Directors Report of Nexome Capital Markets Ltd.

Mar 31, 2025

Your Directors have pleasure in presenting the Forty Second Annual Report of the Company
together with the audited financial statements for the year ended March 31, 2025.

1. (a) FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

('' in I akhs)

Particulars	Year ended 31.03.2025	Year ended 31.03.2024
Profit before Interest, Depreciation, Exceptional items & Tax	324.95	353.63
Less: Finance Charge	8.45	0.51
Profit before Depreciation, Exceptional items & Tax	316.50	353.12
Less: Depreciation / Amortization	52.15	23.88
Profit before Exceptional items and Tax	264.35	329.24
Exceptional items	58.53	-
Profit before Tax	205.82	329.24
Less: Tax Expenses - Current / Earlier years	43.52	56.06
Less : Deferred Tax for the year	44.34	32.09
Profit after Tax	117.96	241.09
Profit brought forward from earlier year	1462.21	1,221.12
Profit transfer from OCI Reserve:	14.79	-
Profit available for Appropriation	1594.96	1,462.21
APPROPRIATIONS	-	-
Dividend including Dividend Tax	-	-
Profit carried to Balance Sheet	1594.96	1,462.21

(b) PERFORMANCE, STATE OF COMPANY''S AFFAIRS AND CHANGE IN NATURE OF
BUSINESS:

Profit Before Tax of the Company for the year was Rs 205.82 Lakhs (previous year Rs
329.24 Lakhs).

Net worth of the Company as on March 31, 2025 was Rs. 15475.95 lakhs (previous
year Rs. 12,960.18 lakhs).

During the year, the Company received the in-Principle approval from the Exchanges
to change its name from SMIFS Capital Markets Limited to Nexome Capital Markets
Limited since the Company wants to expand its business under the name “NEXOME”.
There is no change in the nature of business of the Company during the year under
review.

Your Company is currently providing advisory services for a client which is expected
to complete by June 2025.

(c) CAPITAL

The paid up Equity Share Capital as on March 31,2025 stood at Rs. 587.70 Lakhs divided
into 58.77 equity shares of'' Rs.10/- each.

I. Preferential Allotment of Shares

During the year, the Board of Directors of the Company in their meeting dated
September 11, 2024 and pursuant to the approval from Members of the Company
by way of Postal Ballot, your Company has allotted 2,92,000 Equity Shares of face
value of Rs.10 each at a price of Rs. 64 each to Merlin Resources Private Limited
by way of preferential issue aggregating to Rs. 1,86,88,000/- (Rupees One Crore
Eighty-Six Lakhs and Eighty-Eight Thousand Only) on October 25, 2024.

Consequent to aforesaid allotment of Equity Shares by way of Preferential issue,
the paid-up share capital of the Company has increased from 55,85,000 equity shares
of face value of Rs. 10 each as at 31st March 2024 to 58,77,000 equity shares of
face value of Rs. 10 each as at 31st March 2025.

II. Preferential Allotment of Equity Convertible Warrants

During the year, the Board of Directors of the Company in their meeting dated
September 11, 2024 and pursuant to the approval from Members of the Company
by way of Postal Ballot has approved preferential issue of upto 19,20,000 Equity
Convertible Warrants, each carrying a right to subscribe to 1 fully paid-up equity
share of the Company of face value of Rs. 10 each, to Mr. Utsav Parekh, Panchganga
Advisors Private Limited, Monet Securities Private Limited, Forbes EMF, Chivas
Trading Private Limited aggregating to Rs. 12,28,80,000/- (Rupees Twelve Crores
and Twenty-Eight Lakhs and Eighty Thousand Only). The same was approved by
the Members of the Company by way of Postal Ballot. In terms of the approval and
upon receipt of 25% of consideration, on 25 October 2024, your Company has allotted
19,20,000 Equity Convertible Warrants, by way of preferential issue at a price of
Rs. 64 per warrant.

The remaining 75% of the consideration will be paid at the time of conversion of
warrants into equity shares at any time on or before the expiry of 18 (eighteen) months
from the date of allotment of the Warrants.

The funds raised by way of preferential issue of Equity Shares and Equity Convertible
Warrants have been utilised towards funding the business of the Company by making
Investment in Shares & Securities including investing in special situations, long term
and short term investing, tactical and opportunistic investments, debt funds, capital
requirement for the purpose of repayment or part prepayment of borrowings of the
Company, working capital requirements.

(d) DIVIDEND

To conserve resources for future growth, your Board of Directors do not recommend any
dividend for the year.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividends
are required to be transferred by the Company to the IEPF established by the Central
Government, after the completion of seven years. Further, according to the IEPF Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which
the dividend has not been paid or claimed by the shareholders for seven consecutive
years or more shall also be transferred to the demat account created by the IEPF Authority.
Accordingly, the Company has transferred the unclaimed and unpaid dividend and
shares.

Attention is also being drawn that the unclaimed/unpaid dividend for the financial year
2017-18 is due for transfer to Investor Education and Protection Fund during October/
November 2025. In view of this, Members of the Company, who have not yet encashed
their dividend warrant(s) or those who have not claimed their dividend amounts, may
write to the Company/ Company’s Registrar and Transfer Agents, M/s Maheshwari
Datamatics Private Limited.

(f) MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the
Company for the year under review as required under Regulation 34 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges
is given in the part on Corporate Governance elsewhere in the Annual Report marked
as “Annexure A”.

2. FINANCE

The Company continues to focus on judicious management of its working capital. The
Company’s long-term debt as on 31st March, 2025 was Rs. 297.32 lakhs (Previous Year
Rs. 4.8 lakhs).

3.1 DEPOSITS

The Company has not accepted any deposit falling within the ambit of Section 73 of
the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014
from the public.

3.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments of the Company and its wholly-
owned subsidiary Company namely, SMIFS Capital Services Limited has been disclosed
in the financial statements.

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The Internal Audit monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with operating systems,
accounting procedures and policies of the Company and its subsidiary. Based on the report
of internal auditors, corrective action is undertaken in respective areas and thereby controls
are strengthened. Significant audit observations and corrective actions taken thereon are
presented to the Audit Committee of the Board. The Company vide its meeting of Committee
of Directors held on March 31, 2025 has decided to implement Cybersecurity and Cyber

Resilience Framework (CSCRF) w.e.f. April 01, 2025 in compliance with SEBI Circular No.
SEBI/HO/ITD-1/ ITD_CSC_EXT/ P/ CIR/ 2024/ 113 on Cybersecurity and Cyber Resilience
Framework (CSCRF) for SEBI regulated entities which is mandatory for all the Merchant
Bankers.

5. SUBSIDIARY COMPANY

As on March 31,2025, there is one wholly-owned subsidiary Company namely, SMIFS Capital
Services Limited. Statement required under Section 129(3) of the Companies Act, 2013 in
respect of the Subsidiary Company is attached herewith.

FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE SUBSIDIARY COMPANY

Particulars	Year ended	Year ended
	31.03.2025	31.03.2024
Profit/(Loss) before Interest, Depreciation & Tax	0.71	2.37
Less: Finance Charge	0.35	0.31
Profit/(Loss) before Depreciation & Tax	0.36	2.06
Less: Depreciation / Amortization	2.01	1.97
Profit/ (Loss) before Tax	(1.65)	0.09
Less : Tax Expenses	(0.34)	0.29
Profit/ (Loss) after Tax	(131)	(0.20)
Profit/(Loss) brought forward from earlier years	(45.64)	(45.44)
Profit/(Loss) carried to Balance Sheet	(46.95)	(45.64)

6. YEAR IN RETROSPECT AND FUTURE OUTLOOK

The financial year 2024-25 began on a promising note as supplies of goods were improving,
financial markets exuded greater optimism and globally central banks were steering their
economies towards a soft landing. In December 2024, President Trump sparked trade tensions
by targeting India’s high tariffs under his "America First Trade Policy". On 2nd April 2025 USA
announced reciprocal tariffs: a minimum flat 10% tariff on all imports from various countries
as well as country-specific rates mirroring foreign levies on US goods, citing unfair trade
practices and tariff asymmetry as threats to US economic stability. For India, a 26% duty on
exports to USA starting 9th April, 2025 was announced. However, in a significant shift from
his earlier aggressive stance, President Trump announced a 90 day pause on implementing
new reciprocal tariffs on India which meant 10 % flat duty on all imports, while maintaining
high tariffs on Chinese imports which has later been revised to 30% tariff for 90 days. This
signals a strategic reconsideration amidst global supply chain challenges and evolving
geopolitical priorities. For India, these developments could have a significant impact on exports
by various sectors like textiles, gems and jewellery etc.

Auto parts, steel, and aluminum are not covered in the recent tariff orders as they are already
subject to the Section 232 tariffs of 25% announced on 26 March 2025. Auto parts exports
for which the US is a key market, may face headwinds. India’s exports of semiconductor devices
to the US were approximately US$ 1.81 billion in 2023. Thus, acknowledging their critical
role in global supply chains, semiconductors have been exempted from these tariffs.

Amongst the global turmoil and near recessionary conditions in many countries, India remains
one of the fastest growing economies in the world. Reserve Bank of India in April 2025 has
projected India’s GDP growth rate for the financial year 2025-2026 at 6.5 % and has estimated
CPI inflation to come down in 2025-26 to 4 %. IMF has cut India''s GDP Forecast To 6.2%
for 2025-26, which is lower than RBI''s estimates for the financial year 2025-26.

India’s retail inflation has reduced from 5.4 per cent in 2023-24 to 4.9 per cent in 2024-25(April-
December), aided by various government initiatives and monetary policy measures. WPI
inflation eased to a nine-month low of 0.85% in April, down from 2.05% in March, driven
by falling fuel prices and moderated food inflation. IMD and Skymet have forecasted above
normal and normal monsoon respectively for India in 2025. Therefore, moderating inflation
pressures and forecast of normal monsoon have opened up possibility of interest rate cuts
in India in the second half of 2025-26 as well after two repo rate cuts of 25 basis points each
in last few months.

Our economy is growing at a fast pace and this is evidenced by highest GST revenue collection
for April 2025 at Rs. 2.37 lakh crores. This represents a significant 12.6% year on year growth
driven by a strong demand in domestic transactions (up 10.7%) and imports (up 20.8%). India’s
Industrial growth (IIP) for the financial year 2024-25 was at 4% compared to 5.9% for the
year 2023-24 which is expected to accelerate in 2025-26. Inspite of a record US $824.9
billion worth of exports in financial year 2024-25, India’s trade deficit widened to US$ 94.26
billion, as total imports rose by 6.85%, amounting to US$ 915.19 billion for the financial year.
India’s services exports grew at one of the fastest rates over the last 18 years and India’s
defence and electronics exports have risen rapidly.

India’s fiscal deficit in 2024-25 has come down to 4.8% of GDP and is estimated to come
down to around 4.4% in 2025-26. Inspite of geopolitical developments affecting crude prices,
India has managed its crude imports well by negotiating appropriate discounts from Russia
and other exporting countries.

Amidst this volatility, our banking and non-banking financial service sectors in India remain
healthy and is well governed by the Regulator. The Indian Rupee has also moved in an orderly
manner in the financial year 2024 - 25.

As per IMF, India is likely to become the third largest economy in 2027. Capital expenditure
has emerged as a key growth driver in India. Government has accelerated public sector capital
expenditure and private sector capital expenditure is now catching up. Capacity utilization
has now reached around 75 percent and corporates are considering setting up new capacities.
The Government has also come out with production linked incentive schemes in various
sectors which is boosting capital expenditure and manufacturing.

On April 22, 2025, in a devastating attack in Pahalgam, militants opened fire on tourists which
led to the tragic demise of civilians. In response to the terror attack, decisive action was taken
by India in destroying terror infrastructure in Pakistan and PoK. Pakistan approached India
for a ceasefire which India accepted and our markets moved up in the week thereafter also
aided by trade agreement between USA and China for a 90 day pause. BSE Sensex moved
up from 73,651 on 31st March 2024 to 77,415 on 31st March 2025, a rise of 5.11 %. FIIs
sold Rs. 3,99,939.69 crores worth of shares during 2024-25 as valuations became expensive
and funds moved to developed markets during the year.

7. LISTING OF THE SECURITIES OF THE COMPANY

Equity Shares of your Company continue to be listed on BSE Limited and The Calcutta Stock
Exchange Limited and the listing fees for the year 2025-26 have been paid and 99.19 percent
of the equity shares of your Company are held in dematerialized form.

8. DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect
to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the Annual Accounts the applicable accounting standards have been
followed along with proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and
made judgment 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 the
profit and loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provision of this act for safeguarding the assets
of the company and for preventing and detecting fraud and other irregularities.

