Notes to Accounts of SMC Global Securities Ltd.

Mar 31, 2025

Cash flows from operating activites are
reported using the indirect method
where by the profit after tax is adjusted
for the effect of the transactions of a
non-cash nature, any deferrals or
accruals of past and future operating
cash receipts or payments and items of
income or expenses associated with
investing or financing cash flows. The
cash flows from operating, investing
and financing activities of the company
are segregated.

2.10 Standard Issued but not
Effective

Ministry of Corporate Affairs (“MCA”)
notifies new standards or amendments
to the existing standards under
Companies (Indian Accounting
Standards) Rules as issued from time to
time. For the year ended March 31,
2025, MCA has not notified any new
standards or amendments to the
existing standards applicable to the
company. The standards or
amendments (wherever applicable)
issued till date have been complied by
the company.

Note:- As at the March''25 ? 895 lakhs from the Kotak Mahindra Investment Ltd. loan, earmarked for Capital Work-in-Progress (CWIP),
remains unutilised. This amount is held specifically for use in approved capital expenditure projects in accordance with the terms of the
loan agreement.

a) Term Loan from banks amounting ? 207.56 lakhs and ? 274.07 lakhs as of March 31, 2025 and March 31, 2024, respectively, are secured
by way of hypothecation of vehicles and are repayable over a period up to five years.

b) Term Loan from others amounting ? 7,310.07 lakhs and ? 7,256.56 lakhs as of March 31, 2025 and March 31, 2024, respectively, are
secured by way of hypothecation of freehold land, exclusive charge on collateral property situated at Pusa Road New Delhi and personal
guarantee of promoters directors are repayable in 60 instalments.

c) Term Loan from others amounting ? 15,120.84 lakhs and ? 9,900.00 lakhs as of March 31, 2025 and March 31, 2024 , respectively, are
secured by way of Margin trading facility and personal guarantee of promoter directors.

d) Term Loan from others amounting ? Nil and ? 20.34 lakhs as of March 31, 2025 and March 31, 2024 , respectively, are secured by way of
hypothecation of vehicles and are repayable over a period up to five years.

e) Loan from banks amounting ? 46,463.59 lakhs and ? 46,062.96 lakhs as of March 31, 2025 and March 31, 2024, respectively, are secured
against shares, receivables (including exchange balances), fixed deposits, certain office buildings and personal guarantee of promoter
directors.

f) Loan from others amounting ? 4,750 and ? 400.81 as of March 31, 2025 and March 31, 2024 , respectively, are secured by way of
hypothecation of shares, receivable and personal guarantee of promoter directors.

*In the period of five years immediately preceding March 31, 2025

During the financial year 2022-23, the company had purchased and extinguished a total of 84,34,450 fully paid-up equity shares of face
value ? 2 each from open market through the stock exchanges.

The Company has only one class of equity shares having a par value of ? 2 per share. Each holder of equity shares is entitled to one vote
per share. The Board has proposed final dividend for FY 2024-25 @60% i.e. ? 1.20 per equity shares of the face value of ?2/- each
amounting to ? 1,256.40 lakhs to its equity shareholders (subject to approval of the shareholders in the ensuing Annual General Meeting)
in addition to interim dividend @60% paid during the FY 2024-25, this makes the total dividend @120% i.e. ? 2.40 per equity share.

In the event of Liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after
distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Nature and purpose of reserves :

(A) Securities premium

Securities premium is used to record the premium received on issue of shares. The reserve can be utilised only for limited purposes in
accordance with the provisions of the Companies Act, 2013.

(B) Retained earnings

Retained earnings are the profits that the company has earned till date, less any transfers to generate reserve, dividends or other
distributions paid to shareholders.

(c) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage
in accordance with applicable regulations however, the same is not required to be created under Companies Act, 2013. This reserve can be
utilised only in accordance with the specified requirements of Companies Act, 2013.

(D) Capital redemption reserve

The Companies Act, 2013 requires that when a Company purchases its own shares out of free reserves or securities premium account, a
sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve. The reserve is utilised in
accordance with the provisions of Section 69 of the Companies Act, 2013.

(E) Capital reserve

Capital reserve is created out of capital profits and cannot be used for the distribution of profits and dividend.

Other litigations

1 Title of the property located at Office no 205, 2nd Floor, Plot no 4A, Community Centre, 21st Century Plaza, Sector 8, Rohini, New Delhi
having gross carrying value of ? 46.12 Lakhs is under dispute and sealed due to the allegation of acquisition of the said property by the
transferor from the funds of Ganga Yamuna Finvest Pvt. Ltd, which is under liquidation.

2 The company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The company’s management
does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on
the company’s results of operations and financial condition.

Pending completion of the legal process the impact of liability, if any, cannot be ascertained at this stage, however, management believes
that, based on legal advice, the outcome of these contingencies will be favourable and that outflow of economic resources is not probable.

Financial risk factors

This note presents the information
about the Company’s exposure to
financial risks, the Company’s
objectives, policies and processes for
measuring and managing risk and the
Company’s management of capital.

The Company has exposure to the
following risks arising from financial
instruments:

• Credit risk;

• Liquidity risk and

• Market risk

Financial Risk management
framework

The Board of Directors has overall
responsibility for the establishment and
oversight of the Company’s risk
management framework. Financial risk
management within the Company is
governed by policies and guidelines
approved by the management. The
Board has established a Risk

Management Committee which is
responsible for developing and
monitoring the Company’s risk
management policies. Company policies
and guidelines cover areas such as cash
management, investment of excess
funds and raising of debt and are
managed by segregated functions
within the Company.

The Company’s risk management
policies and procedures are established
to identify and analyse the risks faced
by the Company, to set appropriate risk
limits and controls, and to monitor risks
and adherence to limits. Risk
management policies and systems are
reviewed regularly to reflect changes in
market conditions and the Company’s
activities. The Company, through its
training and management standards
and procedures, aims to maintain a
disciplined and constructive control
environment in which all employees
and stakeholders understand their roles
and obligations.

Different types of risks arising from
financial instruments as identified by
the Company above have been
explained below:

(I) Credit risk

The credit risk is the risk of financial
loss to the Company if a customer or
counterparty to a financial instrument
fails to meet its contractual obligations,
and arises principally from the
Company''s receivable from clients and
exchange and trading members, loan
and advances, investments other than
the quoted securities given. Credit risk
in respect of quoted securities is
expected to have a direct correlation
with the quoted market prices and risk.

