Excess) provision for tax in respect of earlier years)	(1.85)	03.08
Deferred Tax Liability/(Assets)	2.43	(3.51)
Profit After Tax	322.72	188.96
Profit/(loss) brought forward from Previous year	2,021.93	1,832.97
Surplus available for appropriations	2,344.65	2,021.93
Proposed Dividend	175.45	70.18
Tax on Dividend	35.72	14.29
Transferred to General Reserve	â	â
Balance carried forward	2,344.64	2,021.93

DIVIDEND

Your directors are pleased to recommend higher dividend of Rs. 2.50 per Equity Share having a face value of Rs. 10/- each, (i.e.25%) for the year ended 31^st March, 2018 on completion of 25 years of the Company and the same will be paid subject to the approval of the shareholders at the 25^th Annual General Meeting (AGM) of the Company.

OPERATIONS

We are pleased to state that your Company is completing 25 years of its operation in June 2018. During this journey your Company has functioned on the ethos of âCreating Value through Relationship & Trustâ. Over the period Company has developed great amount of intimate relationships with its clients, regulators, shareholders, bankers, service providers, employees and all the other stakeholders. No wonder that during this corporate journey your Company managed 135 Public Issues, 52 Rights Issues, 55 Takeover Offers, 15 Buy Back Offers, 8 Delisting Offers, acted as Advisors for 26 Companies to raise capital, Advised 8 FCCB transactions and 1 GDR Transaction & many clients for valuation, corporate advisory & ESOP advisory services. The management has adopted fair & ethical business practices while acting as a corporate entity enabling the Company to emerge as one of the largest Merchant Banker in mid market segment. Company has also successfully survived the onslaughts of vagaries of market situation, unforeseen adverse events & remained committed to its goal of providing the efficient & cost effective services to its clients.

Out of the last 25 years Company has been consistent in declaring & paying dividend in good times. Continuous dividend payment for past decade is a testimony of Managementâs policy of sharing. The Board of Directors recommended higher dividend of 25% to the equity shareholders on the occasion of completion of 25 years of operation. The equity shares of the Company are listed on BSE & NSE and the category I registration as Merchant Banker from SEBI has been renewed since December 1993. Presently your Company holds a permanent registration as Category I Merchant Banker from SEBI.

The financial year 2017-18 witnessed high mobilisation in public equity market. In the financial year 45 Main Board IPOs & 155 SME IPOs were completed. The average size in the SME segment enhanced to about Rs. 14.50 Crores. Your Company has adopted a policy of being selective while accepting the assignments particularly in SME IPO space. During this year Company could complete one of the largest SME IPOs to the extent of Rs. 55.00 Crores besides handling various assignments on Rights Issue, Buy Back, Delisting, Open Offers for Companies on Dissemination Board and have also conducted various valuation exercises including ESOP advisory. The total income during the year has enhanced to Rs. 1,072.00 lakhs from Rs. 764.00 lakhs witnessed in 2016-17. Company has also been able to provide corporate advisory services to few large corporates in their acquisition strategy as well as restructuring of business transaction. The overall financial performance of the Company was improved with focussed strategy of providing services to select clients.

Company has taken steps to develop new teams to be able to cater to the requirements of the clients more effectively. It has many mandates on hand for execution during the current financial year.

OPERATIONS OF SUBSIDIARIES

Presently the Company is debt free. On a consolidated basis Company has reported total revenue of Rs. 2,042.00 lakhs with PAT of Rs. 571.00 lakhs. The networth of the Company on consolidated basis is Rs. 7,712.81 lakhs.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Keynote Capitals Limited (KCL) and Keynote Fincorp Limited (KFIN) are subsidiary companies. Presently Keynote Capitals Limited has one wholly owned subsidiary namely Keynote Commodities Limited.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Companyâs subsidiaries in Form AOC-1 is attached to the financial statements of the Company.

Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

The financial statement of the subsidiary Companies are kept for inspection by the shareholders at the Registered Office of the Company. The Company shall provide free of cost, the copy of the financial statement of its subsidiary companies to the shareholders upon their request. The statements are also available on the website of the Company i.e. www.keynoteindia.net

As stipulated by Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [âListing Regulationsâ] the consolidated financial statement have been prepared by the Company in accordance with the applicable Accounting standards. The audited consolidated financial statements together with Auditors Report form part of the Annual Report.

The company has formulated a policy for determining âmaterialâ subsidiaries and such policy is disclosed on the companyâs Website http://www.keynoteindia.net/document-hosting/financial results/Material Subsidiary Policy.pdf

NOTE ON INTERIM FINANCIAL RESULTS

Pursuant to the Companies (Indian Accounting Standards) Rules, 2015, our Company had migrated to new Accounting Standards [i.e. Indian Accounting Standards (Ind AS)] effective from 1^st April, 2017 and prepared Un-audited Financial Results for the quarter ended 30^th June, 2017 and 30^th September, 2017 as per Ind AS and same were accordingly published.

However, our attention was drawn to the Notification No. G.S.R. 365(E) issued by MCA dated 30^th March, 2016 which amended Companies (Indian Accounting Standards) Rules, 2015. In terms of the Circular, Companies which are âMerchant Bankingâ were also covered and given further time frame for adopting Ind AS, starting with Financial Year 2018-19 and then 2019-20 depending on the net worth criteria laid down in the notification. In terms of aforesaid circular and being a SEBI Registered Category - I Merchant Banker, we would need to be compliant only effective Financial Year - 2019-20 and not in the current Financial Year i.e. 2017-18. Further, there is no provision for voluntary adoption of Ind AS before this period. Accordingly, we had redrawn our financial results for the Quarter ended 30^th June, 2017 and Quarter and Half year ended 30^th September, 2017 as per earlier Accounting Standards (Previous GAAP) which were applicable instead of Ind AS.

The Board of Directors of the Company at its Meeting held on 8^th February, 2018, considered and again approved the Unaudited Standalone Financial Results of the Company for Quarter ended 30^th June, 2017 and Quarter and Half year ended 30^th September, 2017 as per GAAP and revised financials were re-published and submitted to the Stock Exchanges.

TRANSFER TO RESERVES

During the year your Company has not transferred any amount to general reserve.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of the Listing Regulations with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The Companies Act, 2013 and Listing Regulations require compliances with specified Corporate Governance practices. These practices have been fully implemented and a certificate from the Practicing Company Secretary as well as a detailed report on Corporate Governance approved by the Board of Directors of the Company is set out in the Annual Report. Your Company has also been enlisted in the new SEBI Complaint Redressal System (SCORES) enabling the investors to register their complaints if any for speedy redressal.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed and traded on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). The scrip code number of the Equity Shares of the Company on BSE is 512597/KEYCORPSER and on NSE is KEYCORPSER. The Company has paid up to date listing fees to both the stock exchanges.

DEMATERIALIZATION

The Equity Shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd. (NSDL), Central Depository Services (India) Ltd. (CDSL) and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders. The International Securities Identification Number (ISIN), allotted to the Company is INE681C01015. The Equity Shares of the Company are listed and traded on BSE and NSE. On BSE the equity shares of the Company are traded in âBâ segment. The Equity Shares of the Company are being traded in compulsory dematerialized mode. Presently 97.21% of equity capital of the company is in dematerialized mode.

PUBLIC DEPOSIT

Your Company has neither accepted nor renewed any deposit within the meaning of Section 73 and other applicable provisions, if any, of the Companies Act, 2013 and the necessary rules made there under during the year ended 31^st March, 2018.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investment have been disclosed in the notes to the financial statements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to Managing Director. The Accounts Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and based on the report of internal audit the management undertakes corrective action in the respective areas and thereby strengthens the controls. Significant audit observations and recommendations if any, along with corrective actions thereon are required to be presented to the Audit Committee of the Board. During this financial year no such observations have been made.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company understands and values Corporate Social Responsibility (CSR) initiatives of the Government and has also noted the requirements of CSR activities in terms of Companies Act, 2013. The requirement of mandatory implementation of CSR activity is presently not applicable to your company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

(A) Conservation of energy:

Considering the nature of business activities carried out by the Company, your directors have nothing to report with regard to conservation of energy as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

(B) Technology absorption:

The management keeps itself abreast of the technological advancements in the industry and has adopted the state of the art transaction, billing and accounting systems and also risk management solutions.

a) The foreign exchange earnings Rs. 20.10 lakhs (previous year Rs. 35.91 lakhs).

b) The foreign exchange expenditure Rs. 21.22 lakhs (previous year Rs. 1.07 lakhs).

STATE OF AFFAIRS

During the year under review, your Company enjoyed cordial relationship with employees at all levels.

DISCLOSURES UNDER SECTION 134(3) (l) OF THE COMPANIES ACT, 2013

There are no material changes and commitments which could affect the Companyâs financial position have occurred between the end of the financial year of the Company and date of this report.

DIRECTOR AND KEY MANAGERIAL PERSONNEL (KMP)

(i). Changes in Director and Key Managerial Personnel (KMP):

During the Financial Year there was no change in Composition of the Board of Directors.

During the Financial year Ms. Saloni Maru, Company Secretary resigned with effect from 21^st April, 2017 and Shri Sujeet Krishna More has joined as Company Secretary and Compliance Officer of the Company with effect from 25^th May, 2017.

Event occurred between the end of the financial year of the Company and date of this report:

Shri Hitesh Shah, Independent Director of the Company due to his pre-occupation submitted his resignation to the Board with effect from 28^th May, 2018.

(ii) Retirement by rotation:

As per the provisions of Section 152 of the Companies Act, 2013, Smt. Rinku Suchanti (DIN: 00012903) is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. Your Directors recommend the approval.

(iii) Declaration of Independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued there under as well as Regulation 25 of the Listing Regulations.