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

(e) the directors, have laid down internal financial control to be followed by the company
and that such internal financial control are adequate and were operating effectively, and

(f) the directors have devised proper systems to ensure compliance with the provision of
all applicable laws and that such system were adequate and operating effectively.

9. RELATED PARTY TRANSACTIONS

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

All Related Party Transactions are placed before the Audit Committee as also the Board for
approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for
the transactions which are foreseen and are of repetitive nature. The transactions entered
into pursuant to the omnibus approval so granted are audited and a statement giving details
of all related party transactions is placed before the Audit Committee and the Board of Directors
for their approval on a yearly basis. The policy on Related Party Transactions as approved
by the Board is uploaded on the Company’s website. None of the Directors have any pecuniary
relationship or transactions vis-a-vis the Company. The particulars of contracts or
arrangements with related parties referred to in sub section (1) of section 188 entered by
the Company during the financial year ended 31st March, 2025 has been disclosed in the
financial statements.

10. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION(12)OF
SECTION 143 OF COMPANIES ACT 2013, OTHER THAN THOSE REPORTABLE TO THE
CENTRAL GOVERNMENT

No material fraud by the company or on the company by its officers or employees has been
noticed or reported during the course of audit.

11. MATERIAL CHANGES AND COMMITMENTS

The Company received the approval from Registrar of Companies, Central Processing Centre
for changing its name from SMIFS Capital Markets Limited to Nexome Capital Markets Limited
on April 17, 2025. After which, the Company was officially listed on the Exchanges i.e. BSE
Limited and The Calcutta Stock Exchange Limited as Nexome Capital Markets Limited w.e.f
May 14, 2025 and May 09, 2025 respectively.

No other material changes and commitments affecting the financial position of the Company
occurred between the end of the financial year to which these financial statements relate
and the date of this report.

12. SECRETARIAL STANDARDS

The Company is compliant with all the mandatory secretarial standards as issued by the
Institute of Company Secretaries of India (ICSI).

13. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement,
if any. The details of the Vigil Mechanism is explained in the Corporate Governance Report
and also posted on the website of the Company.

14. COST RECORDS

Maintenance of cost records specified by the Central Government under section 148(1) of
the Companies Act, 2013 is not required as the company does not fall under the ambit of
prescribed class of companies who are required to make and maintain cost records.

15. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right
of gender equality and guarantee against sexual harassment and abuse, more particularly
against sexual harassment at work place, your Company has a Policy on Prevention of Sexual
Harassment at the Workplace duly approved by the Board of Directors.

During the year, no complaint was reported under The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.

16. CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING
ANDOUTGO

Particulars required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies
(Accounts) Rules, 2014, under the heads (a) conservation of energy; and (b) technology
absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year nil). Foreign Exchange
outgo during the year aggregated to Nil. (Previous year Nil).

17. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Regulation
17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with fifty
per cent of the Directors being Independent Directors. Your Board comprises of 8 (eight)
directors out of which 4 (four) are independent directors.

During the year, as per the provisions of the Companies Act, 2013 and other applicable laws,
the appointment of Mr. Nitin Daga and Mr. Pratik Ghose was confirmed as Non- Executive
Independent Directors on May 31, 2024 via Postal Ballot.

Mr. Samarth Parekh and Mr. Anil Kumar Murarka were appointed as Additional Directors of
the Company in the Board Meeting held on April 04, 2025. Their appointment was confirmed
via Postal Ballot on May 09, 2025 as Joint Managing Director and Non-Executive Independent
Director respectively. Further, Mr. Ajay Kumar Kayan resigned w.e.f. May 23, 2025 and
Mr. Saharsh Parekh was appointed as a Non-Executive, Non- Independent Director w.e.f.
May 23, 2025.

Mr. Utsav Parekh is the Non- Executive Chairman.

Re-appointment of Managing Director

Mr. Kishor Shah has been re-appointed as Managing Director of the Company with effect
from April 1, 2024 for a further period of 3 (three) years and the same was confirmed by
the members at the Annual General Meeting by passing a Special Resolution. Terms of
appointment include payment of managerial remuneration as per the provisions of Sections
196, 197, 203 and other applicable provisions, if any, read with Schedule V, Part II, Section
II (A) to the Companies Act, 2013.

Retirement by Rotation

Mr. Utsav Parekh, Non-Executive Director, retires by rotation in accordance with the
requirements of Companies Act, 2013 and Articles of Association of the Company. He being
eligible offers himself for re-appointment.

Brief resume of Mr. Utsav Parekh, nature of his expertise in specific functional areas, names
of companies in which he holds directorships and/or memberships / chairmanships of
committees of Board, his shareholdings are furnished in section on Corporate Governance
elsewhere in the Annual Report.

Resignation / Appointment of the Key Managerial Personnel

During the year, Mr. Shreemanta Banerjee tendered his resignation as Chief Financial Officer
cum Vice President (Finance and Taxation) in order to pursue other career opportunities w.e.f.
November 05, 2024 and he was re-appointed as Chief Financial Officer cum Vice President
(Finance and Taxation) w.e.f. November 26, 2024.

Apart from the aforesaid matter there were no other changes in the Key Managerial Personnel
and in the Management of the Company during the year.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence
as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015. The Independent Directors have also
confirmed that they have complied with Schedule IV of the Act and the Company’s Code
of Conduct. The Board is of the opinion that the Independent Directors of the Company possess
requisite qualifications, experience and expertise in the fields of finance, strategy and
investments; and they hold the highest standards of integrity.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and
Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company
have included their names in the data bank of Independent Directors maintained with the
Indian Institute of Corporate Affairs (“IICA”) and have successfully completed the online
proficiency self-assessment test conducted by IICA within the prescribed time period, unless
they meet the criteria specified for exemption.

Details of the separate meeting of the Independent Directors held and attendance of
Independent Directors therein are provided in the Report on Corporate Governance forming
part of this Report.

18.1 ANNUAL PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Board has carried out an annual
performance evaluation of its own performance, the directors individually, Key Managerial
Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit
Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee.
The manner in which the evaluation has been carried out has been explained in the Corporate
Governance Report.

18.2 NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed
a policy for selection and appointment of Directors, Senior Management and their
remuneration the contents of which are placed on the website of the Company at
www.smifscap.com.

18.3 MEETINGS

During the year seven (7) Board Meetings and five (5) Audit Committee Meetings were
convened and held, the details of which are given in the Corporate Governance Report. The
intervening gap between the Meetings was within the period prescribed under the Companies
Act, 2013.

19. AUDITORS AND THEIR REPORTS

19.1 STATUTORY AUDITORS

M/s S K Agrawal and Co Chartered Accountants LLP, Statutory Auditors of the Company hold
office in accordance with the provisions of the Companies Act, 2013.

M/s S K Agrawal and Co Chartered Accountants LLP were appointed as the Statutory Auditors
of the Company for the second term of 5 years from the conclusion of the Thirty Ninth Annual
General Meeting until the conclusion of the Forty Fourth Annual General Meeting of the
Company subject to the ratification by the Members at every Annual General Meeting, at a
remuneration to be decided by the Board of Directors.

Since, the first proviso of Section 139 has been omitted w.e.f. May 7, 2018 by the Companies
(Amendment) Act, 2017 which requires companies to place the appointment of Statutory
Auditors for ratification before the members at every Annual General Meeting of the Company,
the ratification of appointment of M/s S K Agrawal and Co Chartered Accountants LLP as
the Statutory Auditors of the Company will not be placed before the Members at the ensuring

Annual General Meeting of the Company.

The observation made in the Auditor’s Report are self-explanatory and therefore, do not call
for any further comments under Section 134(3)(f) of the Act.

19.2 SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had
appointed Mr. Sudhansu Sekhar Panigrahi, Company Secretary in Practice to undertake the
Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as
“Annexure B”.

19.3 INTERNAL AUDIT

M/s D.P. Sen & Co., Chartered Accountants, has been appointed as Internal Auditors of the
Company for financial year 2024-25. Internal Auditors are appointed by the Board of Directors
of the Company on a yearly basis, based on the recommendation of the Audit Committee.
The Internal Auditor reports their findings on the Internal Audit of the Company, to the Audit
Committee on a quarterly basis. The scope of internal audit is approved by the Audit
Committee.

20. AUDITORS’ QUALIFICATION

(i) STATUTORYAUDITORS’ QUALIFICATIONS

Qualifications contained in the Auditors’ Report if any have been dealt with in the Notes
to financial statements and are self-explanatory.

(ii) SECRETARIAL AUDITORS’ QUALIFICATIONS

Qualifications contained in the Secretarial Auditors’ Report if any have been dealt with
in the Notes to Form MR-3 and are self-explanatory.

21. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of
employees of the Company, is given in “Annexure C”.

22. ANNUAL RETURN

Pursuant to the provisions of Section 92 (3) read with section 134(3)(a) of the Companies
Act, 2013 the draft copy of the annual return for the F.Y. 2024-25 is uploaded on the website
of the Company www.smifscap.com and the same can be viewed by the members and
stakeholders.

23. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS
IN FUTURE

There are no significant material orders passed by the Regulators/Courts which would impact
the going concern status of the Company and its future operation.

24. DETAILS OF APPLICATION OR NO PROCEEDING IS PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016

The Company has not made any application or no proceeding is pending under the Insolvency
and Bankruptcy Code, 2016 (31 of 2016) during the year.

25. DISCLOSURE OF REASON FOR DIFFERENCE BETWEEN VALUATION DONE AT THE TIME OF
TAKING LOAN FROM BANK AND AT THE TIME OF ONETIME SETTLEMENT

There were no instances of one-time settlement with any Bank or Financial Institution.

26. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received
from the shareholders, bankers, regulatory bodies and other business constituents during
the year under review.

For and on behalf of the Board of Directors

Regd. Office:

‘Vaibhav’ (4F), 4 Lee Road, ^Sd/-

Kolkata - 700 020 (UTSAV PAREKH)

Chairman

The 23^rd day of May, 2025 (DIN No. 00027642)

---

Mar 31, 2024

Your Directors have pleasure in presenting the Forty First Annual Report of the Company together with the audited financial statements for the year ended March 31, 2024.

1. (a) FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

('' in Lakhs)

Particulars	Year ended 31.03.2024	Year ended 31.03.2023
Profit before Interest, Depreciation & Tax	353.63	96.96
Less: Finance Charge	0.51	0.14
Profit before Depreciation & Tax	353.12	96.82
Less: Depreciation / Amortization	23.88	28.76
Profit before Tax	329.24	68.06
Less: Tax Expenses - Current / Earlier years	56.06	11.28
Less : Deferred Tax for the year	32.09	10.89
Profit after Tax M ^ ^	241.09	45.89
Profit brought forward from earlier year	1,221.12	1,176.27
Profit transfer from OCI Reserve:	-	(103)
Profit available for Appropriation	1,462.21	1,221.12
APPROPRIATIONS	-	-
Dividend including Dividend Tax	-	-
Profit carried to Balance Sheet	1,462.21	1,221.12

(b) FINANCIAL AND OPERATIONAL PERFORMANCE

Profit Before Tax of the Company for the year was Rs 329.24 Lakhs (previous year Rs 68.07 lakhs).

Net worth of the Company as on March 31, 2024 was Rs. 12,960.18 lakhs (previous year Rs. 11,800.06 lakhs).

(c) CAPITAL

The paid up Equity Share Capital as on March 31,2024 stood at Rs. 558.50 Lakhs divided into 55.85 equity shares of'' Rs.10/- each.

(d) DIVIDEND

To conserve resources for future growth, your Board of Directors do not recommend any dividend for the year.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which the dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividend and shares.

Attention is also being drawn that the unclaimed/unpaid dividend for the financial year 2016-17 is due for transfer to Investor Education and Protection Fund during October/ November 2024. In view of this, Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts, may write to the Company/ Company’s Registrar and Transfer Agents, M/s Maheshwari Datamatics Private Limited.

(f) MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report marked as “Annexure A”.

2. FINANCE

The Company continues to focus on judicious management of its working capital. The Company’s long term debt as on 31st March, 2024 was Rs. 4.8 lakhs (Previous Year Rs. 0.7 lakhs)

3.1 DEPOSITS

The Company has not accepted any deposit falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 from the public.

3.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments of the Company and its wholly-owned subsidiary Company namely, SMIFS Capital Services Limited has been disclosed in the financial statements.

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company and its subsidiary. Based on the report of internal auditors, corrective action is undertaken in respective areas and thereby controls are strengthened. Significant audit observations and corrective actions taken thereon are

presented to the Audit Committee of the Board.