The Company is exposed to the risk
that third parties that owe money or
securities will not perform their
obligations. Such third parties include
clients, trading members, exchanges,
clearing houses, and other financial
intermediaries. These parties may

policies specially designed to mitigate
the credit risk.

The Company’s Board of Directors has
delegated responsibility for the
oversight of credit risk to the Risk
Management Committee (“the
Committee”). The Committee is
responsible for management of the
Company’s credit risk, including the
following:

(I) Formulating credit policies in
consultation with business units,
covering collateral requirements,
credit assessment, risk grading
and reporting, documentary and
legal procedures, and compliance
with regulatory and statutory
requirements.

(ii) Establishing the organizational
structure for the approval of new
customers or counter parties.
Authorization limits are allocated
to business unit credit officers or
the Arbitrager as appropriate.

(iii) Providing advice, guidance and
specialist skills to business units
through periodic reviews to
promote best practices throughout
the Company in the management
of credit risk.

(iv) The Committee assesses the credit
worthiness of client or
counterparties, prior to taking
exposure on them. Accordingly,
limits are assigned and the
monitoring mechanism ensures

default on their obligations owed to the
Company due to insolvency, lack of
liquidity, operational failure,
government or other regulatory
intervention or other reasons. In these
circumstances, the Company is exposed
to risks arising, for example, from
holding securities of third parties;
executing securities trades that fail to
settle at the required time due to non¬
delivery by the counterparty trading
members, exchanges, clearing houses
or other financial intermediaries.
Significant failures by third parties to
timely perform their obligations owed
could materially and adversely affect
the Company’s financial position, and
ability to borrow in the credit markets
and ability to operate the business.

For the risk management purposes, the
Company considers and consolidates all
elements of credit risk exposures such
as individual obligator default risk,
country and sector risk.

Management / mitigation of credit
risk

The Company operates in a highly
regulated environment which limits its
credit risk against exchanges and
clearing houses. The Company collects
upfront margins in form of funds and/or
securities/commodities from clients and
trading members against their trading
positions. The Company monitors
positions, margins, mark to market
losses and risks on real time basis
through risk management systems and

that exposure to single client does
not cross the laid down threshold
limits. Collateral securities are also
collected from clients to cover the
exposure.

(v) Limiting concentrations of
exposure to counterparties,
geographies and industries (for
loans and advances and similar
exposures), and by issuer, credit
rating bond, market liquidity and
country (for investment securities
and trading assets).

(vi) Reviewing compliance of business
units with agreed exposure limits,
including those for selected
industries, country risk and
product types. Regular reports on
the credit quality of local
portfolios are provided to the
management, which may require
appropriate corrective action to be
taken.

The Board of Directors has also
constituted Audit Committee, which is
responsible for evaluation of internal
financial controls and risk management
systems. The company conducts regular
internal audits of various business units
to identify scope of
improvement/enhancement of the
Company''s processes, quality control,
fraud prevention and legal compliance.
The internal audit reports are reviewed
by audit committee and also placed
with the Board.

(ii) Liquidity risk

Liquidity risk is the risk that the
Company will encounter difficulty in
meeting obligations associated with its
financial liabilities that are settled by
delivering cash or another financial
asset. The Company require sufficient
liquidity to meet their obligations.
Individual companies are generally
responsible for their own fund
management, including the short-term
investment of surpluses and the raising
of loans to cover deficits from third
parties/companies.

The Company’s primary liquidity
requirements are to finance the working

capital needs, which are typically towards
margin maintenance at various
exchanges. The principal portion of the
working capital requirement is utilized by:

(a) depositing funds with banks to
obtain term deposits and guarantees
towards margins payable to the
exchanges/clearing houses;

(b) payments to stock
exchanges/clearing houses towards
settlement obligations;

(c) payment towards purchase of
various trading assets; and

(d) meeting expenses incurred for

operations.

Management of liquidity risk

Working capital requirements fluctuate
on a regular basis depending on the
business requirements. The Company''s
approach to managing liquidity is to
ensure, as far as possible to have
sufficient funds to meet its liabilities
when due, under both normal and
stressed conditions, without incurring
unacceptable losses or risking damage
to the Company''s reputation.

To fund the working capital
requirements, the Company currently
relies principally on internal accruals
and short term credit facilities from
banks and financial institutions against

pledge of derivative assets, term
deposits, receivables from clients and
investments carried at fair value
through profit and loss. By maintaining
sufficient liquid funds and drawing
facilities with banks, the Company
comfortably meets the foreseeable
liabilities in the present and immediate

future, as well as unforeseeable
contingencies.

Central treasury receives information
from business units regarding the
liquidity profile of their financial assets
and liabilities and projected cash flows.
Central treasury maintains surplus
funds in cash and cash equivalents

including term deposits with banks and
in investment securities for which there
is an active and liquid market. These
assets can be readily sold to meet
liquidity requirements. Hence, the
Company believes that the above
monetary mechanism adequately
addresses the liquidity risk.

(iii) Market risk

The Company participates in trading
and investing in various asset classes
such as equity, debt securities,
commodities, foreign currency and
derivatives. These assets classes
experience volatility due to economic
growth levels, inflation, prices, interest
rates, foreign exchange rates and other
macro-economic factors. Any changes in
market prices of these asset classes will
affect the Company’s income or the
value of its holdings of financial
instruments.

The Company segregates its exposure
to market risks between price risk,
interest rate risk and currency risk.
Management of market risks:

The objective of market risk
management is to manage and
minimize market risk exposures within
acceptable parameters, while optimizing
the return on risk. The Company''s
exposure to market risk is determined

by a number of factors, including size,
composition and diversification of
positions held and market volatility.

(a) Price risk

Trading and investment portfolios
include proprietary positions taken in
equities, fixed income securities,
commodities, foreign currency and their
derivatives mainly for availing arbitrage
opportunities. All financial assets and
liabilities are accounted on fair value
basis. Management actively monitors its
market risk by reviewing the
effectiveness of arbitrage and setting
outstanding position limits. The
Company manages market risk with
central oversight, analysis and
formation of risk policy, specific
maximum risk levels to which the
individual trader must adhere to and
real time continuous monitoring by the
senior management.