(iv) Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed under Listing Regulations. Listing Regulations mandates that the Board shall monitor and review the Board evaluation framework.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The Board and the Nomination and Remuneration Committee (âNRCâ) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

(v) DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued there under and Regulation 19 of the Listing Regulations the Board of Directors at their meeting held on 7^th August, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

(vi) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEES

Your Board of Directors duly met four (4) times during the financial year i.e. on 25^th May, 2017, 11^th September, 2017, 1^st December, 2017 and 8^th February, 2018 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The Audit Committee duly met four (4) times during the financial year i.e. on 25^th May, 2017, 11^th September, 2017, 1^st December, 2017 and 8^th February, 2018 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

(vii) DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) In the preparation of the annual accounts for the year ended 31^st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) They 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 that period;

(c) They 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) They have prepared the annual accounts on a going concern basis;

(e) They 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) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013 AND RULES FRAMED THEREUNDER

In accordance with the provisions of section 197(12) of the Companies Act, 2013, the ratio of the remuneration of each Director to the median employeeâs remuneration and other details in terms of sub section 12 of Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this report as âAnnexure [A]â.

In accordance with provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the annexure pertaining to the names and other particulars of employees is available for inspection by Members at the Registered Office of the Company, 21 (Twenty one) days before and up to the date of the ensuing Annual General Meeting during the business hours on working days. Any Shareholder interested in obtaining a copy of the said Annexure may write to the Company Secretary & Compliance Officer at the Registered Office of the Company.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rule, 2014, the Extract of Annual Return (Form No. MGT-9) as on the financial year ended on 31^st March, 2018 is enclosed as âAnnexure - [B]â to the Directorsâ Report.

AUDIT REPORTS AND AUDITORS AUDIT REPORTS

The observations made by the Statutory Auditors in their Report for the Financial Year Ended 31^st March, 2018, read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under section 134(3) of the Companies Act, 2013.

The Secretarial Auditorâs Report for the Financial Year 2017-18 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed herewith as âAnnexure - [C]â

AUDITORS

Statutory Auditors

M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094) was reappointed as Statutory Auditors of the Company at 23^rd Annual General Meeting which was held on 29^th July, 2016 to hold the office as Statutory Auditor from the conclusion of 23^rd Annual General Meeting till conclusion of 28^th Annual General Meeting (AGM) of the Company subject to ratification by the Members of the Company at every Annual General Meeting (AGM). M/s. S M S R & Co LLP is willing to act as a Statutory Auditor of the Company for the financial year 2018 - 2019. The Company has received a written consent from them vide letter No. SMSR/2018-19/AAS/UB/EL/004 dated 30^th April, 2018 for their reappointment and also confirmations from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Statutory Auditors of the Company.

Further, as per the Companies (Amendment) Act, 2017 the provision of ratification by the members at every Annual General Meeting has been deleted w.e.f. 7^th May, 2018. Accordingly there is no need to ratify their appointment in the ensuing Annual General Meeting of the Company.

Secretarial Auditor

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuance to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and Employees to report genuine concerns has been established.

The purpose of the âWhistleblower Policyâ is to allow employees to raise concerns about unacceptable, improper or unethical practices being followed in the organization. They will be protected against any adverse action and/ or discrimination as a result of such a reporting, provided it is justified and made in good faith. The Chairman of the Audit Committee has been designated for the purpose of receiving and recording any complaints under this policy. The Vigil Mechanism Policy has been uploaded on the website of the Company at http:// www.keynoteindia.net/document-hosting/financial results/WHISTLE%20BLOWER%20POLICY.pdf

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on armâs length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as âAnnexure-Dâ. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Regulations. This Policy was considered and approved by the Board has been uploaded on the website of the Company at http://www.keynoteindia.net/document-hosting/financial results/ Keynote Policy%20on%20Related%20Party%20Transactions.pdf

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code has been placed on the Companyâs website www.keynoteindia.net

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have complied compliance with the Code.

RISK MANAGEMENT

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Regulation 17 of Listing Regulations the Company has formulated risk management policy and the same has been placed on the company website. http:// www.keynoteindia.net/document-hosting/financial results/Keynote Risk%20Management%20Policy.pdf

At present the company has not identified any element of risk which may adversely affect functioning of the company.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. Said code of conduct is in line with SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code requires pre-clearance for dealing in the Companyâs shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All the Directors and the designated employees have complied with the Code.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Companyâs operations in future.

GENERAL DISCLOSURES

- DISCLOSURE UNDER SECTION 43(a) (ii) OF THE COMPANIES ACT, 2013

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

- DISCLOSURE UNDER SECTION 54(1) (d) OF THE COMPANIES ACT, 2013

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1) (d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

- DISCLOSURE UNDER SECTION 62(1) (b) OF THE COMPANIES ACT, 2013

The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1) (b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

- DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013

During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished.

ACKNOWLEDGMENT

We take this opportunity to express deep sense of gratitude to Members of Board of Directors, Shareholders of the Company, Securities and Exchange Board of India (SEBI), BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Registrar of Companies (ROC), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), Association of Investment Bankers of India (AIBI), Link Intime India Pvt. Limited, M/s. S M S R & CO. LLP Statutory Auditors, M/s. R. B. Pandya & Co. Internal Auditors, our Clients, Bankers, Employees and other Stakeholders and Government Agencies for their continued support.

For and on behalf of the Board

Keynote Corporate Services Limited

Sd/- Sd/-

Vineet Suchanti Uday S. Patil

Date: 28^th May, 2018 Director Director and CFO

Place: Mumbai (DIN: 00004031) (DIN: 00003978)

Mar 31, 2017

Dear Shareholder(s),

The Directors have pleasure in presenting their 24^th Annual Report together with the Audited Accounts of your Company for the year ended 31^st March, 2017.

FINANCIAL RESULTS

(Rs. In lacs)

Particulars	Year Ended 31-03-2017	Year Ended 31-03-2016
Total Income	763.98	997.87
Gross Operating Profit	278.09	525.55
Depreciation	41.24	44.03
Exceptional Items	â	â
Profit Before Tax Provision for :	236.85	481.52
Current Tax	48.32	114.95
Short / (Excess) provision for tax in respect of earlier years	03.08	00.72
Deferred Tax Liability/(Assets)	(3.51)	18.15
Profit After Tax	188.96	347.70
Profit/(Loss) brought forward from Previous year	1832.97	1,567.59
Surplus available for appropriations	2021.93	1,915.29
Proposed Dividend	70.18	70.18
Tax on Dividend	14.29	12.14
Transferred to General Reserve	â	â
Balance carried forward	2021.93	1,832.97

DIVIDEND

Your directors are pleased to recommend a dividend of Rs.1/- per Equity Share of face value of Rs.10/- each (i.e. 10%) for the year ended 31^st March, 2017. The dividend will be paid subject to approval of members at the 24^th Annual General Meeting (AGM).

OPERATIONS

The financial year 2016-17 witnessed a marginal increase in public equity market dominated by IPOs. 25 Main Board IPOs were launched during the financial year and 78 SME IPOs were completed in the same year. The average issue size in SME segment enhanced to about Rs.10 crores as against about Rs.6 crores. The mobilization of resources through Rights issue had declined. During the financial year 13 Rights issues were completed. Your Company successfully completed SME IPO, Rights issues and have handled Exit offers in respect of Companies shifted to âDissemination Boardâ by SEBI. Company focused on quality transactions with full-fledged efforts towards transparency and completion of assignments in appropriate manner. Your Company was successful in handling about 24% of the Rights issues completed during the financial year and was ranked no.1 Investment Banker (Prime Database) in respect of number of Rights issues handled.

Besides capital market transactions, Company continued to provide corporate advisory services, valuations, ESOP advisory services to various clients. Company continued to maintain long term business relationship with the prominent clients. The total income during the year was Rs.763.98 lacs as against Rs.997.87 lacs for the previous year. Consequently the profit after tax was at a lower level to Rs.188.96 lacs. November 2016 witnessed a path breaking initiative of demonetization by the Government of India. During the period capital market activity was subdued. However, activity is likely to pick up and Company hopes to get benefited.

OPERATIONS OF SUBSIDIARIES

Besides trading, KCL also concentrated on marketing of financial products such as IPOs. During the year, KCL was ranked as No.1 âUnderwriterâ by Prime. KCL also offered its holding in BSE shares for sale in the recently concluded IPO of BSE.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Keynote Capitals Limited (KCL) and Keynote Fincorp Limited (KFIN) are subsidiary companies. Presently Keynote Capitals Limited has one wholly owned subsidiary namely Keynote Commodities Limited.

The financial statement of the subsidiary Companies are kept for inspection by the shareholders at the Registered Office of the Company. The company shall provide free of cost, the copy of the financial statement of its subsidiary companies to the shareholders upon their request. The statements are also available on the website of the Company i.e. www.keynoteindia.net

TRANSFER TO RESERVES

During the year your Company has not transferred any amount to general reserve.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of the Listing Regulations with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

LISTING WITH STOCK EXCHANGES

DEMATERIALIZATION

The Equity Shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd. (NSDL), Central Depository Services (India) Ltd. (CDSL) and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders. The International Securities Identification Number (ISIN), allotted to the Company is INE681C01015. The Equity Shares of the Company are listed and traded on BSE and NSE. On BSE the equity shares of the Company are traded in âBâ segment. The Equity Shares of the Company are being traded in compulsory dematerialized mode. Presently 96.55% of equity capital of the company is in dematerialized mode.

PUBLIC DEPOSIT

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investment have been disclosed in the notes to the financial statements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

CORPORATE SOCIAL RESPONSIBILITY (CSR)

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

(A) Conservation of energy:

(B) Technology absorption:

a) The foreign exchange earnings Rs.35.91 lacs (previous year Rs.25.85 lacs).

b) The foreign exchange expenditure Rs.1.07 lacs (previous year Rs.0.82 lacs).

STATE OF AFFAIRS

During the year under review, your Company enjoyed cordial relationship with employees at all levels. DISCLOSURES UNDER SECTION 134(3) (l) OF THE COMPANIES ACT, 2013

There are no material changes and commitments which could affect the Companyâs financial position have occurred between the end of the financial year of the Company and date of this report.

DIRECTOR AND KEY MANAGERIAL PERSONNEL (KMP)

(i) Changes in Director and Key Managerial Personnel (KMP):

During the Financial Year there was no change in Composition of the Board of Directors.