5. SUBSIDIARY COMPANY

As on March 31,2024, there is one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 129(3) of the Companies Act, 2013 in respect of the Subsidiary Company is attached herewith.

FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE SUBSIDIARY COMPANY

('' in Lakhs)

Particulars	Year ended 31.03.2024	Year ended 31.03.2023
Profit/(Loss) before Interest, Depreciation & Tax	2.37	4.84
Less: Finance Charge	0.31	-
Profit/(Loss) before Depreciation & Tax	2.06	4.84
Less: Depreciation / Amortization	^^^^¦1.97	0.21
Profit/ (Loss) before Tax	0.09	4.63
Less : Tax Expenses	0.29	(0.51)
Profit/ (Loss) after Tax	(0.20)	5.14
Profit/(Loss) brought forward from earlier years	(45.44)	(50.58)
Profit/(Loss) carried to Balance Sheet	(46.64)	f (45.44)

6. YEAR IN RETROSPECT AND FUTURE OUTLOOK

The financial year 2023-24 began on a promising note as supplies of goods were improving, financial markets exuded greater optimism and globally central banks were steering their economies towards a soft landing. However the launch of war by Russia on Ukraine resulted in a sharp increase in prices of various commodities causing high inflation in many countries of the world. The central banks tightened the monetary policies to curb the inflation and are expected to cut interest rates in the later part of current financial year 2024-25 once the inflation comes down within their targeted range. Meanwhile, the recent conflict in the Middle East between Israel and Hamas has also contributed to increase in oil prices and increase in the cost of transportation of goods passing through that area.

Amongst the global turmoil and near recessionary conditions in many countries, India remains one of the fastest growing economies in the world. Reserve Bank of India in it''s April 2024 policy meet has projected India’s GDP growth rate for the financial year 2024-2025 at 7% as compared to expected GDP growth of 7.6% in 2023-24 and has estimated CPI inflation to come down in 2024-25 to 4.5%. IMF has raised India’s GDP growth forecast to 7.8% for 2024-25, higher than RBI’s projection.

India’s retail inflation has also eased to a 11 month low of 4.83% in April 2024. Both IMD and Skymet have forecasted normal monsoon for India in 2024. Therefore, moderating inflation pressures and forecast of normal monsoon have opened up possibility of interest rate cuts in India in the second half of 2024-25.

Our economy is growing at a fast pace and this is evidenced by highest GST revenue collection for April 2024 at Rs. 2.10 lakh crores. This represents a significant 12.4% year on year growth driven by a strong demand in domestic transactions (UP 13.4%) and imports (UP 8.3%). India’s Industrial growth (IIP) for the financial year 2023-24 was at 5.8% compared to 5.2% for the year 2022-23. With a record $776.68 billion worth of exports in financial year 2023-24, India’s trade deficit narrowed to $78 billion. India’s services exports grew at one of the fastest rates over the last 18 years and India’s defence and electronics exports have risen rapidly.

India’s fiscal deficit in 2024-25 is estimated to come down to 5.1% of GDP and around 4.5% in 2025-26. Inspite of geopolitical developments affecting crude prices, India has managed its crude imports well by negotiating appropriate discounts from Russia and other exporting countries.

Amidst this volatility, our banking and non-banking financial service sectors in India remain healthy and are well governed by the Regulators. The Indian Rupee has also moved in an orderly manner in the financial year 2023 - 24.

As per IMF, India is likely to become the third largest economy in 2027. Capital expenditure has emerged as a key growth driver in India. Government has accelerated public sector capital expenditure and private sector capital expenditure is now catching up. Capacity utilization has now reached around 75 percent and corporates are considering setting up new capacities. The Government has also come out with production linked incentive schemes in various sectors which is boosting capital expenditure and manufacturing.

Your company is registered as a Category I Merchant Banker and executes assignments in areas of mergers and acquisitions, debt syndication, placement of equity shares and debentures and is cautiously optimistic for the year 2024 as good monsoon, rural recovery and policy reforms are driving growth momentum in the economy.

7. LISTING OF THE SECURITIES OF THE COMPANY

Equity Shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2023-24 have been paid and 99.19 percent of the equity shares of your Company are held in dematerialized form.

8. DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the Annual Accounts the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and made judgment 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 the profit and loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

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

(e) the directors, have laid down internal financial control to be followed by the company and that such internal financial control are adequate and were operating effectively, and

(f) the directors have devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

9. RELATED PARTY TRANSACTIONS

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

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and are of repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are of audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a yearly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. None of the Directors have any pecuniary relationship or transactions vis-a-vis the Company. The particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 entered by the Company during the financial year ended 31st March, 2024 has been disclosed in the financial statements in prescribed Form AOC-2.

10. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION(12) OF SECTION 143 OF COMPANIES ACT 2013, OTHER THAN THOSE REPORTABLE TO THE CENTRALGOVERNMENT

No material fraud by the company or on the company by its officers or employees has been noticed or reported during the course of audit.

11. MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.

12. SECRETARIAL STANDARDS

The Company is compliant with all the mandatory secretarial standards as issued by the Institute of Company Secretaries of India (ICSI).

13. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism is explained in the Corporate Governance Report and also posted on the website of the Company.

14. COST RECORDS

Maintenance of cost records specified by the Central Government under section 148(1) of the Companies Act, 2013 is not required as the company does not fall under the ambit of prescribed class of companies who are required to make and maintain cost records.

15. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition

and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right of gender equality and guarantee against sexual harassment and abuse, more particularly against sexual harassment at work place, your Company has a Policy on Prevention of Sexual Harassment at the Workplace duly approved by the Board of Directors.

During the year, no complaint was reported under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING ANDOUTGO

Particulars required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year nil). Foreign Exchange outgo during the year aggregated to Nil. (previous year Nil).

17. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with fifty per cent of the Directors being Independent Directors. Your Board comprises of 6 (six) directors out of which 3 (three) are independent directors.

During the year, Mr. Nitin Daga and Mr. Pratik Ghose were appointed as Additional, NonExecutive Independent Directors on March 27, 2024. Further in line with the provisions of the Companies Act, 2013 and other applicable laws, their appointment is proposed to be regularized for a period of 5 years at the Postal Ballot being held in the month of May 2024.

Additionally, Mr. Ramesh Maheshwari (DIN: 00170811) and Mr. Santosh Kumar Mukherjee (DIN: 00170646), Non-Executive Independent Directors ceased to be Directors on the Board of the Company and its Committees w.e.f. close of business hours on March 31, 2024, upon completion of their tenure.

Mr. Utsav Parekh is the Non- Executive Chairman.

Re-appointment of Managing Director

The three-year term of Mr. Kishor Shah as Managing Director ended on March 31, 2024 and on recommendation of the Nomination and Remuneration Committee and on approval of the Board of Directors in its meeting held on February 09, 2024 subject to the same being ratified by the members at the ensuing Annual General Meeting by passing a Special Resolution, Mr. Kishor Shah has been re-appointed as Managing Director of the Company with effect from April 1,2024 for a further period of 3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 196, 197, 203 and other applicable provisions, if any, read with Schedule V, Part II, Section II (A) to the Companies Act, 2013.

Retirement by Rotation

Mr. Ajay Kumar Kayan, Non- Executive Director, retires by rotation in accordance with the requirements of Companies Act, 2013 and Articles of Association of the Company. He being eligible offers himself for re-appointment.

Brief resume of Mr. Ajay Kumar Kayan, nature of his expertise in specific functional areas, names of companies in which he holds directorships and/or memberships/chairmanships of committees of Board, his shareholdings are furnished in section on Corporate Governance elsewhere in the Annual Report.

Resignation / Appointment of the Key Managerial Personnel

The former Company Secretary cum Compliance Officer Ms. Ayanti Sen tendered her resignation due to personal reasons during the Financial Year 2023-24 w.e.f. October 7, 2023 and Mrs. Poonam Bhatia was appointed as the Company Secretary cum Compliance Officer w.e.f. October 9, 2023.

Apart from the aforesaid matter there were no other changes in the Key Managerial Personnel and in the Management of the Company.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

18.1 ANNUAL PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, Key Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

18.2 NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration the contents of which are placed on the website of the Company at www.smifscap.com

18.3 MEETINGS

During the year six (6) Board Meetings and four (4) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

19. AUDITORS AND THEIR REPORTS

19.1 STATUTORY AUDITORS

M/s S K Agarwal and Co Chartered Accountants LLP, Statutory Auditors of the Company hold office in accordance with the provisions of the Companies Act, 2013.

M/s S K Agarwal and Co Chartered Accountants LLP were appointed as the Statutory Auditors of the Company for the second term of 5 years from the conclusion of the Thirty Ninth Annual General Meeting until the conclusion of the Forty Fourth Annual General Meeting of the Company subject to the ratification by the Members at every Annual General Meeting, at a remuneration to be decided by the Board of Directors.

Since, the first proviso of Section 139 has been omitted w.e.f. May 7, 2018 by the Companies (Amendment) Act, 2017 which requires companies to place the appointment of Statutory

Auditors for ratification before the members at every Annual General Meeting of the Company, the ratification of appointment of M/s S K Agarwal and Co Chartered Accountants LLP as the Statutory Auditors of the Company will not be placed before the Members at the ensuing Annual General Meeting of the Company.

The observation made in the Auditor’s Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

19.2 SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Sudhansu Sekhar Panigrahi, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as “Annexure B”.

20. AUDITORS'' QUALIFICATION

(i) STATUTORYAUDITORS''QUALIFICATIONS

Qualifications contained in the Auditors’ Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

(ii) SECRETARIALAUDITORS''QUALIFICATIONS

Qualifications contained in the Secretarial Auditors’ Report if any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

21. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in “Annexure C”.

22. ANNUAL RETURN

Pursuant to the provisions of Section 92 (3) read with section 134(3)(a) of the Companies Act, 2013 the draft copy of the annual return for the F.Y. 2023-24 is uploaded on the website of the Company www.smifscap.com and the same can be viewed by the members and stakeholders.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operation.

24. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

For and on behalf of the Board of Directors

Regd. Office:

‘Vaibhav’ (4F), 4 Lee Road, ^Sd/-

Kolkata - 700 020 (UTSAV PAREKH)

Chairman

The 27^th day of May, 2024 (DIN No. 00027642)

---

Mar 31, 2023

The Directors have pleasure in presenting the Fortieth Annual Report of the Company together with the audited financial statements for the year ended March 31, 2023.

1. (a) FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

(Rs. in Million)
Particulars	Year ended 31.03.2023	Year ended 31.03.2022
Profit before Interest, Depreciation & Tax	9.70	24.15
Less: Finance Charge	0.01	0.10
Profit before Depreciation & Tax	9.69	24.05
Less: Depreciation / Amortization	2.88	3.55
Profit before Tax	6.81	20.50
Less: Tax Expenses - Current / Earlier years	1.13	1.57
Less : Deferred Tax for the year	1.09	(0.96)
Profit after Tax H ^ ^	4.59	19.89
Profit brought forward from earlier year :	117.62	98.98
Profit transfer from OCI Reserve:	(0.10)	(1.25)
Profit available for Appropriation	122.11	117.62
APPROPRIATIONS
Dividend including Dividend Tax	-	-
Profit carried to Balance Sheet	^^™122.11	117.62

(b) FINANCIAL AND OPERATIONAL PERFORMANCE

Profit Before Tax of the Company for the year was '' 6.81 million (previous year '' 20.50 million). Profit Before Tax for previous year ended 31-03-2023 included profit on sale of real estate amounting to '' 17.42 million.

Net worth of the Company as on March 31, 2023 was '' 1180.00 million (previous year '' 1163.95 million).

(c) CAPITAL

The paid up Equity Share Capital as on March 31, 2023 stood at '' 55,850,000/- divided into 5,585,000 equity shares of'' ''10/- each.

(d) DIVIDEND

In view of inadequacy of profits, your Board of Directors do not recommend any dividend for the year.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which the dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly the Company has transferred the unclaimed and unpaid dividend and shares.

Attention is also being drawn that the unclaimed/unpaid dividend for the Financial year 2015-16 is due for transfer to Investor Education and Protection Fund during October/ November 2023. In view of this, Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts, may write to the Company/ Company’s Registrar and Transfer Agents, M/s Maheshwari Datamatics Private Limited.

2. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report marked as “Annexure A”.

3. FINANCE

The Company continues to focus on judicious management of its working capital. The Company’s long term debt as on 31st March, 2023 was Rs. 0.07 million (Previous Year Rs. 0.42 million)

3.1 DEPOSITS

The Company has not accepted any deposit falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 from the public.

3.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company and its subsidiary. Based on the report of internal auditors, corrective action is undertaken in respective areas and thereby controls are strengthened. Significant audit observations and corrective actions taken thereon are presented to the Audit Committee of the Board.