In respect of the proprietary positions,
the Company is exposed to volatility in

the price of the underlying securities.

(b) Interest rate risk

Interest rate risk arises from
movements in interest rates which
could have effects on the Company’s
net income or financial position.
Changes in interest rates may cause
variations in interest income and
expenses resulting from interest-bearing
assets and liabilities. Interest rate risk is
the risk that the fair value or the future
cash flows of a financial instrument will
fluctuate because of changes in market
interest rates.

The Company’s exposure to interest
rate risk relates to the loans taken
from banks, investment in term
deposits placed with banks,
investment in debt securities and
investments of its excess funds in
liquid instruments. A majority of the
financing of the Company has come
from overdraft facility with banks. The
business of the Company is exposed to
fluctuation in interest rate for the
following activities:

(I) Term deposits placed with banks
are generally for short term on
fixed interest rates;

(ii) Facilities availed from banks and
other financial institutions
generally include short term
working capital loans on floating
interest rates;

(iii) Interest paid by Company on
clients’ funds earmarked as fixed
margin are generally for short
term on fixed interest rates.

Management of Interest Rate Risk

Interest rate risk is managed
principally through monitoring interest
rate gaps and by having pre-approved
limits for re-pricing bands. However
the Company does not use derivative
financial instruments to hedge its
interest rate risk.

The Company’s investments in majority
of term deposits with banks are for
both short and long duration, and
therefore do not expose the Company
to significant interest rate risk. Further
significant portion of exposure on term
deposits with banks is offset with
clients’ funds earmarked as margins on
fixed rate basis. The interest rates on
the overdraft facility availed are
marginally higher than the interest rates
on term deposits with the banks and
generally linked to the term deposit
rates with the bank. Accordingly, there
is limited interest rate risk exposure on
the company.

The Company’s exposure to the risk of
changes in market interest rates relates
primarily to the Company’s short-term
and long-term debt obligations with
floating / fixed interest rates, which are
included in loans and borrowings. The
loans and borrowings represent loans

and borrowing taken both fixed and
floating interest rate.

(c) Currency risk

The Company is not significantly
exposed to currency risk as there is no
mismatch between the currencies in
which sales of services, purchase of
goods/services and borrowings are
dominated and the respective
functional currencies of Company .
Further, the functional currency of the
Company is primarily the Indian Rupee
and do not expose the Company to
significant currency risk. The Company
considers the valuation changes in
foreign currency derivatives it trades in
as part of investment/price risk as those
derivatives are exchange traded,
managed and monitored based on
exchange price and are settled in near
term in Indian Rupees.

NOTE NO. 44

Disclosure under The Micro, Small and Medium Enterprises Development Act, 2006

The Company has sent letters to vendors to confirm whether they are covered under micro, small and medium enterprise development
act 2006 as well as they have filed required memorandum with prescribed authority. Out of the letter sent to the party, based on the
confirmation received till the date of finalisation of balance sheet. Based on and to the extent of the information received by the
Company from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act)
and relied upon by the auditors, the relevant particulars as at the year end are furnished below:

NOTE NO. 45

Segment reporting

Ind AS 108 establishes standards for the way
that public business enterprises report
information about operating segments and
related disclosures about products and
services, geographic areas, and major
customers. Based on the "management
approach" as defined in Ind AS 108, the
Chief Operating Decision Maker (CODM)
evaluates the Company''s performance and
allocates resources based on analysis of
various performance indicators by business
segments and geographic segments.
Accordingly, information has been presented
both along industry classes and geographic
segmentation of customers, industry being
the primary segment. Secondary segmental

reporting is performed on the basis of the
geographical location of customers. The
accounting principles used in the
preparation of the financial statements are
consistently applied to record revenue and
expenditure in individual segments, and are
as set out in the note on significant
accounting policies.

a. Business Segment

The Company’s primary business comprises
of dealing in shares, securities, commodities,
derivatives and portfolio management
services either on its own or on behalf of its
constituents and other related ancillary
services.

Accordingly the primary business segment
has been identified as below:

Broking, Distribution & Trading : Comprises
of brokerage income earned on secondary
market transactions done on behalf of
clients, services rendered as depository
participant, clearing services, research
support services, proprietary trading in
securities, commodities, derivatives portfolio
and fund management services.

b. Geographical Segment

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

(Non-Ind AS Information)

NOTE NO. 46

Additonal Regulatory disclosures

I. Title Deeds of all Immovable properties are held in the name of the company

ii. The company does not have any investment property, hence disclosure relating to its valuation are not applicable.

iii. During the year the company has not revalued its property, plant and Equipment.

iv. During the year the company has not revalued its intangible assets.

v. During the year no Scheme of Arrangements related to the company has been approved by the Competent Authority in terms of
sections 230 to 237 of the Companies Act, 2013.

vi. Capital work-in-progress comprises of property, plant and equipment that are not ready for their intended use at the end of reporting
period and are carried at cost comprising direct costs, related incidental expenses, other directly attributable costs and borrowing costs.

xii. There are no charges or satisfactions
pending for registration with the ROC
beyond the statutory period except in
case of Bank guarantee (sanctioned
amount ? 15,500 lakhs and
outstanding amount ? 15,500 lakhs)
and overdraft facility (sanctioned
amount ? 17,500 lakhs and
outstanding amount ? 1572 lakhs)
from HDFC Bank, where the creation
of charge was inadvertently ommitted.

xiii. The company has complied with the
number of layers prescribed under
clause (87) of section 2 of the act read
with companies (Restriction on
number of layers) rule 2017.

xiv. Additional regulatory information
required under (WB) (xiv) of Division III
of Schedule III amendment, disclosure
of ratios, is not applicable to the

Company as it is in broking business
and not an NBFC registered under
Section 45-IA of Reserve Bank of India
Act, 1934.

xv. Utilisation of Borrowed funds and
share premium:-:-

A) The company has not advanced or
loaned or invested funds (either
borrowed funds or share premium or
any other sources or kind of funds) to
any other person(s) or entity(ies),
including foreign entities
(Intermediaries) with the
understanding (whether recorded in
writing or otherwise) that the
Intermediary shall:

(I) directly or indirectly lend or

invest in other persons or entities
identified in any manner
whatsoever by or on behalf of

the company (Ultimate
Beneficiaries) or

(ii) provide any guarantee, security
or the like to or on behalf of the
Ultimate Beneficiaries;

(B) The company has not received any
fund from any person(s) or entity(ies),
including foreign entities (Funding
Party) with the understanding
(whether recorded in writing or
otherwise) that the company shall:

(I) directly or indirectly lend or

invest in other persons or entities
identified in any manner
whatsoever by or on behalf of
the Funding Party (Ultimate
Beneficiaries) or

(ii) provide any guarantee, security
or the like on behalf of the
Ultimate Beneficiaries

NOTE NO. 48

Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold , needs to spend atleast 2% of its average net
profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by
the company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified
in Schedule VII of the Companies Act, 2013:

NOTE NO. 50

Subsequent Event- Public Issue

The Company has also has filed Prospectus dated March, 19 2025 for public issue of secured, rated, listed, redeemable, non-convertible
debentures of face value of ?1,000 each ("NCD") for an amount up to ?7,500 lakhs ("Base issue size") with an option to retain
oversubscription up to ?7,500 lakhs ("Green shoe option"), aggregating up to 15,00,000 NCDs for an aggregate amount of up to ?15,000
lakhs ("issue size" or "issue limit") ("Issue"). The Issue opened for subscription on April, 02 2025 ("Issue Opening date") and closed on
April, 17 2025 ("Issue Closing date"). 12,03,042 NCDs with face value of Rs 1000 each were allotted on April 24, 2025 and same has been
listed on BSE Limited for trading on April 28, 2025.

NOTE NO. 52

The figures for the previous year have been re-grouped to conform with the current year’s presentation. This reclassification does not
affect the overall financial position, results of operations, or cash flows of the company. The changes were made to improve the
comparability of financial information.

In terms of our report of even date attached

For P.C. Bindal & Co. For and on behalf of the Board of SMC Global Securities Limited

Chartered Accountants
Firm Registration No. : 003824N

sd/- sd/- sd/- sd/-

Manushree Bindal S.C. Aggarwal Mahesh C. Gupta Ajay Garg

Partner Chairman & Vice-Chairman & Director & CEO

Membership No. : 517316 Managing Director Managing Director DIN: 00003166

DIN: 00003267 DIN: 00003082

sd/- sd/-

Place: New Delhi Vinod Kumar Jamar Suman Kumar

Date: May 11, 2025 President & Group CFO Company Secretary

---

Mar 31, 2024

a) Term Loan from banks amounting ? 274.07 lakhs and ? 303.72 lakhs as of March 31, 2024 and March 31, 2023, respectively, are secured by way of hypothecation of vehicles and are repayable over a period up to five years.

b) Term Loan from others amounting ? 7,256.56 lakhs and ? 3,482.35 lakhs as of March 31, 2024 and March 31, 2023, respectively, are secured by way of hypothecation of freehold land, exclusive charge on collateral property situated at Pusa Road New Delhi and personal guarantee of promoters directors are repayable in 60 instalments.

c) Term Loan from others amounting ? 9900.00 lakhs and ? 3,000.00 lakhs as of March 31, 2024 and March 31, 2023, respectively, are secured by way of Margin trading facility and personal guarantee of promoter directors.

d) Term Loan from others amounting ? 20.34 lakhs and ? 30.02 lakhs as of March 31, 2024 and March 31, 2023, respectively, are secured by way of hypothecation of vehicles and are repayable over a period up to five years.

e) Loan from banks amounting ? 46,062.96 lakhs and ? 28,120.01 lakhs as of March 31, 2024 and March 31, 2023, respectively, are secured against shares, receivables (including exchange balances), fixed deposits, certain office buildings and personal guarantee of promoter directors.

f) Loan from others amounting ? 400.81 and ? Nil as of March 31, 2024 and March 31, 2023, respectively, are secured by way of hypothecation of shares, receivable and personal guarantee of promoter directors.

*Pursuant to the public announcement dated May 10, 2022 in respect of buy back of shares from the open market through stock exchange mechanism as prescribed under SEBI (Buy Back of Securities) Regulation, 2018, the Buy back of shares commenced on 20th May, 2022 and ended on 16th August, 2022. The Company under the scheme, bought back a total of 84,34,450 shares from the open market. A total sum of ? 9,242.06 lakhs was incurred on the shares bought back (including ? 1,769.21 lakhs towards buy back distribution tax and other expenses). Consequently the total number of paid up equity shares of the company (? 2/- nominal value of per share) reduced from 11,31,34,450 shares to 10,47,00,000 shares as at the end of 16th August, 2022. The consideration was paid towards buy-back of shares is adjusted against share capital by ?168.69 lakhs and the balance in share premium by ? 9,073.37 lakhs in the previous year The Company has only one class of equity shares having a par value of ? 2 per share. Each holder of equity shares is entitled to one vote per share. The Board of Directors has proposed an equity dividend @ 60% i.e. ? 1.20 (P.Y. ? 1.20) per share for the financial year ending March 31, 2024 at there meeting held on dated May 13, 2024 , which is subject to approval by the shareholders in the ensuing Annual General Meeting. The amount of per share dividend recognised as distribution to equity shareholders for Interim dividend is ? 1.20 (P.Y. ? 1.20).

In the event of Liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amount The distribution will be in proportion to the number of equity shares held by the shareholders

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.

The company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The discount rate is based on the government securities yield.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by 50bps, keeping all other actuarial assumptions constant.

Gratuity is applicable only to employees drawing salary in Indian rupees.

Notes:

1. An ESI demand is being agitated by the Company at High Court, New Delhi.

2. Demand and penalty of ? 625.32 Lakhs (PY: ? 570.32 Lakhs) was being agitated by the Company before the Customs, Excise and

Service Tax Appellate Tribunal (CESTAT) and for demand of ? 658.24 Lakhs (PY ? 45.66 Lakhs was being agitated by the Company before Commissioner of Service Tax, Audit 1, Delhi.) against which the Company is in process to file an appeal before Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on or before due date.

3. PF matter is pending before High Court and amount is not quantifiable.

4. The Company had received a notice dated 21.11.2014 from the Collector of Stamp (HQ), Delhi on account of verification of records

pertaining to Stamp duty chargeable on the basis of broker’s Note for the period 2010 to 21.11.2014. Matter is sub-judice and has been stayed by jurisdictional High Court at New Delhi vide its order dated 09/12/2014 until further order.