Events occurred between the end of the financial year of the Company and date of this report:

a. Shri. Vineet Suchanti approached the Company informing about various opportunities abroad which he wished to explore and evaluate. As a result he will not be in a position to look after day to day affairs of the Company and hence resigned as Managing Director w.e.f. 5^th April, 2017 and expressed his willingness to continue as Non-Executive Director of the Company. Accordingly, the Board has appointed him as a Non-executive Director of the Company.

b. Smt. Rinku Suchanti a Non Executive Director of the Company expressed her willingness and gives her consent to act as a Whole-time Director of the Company. Accordingly, the Board appointed her as Whole-time Director w.e.f 25^th May, 2017, subject to approval by the Members of the Company.

c. Ms. Saloni Maru has resigned with effect from 21^st April, 2017 and Shri. Sujeet Krishna More has joined as Company Secretary and Compliance Officer of the Company with effect from 25^th May, 2017.

(ii) Retirement by rotation:

As per the provisions of Section 152 of the Companies Act, 2013, Shri Uday S. Patil (DIN: 00003978) retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Your Directors recommend their approval.

(iii) Declaration of Independence

(iv) Board Evaluation

The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

(v) DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL

(vi) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEES

Your Board of Directors duly met four (4) times during the financial year i.e. on 26^th May, 2016, 11^th August, 2016, 10^th November, 2016 and 9^th February, 2017 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The Audit Committee duly met four (4) times during the financial year i.e. on 26^th May, 2016, 11^th August, 2016, 10^th November, 2016 and 9^th February, 2017 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

(vii) Directors Responsibility Statement

Pursuant to Section 134(3) (c) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) In the preparation of the annual accounts for the year ended 31^st March, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(d) They have prepared the annual accounts on a going concern basis;

(e) They 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) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013 AND RULES FRAMED THEREUNDER

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rule, 2014, the Extract of Annual Return (Form No. MGT-9) as on the financial year ended on 31^st March, 2017 is enclosed as âAnnexure - [B]â to the Directorsâ Report.

AUDIT REPORTS AND AUDITORS

AUDIT REPORTS

The observations made by the Statutory Auditors in their Report for the Financial Year Ended 31^st March, 2017, read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under section 134(3) of the Companies Act, 2013.

The Secretarial Auditorâs Report for the Financial Year 2016-17 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed herewith as âAnnexure - [C]â

AUDITORS Statutory Auditors

M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094) was re-appointed as Statutory Auditors of the Company at 23^rd Annual General Meeting which was held on 29^th July, 2016 to hold the office as Statutory Auditor from the conclusion of 23^rd Annual General Meeting till conclusion of 28^th Annual General Meeting (AGM) of the Company subject to ratification by the Members of the Company at every Annual General Meeting (AGM). M/s. S M S R & CO LLP is willing to act as a Statutory Auditor of the Company for the financial year 2017 - 2018. The Company has received a written consent from them vide letter No. SMSR/2017-18/AAS/SS/002 dated 5^th April, 2017 for their reappointment and also confirmations from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Statutory Auditors of the Company.

As recommended by Audit Committee, the Board has proposed the appointment of M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094) as Statutory Auditors for the financial year 2017-2018.

Necessary resolution for appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members.

Secretarial Auditor

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuance to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and Employees to report genuine concerns has been established.

The purpose of the âWhistleblower Policyâ is to allow employees to raise concerns about unacceptable, improper or unethical practices being followed in the organization. They will be protected against any adverse action and/ or discrimination as a result of such a reporting, provided it is justified and made in good faith. The Chairman of the Audit Committee has been designated for the purpose of receiving and recording any complaints under this policy. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.keynoteindia.net/document-hosting/financial results/WHISTLE%2QBLOWER%2QPOLICY.pdf

RELATED PARTY TRANSACTIONS

CODE OF CONDUCT

RISK MANAGEMENT

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Regulation 17 of Listing Regulations the Company has formulated risk management policy and the same has been placed on the company website. http://www.keynoteindia.net/document-hosting/financial results/Keynote Risk%20Management%20Policy.pdf

At present the company has not identified any element of risk which may adversely affect functioning of the company.

PREVENTION OF INSIDER TRADING

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Companyâs operations in future.

GENERAL DISCLOSURES

- DISCLOSURE UNDER SECTION 43(a) (ii) OF THE COMPANIES ACT, 2013

- DISCLOSURE UNDER SECTION 54(1) (d) OF THE COMPANIES ACT, 2013

- DISCLOSURE UNDER SECTION 62(1) (b) OF THE COMPANIES ACT, 2013

- DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013

ACKNOWLEDGMENT

We take this opportunity to express deep sense of gratitude to Members of Board of Directors of the Company, Securities and Exchange Board of India (SEBI), BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Registrar of Companies (ROC), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), Association of Investment Bankers of India (AIBI), Link Intime India Pvt. Limited, M/s. S M S R & CO. LLP Statutory Auditors, M/s. R. B. Pandya & Co. Internal Auditors, our Clients, Bankers, Employees and other Stakeholders and Government Agencies for their continued support.

By Order of the Board

For Keynote Corporate Services Limited

Sd/-

B. Madhuprasad

Date: 25^th May, 2017 Chairman

Place: Mumbai (DIN: 00004632)

Mar 31, 2016

The Members of KEYNOTE CORPORATE SERVICES LIMITED

Dear Shareholder(s),

The Directors have pleasure in presenting their 23^rd Annual Report together with the Audited Accounts of your Company for the year ended 31^st March, 2016.

FINANCIAL RESULTS

(Rs. In lacs)

Particulars	Year Ended 31-03-2016	Year Ended 31-03-2015
Total Income	997.87	583.68
Gross Operating Profit	525.55	130.52
Depreciation	44.03	37.39
Exceptional Items	â	14.12
Profit Before Tax	481.52	79.01
Provision for :
Current Tax	114.95	12.25
Deferred Tax Liability/(Assets)	18.15	14.67
Profit After Tax	348.42	52.09
Add/Less : Excess Provision/Short Provision	0.72	â
Profit/(Loss) brought forward from Previous year	1,567.59	1,597.61
Surplus available for appropriations	1,915.29	1,649.70
Proposed Dividend	70.18	70.18
Tax on Dividend	12.14	11.93
Transferred to General Reserve	â	â
Balance carried forward	1,832.97	1,567.59

DIVIDEND

Your directors are pleased to recommend a dividend of Rs. 1/- per Equity Share of face value of Rs. 10/- each (i.e. 10%) for the year ended 31^st March, 2016. The dividend will be paid subject to approval of members at the 23^rd Annual General Meeting (AGM).

OPERATIONS

The year 2015-16 witnessed a major revival in the Initial Public Offer (IPO) markets after nearly 4 dismal years. Though the year witnessed turbulent secondary market, the primary market showed signs of revival as many IPOs hit the market during the financial year. During the financial year 2015-16, 24 Main Board IPOs were launched in the primary market and significant activity was also witnessed in the IPOs on SME platforms where 50 SME IPOs were launched. The mobilization of resources through Rights issue also recorded an increase with 12 Rights issues being completed during the financial year. The enhanced equity resource raising through primary market is seen with enthusiasm by market participants and investors. Your company also witnessed major activity in these areas and has performed well as compared to the previous financial year.

Your company completed many capital market transactions during the financial year. Keynote acted as âFinancial Advisor'' for a large IPO of a Company engaged in âFragrance & Flavorsâ business and also sole Lead Managed a Main Board IPO of a Company engaged in manufacturing of dyes and dye intermediates along with fertilizers. Company lead managed 3 Rights issues and also completed an SME issue on NSE platform i.e. EMERGE. The Company played a major role in the capital market transactions pertaining to one of the Chinese Major who entered India by acquiring a listed Company. The Company advised the Chinese promoter for âOffer for Sale'' and also in respect of Rights issue amounting to Rs. 100 crores. Besides this, Company was also able to complete a few transactions in respect of Scheme of Arrangement, Valuation & ESOP Advisory etc. The total income during the year was Rs. 997.87 lacs, an increase of 71% as against the total income for the previous year. Consequently the PAT has reached Rs. 348.42 lacs registering substantial increase over the previous year''s profit after tax. There has been a general sense of buoyancy in the capital market and company expects to bag few more mandates on IPOs & other capital market transactions.

OPERATIONS OF SUBSIDIARIES

Presently your company has two subsidiaries namely Keynote Capitals Limited (KCL) an integrated broking house and Keynote Fincorp Ltd. (KFIN) a NBFC. KCL is a member of BSE & NSE as well as Depository Participant of Central Depository Services India Limited. KCL has a subsidiary namely Keynote Commodities Ltd. which is member of Multi Commodity Exchange of India (MCX). KCL focuses on institutional trading & other trading activities of large and high net worth investors. KCL posted a total income of Rs. 1,033.27 lacs for 31^st March, 2016 as compared to Rs. 618.41 lacs for 31^st March, 2015. Profit after Tax stood at Rs. 86.19 lacs as compared to Rs. 79.17 lacs for the previous year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Keynote Capitals Limited (KCL) and Keynote Fincorp Limited (KFIN) are subsidiary companies. Presently Keynote Capitals Limited has one wholly owned subsidiary namely Keynote Commodities Limited.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company. Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

As stipulated by Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements). Regulations, 2015 [âListing Regulationsâ] the consolidated financial statement have been prepared by the Company in accordance with the applicable Accounting standards. The audited consolidated financial statements together with Auditors Report form part of the Annual Report.

The company has formulated a policy for determining âmaterial'' subsidiaries and such policy is disclosed on the company''s Website http://www.keynoteindia.net/document-hosting/financial results/ Material Subsidiary Policy.pdf

TRANSFER TO RESERVES

During the year your Company has not transferred any amount to general reserve.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34 of the Listing Regulations with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The Companies Act, 2013 and Listing Regulations require compliances with specified Corporate Governance practices. These practices have been fully implemented and a certificate from the Practicing Company Secretary as well as a detailed report on Corporate Governance approved by the Board of Directors of the Company is se out in the annual report. The Company is regularly complying with Corporate Governance practices and also uploading the information under Corporate Filing & Dissemination System (corpfiling). Your Company has also been enlisted in the new SEBI complaint redressal system (SCORES) enabling the investors to register their complaints if any for speedy redressal.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed and traded on the BSE Limited (BSE) and Nationa Stock Exchange of India Ltd. (NSE). The scrip code number of the Equity Shares of the Company on BSE i; 512597/KEYCORPSER and on NSE is KEYCORPSER. The Company has paid up to date listing fees to both the stock exchanges.