As on March 31, 2023, there is one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 129(3) of the Companies Act, 2013 in respect of the Subsidiary Company is attached herewith.

FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE SUBSIDIARY COMPANY

('' in million)
Particulars	Year ended 31.03.2023	Year ended 31.03.2022
Profit/(Loss) before Interest, Depreciation & Tax	0.48	0.37
Less: Finance Charge	-	-
Profit/(Loss) before Depreciation & Tax	0.48	0.37
Less: Depreciation / Amortization	0.02	0.03
Profit/ (Loss) before Tax	0.46	0.34
Less : Tax Expenses	(0.05)	0.01
Profit/ (Loss) after Tax	0.51	0.33
Profit/(Loss) brought forward from earlier years	(5.06)	(5.39)
Profit/(Loss) carried to Balance Sheet	(4.55)	(5.06)

6. YEAR IN RETROSPECT AND FUTURE OUTLOOK

The year 2022- 2023 began on a promising note as supply conditions were improving, financial markets exuded greater optimism and central banks were steering their economies towards a soft landing. However the launch of war by Russia on Ukraine which is still continuing resulted in a sharp increase in Price of various commodities causing high inflation in many countries of the world and it is expected that both Europe and USA may face recessionary conditions in the current year. The global economy is now witnessing a renewed phase of turbulence with fresh headwinds from the banking sector turmoil in some advanced economies. Bank failures and contagion risk have brought financial stability issues to the forefront. Given the stubbornness in inflation, central banks continue to tighten monetary policy, although at a reduced pace.

In our Country also inflation shot up and to contain inflation, RBI has increased the policy repo rate cumulatively by 250 bps in the last 11 months starting May 2022. This was preceded by the introduction of the Standing Deposit Facility (SDF) at a rate 40 bps higher than the fixed rate reverse repo. Thus, the effective rate hike has been 290 bps. Currently, Consumer Price Index (CPI) for April 2023 has come down to 4.7 percent within the RBI’s tolerance limit of 2% to 6%. 10 years Bond yield has come down to around 7 percent. In the meeting held by RBI in April 2023 it decided to keep the policy repo rate unchanged at 6.50 per cent.

Amidst this volatility, our banking and non-banking financial service sectors in India remain healthy and financial markets have evolved in an orderly manner. Economic activity remains resilient and real GDP growth is expected to have been 7.0 per cent in 2022-23. After taking various factors into consideration, RBI has projected real GDP growth for FY 2023-24 at 6.5 percent.

The Indian Rupee has moved in an orderly manner in the calendar year 2022 and continues to be so in 2023 also. This is reflective of the strength of domestic macroeconomic fundamentals and the resilience of the Indian economy to global spillovers.

In this daunting environment, India’s financial sector remains resilient and stable. As expected, favourable base of last year led the Headline WPI for April 2023 to come at -0.9%, a negative print for the first time in 33-months which indicated lower imported inflation. The easing of overall input cost pressures suggests an improved outlook for retail inflation.

India’s Trade Deficit improved to USD 15.2 bn in April 2023 from USD 18.6 bn in March due to a sharp reduction in non-oil-non-gold imports. The imports declined by 14.1% YoY and exports declined by 12.7% YoY indicative of domestic and foreign demand weakness. India’s services sector remained robust with a surplus of USD 13.9 bn. The estimate for FY24 is CAD/GDP at 1.2% with crude oil prices averaging at USD 80 per barrel. Brent crude has dropped to $73.74 per barrel from a high of $82.55 per barrel during the year.

Overall, the broadening of economic activity; the expected moderation in inflation; the fiscal consolidation with focus on capital spending; the significant narrowing of the current account deficit to more sustainable levels and the comfortable level of foreign exchange reserves are welcome developments which will further bolster India’s macroeconomic stability.

Foreign portfolio investors (FPIs) again withdrew substantial amounts from Indian equity market during the Financial Year 2022-2023, after selling a record amount in the previous year. However, FPIs are expected to return in the current financial year as India has a high growth potential in 2023-24. Factors including US Federal Reserve policy, oil prices and geopolitical developments may affect FPI flows this year. Domestic institutional investors have absorbed the massive selling by FPIs.

Your Company is registered as Category I Merchant Banker and executes assignments in areas of Mergers and Acquisitions, Debt Syndication, Placement of Equity Shares and Bonds.

7. LISTING OF THE SECURITIES OF THE COMPANY

Equity Shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2022-23 have been paid and 99.19 percent of the equity shares of your Company are held in dematerialized form.

8. DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the Annual Accounts the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and made judgment 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 the profit and loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

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

(e) the directors, have laid down internal financial control to be followed by the company and that such internal financial control are adequate and were operating effectively, and

(f) the directors have devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

9. RELATED PARTY TRANSACTIONS

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

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and are of repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are of audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a yearly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. None of the Directors have any pecuniary relationship or transactions vis-a-vis the Company.

10. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism is explained in the Corporate Governance Report and also posted on the website of the Company.

11. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right of gender equality and guarantee against sexual harassment and abuse, more particularly against sexual harassment at work place, your Company has a Policy on Prevention of Sexual Harassment at the Workplace duly approved by the Board of Directors.

During the year, no complaint was reported under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING ANDOUTGO

Particulars required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year nil). Foreign Exchange outgo during the year aggregated to Nil. (previous year Nil).

Composition of the Board of Directors of your Company fulfills the criteria fixed by Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with fifty per cent of the Directors being Independent Directors. Your Board comprises of 6 (six) directors out of which 3 (three) are independent directors.

Mr. Utsav Parekh is the Non- Executive Chairman. The three-year term of Mr. Kishor Shah as Managing Director ended on March 31, 2021 and on recommendation of the Nomination and Remuneration Committee and on approval of the Board of Directors in its meeting held on February 12, 2021 subject to ratification by the members at the ensuing Annual General Meeting by passing a Special Resolution, Mr. Kishor Shah has been re-appointed Managing Director of the Company with effect from April 1, 2021 for a further period of 3 (three) years. The same was ratified in the Annual General Meeting by a Special Resolution. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 196, 197, 203 and other applicable provisions, if any, read with Schedule V, Part II, Section II (A) to the Companies Act, 2013.

Mr. Utsav Parekh, Non- Executive Director, retires by rotation in accordance with the requirements of Companies Act, 2013 and Articles of Association of the Company. He being eligible offers himself for re-appointment.

Brief resume of Mr. Utsav Parekh, nature of his expertise in specific functional areas, names of companies in which he holds directorships and/or memberships/chairmanships of committees of Board, his shareholdings are furnished in section on Corporate Governance elsewhere in the Annual Report.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

13.1 ANNUAL PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, Key Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

13.2 NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration the contents of which are placed on the website of the Company at www.smifscap.com

13.3 MEETINGS

During the year five (5) Board Meetings and four (4) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

14. AUDITORS14.1 STATUTORY AUDITORS

M/s S K Agarwal and Co Chartered Accountants LLP, Statutory Auditors of the Company hold office in accordance with the provisions of the Companies Act, 2013.

M/s S K Agarwal and Co Chartered Accountants LLP were appointed as the Statutory Auditors of the Company for the second term of 5 years from the conclusion of the Thirty Ninth Annual General Meeting until the conclusion of the Forty Fourth Annual General Meeting of the Company subject to the ratification by the Members at every Annual General Meeting, at a remuneration to be decided by the Board of Directors.

Since, the first proviso of Section 139 has been omitted w.e.f. May 7, 2018 by the Companies (Amendment) Act, 2017 which requires companies to place the appointment of Statutory Auditors for ratification before the members at every Annual General Meeting of the Company, the ratification of appointment of M/s S K Agarwal and Co Chartered Accountants LLP as the Statutory Auditors of the Company will not be placed before the Members at the ensuring Annual General Meeting of the Company.

The observation made in the Auditor’s Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

14.2 SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Sudhansu Sekhar Panigrahi, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as “Annexure B”.

15. AUDITORS'' QUALIFICATION(i) STATUTORY AUDITORS'' QUALIFICATIONS

Qualifications contained in the Auditors’ Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

(ii) SECRETARIAL AUDITORS'' QUALIFICATIONS

Qualifications contained in the Secretarial Auditors’ Report if any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

16. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in “Annexure C”.

17. EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form MGT-9 is available at the website of the Company at www.smifscap.com

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operation.

19. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

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Mar 31, 2018

DIRECTORS’ REPORT

TO THE MEMBERS,

The Directors have pleasure in presenting the Thirty Fifth Annual Report of the Company together with the audited financial statements for the year ended March 31, 2018.

1. (a) FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

(Rs, in million)

	Year ended 31.03.2018	Year ended 31.03.2017
Profit before Finance Charge, Depreciation & Tax	16.68	15.75
Less: Finance Charge	0.77	0.22
Profit before Depreciation & Tax	15.91	15.53
Less: Depreciation / Amortization	6.54	5.88
Profit before Tax	9.36	9.65
Less: Tax Expenses - Current / Earlier years	2.81	2.50
Less : Deferred Tax for the year	(19.84)	(1.40)
Profit after Tax ^ j ^	26.39	8.55
Profit brought forward from earlier year :	75.59	72.08
Profit transfer from OCI Reserve:	4.19	0.00
Profit available for Appropriation	106.17	80.63
APPROPRIATIONS
Proposed Dividend including Dividend Tax	6.72	5.04
Profit carried to Balance Sheet	99.45	75.59

FINANCIAL AND OPERATIONAL PERFORMANCE

Operating profit (PBDIT) of the Company for the year was Rs, 16.68 million (previous year Rs, 15.75 million). Profit after tax for the year increased to Rs, 26.39 million (from Rs, 8.55 million in the previous year).

Net worth of the Company as on March 31, 2018 was Rs, 1106.66 million (previous year Rs, 1050.86 million).

(b) CAPITAL

The paid up Equity Share Capital as on March 31, 2018 stood at Rs, 55,850,000/- divided into 5,585,000 equity shares of Rs,10/- each.

(c) DIVIDEND

Your Directors recommend payment of dividend of Rs, 1/- per equity share (previous year Rs, 1/- per share) on the paid up equity capital for the year ended March 31, 2018.

(d) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which the dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly the Company has transferred the unclaimed and unpaid dividend and shares.

Attention is also being drawn that the unclaimed/unpaid dividend for the Financial Year 2010-11 is due for transfer to Investor Education and Protection Fund during October/ November 2018. In view of this, Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts, may write to the Company/ Company’s Registrar and Transfer Agents, M/s Maheshwari Datamatics Private Limited.

2. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report marked as “Annexure A”.

3. FINANCE

The Company continues to focus on judicious management of its working capital. Receivables and inventories were kept under strict control through continuous monitoring.

3.1 DEPOSITS

The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

3.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiary. Based on the report of internal auditors, corrective action is undertaken in respective areas and thereby controls are strengthen. Significant audit observations and corrective actions taken thereon are presented to the Audit Committee of the Board.

5. SUBSIDIARY COMPANY

As on March 31, 2018, there was one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 129(3) of the Companies Act, 2013 in respect of the Subsidiary Company is attached herewith.

FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE SUBSIDIARY COMPANY

(Rs, in million)

	Year ended 31.03.2018	Year ended 31.03.2017
Profit/(Loss) before Finance Charge, Depreciation & Tax	(1.42)	(1.32)
Less: Finance Charge	—	—
Profit/(Loss) before Depreciation & Tax	(1.42)	(1.32)
Less: Depreciation / Amortization	0.14	0.11
Profit/ (Loss) before Tax	(156)	(143)
Less : Tax Expenses	0.01	(0.18)
Profit/ (Loss) after Tax	(155)	(1.25)
Profit/(Loss) brought forward from earlier years :	(2.95)	(1.70)
Profit/(Loss) carried to Balance Sheet	(450)	(2.95)

6. YEAR IN RETROSPECT AND FUTURE OUTLOOK

The financial year 2017-18 was a year of two halves, which saw sharp contrast in the manner in which the economy grew in the first and second half. T ransient challenges emanating from the continuing impact of ‘Demonetization’ and the implementation of GST slowed down the economy in the first half of the year.