The Demerged Company M/s Pulin Comtrade Limited had received a show cause notice of demand dated 05/01/2015 from the Office of The Collector of Stamps, Delhi, on account of levy of stamp duty on commodity transactions. The matter is sub-judice and has been stayed by jurisdictional High Court at Delhi vide its order dated 19/01/2015 in the matter of WP/C/516/2015.

NOTE NO. 34.02

Other litigations

1 Title of the property located at Office no 205, 2nd Floor, Plot no 4A, Community Centre, 21st Century Plaza, Sector 8, Rohini, New Delhi having gross carrying value of ? 46.12 Lakhs is under dispute and sealed due to the allegation of acquisition of the said property by the transferor from the funds of Ganga Yamuna Finvest Pvt. Ltd, which is under liquidation.

2 The company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the company’s results of operations and financial condition.

Pending completion of the legal process the impact of liability, if any, cannot be ascertained at this stage, however, management believes that, based on legal advice, the outcome of these contingencies will be favourable and that outflow of economic resources is not probable.

NOTE NO. 35

The Company had given corporate guarantee towards credit facility on behalf of one of the subsidiary M/s Moneywise Financial Services Private Limited for ? Nil (PY : ? 1,938 lakhs). Pursuant to the requirement of NSE circular number NSE/COMP/50957 dated 8th January 2022, the company was required to unwind all corporate guarantees and accordingly it has withdrawn the same.

NOTE NO. 36.05

Financial risk management

Financial risk factors

This note presents the information about the Company’s exposure to financial risks, the Company’s objectives, policies and processes for measuring and managing risk and the Company’s management of capital.

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk and

• Market risk

Financial Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. Financial risk management within the Company is governed by policies and guidelines approved by the management. The

Board has established a Risk Management Committee which is responsible for developing and monitoring the Company’s risk management policies. Company policies and guidelines cover areas such as cash management, investment of excess funds and raising of debt and are managed by segregated functions within the Company.

The Company’s risk management policies and procedures are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees and stakeholders understand their roles and obligations.

Different types of risks arising from financial instruments as identified by the Company above have been explained below:

Credit risk

The credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivable from clients and exchange and trading members, loan and advances, investments other than the quoted securities given. Credit risk in respect of quoted securities is expected to have a direct correlation with the quoted market prices and risk.

"The Company is exposed to the risk that third parties that owe money or securities will not perform their obligations. Such third parties include clients, trading members, exchanges,

clearing houses, and other financial intermediaries. These parties may default on their obligations owed to the Company due to insolvency, lack of liquidity, operational failure, government or other regulatory intervention or other reasons. In these circumstances, the Company is exposed to risks arising, for example, from holding securities of third parties; executing securities trades that fail to settle at the required time due to nondelivery by the counterparty trading members, exchanges, clearing houses or other financial intermediaries. Significant failures by third parties to timely perform their obligations owed could materially and adversely affect the Company’s financial position, and ability to borrow in the credit markets and ability to operate the business.

For the risk management purposes, the Company considers and consolidates all elements of credit risk exposures such as individual obligator default risk, country and sector risk."

"Management/mitigation of credit risk

The Company operates in a highly regulated environment which limits its credit risk against exchanges and clearing houses. The Company collects upfront margins in form of funds and/or securities/commodities from clients and trading members against their trading positions. The Company monitors positions, margins, mark to market losses and risks on real time basis

through risk management systems and policies specially designed to mitigate the credit risk.

The Company’s Board of Directors has delegated responsibility for the oversight of credit risk to the Risk Management Committee (“the Committee”). The Committee is responsible for management of the Company’s credit risk, including the following:

(i) Formulating credit policies in consultation with business units, covering collateral requirements, credit assessment, risk grading and reporting, documentary and legal procedures, and compliance with regulatory and statutory requirements.

(ii) Establishing the organizational structure for the approval of new customers or counter parties. Authorization limits are allocated to business unit credit officers or the Arbitrager as appropriate.

(iii) Providing advice, guidance and specialist skills to business units through periodic reviews to promote best practices throughout the Company in the management of credit risk.

(iv) The Committee assesses the credit worthiness of client or counterparties, prior to taking exposure on them. Accordingly, limits are assigned and the

monitoring mechanism ensures that exposure to single client does not cross the laid down threshold limits. Collateral securities are also collected from clients to cover the exposure.

(v) Limiting concentrations of exposure to counter parties, geographies and industries (for loans and advances and similar exposures), and by issuer, credit rating bond, market liquidity and country (for investment securities and trading assets).

(vi) Reviewing compliance of business units with agreed exposure limits, including those for selected industries, country risk and product types. Regular reports on the credit quality of local portfolios are provided to the management, which may require appropriate corrective action to be taken.

The Board of Directors has also constituted Audit Committee, which is responsible for evaluation of internal financial controls and risk management systems. The company conducts regular internal audits of various business units to identify scope of improvement/enhancement of the Company''s processes, quality control, fraud prevention and legal compliance. The internal audit reports are reviewed by audit committee and also placed with the Board.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company require sufficient liquidity to meet their obligations. Individual companies are generally responsible for their own fund management, including the short-term investment of surpluses and the raising of loans to cover deficits from third parties/companies.

The Company’s primary liquidity

requirements are to finance the working capital needs, which are typically towards margin maintenance at various exchanges. The principal portion of the working capital requirement is utilized by:

(a) depositing funds with banks to obtain term deposits and guarantees towards margins payable to the exchanges/clearing houses;

(b) payments to stock exchanges/ clearing houses towards settlement obligations;

(c) payment towards purchase of

various trading assets; and

(d) meeting expenses incurred for operations.

Management of liquidity risk

Working capital requirements fluctuate on a regular basis depending on the business requirements. The Company''s approach to managing liquidity is to ensure, as far as possible to have sufficient funds to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

To fund the working capital requirements, the Company currently relies principally on internal accruals and short term credit facilities from banks and financial institutions against pledge of derivative assets, term deposits, receivables from clients and investments carried at fair value through profit and loss. By maintaining sufficient liquid funds and drawing

facilities with banks, the Company comfortably meets the foreseeable liabilities in the present and immediate future, as well as unforeseeable contingencies.