Further, the Securities and Exchange Board of India (SEBI) issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) on 2^nd September, 2015. The Listing Regulations went effective from 1^st December, 2015. Accordingly, all the listed entities were required to execute fresh listing agreement with Stock Exchanges where the shares of the Company were listed. The fresh agreement had to b( executed within six months from the effective date. The Company entered into fresh Listing Agreement with BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE) on 1^st December, 2015.

DEMATERIALIZATION

The Equity Shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd., (NSDL) Central Depository Services (India) Ltd., (CDSL and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders The International Securities Identification Number (ISIN), allotted to the Company is INE681C01015. Th( Equity Shares of the Company are listed and traded on BSE and NSE. On BSE the equity shares of the Company are traded in âBâ segment. The Equity Shares of the Company are being traded in compulsory dematerialize< mode. Presently 96.54% of equity capital of the company is in dematerialized mode.

PUBLIC DEPOSIT

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investment have been disclosed in the notes to the financial statements INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has Internal Control System, commensurate with the size, scale and complexity of its operations The scope and authority of the Internal Audit function is well defined. To maintain its objectivity and independence the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to Managing Director. The( Accounts Department monitors and evaluates the efficacy and adequacy of internal control system in the Company its compliance with operating systems, accounting procedures and based on the report of internal audit the management undertakes corrective action in the respective areas and thereby strengthens the controls. Significant audit observations and recommendations if any, along with corrective actions thereon are required to be presented< to the Audit Committee of the Board. During this financial year no such observations have been made.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company understands and values Corporate Social Responsibility (CSR) initiatives of the Government and has also noted the requirements of CSR activities in terms of Companies Act, 2013. The requirement o mandatory implementation of CSR activity is presently not applicable to your company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

(A) Conservation of energy:

(B) Technology absorption:

a) The foreign exchange earnings Rs. 25.85 lacs (previous year Rs. 45.17 lacs).

b) The foreign exchange expenditure Rs. 0.82 lacs (previous year Rs. 2.20 lacs).

STATE OF AFFAIRS

During the year under review, your Company enjoyed cordial relationship with employees at all levels. DISCLOSURES UNDER SECTION 134(3) (l) OF THE COMPANIES ACT, 2013

There are no material changes and commitments which could affect the Company''s financial position have occurred between the end of the financial year of the Company and date of this report.

DIRECTOR AND KEY MANNEGERIAL PERSONNEL (KMP)

(i) Changes in Director and Key Managerial Personnel (KMP):

During the period, Ms. Shruti Jayant Deshmukh resigned from the post of Company Secretary and Compliance Officer of the Company with effect from 11^th February, 2016 and Ms. Saloni Dilip Maru joined as Company Secretary and Compliance Officer of the Company with effect from 25^th February, 2016.

(ii) Retirement by rotation:

As per the provisions of Section 152 of the Companies Act, 2013, Shri Vineet Suchanti (DIN:00004031) retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Your Directors recommend their approval.

(iii) Appointment of Independent Director

At the 22^nd Annual General Meeting (AGM) of the Company held on 29^th September, 2015, Shri Shishir Dalal (DIN: 00007008) was appointed as an Independent Director of the Company.

DECLARATION OF INDEPENDENCE

BOARD EVALUATION

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee (âNRCâ) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in âAnnexure [A]â to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) In the preparation of the annual accounts for the year ended 31^st March, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(d) They have prepared the annual accounts on a going concern basis;

(e) They 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) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATUTORY AUDITORS

M/s. Haribhakti & Co. LLP, Chartered Accountants, retired as Statutory Auditors of the Company after conclusion of 22^nd Annual General Meeting (AGM) dated 29^th September, 2015 as they were not seeking re-appointment. With this retirement, vacancy was caused and appointment of Statutory Auditors was required to be approved by the shareholders. The Company had received consent from M/s. NMAH & Company (Firm Registration No. 135966W) for appointment of Statutory Auditors subject to shareholdersâ approval. Accordingly the matter of appointment of M/s. NMAH & Co., Chartered Accountants, Mumbai (Firm Registration No. 135966W) as Statutory Auditors to hold office from the conclusion of 22^nd Annual General Meeting, until the conclusion of sixth Annual General Meeting to be held after that meeting, subject to ratification at every Annual General Meeting (AGM) was approved by the members.

However, later on M/s. NMAH & Co. Chartered Accountants, Mumbai, tendered their resignation on account of technical reasons at their end vide their letter dated 23^rd October, 2015 from the position of the Statutory Auditors of the Company.

The Company received consent from M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094) willing to act as a Statutory Auditor of the Company to fill-up the Casual Vacancy caused by the resignation of M/s. NMAH & Co. Chartered Accountants. As per the recommendation of the Audit Committee, the Board proposed and recommended that M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094) be appointed as Statutory Auditors of the Company and to hold the office till the conclusion of ensuing AGM. Accordingly, M/s. S M S R & CO LLP Chartered Accountants, conducted the Statutory Audit of the Company for the period ended 31^st March, 2016.

The Casual Vacancy caused by the resignation of the erstwhile Auditors was filled by the Board subject to the approval of the members, through Circular Resolution dated 26^th October, 2015 and Postal Ballot Notice dated 14^th November, 2015 was sent to shareholders. Shareholders/Members approved the appointment of M/s. S M S R & CO LLP Chartered Accountants, as Statutory Auditors vide special resolution passed through Postal Ballot Notice dated 14^th November, 2015 results of which were declared on 29^th December, 2015.

M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094) are willing to act as a Statutory Auditor of the Company for the financial year 2016 - 2017. The Company has received a written consent letter No. SMSR/AAS/AB/16-17/002 dated 27^th April, 2016 from them for their reappointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. S M S R & CO LLP Chartered Accountants, Mumbai (Firm Registration No. 110592W/W100094), the Statutory Auditors of the Company have been appointed for a term of five years. However, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.

Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of AGM for seeking approval of members.

AUDITORSâ REPORT

The Auditors have referred to certain routine matters in their report and the respective notes to the accounts are self-explanatory.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rule, 2014, the Extract of Annual Return (Form No. MGT-9) as on the financial year ended on 31^st March, 2016 is enclosed as âAnnexure - IET to the Directors'' Report.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/S Uma Lodha & Co., Practicing Company Secretaries to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as âAnnexure - JOT to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEES

Your Board of Directors duly met four (4) times during the financial year i.e. on 28^th May, 2015, 10^th August, 2015, 14^th November, 2015 and 11^th February, 2016 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The Audit Committee duly met six (6) times during the financial year i.e. on 28^th May, 2015, 10^th August, 2015, 2^nd September, 2015, 26^th October, 2015, 14^th November, 2015 and 11^th February, 2016 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuance to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and Employees to report genuine concerns has been established.

The purpose of the âWhistleblower Policyâ is to allow employees to raise concerns about unacceptable, improper or unethical practices being followed in the organization. They will be protected against any adverse action and/ or discrimination as a result of such a reporting, provided it is justified and made in good faith. The Chairman of the Audit Committee has been designated for the purpose of receiving and recording any complaints under this policy. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.keynoteindia.net/documenthosting/financial results/WHISTLE⁰/o20BLOWER⁰/o2QPOLICY.pdf

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

CODE OF CONDUCT

RISK MANAGEMENT

Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Regulation 17 of Listing Regulations the Company has formulated risk management policy and the same has been placed on the company website. http://www.keynoteindia.net/documenthosting/financial results/Keynote Risk%20Management%20Policy.pdf At present the company has not identified any element of risk which may adversely affect functioning of the company.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. Said code of conduct is in line with SEBI (Prohibition of Insider Trading) Regulations, 2015 The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All the Directors and the designated employees have complied with the Code.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There is no disciplinary action taken/penalty imposed by Securities and Exchange Board of India (SEBI)/other regulatory authority during the financial year. However, Company received a prohibitory order dated 6^th April, 2016 issued by Whole Time Member (WTM), SEBI in the matter of IPO of Emmbi Industries Ltd. Though said order was not received during the period of the financial year, same was placed before the Board of Directors as the meeting of Board of Directors was scheduled on 26^th May, 2016. In terms of order No. WTM/RKA/EFD/46/ 2016 dated 6^th April, 2016, Keynote Corporate Services Ltd. (KCSL) has been prohibited from taking up new assignment as âMerchant Banker'' for the period of one month & Keynote Capitals Ltd. (KCL), a wholly owned subsidiary, has been prohibited from taking up any new assignment as âUnderwriter'' for a period of one month. The order to come into effect immediately on the expiry of twenty-one days from the date of the order. The Board of Directors after detailed discussion have observed that in the normal course of business there would be such regulatory risks. However, while conducting the business intentions shall be right. They also expressed satisfaction that the company for which the IPO was managed has implemented the project and have progressed very well on the business front which has reflected in the current market price of the Company. The Company is genuine and efforts put in by Keynote entities have yielded positive results. However, precautions shall be taken to avoid repetition of such instances. All the attempts shall be made to ensure that Company is not required to defend such regulatory actions.

GENERAL DISCLOSURES

- DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013

- DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013

- DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013

- DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013

ACKNOWLEDGMENT

We take this opportunity to express deep sense of gratitude to Members of Board of Directors of the Company, Securities and Exchange Board of India (SEBI), BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Registrar of Companies (ROC), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), Association of Investment Bankers of India (AIBI), Link Intime India Pvt. Limited, M/s. S M S R & CO. LLP Statutory Auditors, M/s. R. B. Pandya & Co. Internal Auditors, our Clients, Bankers and other Government Agencies for their continued support.

By Order of the Board

For Keynote Corporate Services Limited

Sd/- Sd/-

Uday S. Patil Vineet Suchanti

Date: 26^th May, 2016 Director & CFO Managing Director

Place: Mumbai (DIN: 00003978) (DIN: 00004031)

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 22nd Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2015.