However, with the last quarter of the second half of the year witnessing near complete ‘Remonetization’ of the economy along with smoothening of the GST architecture ,business activity revived with the country’s GDP estimated to have growth at 6.7% FY18 vis-a-vis 6.1% growth seen in Apr-Sep FY18. FY18 was the year of profound economic changes on both the global and domestic front. Globally, economic recovery gathered momentum with 2017 characterizing a synchronized improvement across all regions. Domestically, economic RBI shifted monetary policy stance to ‘neutral’ from ‘accommodative’ during the course of the year. These structural policy reforms have ushered in the desirable drive of ‘Formalization through Financializtion’ of the economy while also helping revive investments by unlocking capital stuck in the non-productive assets. This resulted in the substantial inflow of the domestic funds in the Capital Markets and BSE Sensex moved up from 29,620.50 on 31st March 2017 to 32,968.68 on 31st March, 2018 having peaked on 31st January, 2018 at 35,965.02

However the macros have worsened considerably in the current financial year. Price of brent crude has moved up to US $80 per barrel and 10 year bond yields have moved up to a high of 7.9 %, while rupee has depreciated to 68 against a dollar. These will considerably affect both the fiscal and current account deficit. Inflation has also moved up to 4.6% year on year in April from 4.3% year on year the previous month. Headline Core Inflation accelerated to 5.8% Year on Year and is now only slightly below the MPC target range of 2-6% Year on Year. To support the economic growth, revival of the India’s banking sector will need to keep pace with it. The process of resolution of the NPA’s which has got streamlined through the Insolvency and Bankruptcy Code (IBC) framework ,is witnessing good progress. This could throw up opportunities for companies in the financial services industry.

Your Company is registered as Category I Merchant Banker and executes various assignments in areas of Mergers and Acquisitions, Loan Syndication, Capital Market Operations, Placement of Equity Shares and Bonds. Your company is hopeful of executing current assignments which will enable it to post reasonable return under the circumstances in the current year.

7. LISTING OF THE SECURITIES OF THE COMPANY

Equity Shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2018-19 have been paid. 98.90 per cent of the equity shares of your Company are held in dematerialized form.

8. DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) the preparation of the Annual Accounts the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and made judgement 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 the profit and loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

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

(e) the directors, have laid down internal financial control to be followed by the company and that such internal financial control are adequate and were operating effectively, and

(f) the director have devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

9. RELATED PARTY TRANSACTIONS

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

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a yearly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.

10. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism is explained in the Corporate Governance Report and also posted on the website of the Company.

11. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right of gender equality and the guarantee against sexual harassment and abuse, more particularly against sexual harassment at work place, your Company has a Policy on Prevention of Sexual Harassment at the Workplace duly approved by the Board of Directors.

During the year, no complaint was reported under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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

Particulars required under Section 134(3)(m) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year nil). Foreign Exchange outgo during the year aggregated to Rs.1.13 million (previous year Rs. 2.29 million).

13. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with more than fifty per cent of the Directors being Independent Directors. Your Board comprises of 7 (seven) directors out of which 4 (four) are independent directors.

There was a change in the composition of Board of Directors during the year. Mrs. Pushpa Mishra was appointed on August 9, 2017 as an Additional Director and held office till the 34^th Annual General Meeting. She was again appointed as an Additional Director and designated as Independent Director, on September 25, 2017. Further in line with the provisions of the Companies Act, 2013 and other applicable laws, Mrs. Pushpa Mishra’s appointment is proposed to be regularized at the ensuing AGM for a period of 5 years and the relevant disclosure for her appointment forms a part of the Notice of the 35^th Annual General Meeting. Mr. Utsav Parekh is the Non- Executive Chairman. The three-year term of Mr. Kishor Shah as Managing Director ended on March 31, 2018 and on recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors in its meeting held on February 3, 2018 subject to the same being ratified by the members at the ensuing Annual General Meeting by passing a Special Resolution, Mr. Kishor Shah has been re-appointed Managing Director of the Company with effect from April 1, 2018 for a further period of 3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 196, 197, 203 and other applicable provisions, if any, read with Schedule V, Part II, Section II (A) to the Companies Act, 2013.

Mr. Ajay Kumar Kayan, Director, retires by rotation in accordance with the requirements of Companies Act, 2013 and Articles of Association of the Company. He being eligible offered himself for re-appointment.

Brief resume of Mr. Ajay Kumar Kayan and Mrs. Pushpa Mishra, nature of their expertise in specific functional areas, names of companies in which they hold their directorship and/or membership/ chairmanship of committees of Board, their shareholding is furnished in Corporate Governance elsewhere in the Annual Report.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Ajay Kumar Kayan retires by rotation and is eligible for re-appointment.

13.1 ANNUAL PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, Key Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

13.2 NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy is stated in the Corporate Governance Report.

13.3 MEETINGS

During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

14. AUDITORS

14.1 STATUTORY AUDITORS

M/s S. K. Agarwal & Co., Chartered Accountants, Kolkata (Registration No.: 306033E), Statutory Auditors of the Company hold office in accordance with the provisions of the Companies Act, 2013.

The observation made in the Auditor’s Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

14.2 SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Dash M & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as “Annexure B”.

15. AUDITORS’ QUALIFICATION

(i) STATUTORY AUDITORS’ QUALIFICATIONS

Qualifications contained in the Auditors’ Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

(ii) SECRETARIAL AUDITORS’ QUALIFICATIONS

Qualifications contained in the Secretarial Auditors’ Report if any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

16. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in “Annexure C”.

17. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “Annexure D”.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operation.

19. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

For and on behalf of the Board of Directors

Regd. Office:

‘Vaibhav’ (4F), 4 Lee Road, ^Sd/-

Kolkata - 700 020 (UTSAV PAREKH)

Chairman

The 30^th day of May, 2018 (DIN No. 00027642)

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Mar 31, 2015

The Directors have pleasure in presenting the Thirty Second Annual Report of the Company together with the audited financial statements for the year ended March 31, 2015.

1. (a) FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

(Rs. in million) Year ended Year ended 31.03.2015 31.03.2014

Profit before Interest, Depreciation & Tax 14.05 8.19

Less: Interest 0.29 0.28

Profit before Depreciation & Tax 13.76 7.91

Less: Depreciation / Amortization 3.72 3.29

Profit before Tax 10.04 4.62

Less : Tax Expenses - Current / Earlier years 1.79 2.84

Less : Deferred Tax for the year 0.45 2.46

Add : MAT Credit Entitlement 1.75 2.76

Profit after Tax 9.55 2.08

Profit brought forward from earlier year : 61.12 65.57

Add : Transfer from General Reserve : 5.58 -

Less : Adjusted for fixed assets having remaining useful life nil as on 01.4.2014 : 0.90 65.80 65.57

Profit available for Appropriation 75.35 67.65

APPROPRIATIONS

Proposed Dividend including Dividend Tax 6.72 6.53

Profit carried to Balance Sheet 68.63 61.12

Financial and Operational Performance

Operating Profit (PBDIT) of the Company for the year was Rs. 14.05 million (previous year Rs. 8.19 million) or an increase of 71.55% over the previous year. Profit after tax for the year stood at Rs. 9.55 million (previous year Rs. 2.08 million) or an increase of 359.13% over the previous year.

Net worth of the Company as on March 31, 2015 was Rs. 1049.73 million (previous year Rs. 1049.72 million).

(b) CAPITAL

The paid up Equity Share Capital as on March 31, 2015 stood at Rs. 55,850,000/- divided into 5,585,000 equity shares of Rs. 10/- each.

(c) DIVIDEND

Your Directors recommend payment of dividend of Rs. 1/- per equity share (previous year Rs.1/- per share) on the paid up equity capital for the year ended March 31, 2015. Dividend will absorb a sum of Rs. 6.72 million including the dividend distribution tax thereon. In order to conserve the resources of the Company, the Directors recommended the same amount of dividend.

(d) TRANSFER FROM GENERAL RESERVES

Rs. 5.58 million (Previous Year: Rs. Nil) has been transferred from General Reserve of the Company to Statement of Profit and Loss. Current year dividend has been paid out of Profit of the Company for the year in accordance with Section 123 of the Companies Act, 2013.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the unclaimed dividend pertaining to the dividend for the year ended March 31, 2007 was transferred to the Investor Education & Protection Fund after giving due notice to the Members.

Attention is being drawn that the unclaimed/unpaid dividend for the fi nancial year 2007-08 is due for transfer to Investor Education and Protection Fund during October/November 2015. In view of this, Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts, may write to the Company/ Company's Registrars and Transfer Agents, M/s. Maheshwari Datamatics Private Limited.

(f) MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report marked as "Annexure A".

2. FINANCE

The Company continues to focus on judicious management of its working capital. Receivables and inventories were kept under strict check through continuous monitoring.

2.1 DEPOSITS

The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

2.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

3. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

4. SUBSIDARY COMPANY

As on March 31, 2015, there was one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 129(3) of the Companies Act, 2013 in respect of the Subsidiary Company is attached.

FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE SUBSIDIARY COMPANY

(Rs. in million)

Year ended Year ended 31.03.2015 31.03.2014

Profit before Interest, Depreciation & Tax (0.80) (1.37)

Less : Interest 0.016 0.02

Profit before Depreciation & Tax (0.816) (1.39)

Less : Depreciation / Amortization 0.169 0.15

Profit before Tax (0.985) (1.54)

Less : Tax Expenses (0.023) 0.01

Profit after Tax (0.962) (1.53)

Profit brought forward from earlier year: (1.880) (0.35)

Less : Adjusted for fixed assets having remaining useful life nil as on 01.4.2014 (0.0014)(1.8814) - (0.35)

Profit carried to Balance Sheet (2.8434) (1.88)

5. YEAR IN RETROSPECT AND FUTURE OUTLOOK

The global economy in FY 2014-15 witnessed divergent trends among major economies and stress on major oil producing countries as a direct result of sharp decline in energy prices, especially in the second half of the year. Lower oil prices however benefit commodity importing countries, such as India. Falling energy prices have significantly improved India's overall fiscal landscape, and augur well for growth in domestic consumption.

India's economy is poised to return to its high-growth path, thanks to lower fiscal and current account deficits, falling inflation, benign commodity prices, and structural reforms to boost investments. Monetary policy is also likely to be supportive with the Reserve Bank of India (RBI) having already reduced interest rates twice.The manufacturing sector is likely to benefit from lower interest rates.

The government's call for 'Make in India' has sent out positive cues to the global investors Community. As India stands at the cusp of phenomenal opportunities, the financial services sector will play a supportive role in transforming the nation's future.

Your Company is registered as Category I Merchant Banker and is executing various assignments in areas of Mergers and Acquisitions, Loan Syndication, Capital Market Operations, Placement of Equity shares and debt. Your Company's real estate project at Bondel Road is progressing well and is expected to be completed within the next one year. Barring unforeseen circumstances, your Company is hopeful of achieving better results in the current year.

6. LISTING OF THE SECURITIES OF THE COMPANY

Equity Shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2015-16 have been paid. 97.31 per cent of the equity shares of your Company are held in dematerialized form.

7. DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that :

(a) in the preparation of the Annual Accounts the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and made judgment 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 the Profit and loss of the Company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

(e) the directors, in the case of a Listed Company, have laid down internal financial control to be followed by the Company and that such internal financial control are adequate and were operating effectively, and

(f) the director have devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

8. RELATED PARTY TRANSACTIONS

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

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a yearly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company.

9. VIGIL MECHANISM FOR DIECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism is explained in the Corporate Governance Report and also posted on the website of the Company.

10. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, REDRESSAL ACT 2013)

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right of gender equality and the guarantee against sexual harassment and abuse, more particularly against sexual harassment at work place, your Company has a Policy on Prevention of Sexual Harassment at the workplace duly approved by the Board of Directors.

During the year, no complaint was reported under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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

Particulars required under Section 134(3)(m) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year Rs. nil). Foreign Exchange outgo during the year aggregated to Rs. 1.30 million (previous yearRs. 2.19 million).

12. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Clause 49 of the listing agreement with fifty per cent of the Directors being Independent Directors. Your Board comprises of six directors out of which three are independent directors.

Mr. Utsav Parekh is the Non-Executive Chairman. Further, Mr. Chandranath Mukherjee, Independent Director of the Company ceased to be the Director due to his sad and sudden demise on September 5, 2014.

The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed Mrs. Ramya Hariharan as an Additional Director w.e.f September 20, 2014 and her appointment was regularized by conducting a Postal Ballot whose results were announced on November 18, 2014.

The three-year term of Mr. Kishor Shah as Managing Director ended on March 31, 2015 and on recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors in its meeting held on January 30, 2015 subject to the same being ratified by the members at the ensuing Annual General Meeting by passing a Special Resolution, Mr. Kishor Shah has been re-appointed Managing Director of the Company with effect from April 1, 2015 for a further period of 3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 196, 197, 203 and other applicable provisions, if any, read with Schedule V, Part II, Section II (A) to the Companies Act, 2013.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company Mr. Utsav Parekh retires by rotation and is eligible for re-appointment.