Central treasury receives information from business units regarding the liquidity profile of their financial assets and liabilities and projected cash flows. Central treasury maintains surplus funds in cash and cash equivalents including term deposits with banks and in investment securities for which there is an active and liquid market. These assets can be readily sold to meet liquidity requirements. Hence, the Company believes that the above monetary mechanism adequately addresses the liquidity risk.

Market risk

The Company participates in trading and investing in various asset classes such as equity, debt securities, commodities, foreign currency and derivatives. These assets classes experience volatility due to economic growth levels, inflation, prices, interest rates, foreign exchange rates and other macro-economic factors. Any changes in market prices of these asset classes will affect the Company’s income or the value of its holdings of financial instruments.

The Company segregates its exposure to market risks between price risk, interest rate risk and currency risk.

Management of market risks:

The objective of market risk management is to manage and minimize market risk exposures within acceptable parameters, while optimizing the return on risk. The Company''s exposure to market risk is determined by a number of factors, including size, composition and diversification of positions held and market volatility.

(a) Price risk

Trading and investment portfolios include proprietary positions taken in equities, fixed income securities, commodities, foreign currency and their derivatives mainly for availing arbitrage opportunities. All financial assets and liabilities are accounted on fair value basis. Management actively monitors its market risk by reviewing the effectiveness of arbitrage and setting outstanding position limits. The Company manages market risk with central oversight, analysis and formation of risk policy, specific maximum risk levels to which the individual trader must adhere to and real time continuous monitoring by the senior management.

In respect of the proprietary positions, the Company is exposed to volatility in the price of the underlying securities.

(b) Interest rate risk

Interest rate risk arises from movements in interest rates which could have effects on the Company’s net income or financial position. Changes in interest rates may cause variations in interest income and expenses resulting from interestbearing assets and liabilities.

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company’s exposure to interest rate risk relates to the loans taken from banks, investment in term deposits placed with banks, investment in debt securities and investments of its excess funds in liquid instruments. A majority of the financing of the Company has come from overdraft facility with banks. The business of the Company is exposed to fluctuation in interest rate for the following activities:

(I) Term deposits placed with banks are generally for short term on fixed interest rates;

(ii) Facilities availed from banks and other financial institutions generally include short term working capital loans on floating interest rates;

(iii) Interest paid by Company on clients’ funds earmarked as fixed margin are generally for short term on fixed interest rates.

Management of Interest Rate Risk

Interest rate risk is managed principally through monitoring interest rate gaps and by having pre-approved limits for re-pricing bands. However the Company does not use derivative

financial instruments to hedge its interest rate risk.

The Company’s investments in majority of term deposits with banks are for both short and long duration, and therefore do not expose the Company to significant interest rate risk. Further significant portion of exposure on term deposits with banks is offset with clients’ funds earmarked as margins on fixed rate basis. The interest rates on the overdraft facility availed are marginally higher than the interest rates on term deposits with the banks and generally linked to the term deposit rates with the bank. Accordingly, there is limited interest rate risk exposure on the company.

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short-term and long-term debt obligations with floating / fixed interest rates, which are included in loans and borrowings. The loans and borrowings represent loans and borrowing taken both fixed and floating interest rate.

(c) Currency risk

The Company is not significantly exposed to currency risk as there is no mismatch between the currencies in which sales of services, purchase of goods/services and borrowings are dominated and the respective functional currencies of Company . Further, the functional currency of the Company is primarily the Indian Rupee and do not expose the Company to significant currency risk. The Company considers the valuation changes in foreign currency derivatives it trades in as part of investment/price risk as those derivatives are exchange traded, managed and monitored based on exchange price and are settled in near term in Indian Rupees.

NOTE NO. 36.06

Capital Management

Risk Management

The Company manages its capital structure and makes necessary adjustments in light of changes in economic conditions and the requirement of financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend

payment to shareholders, return on capital to shareholders, issue new shares or raise / repay debt.

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of

the Company’s capital management is to maximise the shareholder value and to ensure the Company''s ability to continue as a going concern. There is no non compliance with any covenants of borrowings.

NOTE NO.38

Disclosure under The Micro, Small and Medium Enterprises Development Act, 2006

The Company has sent letters to vendors to confirm whether they are covered under micro, small and medium enterprise development act 2006 as well as they have filed required memorandum with prescribed authority. Out of the letter sent to the party, based on the confirmation received till the date of finalisation of balance sheet. Based on and to the extent of the information received by the Company from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and relied upon by the auditors, the relevant particulars as at the year end are furnished below:

NOTE NO. 39

Segment reporting

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. Based on the "management approach" as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on analysis of various performance indicators by business segments and geographic segments. Accordingly, information has been presented both along industry classes and geographic segmentation of customers, industry being the primary segment. Secondary segmental reporting is performed on the basis of the geographical location of customers. The

accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the note on significant accounting policies.

a. Business Segment

The Company’s primary business comprises of dealing in shares, securities, commodities, derivatives and portfolio management services either on its own or on behalf of its constituents and other related ancillary services.

Accordingly the primary business segment has been identified as below:

Broking, Distribution & Trading : Comprises of brokerage income earned on secondary market transactions done on behalf of clients, services rendered as depository participant, clearing services, research support services, proprietary trading in securities, commodities, derivatives portfolio and fund management services.

b. Geographical Segment

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

viii. No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ix. Quarterly statements of current assets filed with banks and financial institutions for fund borrowed from those banks and financial institutions on the basis of security of current assets are in accordance with terms and conditions.

x. The company has not been declared as wilful defaulter by any bank or financial institution.

A) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

(i) directly or indirectly lend or invest

in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the

xii. No charges or satisfaction yet to be registered with ROC beyond the statutory period.

xiii. The company has complied with the number of layers prescribed under clause (87) of section 2 of the act read with companies (Restriction on number of layers) rule 2017.

xiv. Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios, is not applicable to the Company as it is in broking business and not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.

xv. Utilisation of Borrowed funds and share premium:-:-

Ultimate Beneficiaries;

(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

NOTE NO. 41

The company does not have any transactions which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax 1961( such as search or survey or any other relevant provisions of the Income Tax 1961).

NOTE NO. 42

Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold , needs to spend atleast 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013:

NOTE NO. 43

The company has not traded or invested in Crypto Currency or Virtual currency during the year.