(Rs. In lacs)

Details Year Ended Year Ended 31-03-2015 31-03-2014

Total Income 583.68 942.12

Gross Operating Profit 130.52 319.10

Depreciation 37.39 34.06

Exceptional Items 14.12 -

Profit Before Tax 79.01 285.04

Provision for :

Current Tax 12.25 61.57

Deferred Tax Liability/(Assets) 14.67 16.93

Profit After Tax 52.09 206.53

Add/Less : Excess Provision/Short - (0.26) Provision

Profit/(Loss) brought forward from 1,597.61 1,494.07 Previous year

Surplus available for appropriations 1,649.70 1,700.35

Proposed Dividend 70.18 70.18

Tax on Dividend 11.93 11.93

Transferred to General Reserve - 20.63

Balance carried forward 1,567.59 1,597.61

DIVIDEND

Your directors are pleased to recommend a dividend of Rs. 1/- per Equity Share of face value of Rs. 10/- each (i.e.10%) for the year ended 31st March, 2015. The dividend will be paid subject to approval of members at the 22nd Annual General Meeting (AGM).

OPERATIONS:

The financial year 2014-15 saw major change in political scenario in the country. The new government with a majority assumed charge at the centre. The expectations of markets including financial markets increased due to stable government with a general sense of optimism & enthusiasm. Though the capital market showed signs of improvement, the primary market conditions did not improve drastically. However, few IPOs were launched in the capital market and resource raising in the form of equity through capital market issuances have improved. Your company also has been able to get a few mandates for IPOs, Rights Issues & other Advisory services in respect of preferential allotment, private equity placement etc. During financial year, your company filed the draft offer documents in respect of 2 Public issues and 3 Rights issues besides handling other assignments. However, many of the transactions could not be completed due to adverse primary market conditions which has resulted in sharp fall in income from operations. Company was able to complete certain assignments in 'Corporate Finance' area such as advising companies on raising debt from Banks, corporate advisory services, valuation services etc. Company continued to provide advisory services in respect of ESOP transactions. There has been a strain on profitability. During the financial year, company could post total income of Rs. 583.68 lacs with a profit after tax of Rs. 52.09 lacs as against income of Rs. 942.12 lacs and profit after tax of Rs. 206.53 lacs for the previous financial year 31st March, 2014. The company has to maintain the team of professionals which is essential to cope up with future possibilities of improvement in business environment. Company is hopeful of overall improvement in the capital market and would be able to post reasonable good income levels in years to come.

OPERATIONS OF SUBSIDIARY

Presently your company has two 100% subsidiaries namely Keynote Capitals Limited (KCL) an integrated broking house and Keynote Fincorp Ltd. (KFIN) a NBFC. KCL is a member of BSE & NSE as well as Depository Participant of Central Depository Services India Limited. KCL has a subsidiary namely Keynote Commodities Ltd. which is member of Multi Commodity Exchange of India (MCX).

During the last financial year subsidiary restructured the operations by exiting from retail business via process of realignment of business. KCL focuses on institutional trading & other trading activities of large and high net worth investors. KCL posted a total income of Rs. 618.41 lacs for 31st March, 2015 as compared to Rs. 919.22 lacs for 31st March, 2014. Profit After Tax stood at Rs. 79.17 lacs as compared to Rs. 81.62 lacs for the previous year.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Keynote Capitals Limited (KCL) and Keynote Fincorp Limited (KFIN) are our wholly owned subsidiary companies. Presently Keynote Capitals Limited has one wholly owned subsidiary namely Keynote Commodities Limited. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company. Pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company.

The financial statement of the subsidiary Companies are kept for inspection by the shareholders at the Registered Office of the Company. The company shall provide free of cost, the copy of the financial statement of its subsidiary companies to the shareholders upon their request. The statements are also available on the website of the Company i.e. www.kevnoteindia.net

As stipulated by Clause 32 of the listing agreement with the stock exchanges, the consolidated financial statement have been prepared by the Company in accordance with the applicable Accounting standards. The audited consolidated financial statements together with Auditors Report form part of the Annual Report.

The company had formulated a policy for determining 'material' subsidiaries and such policy disclosed the company's website http://www.keynoteindia.net/document-hosting/financial results/ Keynote Material%20Subsidiarv%20Policv.pdf

TRANSFER TO RESERVES

During the year your Company has not transferred any amount to general reserve.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The Companies Act, 2013 and the listing agreement with the Stock exchanges require compliances with specified Corporate Governance practices. These practices have been fully implemented and a certificate from the Practicing Company Secretary as well as a detailed report on Corporate Governance approved by the Board of Directors of the Company is set out in the annual report. The Company is regularly complying with Corporate Governance practices and also uploading the information under Corporate Filing & Dissemination System (corpfiling). Your Company has also been enlisted in the new SEBI compliant redressal system (SCORES) enabling the investors to register their complaint if any for speedy redressal.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed and traded on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). The scrip code number of the Equity Shares of the Company on BSE is 512597 and on NSE is KEYCORPSER. The Company has paid upto date listing fees to both the stock exchanges.

DEMATERIALIZATION

The Equity Shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd., (NSDL) Central Depository Services (India) Ltd., (CDSL) and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders. The International Securities Identification Number (ISIN), allotted to the Company is INE681C01015. The Equity Shares of the Company are listed and traded on BSE and NSE. On BSE the equity shares of the Company are traded in "B" segment. The Equity Shares of the Company are being traded in compulsory dematerialized mode. Presently 96.52% of equity capital of the company is in dematerialized mode.

PUBLIC DEPOSIT

Your Company has neither accepted nor renewed any deposit within the meaning of Section 73 and other applicable provisions, if any, of the Companies Act, 2013 and the necessary rules made there under during the year ended 31st March, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investment have been disclosed in the notes to the financial statements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to Managing Director. The Accounts Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and based on the report of internal audit the management undertakes corrective action in the respective areas and thereby strengthens the controls. Significant audit observations and recommendations if any, along with corrective actions thereon are required to be are presented to the Audit Committee of the Board. During this financial year no such observations have been made.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company understands and values Corporate Social Responsibility (CSR) initiatives of the Government and have also noted the requirements of CSR activities in terms of Companies Act, 2013. The requirement of mandatory implementation of CSR activity is not applicable to your company due to inadequacy of profits in past three financial years.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

(A) Conservation of energy:

Considering the nature of business activities carried out by the Company, your directors have nothing to report with regard to conservation of energy as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

(B) Technology absorption:

The management keeps itself abreast of the technological advancements in the industry and has adopted the state of the art transaction, billing and accounting systems and also risk management solutions.

(C) Foreign exchange earnings and Outgo:

a) The foreign exchange earnings Rs. 57.17 lacs (previous year Rs. 86.52 lacs).

b) The foreign exchange expenditure Rs. 2.20 lacs (previous year Rs. 16.42 lacs).

STATE OF AFFAIRS

During the year under review, your Company enjoyed cordial relationship with employees at all levels.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

(i) Changes in Directors and Key Managerial Personnel (KMP):

(a) At the Board meeting held on 10th February, 2015 your Company has appointed Shri Uday S. Patil, Whole-Time Director of the Company also as 'Chief Financial Officer (CFO)'

(b) Vide Circular Resolution dated 31st March, 2015 your Company has appointed Smt. Rinku Suchanti (DIN: 00012903) as an Additional Director of the Company to hold office upto the ensuring Annual General Meeting of the Company. Thus the Company is in compliance with the provision relating to having at-least one Woman Director on the Board in terms of requirement of Corporate Governance,

(c) Vide Circular Resolution dated 4th May, 2015 your Company has appointed Shri Shishir Dalal [DIN: 00007008] as an Additional Director of the Company in the category of Independent Director to hold office upto the ensuing Annual General Meeting of the Company and accepted resignation of Shri Sujal Shah (DIN: 00058019) as a Director of the Company and

(d) In accordance with the provision of Section 152(6)(a) of the Companies Act, 2013 and the Articles of Association of the Company, Shri B. Madhuprasad Director (DIN: 00004632) of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers, himself for reappointment. Your Board recommends his re-appointment.

(ii) Appointment of Independent Director:

At the Annual General Meeting of the members of the Company held on 9th September, 2014, your Company appointed following persons as the Independent Directors of the Company:

Sr. Name of the Director DIN Designation No.

1. Shri Hitesh Shah 00061296 Independent Director

2. Shri Sujal Shah* 00058019 Independent Director

3. Shri Anish Malhotra 02034366 Independent Director

4. Shri Manish Desai 02925757 Independent Director

Sr. Name of the Director Date of Appointment as No. Independent Director

1. Shri Hitesh Shah 9th September, 2014

2. Shri Sujal Shah* 9th September, 2014

3. Shri Anish Malhotra 9th September, 2014

4. Shri Manish Desai 9th September, 2014

* During the period Shri Sujal Shah has resigned as an Independent Director of the Company w.e.f. 4th May, 2015. Shri Shishir Dalal has been appointed as an Independent Director from the said date.

DECLARATION OF INDEPENDENCE

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued there under as well as Clause 49 of the Listing Agreement.

BOARD EVALUATION

The Board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued there under and Clause 49 of the Listing Agreement, the Board of Directors at their meeting held on 7th August, 2014 formulated the Nomination and Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Report.

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in "Annexure [A]" to this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, Directors of your Company hereby state and confirm that

(a) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The directors had 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 and loss of the company for that period;

(c) The directors had 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 had 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) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

STATUTORY AUDITORS

M/s. Haribhakti & Co. LLP, Chartered Accountants, Mumbai Statutory Auditors of the company will retire at the ensuing Annual General Meeting. The Board of Directors proposes to appoint M/s. NMAH & Co., Chartered Accountants, Mumbai (Firm Registration No. 135966W) as a Statutory Auditors of the Company. Members are requested to consider appointment of M/s. NMAH & Co., Chartered Accountants, Mumbai as Staturoty Auditors of the Company at a remuneration to be decided by the Board of Directors.

Your Company has received written consent and a certificate stating that they satisfy the criteria provided under Section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued there under.

AUDITORS' REPORT

The Auditors have referred to certain routine matters in their report and the respective notes to the accounts are self-explanatory.