12.1. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, Key Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

12.2. Nomination & Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy is stated in the Corporate Governance Report.

12.3 Meetings

tDuring the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

13. AUDITORS

13.1. Statutory Auditors

M/s. J. S. Vanzara & Associates, Chartered Accountants, Statutory Auditors of the Company hold office in accordance with the provisions of the Companies Act, 2013 upto the conclusion of the forthcoming Annual General Meeting.

M/s. J. S. Vanzara & Associates, Chartered Accountants confirmed that their appointment, if made, would be within the prescribed limits under section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of section 141 of the Companies Act, 2013 and they hold valid certificate issued by the Peer Review Board of ICAI.

13.2. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Ms. Disha Dugar, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure B".

14. AUDITORS' QUALIFICATION

(i) Statutory Auditors' Qualifications

Qualifications contained in the Auditors' Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

(ii) Secretarial Auditors' Qualifications

Qualifications contained in the Secretarial Auditors' Report if any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

15. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5, of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in "Annexure C".

16. EXTRACT OF ANNUAL REPORT

The details forming part of the extract of the Annual Report in form MGT-9 is annexed herewith as "Annexure D".

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operation.

18. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

Regd. Office : For and on behalf of the Board of Directors

'Vaibhav' (4F), 4 Lee Road,

Kolkata - 700 020 (UTSAV PAREKH)

The 27th day of May, 2015 Chairman

---

Mar 31, 2014

DEAR MEMBERS,

The Directors have pleasure in presenting the Thirty First Annual Report of the Company together with the audited financial statements for the year ended March 31, 2014.

1. (a) FINANCIAL HIGHLIGHTS

(Rupees in million) Year ended Year ended 31.03.2014 31.03.2013

Profit before Interest, Depreciation & Tax 8.19 17.59

Less: Interest 0.28 0.34

Profit before Depreciation & Tax 7.91 17.25

Less: Depreciation/Amortization 3.29 3.58

Profit before Tax 4.62 13.67

Less: Tax Expenses-Current/Earlier years 2.84 5.50

Less : Deferred Tax for the year 2.46 25.82

Add: MAT Credit Entitlement 2.76 27.84

Profit after Tax 2.08 10.19

Profit brought forward from earlier year 65.57 65.08

Profit available for Appropriation 67.65 75.27

APPROPRIATIONS

Proposed Dividend including Dividend Tax 6.53 9.15

Transfer to General Reserve - 0.55

Profit carried to Balance Sheet 61.12 65.57



Financial and Operational Performance

Operating profit (PBDIT) of the Company for the year was Rs. 8.19 million (previous year Rs. 17.59 million). Profit after tax for the year stood at Rs. 2.08 million (previous year Rs. 10.19 million).

Net worth of the Company as on March 31, 2014 was Rs. 1049.72 million (previous year Rs. 1057.54 million).

(b) CAPITAL

Paid up capital of the Company as on March 31, 2014 stood at Rs. 55,850,000/- divided into 5,585,000 equity shares of Rs. 10/- each.

(c) DIVIDEND

In spite of the reduction in profit after tax for the year as compared to the previous year, your Directors recommend payment of dividend of Rs. 1.00 per equity share (previous year Rs. 1.40 per share) on the paid up equity capital for the year ended March 31, 2014. Dividend will absorb a sum of Rs. 6.53 million including the dividend distribution tax thereon. Due to inadequacy of profits the dividend is being paid out of free reserves.

(d) TRANSFER TO GENERAL RESERVES

Rs. Nil (Previous Year: Rs. 0.55 million) has been transferred to the General Reserve of the Company. Current year dividend has been paid out of free reserves.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

No unpaid and unclaimed dividend as on March 31, 2014 was required to be transferred as per the provisions of Sections 205A and 205C of the Companies Act, 1956.

Attention is being drawn that the unclaimed/unpaid dividend for the Financial Year 2006-07 is due for transfer to Investor Education and Protection Fund during October/November 2014. In view of this, Members of the Company, who have not yet encashed their dividend warrants(s) or those who have not claimed their dividend amounts, may write to the Company/Company’s Registrar and Transfer Agents M/s. Maheshwari Datamatics Private Limited.

(f) MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report.

2. SUBSIDIARY COMPANY

As on March 31, 2014, there was one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 212 of the Companies Act, 1956 in respect of the Subsidiary Company is attached.

3. YEAR IN RETROSPECT AND FUTURE OUTLOOK

The global economy began its modest recovery in FY 2013-14 with somewhat improved demand from OCED economies in the second half of 2013. While the trend is expected to continue in the current year, the positive outlook is subdued by the potential consequences of gradual ''tapering'' by US Federal Reserve of its quantitative easing policies.

Emerging markets like India faced multiple challenges during the year namely capital outflows, intense exchange rate pressure and volatile current account movement. A combination of persistent inflation, fiscal imbalances, external sector vulnerabilities and low investments resulted in sluggish domestic demand growth. Fiscal and monetary initiatives taken by the Indian government and the Reserve Bank of India (RBI) helped stabilize currency and financial markets, but the domestic macro-economic environment still remains challenging.

The slowdown was mainly due to policy paralysis at the center and steps taken to curtail fiscal deficit and current account deficit and continued uncertainty and slowdown in the global economy. Fiscal deficit and current account deficit of the country climbed sharply in the first half of the year and India faced threat of ratings downgrade from international rating agencies. In this backdrop, the then finance minister took several steps to rein in both fiscal deficit and current account deficit and also cut government spending in last few months of the year. With the new stable government now coming to power with absolute majority, things are expected to improve over time.

Rising inflationary pressures required adoption of tight monetary policies by RBI in the preceding years. Increasing risks to growth from external as well as domestic sources and tight monetary policy in the preceding few years in face of persistent inflationary pressures has also resulted in a slowdown of the economy. A cautious monetary policy and slowdown in economy has impacted investment and consumption growth. Investments by Foreign Institutional Investors also slowed down during the year.

The slowdown in 2011-12 and 2012-13 has been precipitated by domestic factors as well as factors emanating from the rest of the world, particularly advanced economies and India''s major trading partners.

The inflation has started gradually receding and with the steps taken to rein in fiscal deficit and current account deficit and a gradual reduction in interest rates, it is expected that Indian Economy will bottom out in the second half of the current year 2014-15.

Your Company is registered as Category I Merchant Banker and is executing various assignments in areas of Mergers and Acquisitions, Loan Syndication, Capital Market Operations, Placement of Equity shares and debt. Your Company''s real estate project at Bondel road is progressing well. Barring unforeseen circumstances, your Company is hopeful of achieving better results in the current year.

4. LISTING OF SECURITIES OF THE COMPANY

Equity shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2014-15 have been paid. 97.29 per cent of the equity shares of your Company are held in dematerialized form.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that.

(i) in the preparation of the accounts for the financial year ended March 31, 2014, the applicable Accounting Standards have been followed and that there are no material departures.

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date

(iii) the Directors have taken proper and sufficient 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

(iv) the Directors have prepared the annual financial statements of the Company on a ''going concern'' basis.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.

Particulars required under Section 217(1)(e) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earning (previous year ''nil''). Foreign Exchange outgo during the year aggregated to Rs. 2.19 million (previous year Re 2.38 million).

7. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Clause 49 of the listing agreement with fifty per cent of the Directors being independent directors. Your Board comprises of six directors out of which three are independent directors.

There was no change in the composition of Board of Directors during the year. Mr. Utsav Parekh is the Non- Executive Chairman.

The three-year term of Mr. Kishor Shah as Managing Director ended on 31st March 2012 and thereafter on recommendation of the Remuneration Committee, his reappointment was approved by the Board of Directors and also by the members by a Special Resolution at the Annual General Meeting held on September 8, 2012. Mr. Kishor Shah has been re-appointed Managing Director of the Company with effect from April 1, 2012 for a further period of 3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 198, 269, 309, 310, 311 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII, Part II, Section II 1(B) to the Companies Act, 1956.

Mr. Ajay Kumar Kayan, Director retire by rotation in accordance with the requirement of the Companies Act, 2013 and the Articles of Association of the Company. He being eligible offered himself for re-appointment.

Brief resume of Mr. Ajay Kumar Kayan, nature of his expertise in specific functional areas, names of companies in which he hold directorship and/or membership/Chairmanship of committees of the board, his shareholdings as stipulated under Clause 49 of the listing agreement are furnished in the part on Corporate Governance elsewhere in the Annual Report.

Section 149(10) of the Companies Act, 2013 (the Act) which has become effective from 01st April, 2014, provides for appointment of Independent Directors for a period of 2 terms of 5 consecutive years. The Act provides that while considering the reappointment, the tenure of holding of the office as Independent Directors prior to the commencement of the Act shall not be taken into account. In terms of Section 149, 152 and any other applicable provisions of the Companies Act, 2013, effective from 1st April, 2014, for the purpose of determining the directors liable to retire by rotation, the Independent Directors shall not be included in the total number of directors of the Company.

Our three Independent Directors, viz Mr. Ramesh Maheshwari, Mr. Chandranath Mukherjee and Mr. Santosh Kumar Mukherjee were appointed on 10th July, 1990, 27th October, 2006 and 16th September, 2006 respectively and hence they will be appointed for 5 consecutive years for a term upto 31st March, 2019. Details of the resolution for the appointment of Mr. Ramesh Maheshwari, Mr. Chandranath Mukherjee and Mr. Santosh Kumar Mukherjee are given in the Explanatory Statement prepared under Section 102 of the Companies Act, 2013 of the Notice of the Annual General Meeting.

8. AUDITORS

M/s. J. S. Vanzara & Associates, Chartered Accountants, statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of the forthcoming Annual General Meeting.

M/s. J. S. Vanzara & Associates, Chartered Accountants confirmed that their appointment, if made, would be within the prescribed limits under section 141 (3) (g) of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of section 141 of the Companies Act, 2013 and they hold valid certificate issued by the Peer Review Board of ICAI.

9. AUDITORS'' QUALIFICATION

Qualifications contained in the Auditors'' Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

10. PARTICULARS OF EMPLOYEES

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors'' Report is not required to be annexed. MCA vide its notification dated March 31, 2011 raised the exemption limit of disclosure of salary to employees to Rs.5 Lac per month or Rs. 60 Lac per annum. There are no employees in your company drawing remuneration more than Rs.5 Lac per month or Rs. 60 Lac per annum

11. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.



Regd. Office : On behalf of the Board of Directors

''Vaibhav'' 4F, 4 Lee Road, Kolkata - 700 020

(UTSAV PAREKH) The 28th day of May, 2014 Chairman

---

Mar 31, 2013

TO THE MEMBERS,

The Directors have pleasure in presenting the Thirtieth Annual Report of the Company together with the audited financial statements for the year ended March 31, 2013.

1. (a) FINANCIAL HIGHLIGHTS

(Rupees in million)

Year ended Year ended 31.03.2013 31.03.2012

Profit before Interest, Depreciation & Tax 17.59 56.87

Less: Interest 0.34 0.42

Profit before Depreciation & Tax 17.25 56.45

Less: Depreciation / Amortization 3.58 3.90

Profit before Tax 13.67 52.55

Less: Tax Expenses - Current / Earlier years 5.50 0.19

Less : Deferred Tax for the year 25.82 12.96

Add: MAT Credit Entitlement 27.84 -

Profit after Tax 10.19 39.40

Profit brought forward from earlier year 65.08 54.76

Profit available for Appropriation 75.27 94.16

Appropriations

Proposed Dividend including Dividend Tax 9.15 9.08

Transfer to General Reserve 0.55 20.00

Profit carried to Balance Sheet 65.57 65.08

Financial and Operational Performance

Operating profit (PBDIT) of the Company for the year was Rs. 17.59 million (previous year Rs. 56.87 million). Profit after tax for the year stood at Rs. 10.19 million (previous year Rs. 39.40 million).

Net worth of the Company as on March 31, 2013 was Rs. 1057.54 million (previous year Rs. 1060.06 million).

(b) CAPITAL

Paid up capital of the Company as on March 31, 2013 stood at Rs. 55,850,000/- divided into 5,585,000 equity shares of Rs. 10/- each.

(c) DIVIDEND

Inspite of the reduction in profit after tax for the year as compared to the previous year, your Directors recommend payment of dividend of Rs. 1.40 per equity share (previous year Rs. 1.40 per share) on the paid up equity capital for the year ended March 31, 2013. Dividend will absorb a sum of Rs. 9.15 million including the dividend distribution tax thereon.

(d) TRANSFER TO GENERAL RESERVES

Rs. 0.55 million (Previous Year: Rs. 20 million) has been transferred to the General Reserve of the Company.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

No unpaid and unclaimed dividend as on March 31, 2013 was required to be transferred as per the provisions of Sections 205A and 205C of the Companies Act, 1956.

(f) MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report.