---

Mar 31, 2023

*The Company''s holding of number of equity shares has reduced from 404.00 lakhs to 135.00 lakhs due to following reasons:

1. Pursuant to the scheme for capital reduction filed with NCLT vide CP number 128/ND/2021/dated 23rd November 2022, the equity shares of SMC Insurance Brokers Private Limited has been reduced from ? 4140 lakhs to ? 1500 lakhs on payment to the equity shareholders of the company on proportionate basis at face value of ? 10 each on 30.11.2022. which has become effective and operative on that date and accordingly to that extent share capital stand cancelled and extinguished upon approval from MCA. Accordingly, company''s shares has been reduced by 2,57,63,000 number of share

2. Further, the company has sold 11,37,000 equity shares during the year.

** The investments in subsidiaries are strategic in nature and it is expected to be held for a long period of time. The company is carrying the investment at cost though the net worth has fully eroded as it is hopeful of turnaround in near future based on strategic initiatives of the management and plan of restructuring which is expected to result in positive cash flows and revival of the business. Further, the company has carried out impairment testing and on the basis of the valuation report from a SEBI Registered Category -1 Merchant Banker, the fair value of shares is much more than the carrying amount.

***These preference shares were potential equity shares invested with the aim of converting them into equity shares and accordingly the said preference shares have been converted into equity shares during the year.

a) Term Loan amounting ?3,482.35 lakhs and ?3,700 lakhs as of March 31, 2023 and March 31, 2022, respectively, are secured by way of hypothecation of freehold land and personal guarantee of directors are repayable in 60 instalments.

b) Term Loan from others amounting ?3,000 lakhs and ?Nil as of March 31, 2023 and March 31, 2022 , respectively, are secured by way of Multilateral trading facility.

c) Term Loan amounting ?333.74 lakhs and ?171.30 lakhs as of March 31, 2023 and March 31, 2022 , respectively, are secured by way of hypothecation of vehicles and are repayable over a period up to five years.

d) Loan from banks amounting ^28,120.01 lakhs and ?9,727.39 lakhs as of March 31, 2023 and March 31, 2022, respectively, are secured against shares, receivables (including exchange balances), fixed deposits, certain office buildings and personal guarantee of promoter directors.

e) Loan from others amounting ?Nil and ?1,475.00 lakhs as of March 31, 2023 and March 31, 2022 , respectively, are secured by way of hypothecation of shares and personal guarantee of promoter directors.

*Pursuant to the public announcement dated May 10, 2022 in respect of buy back of shares from the open market through stock exchange mechanism as prescribed under SEBI (Buy Back of Securities) Regulation, 2018, the Buy back of shares commenced on 20th May, 2022 and ended on 16th August, 2022. The Company under the scheme, bought back a total of 84,34,450 shares from the open market. A total sum of ?9,242.06 lakhs was incurred on the shares bought back (including ?1,769.21 lakhs towards buy back distribution tax and other expenses). Consequently the total number of paid up equity shares of the company (? 2/- nominal value of per share) reduced from 11,31,34,450 shares to 10,47,00,000 shares as at the end of 16th August, 2022. The consideration paid towards buy-back of shares is adjusted against share capital by ?168.69 lakhs and the balance in share premium by ?9,073.37 lakhs.

The Company has only one class of equity shares having a par value of ?2 per share. Each holder of equity shares is entitled to one vote per share. The Board of Directors has proposed an equity dividend @ 60% i.e. ?1.20 (P.Y. ?1.20) per share for the financial year ending March 31, 2023 at there meeting held on dated May 18, 2023, which is subject to approval by the shareholders in the ensuing Annual General Meeting. The amount of per share dividend recognised as distribution to equity shareholders for Interim dividend is Rs. 1.20 (P.Y. ?1.20).

In the event of Liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.

The company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The discount rate is based on the government securities yield.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by 50bps, keeping all other actuarial assumptions constant.

Gratuity is applicable only to employees drawing salary in Indian rupees.

NOTE NO. 33.01 Contingent liabilities not provided in the financial statements:		(? in Lakhs)
Particulars	As at
	March 31, 2023	March 31, 2022
1 ESI demand	31.06	31.06
(Total amount paid under protest ? 12.43 Lakhs (Previous Year: ? 12.43 Lakhs))
2 Service Tax Demand	615.98	615.98
(Total amount paid under protest ? 42.77 Lakhs (Previous Year: 42.77 Lakhs))
3 Income Tax Demand (A.Y. 2013-14 to 2019-20)	141.56	52.89
(Total amount paid under protest ? Nil (Previous Year: Nil))
4 Provident Fund	-	-
5 Stamp Duty	-	-

Notes:

1 An ESI demand is being agitated by the Company at High Court, Delhi.

2 Service Tax demand of ? 45.66 Lakhs is being agitated by the Company before Commissioner of Service Tax, Audit 1, Delhi. The adjudication proceedings in the case has been kept in abeyance for the time being since similar issue is sub-judice before the Hon''ble supreme court.

Another demand of ? 570.32 Lakhs was being agitated by the Company before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

3 Block Assessments u/s 153(A) for the A.Y 2013-14 to A.Y 2019-20 have been completed and certain disallowances made by the Income Tax Department. The company has filed necessary appeals before the Commissioner of Income Tax (Appeals), Delhi. However certain refunds have been adjusted against the demand raised, pending final assessment.

4 PF matter is pending before High Court and amount is not quantifiable.

5 The Company had received a notice dated 21.11.2014 from the Collector of Stamp (HQ), Delhi on account of verification of records pertaining to Stamp duty chargeable on the basis of broker’s Note for the period 2010 to 21.11.2014. Matter is sub-judice and has been stayed by jurisdictional High Court at Delhi vide its order dated 09/12/2014 until further order.

The Demerged Company M/s SMC Comtrade Limited had received a show cause notice of demand dated 05/01/2015 from the Office of The Collector of Stamps, Delhi, on account of levy of stamp duty on commodity transactions. The matter is sub-judice and has been stayed by jurisdictional High Court at Delhi vide its order dated 19/01/2015 in the matter of WP/C/516/2015.