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rule, 2014, the Extract of Annual Return (Form No. MGT-9) as on the financial year ended on 31st March, 2015 is enclosed as "Annexure - [B]" to the Directors' Report.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/S Uma Lodha & Co., Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure - [C|" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEES

Your Board of Directors has duly met four (4) times during the financial year i.e. on 27th May, 2014, 7th August, 2014, 11th November, 2014 and 10th February, 2015 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

The Audit Committee has duly met four (4) times during the financial year i.e. on 27th May, 2014, 7th August, 2014, 11th November, 2014 and 10th February, 2015 in respect of which proper notices were given and the proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established.

The purpose of the "Whistleblower Policy" is to allow employees to raise concerns about unacceptable, improper or unethical practices being followed in the organization. They will be protected against any adverse action and/ or discrimination as a result of such a reporting, provided it is justified and made in good faith. The Chairman of the Audit Committee has been designated for the purpose of receiving and recording any complaints under this policy. The Vigil Mechanism Policy has been uploaded on the website of the Company at http:// www.keynoteindia.net/document-hosting/financial results/Kevnote Whistle%20Blower%20Policy.pdf

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as "Annexure-D". The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at http://www.keynoteindia.net/document-hosting/financial results/ Keynote Policy%20on%20Related%20Partv%20Transactions.pdf

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code has been placed on the Company's website www.kevnoteindia.net

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the Company has formulated risk management policy the same has been placed on the company website. http:// www.keynoteindia.net/document-hosting/financial results/Keynote Risk%20Management%20Policy.pdf At present the company has not identified any element of risk which may threaten the existence of the company.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All the Directors and the designated employees have confirmed compliance with the Code.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

General

a. Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and

b. Your Company does not have any ESOP scheme for its employees/Directors.

ACKNOWLEDGMENT

We take this opportunity to express our deep sense of gratitude to Securities and Exchange Board of India (SEBI), BSE Limited (bSe), National Stock Exchange of India Limited (NSE), Registrar of Companies (ROC), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), Association of Investment Bankers of India (AIBI), Link Intime India Pvt. Limited, M/s. Haribhakti & Co. LLP Statutory Auditors, M/s. R. B. Pandya & Co. Internal Auditors, our Clients, Bankers and other Government Agencies for their continued support.

By Order of the Board For Keynote Corporate Services Limited

Sd/- Vineet Suchanti Date: 10th August, 2015 Managing Director Place: Mumbai (DIN: 00004031)

Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting their 21st Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2014.

(Rs In lacs)

Details Year Ended Year Ended 31-03-2014 31-03-2013

Total Income 942.12 1,069.05

Gross Operating Profit 319.10 480.59

Depreciation 34.06 28.06

profit Before Tax 285.04 452.53

Provision for :

Current Tax 61.57 84.21

Deferred Tax Liability/(Assets) 16.93 29.10

profit After Tax 206.53 339.21

Add/Less : Excess Provision/Short Provision (0.26) 3.37

profit/(Loss) brought forward from Previous year 1,494.07 1,300.35

Surplus available for appropriations 1,700.35 1,642.93

Proposed Dividend 70.18 105.28

Tax on Dividend 11.93 17.89

Transferred to General Reserve 20.63 25.69

Balance carried forward 1,597.61 1,494.07

Dividend

Your directors are pleased to recommend a dividend of Rs 1.00 per Equity Share of face value of Rs 10/- each for the year ended 31st March, 2014. The dividend will be paid subject to approval of members at the 21st Annual General Meeting (AGM).

Operations

The fi rst half of financial year 2013-14 remained dull as far as capital markets are concerned. The BSE Sensex & NSE Nifty was at its lowest ebb in August-September 2013. With the announcement of general elections and certain other political developments the outlook towards Indian capital market changed dramatically with the hope of a stable Government. The secondary market conditions improved with renewed activity with interest by Foreign Institutional Investors followed by good demand from domestic investors. By the end of financial year secondary market showed defi nite indicators of improvement with large infl ows from foreign investors. Thus the hopes for general improvement of economic and capital market conditions revived by the end of fi nancial year.

However, as far as primary market conditions are concerned the activity of equity resource raising through new issuances remained abysmally low. The financial year witnessed one large offer for sale by a company and two Follow on Public Offers (FPOs) by Public Sector Undertakings (PSUs). The activity on SME segment was brisk with about 32 IPO issuances. Your company was able to successfully complete 2 IPOs on SME platform of NSE - EMERGE. The company could also successfully complete 2 Delisting Offers and a right issue during the financial year. Company has been focusing on select capital market and corporate fi nance transactions.

Your Company has been able to provide corporate advisory services to some of the large corporate groups consistently and has been able to maintain its level of operations. The Company posted a total income of Rs 942.12 lacs during the financial year with profit After Tax of Rs 206.53 lacs. The Company has been continuously striving to strengthen and maintain the team of professional with good execution capabilities across the Board. The overall contribution of the team has been on increase during the financial year. Though there has been a fall in income during the financial year as compared to last financial year company is hopeful that with improvement in general market conditions company will be able to generate good business and complete various transactions on hand. Company is hoping to move forward strategically by adding new clients and transactions in year to come.

Operations of Subsidiary

Presently your company has two 100% subsidiaries namely Keynote Capitals Limited (KCL) an integrated broking house and Keynote Fincorp Ltd. (KFIN) a NBFC. KCL is a member of BSE & NSE as well as Depository Participant of Central Depository Services India Limited. KCL has a subsidiary namely Keynote Commodities Ltd. which is member of Multi Commodity Exchange of India (MCX).

During the last financial year the subsidiary was able to restructure the operations by exiting from retail business via process of realignment of business. KCL posted a total income of Rs 919.22 lacs for 31st March, 2014 as compared toRs 2,215.66 lacs for 31st March, 2013. profit After Tax stood atRs 81.62 lacs as compared to Rs 98.35 lacs for the previous year.

Subsidiary Companies and Consolidated Financial Statements.

Keynote Capitals Limited (KCL) and Keynote Fincorp Limited (KFIN) are our wholly owned subsidiaries companies. Presently Keynote Capitals Limited has one wholly owned subsidiary namely Keynote Commodities Limited.

The Statement pursuant to Section 212 of the Companies Act, 1956, relating to Company''s subsidiary and step down subsidiaries is annexed to this Report.

The Audited Accounts of the aforesaid Companies along with the report of the Board of Directors and the Auditors Report thereon which are required to be attached with the Annual Report of the Company have not been attached as the Board of Directors have given consent not to attach the Annual Accounts of the Company''s subsidiary and step down subsidiaries with the Annual Accounts of the Company in accordance with the Ministry of Corporate Affairs, Government of India Circular No.2/2011 dated 8th February, 2011 under Section 212 of the Companies Act, 1956.

Tax Provisions

The Company has made adequate tax provisions under the provisions of Income Tax Act, 1961.

Listing

The Equity Shares of the Company continued to be listed and traded on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). The scrip code number of the Equity Shares of the Company on BSE is 512597 and on NSE is KEYCORPSER. The Company has paid upto date listing fees to both the stock exchanges.

Dematerialization

The Equity Shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd., (NSDL) Central Depository Services (India) Ltd., (CDSL) and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders.

The International Securities Identifi cation Number (ISIN), allotted to the Company is INE681C01015. The Equity Shares of the Company are listed and traded on BSE and NSE. On BSE the equity shares of the Company are traded in "B" segment. The Equity Shares of the Company are being traded in compulsory dematerialized mode. Presently 96.46% of equity capital of the company is in dematerialized mode.

Directors Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956:

(a) that in the preparation of the Annual Accounts for the year ended March 31, 2014 the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) that 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 as at March 31, 2014 and of the profit of the Company for the year ended on that date;

(c) that the Directors have taken proper and suffi cient care 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; and

(d) the annual accounts have been prepared on a going concern basis.

Corporate Governance

The Companies Act, 1956 and the listing agreement with the Stock exchanges require compliances with specifi ed Corporate Governance practices. These practices have been fully implemented and a certifi cate from the Practicing Company Secretary as well as a detailed report on Corporate Governance approved by the Board of Directors of the Company is set out in the annual report. The Company is regularly complying with Corporate Governance practices and also uploading the information under Corporate Filing & Dissemination System (corpfi ling). Your Company has also been enlisted in the new SEBI compliant redressal system (SCORES) enabling the investors to register their complaint if any for speedy redressal.

Particulars of Employees

Your Directors acknowledge and appreciate the sincere efforts and effective services rendered by the committed employees and staff of the company.

During the year under review, there was no employee covered under the provision of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

Auditors Observations

The Auditors have referred to certain routine matters in their report and the respective notes to the accounts are self- explanatory.

Conservation of Energy, Technology absorption, Foreign Exchange Earning and outgo:

In view of the nature of activities of the Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 concerning conservation of energy and technology absorption respectively are not applicable to the Company.

During the year the Company has earned an Income of Rs 86.52 lacs in Foreign Exchange and has incurred an expenditure ofRs 16.42 lacs in Foreign Exchange.

Fixed Deposits

During the year ended 31st March, 2014 the Company has not accepted any deposits from the Public under Section 58A of the Companies Act, 1956.

Directors

In accordance with Section 152 and other applicable provisions of Companies Act, 2013, Shri Uday S. Patil (DIN : 00003978) Director retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting. Also as per the provisions of Companies Act, 2013, it is proposed to appoint Shri Hitesh Shah (DIN : 00061296), Shri Sujal Shah (DIN : 00058019), Shri Anish Malhotra (DIN : 02034366) and Shri Manish Desai (DIN : 02925757) as Independent Directors of the Company for a consecutive term of fi ve years from 21st Annual General Meeting.

Brief resumes of Directors, nature of their expertise in specifi c functional areas are annexed and forms part of this Report.

Based on the confi rmations received, none of the Directors are disqualifi ed for appointment under Section 274(1)(g) of the Companies Act, 1956 and Section 164(2) of Companies Act, 2013.

Statutory Auditors

The Auditors, M/s. Haribhakti & Co. LLP Chartered Accountants, Mumbai, hold offi ce until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment.