2. SUBSIDIARY COMPANY

As on March 31, 2013, there was one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 212 of the Companies Act, 1956 in respect of the subsidiary Company is attached.

3. YEAR IN RETROSPECT AND FUTURE OUTLOOK

India''s economic growth rate in terms of gross domestic product had slipped to decade''s low of 5% in 2012-13, as against 6.2% in the previous fiscal and a slowdown in the industrial activity was witnessed throughout the year.

The slowdown was mainly due to policy paralysis at the center and the continued uncertainty and slowdown in the global economy. Growth of exports for most of the current year remained in negative territory while imports picked up during the year. Fiscal deficit and current account deficit of the country climbed sharply in the first half of the year and India faced threat of ratings downgrade from international rating agencies. In this backdrop, the current finance minister took several steps to rein in both fiscal deficit and current account deficit and also cut government spending in last few months of the year.

Rising inflationary pressures required adoption of tight monetary policies by RBI in the preceding years. Increasing risks to growth from external as well as domestic sources and tight monetary policy in the preceding few years in face of persistent inflationary pressures has also resulted in a slowdown of the economy. The RBI reduced repo rates by 50 basis points in April, 2012 and by 25 basis points again in January 2013 and reduced Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) to improve liquidity conditions. A cautious monetary policy and slowdown in economy has impacted investment and consumption growth. Investments by Foreign Institutional Investors has also slowed down.

The slowdown in 2011-12 and 2012-13 has been precipitated by domestic factors as well as factors emanating from the rest of the world, particularly advanced economies and India''s major trading partners. The crisis in the Euro-zone area and slow growth in many other advanced economies have affected growth in India.

The inflation has started gradually receding and with the steps taken to rein in fiscal deficit and current account deficit and a gradual reduction in interest rates, it is expected that Indian Economy will bottom out in the second half of the current year 2013-14.

Your Company is registered as Category I Merchant Banker and is executing various assignments in areas of Mergers and Acquisitions, Loan Syndication, Capital Market Operations, Placement of Equity shares and debts. Your Company''s real estate project at Bondel road is progressing well. Barring unforeseen circumstances, your Company is hopeful of achieving better results in the current year.

4. LISTING OF SECURITIES OF THE COMPANY

Equity shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2013-14 have been paid. 97.29 per cent of the equity shares of your Company are held in dematerialized form.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the financial year ended March 31, 2013, the applicable Accounting Standards have been followed and that there are no material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient 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

(iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 217(1)(e) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earning (previous year ''nil''). Foreign Exchange outgo during the year aggregated to Rs. 2.38 million (previous year Re. 1.17 million).

7. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Clause 49 of the listing agreement with fifty per cent of the Directors being independent directors. Your Board comprises of six directors out of which three are independent directors.

There was no change in the composition of Board of Directors during the year. Mr. Utsav Parekh is the Non- Executive Chairman.

The three-year term of Mr. Kishor Shah as Managing Director ended on 31st March 2012 and on recommendation of the Remuneration Committee and approval of the Board of Directors and also by the members by a Special Resolution at the Annual General Meeting held on September 8, 2012, Mr. Kishor Shah has been re-appointed Managing Director of the Company with effect from April 1, 2012 for a further period of 3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 198, 269, 309, 310, 311 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII, Part II, Section II 1(B) to the Companies Act, 1956.

Mr. Utsav Parekh, Director and Mr. Santosh Kumar Mukherjee, Director retire by rotation in accordance with the requirement of the Companies Act, 1956 and the Articles of Association of the Company. They being eligible offered themselves for re-appointment.

Brief resume of Mr. Utsav Parekh and Mr. Santosh Kumar Mukherjee, nature of their expertise in specific functional areas, names of companies in which they hold directorship and / or membership / Chairmanship of committees of the board, their shareholdings as stipulated under Clause 49 of the listing agreement are furnished in the part on Corporate Governance elsewhere in the Annual Report.

8. AUDITORS

M/s. J. S. Vanzara & Associates, Chartered Accountants, statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of the forthcoming Annual General Meeting.

M/s. J. S. Vanzara & Associates, Chartered Accountants confirmed that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956 and they hold valid certificate issued by the Peer Review Board of ICAI.

9. AUDITORS'' QUALIFICATION

Qualifications contained in the Auditors'' Report have been dealt with in the Notes to financial statements and are self-explanatory.

10. PARTICULARS OF EMPLOYEES

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors'' Report is not required to be annexed. MCA vide its notification dated March 31, 2011 raised the exemption limit of disclosure of salary to employees to Rs.5 Lac per month or Rs. 60 Lac per annum. There are no employees in your company drawing remuneration more than Rs.5 Lac per month or Rs. 60 Lac per annum

11. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

Regd. Office : On behalf of the Board of Directors

''Vaibhav'' 4F, 4 Lee Road,

Kolkata - 700 020 (UTSAV PAREKH)

The 24th day of May, 2013 Chairman

---

Mar 31, 2012

The Directors have pleasure in presenting the Twenty-Ninth Annual Report of the Company together with the audited Financial Statements for the year ended March 31, 2012.

1. (a) FINANCIAL HIGHLIGHTS

(Rupees in million)

Year ended Year ended 31.03.2012 31.03.2011

Profit before Interest, Depreciation & Tax 56.87 66.65

Less: Interest 0.42 0.57

Profit before Depreciation & Tax 56.45 66.08

Less: Depreciation / Amortization 3.90 3.35

Profit before Tax 52.55 62.73

Less: Provision for Tax — Current / Earlier years 0.19 7.93

Less: Deferred Tax for the year 12.96 0.32

Profit after Tax 39.40 54.48

Profit brought forward from earlier year 54.76 41.31

Profit available for Appropriation 94.16 95.79

APPROPRIATIONS

Proposed Dividend including Dividend Tax 9.08 11.03

Transfer to General Reserve 20.00 30.00

Profit carried to Balance Sheet 65.08 54.76

Financial and Operational Performance

Operating profit (PBDIT) of the Company for the year was Rs. 56.87 million (previous year Rs. 66.65 million). Profit before tax for the year stood at Rs. 52.55 million (previous year Rs. 62.73 million).

Net worth of the Company as on March 31, 2012 including revaluation reserve was Rs. 1060.06 million (previous year Rs. 739.33 million).

(b) CAPITAL

Paid up capital of the Company as on March 31, 2012 stood at Rs. 55,850,000/- divided into 5,585,000 equity shares of Rs. 10/- each.

(c) DIVIDEND

In view of the reduced profits and challenging future outlook, your Directors recommend payment of dividend of Rs. 1.40 per equity share (previous year Rs. 1.70 per share) on the paid up equity capital for the year ended March 31, 2012. Dividend will absorb a sum of Rs. 9.08 million including the dividend distribution tax thereon.

(d) TRANSFER TO GENERAL RESERVES

Rs. 20 million (Previous Year: Rs. 30 million) has been transferred to the General Reserve of the Company.

(e) TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

No unpaid and unclaimed dividend as on March 31, 2012 was required to be transferred as per the provisions of Sections 205A and 205C of the Companies Act, 1956.

(f) MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report.

2. SUBSIDIARY COMPANY

As on March 31, 2012, there was one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 212 of the Companies Act, 1956 in respect of the subsidiary Company is attached.

3. YEAR IN RETROSPECT AND FUTURE OUTLOOK

For the Indian economy, it was a year of subdued GDP growth of 6.9% (previous year 8.5%). India's economic growth slumped in January to March 2012 to a nine year low of 5.3%. Growth rate is slated to be between 6% to 6.5 % in the year 2012-1 3. Due to the sovereign debt crisis in the Euro Zone, slowdown in many countries across the globe, rise in crude oil prices and policy paralysis in our country, the economy continues to be sluggish. Reserve Bank of India's tight monetary policy is geared towards taming domestic inflationary pressure. However, price spiral continues to plague the economy. Profit margin of the companies are affected due to high inflation and interest rates.

A cautious monetary policy and slowdown in economy has impacted investment and consumption growth. RBI has announced various measures to curb inflationary pressures. Investments by Foreign Institutional Investors have slowed down considerably. Stock markets remained weak on global macro-economic concerns and effect of Euro Zone crisis besides slowdown in the Indian economy. BSE Sensex was 17,404.20 as on March 31, 2012 (previous year 19,445.22). The depreciation of Indian rupee has also significantly affected Indian corporates who are net importers of goods and / or services or who have borrowed in foreign currency without resorting to hedging of currency exposure.

The financial year 2012-2013 appears to be a challenging year both for financial services industry and your Company. Your Company has chalked out an action plan to increase its client base and is taking necessary steps to achieve the same. Your Company continues to focus mainly in areas of Mergers and Acquisitions, Loan Syndication, Capital Market Operations, Placement of Equity shares and debts. Your Company obtained renewal of registration as a Category I Merchant Banker.

4. LISTING OF SECURITIES OF THE COMPANY

Equity shares of your Company continue to be listed on the Stock Exchanges at Kolkata and Mumbai and the listing fees for the year 2012-13 have been paid. 97.18 per cent of the equity shares of your Company are held in dematerialized form.

5. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1 956 with respect to Directors' Responsibility Statement, it is hereby confirmed that: (i) in the preparation of the accounts for the financial year ended March 31, 2012, the applicable Accounting Standards have been followed and that there are no material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year ended on that date;

(Hi) the Directors have taken proper and sufficient 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

(iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 217(1)(e) of the Act, read with the Companies (Disclosure of Particulars in the Report of the Board of directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earning (previous year 'nil'). Foreign Exchange outgo during the year aggregated to Rs. 1.17 million (previous year Rs. 0.70 million).

7. DIRECTORS

Composition of the Board of directors of your Company fulfills the criteria fixed by Clause 49 of the listing agreement with fifty per cent of the Directors being independent directors. Your Board comprises of six members out of which three are independent directors.

There was no change in the composition of Board of directors during the year. Mr. Utsav Parekh is the Non- Executive Chairman.

The three-year term of Mr. Kishor Shah as Managing Director ended on 31st March 2012 and on recommendation of the Remuneration Committee and approval of the Board of directors subject to the same being ratified by the members at the ensuing Annual General Meeting by passing a Special Resolution, Mr. Kishor Shah has been re-appointed Managing Director of the Company with effect from April 1, 2012 for a further period of

3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 198, 269, 309, 310, 311 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII, Part II, Section II 1 (B) to the Companies Act, 1956.

Mr. Ramesh Maheshwari, Director retires by rotation in accordance with the requirement of the Companies Act, 1956 and the Articles of Association of the Company. He being eligible offered himself for re-appointment.

Brief resume of Mr. Kishor Shah and Mr. Ramesh Maheshwari, nature of their expertise in specific functional areas, names of companies in which they hold directorship and / or membership / Chairmanship of committees of the board, their shareholdings as stipulated under Clause 49 of the listing agreement are furnished in the part on Corporate Governance elsewhere in the Annual Report.

8. AUDITORS

M/s J. S. Vanzara & Associates, Chartered Accountants, statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of the forthcoming Annual General Meeting.

M/s J. S. Vanzara & Associates, Chartered Accountants confirmed that their appointment, if made, would be within the prescribed limits under section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1 956 and they hold valid certificate issued by the Peer Review Board of ICAI.

9. AUDITORS' QUALIFICATION

Qualifications contained in the Auditors' Report have been dealt with in the Notes to Financial Statement and are self-explanatory.

10. PARTICULARS OF EMPLOYEES

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors' Report is not required to be annexed. MCA vide its notification dated March 31, 2011 raised the exemption limit of disclosure of salary to employees to Rs. 5 Lac per month or Rs. 60 Lac per annum. There are no employees in your company drawing remuneration more than Rs. 5 Lac per month or Rs. 60 Lac per annum.

11. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

Regd. Office:

On behalf of the Board of Directors 'Vaibhav' 4F, 4 Lee Road,

Kolkata - 700 020 (UTSAV PAREKH)

The 20th day of July, 2012 CHAIRMAN

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Mar 31, 2011

TO THE MEMBERS,

The Directors have pleasure in presenting the Twenty Eighth Annual Report of the Company together with the audited statement of accounts for the year ended March 31, 2011.