The Ministry of Corporate Affairs has notifi ed the provisions of Section 139 of the Companies Act, 2013 for appointment of Auditors, which is effective from April 1, 2014. Pursuant to Section 139(2) of the Companies Act, 2013 and the rules made thereunder, no listed company shall appoint or re-appoint a audit fi rm as auditor for more than two terms of fi ve consecutive years. Further the aforesaid appointment is subject to ratifi cation by the Members of the Company at every Annual General Meeting.

Pursuant to Section 139(2) of the Companies Act, 2013, the Audit Committee and Board of Directors of Company have recommended their appointment for a period of fi ve years i.e. from the conclusion of 21st Annual General Meeting, until conclusion of sixth Annual General Meeting to be held after this meeting, subject to ratifi cation at every Annual General Meeting. M/s. Haribhakti & Co. LLP Chartered Accountants have confi rmed that re-appointment, if made, will comply with the eligibility criteria in terms of Section 141(3) of the Companies Act, 2013.

Information under the sexual harassment of women at workplace (Prevention, prohibition and Redressal), Act, 2013.

In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has formed a Committee to look into such cases as and when they arise. During the period under review, no cases were fi led before the Committee.

Whistle Blower Policy

As per the provision of Section 177(9) of the Companies Act, 2013 the listed Company shall establish a vigil mechanism for directors and employees. The vigil mechanism shall also provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. Such mechanism has been disclosed by the Company on its website.

The purpose of the "Whistleblower Policy" is to allow employees to raise concerns about unacceptable, improper or unethical practices being followed in the organization. They will be protected against any adverse action and/or discrimination as a result of such a reporting, provided it is justifi ed and made in good faith. The Chairman of the Audit Committee has been designated for the purpose of receiving and recording any complaints under this policy.

Acknowledgment

We take this opportunity to express our deep sense of gratitude to Securities and Exchange Board of India (SEBI), BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Registrar of Companies (ROC), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), Association of Investment Bankers of India (AIBI), Link Intime India Pvt. Limited, M/s. Haribhakti & Co. LLP Statutory Auditors, M/s. K. K. Bhageria & Co. Internal Auditors, our Clients, Bankers and other Government Agencies for their continued support.

By Order of the Board For Keynote Corporate Services Limited

Sd/- Date: 7th August, 2014 Vineet Suchanti Place: Mumbai Managing Director

Mar 31, 2012

To The Members of Keynote Corporate Services Limited (Keynote)

The Directors have pleasure in presenting their 19th Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2012.

(Rs in lacs)

Details Year Ended Year Ended 31-03-2012 31-03-2011

Total Income 1,039.98 1,626.53

Gross Operating Profit 471.71 942.59

Depreciation 11.37 12.09

Profit Before Tax 460.34 930.50 Provision for :

Current Tax 142.19 337.13

Deferred Tax Liability/(Assets) 5.35 (20.95)

Profit After Tax 312.80 614.31

Add/Less : Excess Provision/Short Provision - -

Profit/(Loss) brought forward from Previous year 1,130.44 675.75

Surplus available for appropriations 1,443.24 1,290.06

Proposed Dividend 105.28 105.28

Tax on Dividend 17.08 17.48

Transferred to General Reserve 20.55 36.86

Balance carried forward 1,300.35 1,130.44

Dividend

Your Board is pleased to recommend a dividend of Rs. 1.50 per Equity Shares (i.e. 15%) on 70,18,339 fully paid- up Equity Shares of Rs. 10/- each for the financial year ended on 31st March, 2012.

Change in Registered Office

Your Directors are pleased to inform the members that wef 16th April, 2012, the registered office of your company has been shifted to a new and spacious owned premises at The Ruby, 9th Floor, Seagate Bapat Marg, Dadar (W), Mumbai - 400 028.

Operations

The capital market scenario during the financial year 2011-12 remained subdued. The primary market conditions remained lackluster and mobilization through public equity market was almost half that of the preceding year. The Government of India had to defer some of the large PSU offerings on account of continuing volatility in the secondary market throughout the year. There was a decrease of about 35% in number of public issues during the financial year. Similarly the rights issue mobilization was down by 75% as compared with rights issue mobilization in the year 2010-11. The dismal market conditions throughout the year contributed to the sharp fall in resource raising through public markets.

During the financial year ended 31st March, 2012 your company could successfully complete 1 IPO as Book Running Lead Manager and 3 Rights Issues aggregating to about Rs. 14,819 lacs successfully. Your company laid emphasizes on corporate finance activities with efforts to advise and complete transactions relating to Mergers

& Acquisition, Private Equity deals, Valuations and other advisory services. Your company was successful in advising on a large acquisition deal by an established industry house aggregating to about Ã 275 Million. Besides this mega deal your company was also able to advise some of the corporate on implementation of scheme of arrangement, preferential allotment to foreign investors etc. The company posted a total income of Rs. 1039.98 lacs during the financial year with a profit after tax of Rs. 312.80 lacs.

During the year the company strengthened the internal team of personnel with execution capabilities across the board. Your company applied to Securities & Exchange Board of India (SEBI) for renewal of Category I Merchant Banker registration in September 2011. As on date we are pleased to inform the members that your company has received "Permanent Registration" from SEBI to act as Category I Merchant Banker.

Operations of Subsidiaries

Keynote Capitals Limited (KCL), a 100% subsidiary and an integrated broking house having memberships of the BSE Limited (BSE), National Stock Exchange of India Ltd., (NSE) & Multi Commodity Exchange of India Ltd. (MCX) has also posted consistent performance. KCL continues to focus on institutional and corporate broking business.

KCL geared up process of expanding its Retail operations with a focus on more active equity centers. Over the past few months KCL has expanded the retail network and currently offers stock broking services at 90 locations through network of branches and franchises.

KCL posted a total Income of Rs. 1,520.10 lacs for 31st March, 2012 as compared to Rs. 1,255.28 lacs in 31st March, 2011. However, Profit after Tax stood at Rs. 55.57 lacs compared to Rs. 46.17 lacs for the previous year. During the financial year 2011-12 the subsidiary acquired a Non-Banking Finance Company (NBFC) and obtained requisite Reserve Bank of India (RBI) approvals. Acquisition is aimed at developing the Synergies with Stock- Broking proposed portfolio Management activities and other existing businesses of subsidiary.

Subsidiary Companies and Consolidated Financial Statements.

Keynote Capitals Limited (KCL) is our wholly owned subsidiary company. Presently Keynote Capitals Limited has two wholly owned subsidiaries namely (1) Keynote Commodities Limited and (2) Keynote Fincorp Private Limited (Formerly Abhishek Finance and Investment Pvt. Limited) which became subsidiary wef. 29th November, 2011. During the year the operations of Arteries Insurance Broking Limited (a subsidiary of KCL) were discontinued wef 15th June, 2012 and accordingly the name of the Company was striked off from Ministry of Corporate Affairs (MCA) records.

The Statement pursuant to Section 212 of the Companies Act, 1956, relating to Company's subsidiary and step down subsidiaries is annexed to this Report.

The Audited Accounts of the aforesaid Companies along with the report of the Board of Directors and the Auditors Report thereon which are required to be attached with the Annual Report of the Company have not been attached as the Board of Directors have given consent not to attach the Annual Accounts of the Company's subsidiary and step down subsidiaries with the Annual Accounts of the Company in accordance with the Ministry of Corporate Affairs, Government of India Circular No.2/2011 dated 8th February, 2011 under Section 212 of the Companies Act, 1956.

Tax Provisions

The Company has made adequate tax provisions under the provisions of Income Tax Act, 1961.

Listing

The Equity Shares of the Company continued to be listed and traded on the BSE Limited (BSE) and National Stock Exchange of India Ltd. (NSE). The scrip code number of the Equity Shares of the Company on BSE is 512597 and on NSE is KEYCORPSER. The Company has paid up-to-date listing fees to both the exchanges.

Dematerialization

The Equity Shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd., Central Depository Services (India) Ltd., and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders.

The International Securities Identification Number, allotted to the Company is INE681C01015. The Equity Shares of the Company are listed and traded on BSE, in "B" segment and NSE, and are being traded in compulsory dematerialized mode. Presently 96.16% of equity capital of the company is in dematerialized mode.

Directors Responsibility Statement

In compliance with Section 217(2AA) of the Companies (Amendment) Act 2000, the Directors state that:

(a) In the preparation of annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departures, if any, have been furnished.

(b) Accounting policies as listed in note No. 1 and 2 to the financial statements have been selected and consistently applied and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the company as on 31st March, 2012 and of the Profit or Loss of the Company for the Accounting Year ended on that day.

(c) Proper and sufficient care for the maintenance of adequate accounting records has been taken in accordance with the provisions of the said act so as to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

(d) The annual accounts have been prepared on a going concern basis.

Corporate Governance

The Companies Act, 1956 & the listing agreement with the Stock exchanges require compliances with specified Corporate Governance practices. These practices have been fully implemented and a certificate from the Practicing Company Secretary as well as a detailed report on Corporate Governance, approved by the Board of Directors of the Company is set out in the annual report. The Company is regularly filing of reports including uploading of information in Corporate Filing & Dissemination System (compiling). Your Company has also been enlisted in the new SEBI compliant redressed system (SCORES) enabling the investors to register their complaint if any for speedy redressed.

Human Resources

Your Directors acknowledge and appreciate the sincere efforts and effective services rendered by the committed officers and staff of the company.

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975 as amended, regarding employees and forming part of this Report are not applicable to the Company as per notification dated 31st March, 2011 issued by the Ministry of Corporate Affairs, New Delhi.

Auditors Observations

The Auditors have referred to certain routine matters in their report and the respective notes to the accounts are self-explanatory.

Conservation of Energy and Technology Absorption

The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 require disclosure of particulars regarding conservation of energy in Form A and Technology Absorption in Form B prescribed by the rules. The Company not being a manufacturing Company is advised that Form A and B are not applicable to it.

Foreign Exchange Earnings & Expenditure

During the year the Company has earned an Income of Rs. 1.08 lacs in Foreign Exchange and has incurred an expenditure of Rs. 5.76 lacs in Foreign Exchange.

Fixed Deposits

During the year ended 31st March, 2012 the Company has not accepted any Fixed Deposits from the Public under Section 58-A of the Companies Act, 1956. The Company does not hold any Fixed Deposits from the public.

Directors

Shri Nirmal Suchanti has resigned from the Board of Directors wef 9th August, 2012.

Shri Vineet Suchanti and Shri Sujal Shah, Directors are due to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their re-appointment.

Auditors

M/s. Haribhakti & Company, Chartered Accountants and Statutory Auditors will retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Members are requested to consider their re-appointment at a remuneration to be decided by the Board of Directors for the financial year ended 31st March, 2013.

Acknowledgment

We take this opportunity to express our deep sense of gratitude to Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India Limited, Registrar of Companies, National Securities Depository Limited, Central Depository Services (India) Limited, Association of Investment Bankers of India, Link Intime India Pvt. Limited, M/s. Haribhakti & Co., Statutory Auditors, M/s. K. K. Bhageria & Co. Internal Auditors, our Clients, Bankers and other Government Agencies for their continued support.

By Order of the Board For Keynote Corporate Services Limited

Sd/-

Date : 9th August, 2012 B. Madhuprasad

Place: Mumbai Vice-Chairman

Mar 31, 2010

The Directors have pleasure in presenting their 17,th Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2010.

(Rs. in lacs)

Details Year Ended Year Ended 31-03-2010 31-03-2009

Total Income 1,011.00 1,125.11

Gross Operating Profit 559.46 629.69

Depreciation 11.71 11.41

Profit Before Tax 547.75 618.28

Provision for:

Current Tax 144.00 200.00

Deferred Tax Liability/(Assets) (0.07) 1.01

Fringe Benefit Tax - 5.55

Profit After Tax 403.82 411.72

Add/Less : Excess Provision/Short Provision 64.18 (10.09)

Profit/(Loss) brought forward from Previous year 479.46 159.93

Surplus available for appropriations 819.10 561.56

Proposed Dividend 105.00 70.18

Tax on Dividend 18.00 11.93

Transferred to General Reserve 20.19 -

Balance carried forward 675.75 479.45

Dividend

Your Board is pleased to recommend a dividend of Rs. 1.50/- per Equity Shares (i.e. 15%) on 70,18,339 fully paid- up Equity Shares of Rs. 10/- each for the financial year ended on 31st March, 2010.

Operations

The first half of the financial year 2009-10 continued to be sluggish in line with the global scenario. Your company was able to withstand the downturn effectively. Transactions and markets stated picking up in the second half and during the current financial year Keynote was actively involved in Book Running for 3 IPOs raising approximately Rs. 140 crores. In addition, the company also successfully managed a few Buy Back of shares and Tender Open Offers. The company, during the year, strengthened its Corporate Finance Team and its valuation desk with a view to be actively involved in raising funds for unlisted companies through Private Equity and being an Advisor to Mergers & Acquisitions transactions (M & A).

The Company has posted a total Income of Rs. 1,1011.00 lacs and a Profit After Tax of Rs. 403.82 lacs.

Operations of Subsidiaries

Keynote Capitals Limited (KCL), a 100% subsidiary and an integrated broking house having memberships of the Bombay Stock Exchange Ltd., (BSE) and National Stock Exchange of India Ltd., (NSE) has also posted ! consistent performance. KCL continues to focus on institutional and corporate broking business. KCL has also expanded its research and focuses on covering mid-cap companies as well as track the IPO market.

KCL is in the process of expanding its Retail operations with a focus on more active equity centres. It is j estimated that by the end of the next financial year, KCL will have over 10 full fledged branches offering retails clients the entire bouquet of equity trading, demat and research services. Your holding company, KCSL invested Rs. 625 lacs in KCL by way of equity to further strengthen the subsidiarys capitalization.

KCL posted a total Income of Rs. 1,004.88 lacs for 31/03/2010 as compared to Rs. 836.33 lacs in 31/03/2009. However, Profit After Tax stood at Rs. 186.50 lacs compared to Rs. 215.33 lacs for the previous year.

The corporate structure of the Group is as below :

Keynote Corporate Services Ltd.

SEBI Registered Category Merchant Banker

Wholly owned subsidiary

Keynote Capitals Ltd.

Member: BSE, NSE, NSE Derivative Depository Participant (DP)

Wholly owned subsidiaries

Keynote Commodities Ltd. Keynote Wealth Management Ltd. Arteries

Insurance

Broking Ltd.

Member: Multi Commodity Distributor of Financial Products Insurance Broking : Applied for Exchange (MCX) i.e. MFs, IPOs, Bonds, FDs etc.

Subsidiary Companies and Consolidated Financial Statements.

Keynote Capitals Limited (KCL) is a wholly owned subsidiary company. Keynote Capitals Limited has three i wholly owned subsidiaries namely (1) Keynote Commodities Limited (2) Keynote Wealth Management Limited (3) Arteries Insurance Broking Limited.

Pursuant to Section 212 of the Companies Act, 1956 the Company made an application to the Ministry of Corporate Affairs, Government of India, New Delhi and sought an exemption from attaching with the Balance Sheet of the company, the Accounts and other documents of each of the Subsidiary Companies of the company. The Ministry of Corporate Affairs, Government of India vide its letter No. 47/672/2010-CL-III dated 2nd August, 2010, has granted their approval under Section 212(8) of the Companies Act, 1956 for not attaching the Balance Sheet etc. of the aforesaid subsidiaries for the financial year ended 31st March, 2010. Accordingly provisions of Section 212 (1) of the Companies Act, 1956 in respect of these subsidiaries are not applicable. In compliance with the said approval the company has disclosed the information in respect of these subsidiaries as advised.

The Company undertakes that annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies investors seeking such information at any point of time. The annual accounts of the subsidiary companies are also kept for inspection by any investor in its registered office and that of the subsidiary companies concerned. The holding Company shall furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand. The Company will put the details of the accounts of individual subsidiary companies on the website of the company.

As per Clause 32 of the Listing Agreement, the consolidated financial statements of the Company with its Subsidiaries form part of the Annual Report. The copies of the audited annual accounts of the Companys Subsidiaries and other related documents can also be sought by any member of the Company or its Subsidiaries on making a written request to the Company Secretary in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection by any investor at the Companys and/or the concerned Subsidiaries registered office.

Tax Provisions

The Company has made adequate tax provisions under the provisions of Income Tax Act, 1961.

Listing

The Equity Shares of the Company continue to be listed and traded on the BSE and NSE. The scrip code number of the equity shares of the Company on BSE is 512597 and on NSE is KEYCORPSER. The Company has paid up-to-date listing fees to both the exchanges.

Dematerialization

The equity shares of the Company can be held in dematerialized form. The Company has signed the tripartite agreement with National Securities Depository Ltd. Central Depository Services (India) Ltd., and existing Registrar & Transfer Agent for dematerialization of existing holding of the shareholders.

The International Securities Identification Number, allotted to the Company is INE681C01015. The equity shares of the Company are listed and traded on Bombay Stock Exchange Ltd., in "B" segment and National Stock Exchange of India Ltd. and are being traded in compulsory dematerialized mode. Presently 92.94% of equity capital of the company is in dematerialized mode.

Directors Responsibility Statement

In compliance with Section 217(2AA) of the Companies (Amendment) Act 2000, the Directors state that:

(a) In the preparation of annual accounts, the applicable accounting standards have been followed and proper explanations relating to material departures, if any, have been furnished.

(b) Accounting policies as listed in Schedule "N" to the financial statements have been selected and consistently applied and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the company as on 31st March, 2010 and of the Profit or Loss of the Company for the Accounting Year ended on that day.

(c) Proper and sufficient care for the maintenance of adequate accounting records has been taken in accordance with the provisions of the said act so as to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

(d) The annual accounts have been prepared on a going concern basis.

Corporate Governance

The Companies Act, 1956 & the listing agreement with the Stock exchanges require compliances with specified Corporate Governance practices. These practices have been fully implemented and a certificate from the Auditors of the Company as well as a detailed report on Corporate Governance, approved by the Board of Directors of the Company is set out in the annual report. The Company is regularly filing of reports including uploading of information in Electronic Data Information filing and Retrieval System/Corporate Filing & Dissemination system.

Human Resources

Your Directors acknowledge and appreciate the sincere efforts and effective services rendered by the committed officers and staff of the company.

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975 as amended, regarding employees and forming part of this Report is furnished in the Annexure to this Report.

Auditors Observations

The Auditors have referred to certain routine matters in their report and the respective notes to the accounts are self-explanatory.

Conservation of Energy and Technology Absorption

The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 require disclosure of particulars regarding conservation of energy in Form A and Technology Absorption in Form B prescribed by the rules. The Company not being a manufacturing Company is advised that Form A and B are not applicable to it.

Foreign Exchange Earnings & Expenditure

During the year the Company has earned an Income of Rs. 13.79 lacs in Foreign Exchange and has incurred an expenditure of Rs. 7.49 lacs in Foreign Exchange.

Fixed Deposits

During the year ended 31st March, 2010 the Company has not accepted any Fixed Deposits from the Public under Section 58-A of the Companies Act, 1956. The Company does not hold any Fixed Deposits from the public.

Directors

Shri B. Madhuprasad and Shri Hitesh Shah, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Your Directors recommend their re-appointment. Auditors

M/s. K. K. Bhageria & Co., Chartered Accountants and Statutory Auditors of the company will retire at the ensuing Annual General Meeting. The Board of Directors proposes to appoint M/s. Haribhakti & Company, Chartered Accountants, as a Statutory Auditor of the Company. Members are requested to consider appointment of M/s. Haribhakti & Company, at a remuneration to be decided by the Board of Director for the financial year 31st March, 2011.

Acknowledgment

We take this opportunity to express our deep sense of gratitude to Securities and Exchange Board of India, Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd., Registrar of Companies, National Securities Depository Ltd., Central Depository Services (India) Ltd., Association of Merchant Bankers of India, M/s. Link Intime India Pvt. Ltd., Clients, Bankers and other Government Agencies for their continued support.

By Order of the Board

For Keynote Corporate Services Limited

Sd/-

Date :25th August, 2010 B. Madhuprasad

Place : Mumbai Vice Chairman

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