1(a). FINANCIAL HIGHTLIGHTS

(Rupees in million)

Year ended Year ended 31.03.2011 31.03.2010

Profit / (Loss) before Interest, 66.00 43.49 Depreciation & Tax

Less: Interest (0.08) 0.65

Profit / (Loss) before 66.08 42.84 Depreciation & Tax

Less: Depreciation 3.35 2.64

Profit / (Loss) before Tax 62.73 40.20

Less: Provision for Tax – 7.93 6.28 current / earlier years Less : Deferred tax for the year 0.32 (17.24)

Profit / (Loss) after Tax 54.48 51.16

Profit / (Loss) Account brought 41.31 109.92 forward from earlier year

Profit available for Appropriation 95.79 161.08

Proposed Dividend including 11.03 9.77 Dividend Tax

Transfer to General Reserve 30.00 110.00

Profit / (Loss) carried to 54.76 41.31 Balance Sheet

The operations of your Company during the year were satisfactory. Operating profit (PBDIT) of the Company for the year was Rs. 66.00 million (previous year Rs. 43.49 million) which is an increase of Rs 22.51 million over the previous year. Net profit before tax for the year stood at Rs. 62.73 million (previous year Rs. 40.20 million) which is an increase of 56.04% over the previous year.

Net worth of the Company as on March 31, 2011 was Rs.739.33 million (previous year Rs. 695.89 million).

(b). CAPITAL

The paid up capital of the Company as on March 31, 2011 stood at Rs. 55,850,000/- divided into 5,585,000 equity shares of Rs. 10/- each.

(c). DIVIDEND

Your Directors recommend payment of dividend of Rs. 1.70 per equity share, i.e. @ 17 % on the paid up equity capital for the year ended 31st March, 2011 as against 15% paid in the previous year. The said equity dividend will absorb a sum of Rs. 11.03 million including the dividend distribution tax thereon.

(d). MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and results of operations of the Company for the year under review as required under clause 49 of the listing agreement with the Stock Exchanges is given in the section on Corporate Governance elsewhere in the Annual Report.

2. SUBSIDIARY COMPANY

As on 31.03.2011 the Company had one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 212 of the Companies Act, 1956 in respect of the subsidiary Company is attached.

3. YEAR IN RETROSPECT AND FUTURE OUTLOOK

Indian economy recorded a GDP growth rate of around 8.5% in the year 2010-11and is expected to register a growth of around 7.5% in the year 2011-12. The rate of growth has come down due to steep increase in interest rates by Reserve Bank of India leading to a slowdown in the Indian economy. Inflation continues to be high. Profit margins of companies have been impacted both due to high inflation and higher interest rates. The steep increase in oil prices is also a matter of great concern for the government. It appears that this will be a challenging year for the financial services industry including your company.

Stock markets performed well during the year and BSE Sensex was 19,445.22 as on March 31, 2011 against 17,527.77 as on March 31, 2010. Indian financial sector is healthy and is well placed to capitalise on growth opportunities in the domestic market. Prevalent banking system is well capitalised and well placed to manage asset quality concerns.

Your Company continues to focus mainly in the areas of Mergers and Acquisitions, Loan Syndication, Capital Market operations, Placement of Equity shares and debts.

4. LISTING OF SECURITIES OF THE COMPANY

Equity shares of your Company continue to be listed on the Stock Exchanges at Kolkata and Mumbai and the listing fees for the year 2011-12 have been paid. 97.14 per cent of the equity shares of your Company are held by the shareholders' in dematerialized form.

5. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the financial year ended March 31, 2011, the applicable Accounting Standards have been followed and that there are no material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient 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

(iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 217(1)(e) of the Act, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year ‘nil'). Foreign Exchange outgo during the year aggregated to Rs. 0.70 million (previous year Rs. 2.44 million).

7. DIRECTORS

Composition of the Board of Directors of the Company fulfills the criteria fixed by Clause 49 of the listing agreement with fifty per cent of the Directors being independent directors. Your Board comprises of six members out of which three are independent directors.

There was no change in the composition of Board of Directors during the year. Mr. Utsav Parekh is the Non- Executive Chairman. Mr. Kishor Shah is the Managing Director of the Company being appointed for a period of 3 (Three) years w.e.f 1/04/2009 at a remuneration approved by the shareholders in the Annual general Meeting held on September 12, 2009. On the recommendation of the Remuneration Committee and approval of the Board of Directors subject to the same being ratified by the members at the ensuing Annual General Meeting by passing a special resolution, managerial remuneration paid to Mr. Kishor Shah, Managing Director is proposed to be revised within the limits prescribed under Sections 198, 269, 309, 310, 311 and other applicable provisions of the Companies Act, 1956 read with Schedule XIII, Part II, Section II 1 (B) to the Companies Act, 1956.

Mr. Chandranath Mukherjee, Director retires by rotation in accordance with the requirement of the Companies Act, 1956 and Articles of Association of the Company and being eligible has offered himself for re-appointment.

Brief resume of Mr. Chandranath Mukherjee, nature of his expertise in specific functional areas, names of companies in which he holds directorship and / or membership / Chairmanship of committees of the board, his shareholdings as stipulated under Clause 49 of the listing agreement with the Stock Exchanges, are given in the section on Corporate Governance elsewhere in the Annual Report.

8. AUDITORS

M/s J. S. Vanzara & Associates, Chartered Accountants, who are the statutory auditors of the Company hold office in accordance with the provisions of the Companies Act, 1956 up to the conclusion of the forthcoming Annual General Meeting.

M/s J. S. Vanzara & Associates, Chartered Accountants have confirmed that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualified

for such appointment within the meaning of section 226 of the Companies Act, 1956 and they hold a valid certificate issued by the Peer Review Board of ICAI.

9. AUDITORS' QUALIFICATION

The qualifications in the Auditors' Report have been dealt with in the Notes to Accounts and are self-explanatory.

10. PARTICULARS OF EMPLOYEES

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 forming part of the Directors' Report is not required to be annexed. MCA vide its notification dated March 31, 2011 has revised the limit of disclosure to Rs.5 Lac per month or Rs. 60 Lac per annum. There are no employees in your company drawing remuneration more than Rs.5 Lac per month or Rs. 60 Lac per annum

11. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

On behalf of the Board of Directors

(UTSAV PAREKH) CHAIRMAN

Regd. Office: 'Vaibhav' 4F, 4 Lee Road, Kolkata - 700 020 The 27th day of May, 2011

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Mar 31, 2010

The Directors have pleasure in presenting the Annual Report of the Company together with the audited statement of accounts for the year ended March 31, 2010.

1(a). FINANCIAL HIGHTLIGHTS

(Rupees in million)

Year ended Year ended

31.03.2010 31.03.2009

Profit / (Loss) before Interest, Depreciation & Tax 43.49 11.32

Less: Interest 0.65 0.92

Profit / (Loss) before Depreciation & Tax 42.84 10.40

Less: Depreciation 2.64 2.75

Profit / (Loss) before Tax 40.20 7.65

Less: Provision for Tax – current / earlier years 6.28 4.90

Less : Deferred tax for the year (17.24) (0.27)

Less: Fringe Benefit Tax - 0.46

Profit / (Loss) after Tax 51.16 2.56

Profit / (Loss) Account brought forward from earlier year 109.92 107.36 Profit available for Appropriation 161.08 109.92

Proposed Dividend including Dividend Tax 9.77 -

Transfer to General Reserve 110.00 -

Profit / (Loss) carried to Balance Sheet 41.31 109.92



The operations of your Company during the year were satisfactory. Operating profit (PBDIT) of the Company for the year was Rs. 43.49 million (previous year Rs. 11.32 million) which is an increase of 284% over the previous year. Net profit before tax for the year stood at Rs. 40.20 million (previous year Rs. 7.65 million) which is an increase of 425% over the previous year.

Net worth of the Company as on March 31, 2010 was Rs. 695.89 million (previous year Rs. 654.50 million).

(b). CAPITAL

The paid up capital of the Company as on March 31, 2010 stood at Rs. 55,850,000/- divided into 5,585,000 equity shares of Rs. 10/- each.

(c). DIVIDEND

Your Directors recommend payment of dividend of Rs. 1.5/- per equity share, i.e. @ 15% on the Equity Capital for the year ended 31st March, 2010. The said equity dividend will absorb a sum of Rs. 9.77 million including the dividend distribution tax thereon.

(d). MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and results of operations of the Company for the year under review as required under clause 49 of the listing agreement with the Stock Exchanges is given in the section on Corporate Governance elsewhere in the Annual Report.

2. SUBSIDIARY COMPANY

With effect from March 15, 2010, Antriksh Vyapaar Private Limited became a subsidiary of the Company. SMIFS Capital Services Limited continues to be a wholly-owned subsidiary of the Company. Statement required under Section 212 of the Companies Act, 1956 in respect of the subsidiary Companies are attached.

3. YEAR IN RETROSPECT AND FUTURE GROWTH

Your Company has applied to the Securities and Exchange Board of India (SEBI) for renewal of its registration as a Category I Merchant Banker. Pursuant to the SAT Order dated 24.02.2010, the application for renewal of registration filed by the Company is under consideration.

Indian economy recorded a GDP growth rate of 7.2% in 2009-10. Performance of Indian economy is considered encouraging compared to the prevailing situation in most of the developed economies.

Stock markets performed very well during the year. BSE Sensex was 17,527.77 as on March 31, 2010 against 9,709 as at 31.03.2009.

Indian financial sector is healthy and is well placed to capitalise on growth opportunities in the domestic market. Prevalent banking system is well capitalised and well placed to manage any asset quality concern.

Your Company continues to focus mainly in the areas of Mergers and Acquisitions, Loan Syndication, Capital Market operations, Placement of Equity shares and debts. Your Company is also jointly developing its property at Bondel Road, Kolkata and the project is likely to be completed in 3-4 years. It is expected that this real estate development will be highly beneficial to the company on its completion. Business outlook for the current year appears positive.

4. LISTING OF SECURITIES OF THE COMPANY

Equity shares of your Company continue to be listed on the Stock Exchanges at Kolkata and Mumbai and the listing fees for the year 2010-11 have been paid. 97.04 per cent of the equity shares of your Company are dematerialized.

5. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the financial year ended March 31, 2010, the applicable Accounting Standards have been followed and that there are no material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the profit of the Company for the year ended on that date;

(iii) the Directors have taken proper and sufficient 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

(iv) the Directors have prepared the annual accounts of the Company on a going concern basis.

6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 217(1)(e) of the Act, read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year nil). Foreign Exchange outgo during the year aggregated to Rs. 2.43 million (previous year Rs. 0.93 million).

7. DIRECTORS

There was no change in the composition of Board of Directors, except that with effect from 1st April, 2009, Mr. Utsav Parekh resigned as Executive Chairman. He was appointed as a Director under Section 257 of the Companies Act, 1956 in the Annual General Meeting held on September 12, 2009. He was appointed Non- Executive Chairman of the Board in the Board Meeting held on September 14, 2009.

Three year term of Mr. Kishor Shah as Whole-Time Director ended on 31st March, 2009. On the recommendation of the Remuneration Committee and as approved by the Board of Directors and also by the members by a Special Resolution at the Annual General Meeting held on September 12, 2009, Mr. Kishor Shah was appointed Managing Director of the Company for a period of 3 (three) years. Terms of appointment including payment of managerial remuneration with effect from 1st April, 2009 as per the provisions of Section 269 read with the other applicable provisions are within the limits prescribed in Schedule XIII, Part II, Section II(B) to the Companies Act, 1956.

Mr. Ajay Kumar Kayan, Director retires by rotation in accordance with the requirement of the Companies Act, 1956 and Articles of Association of the Company and being eligible has offered himself for re-appointment.

Composition of the Board of Directors of the Company fulfills the criteria fixed by Clause 49 of the listing agreement with fifty per cent of the Directors being independent directors. Your Board comprises of six members out of which three are independent directors.

Brief resume of Mr. Ajay Kumar Kayan, nature of his expertise in specific functional areas, names of companies in which he holds directorship and / or membership / Chairmanship of committees of the board, his shareholdings

as stipulated under Clause 49 of the listing agreement with the Stock Exchanges, are given in the section on Corporate Governance elsewhere in the Annual Report.

8. AUDITORS

M/s J. S. Vanzara & Associates, Chartered Accountants, who are the statutory auditors of the Company hold office, in accordance with the provisions of the Companies Act, 1956 up to the conclusion of the forthcoming Annual General Meeting.

M/s J. S. Vanzara & Associates, Chartered Accountants have confirmed that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Companies Act, 1956 and they hold a valid certificate issued by the Peer Review Board of ICAI.

9. AUDITORS QUALIFICATION

The qualifications in the Auditors Report have been dealt with in the Notes to Accounts and are self-explanatory.

10. PARTICULARS OF EMPLOYEES

Your Directors wish to acknowledge the support and valuable contribution made by the employees at all levels. Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 (as amended) are given in a separate annexure attached hereto and forms part of this report.

11. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

On behalf of the Board of Directors Regd. Office: Vaibhav

4F, 4 Lee Road, (UTSAV PAREKH)

Kolkata - 700 020 CHAIRMAN The 24th day of May, 2010