NOTE NO. 33.02

Other litigations

1 Title of the property located at Office no 205, 2nd Floor, Plot no 4A, Community Centre, 21st Century Plaza, Sector 8, Rohini, New Delhi having gross carrying value of ? 46.12 Lakhs is under dispute and sealed due to the allegation of acquisition of the said property by the transferor from the funds of Ganga Yamuna Finvest Pvt. Ltd, which is under liquidation.

2 The company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the company’s results of operations and financial condition.

Pending completion of the legal process the impact of liability, if any, cannot be ascertained at this stage, however, management believes that, based on legal advice, the outcome of these contingencies will be favourable and that outflow of economic resources is not probable.

NOTE NO. 34

The Company has given corporate guarantee towards credit facility of the subsidiaries M/s Moneywise Financial Services Private Limited for ?1,938 lakhs (PY : ?16,000 lakhs) and M/s Moneywise Finvest Limited for ?Nil (PY : ?500 lakhs). Pursuant to the requirement of NSE circular number NSE/COMP/50957 dated 8th January 2022, the company was required to unwind all corporate guarantees latest by 31.03.2023 and accordingly it has reduced significantly and necessary action/follow up are being made to unwind the balance corporate guarantee.

NOTE NO. 35.04

Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

NOTE NO. 35.05

Financial risk management

Financial risk factors

This note presents the information about the Company’s exposure to financial risks, the Company’s objectives, policies and processes for measuring and managing risk and the Company’s management of capital.

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk and

• Market risk

Financial Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. Financial risk management within the Company is governed by policies and guidelines approved by the management. The

Board has established a Risk Management Committee which is responsible for developing and monitoring the Company’s risk management policies. Company policies and guidelines cover areas such as cash management, investment of excess funds and raising of debt and are managed by segregated functions within the Company.

The Company’s risk management policies and procedures are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees and stakeholders understand their roles and obligations.

Different types of risks arising from financial instruments as identified by the Company above have been explained below:

(i) Credit risk

The credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivable from clients and exchange and trading members, loan and advances, investments other than the quoted securities given. Credit risk in respect of quoted securities is expected to have a direct correlation with the quoted market prices and risk.

The Company is exposed to the risk that third parties that owe money or securities will not perform their obligations. Such third parties include clients, trading members, exchanges, clearing houses, and other financial intermediaries. These parties may default on their obligations owed to the

Company due to insolvency, lack of liquidity, operational failure, government or other regulatory intervention or other reasons. In these circumstances, the Company is exposed to risks arising, for example, from holding securities of third parties; executing securities trades that fail to settle at the required time due to nondelivery by the counterparty trading members, exchanges, clearing houses or other financial intermediaries. Significant failures by third parties to timely perform their obligations owed could materially and adversely affect the Company’s financial position, and ability to borrow in the credit markets and ability to operate the business.

For the risk management purposes, the Company considers and consolidates all elements of credit risk exposures such as individual obligator default risk, country and sector risk.

Management / mitigation of credit risk

The Company operates in a highly regulated environment which limits its credit risk against exchanges and clearing houses. The Company collects upfront margins in form of funds and/or securities/commodities from clients and trading members against their trading positions. The Company monitors positions, margins, mark to market losses and risks on real time basis through risk management systems and policies specially designed to mitigate

the credit risk.

The Company’s Board of Directors has delegated responsibility for the oversight of credit risk to the Risk Management Committee (“the Committee”). The Committee is responsible for management of the Company’s credit risk, including the following:

(I) Formulating credit policies in consultation with business units, covering collateral requirements, credit assessment, risk grading and reporting, documentary and legal procedures, and compliance with regulatory and statutory requirements.

(ii) Establishing the organizational structure for the approval of new customers or counter parties. Authorization limits are allocated to business unit credit officers or the Arbitrager as appropriate.

(iii) Providing advice, guidance and specialist skills to business units through periodic reviews to promote best practices throughout the Company in the management of credit risk.

(iv) The Committee assesses the credit worthiness of client or counterparties, prior to taking exposure on them. Accordingly, limits are assigned and the monitoring mechanism ensures that exposure to single client does not cross the laid down threshold limits. Collateral securities are also collected from clients to cover the exposure.

(v) Limiting concentrations of exposure to counterparties, geographies and industries (for loans and advances and similar exposures), and by issuer, credit rating bond, market liquidity and country (for investment securities and trading assets).

(vi) Reviewing compliance of business units with agreed exposure limits, including those for selected industries, country risk and product types. Regular reports on the credit quality of local portfolios are provided to the management, which may require appropriate corrective action to be taken.

The Board of Directors has also constituted Audit Committee, which is responsible for evaluation of internal financial controls and risk management systems. The company conducts regular internal audits of various business units to identify scope of improvement/ enhancement of the Company''s processes, quality control, fraud prevention and legal compliance. The internal audit reports are reviewed by audit committee and also placed with the Board.

The Company monitors all the receivables, loans and other financial assets continuously basis the factors considered while dealing. If there are any indicators of impairment on management assessment of these receivables, loans and other financial assets, these are provided for. The Company uses ECL method for impairment.

The Company’s primary liquidity requirements are to finance the working capital needs, which are typically towards margin maintenance at various exchanges. The principal portion of the working capital requirement is utilized by:

(a) depositing funds with banks to obtain term deposits and guarantees towards margins payable to the exchanges/clearing houses;

(b) payments to stock exchanges/clearing houses towards

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company require sufficient liquidity to meet their obligations. Individual companies are generally responsible for their own fund management, including the short-term investment of surpluses and the raising of loans to cover deficits from third parties/companies.

settlement obligations;

(c) payment towards purchase of various trading assets; and

(d) meeting expenses incurred for operations.

Management of liquidity risk

Working capital requirements fluctuate on a regular basis depending on the business requirements. The Company''s approach to managing liquidity is to ensure, as far as possible to have sufficient funds to meet its liabilities

when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

To fund the working capital requirements, the Company currently relies principally on internal accruals and short term credit facilities from banks and financial institutions against pledge of derivative assets, term deposits, receivables from clients and

investments carried at fair value through profit and loss. By maintaining sufficient liquid funds and drawing facilities with banks, the Company comfortably meets the foreseeable liabilities in the present and immediate future, as well as unforeseeable contingencies.

Central treasury receives information from business units regarding the liquidity profile of their financial assets

and liabilities and projected cash flows. Central treasury maintains surplus funds in cash and cash equivalents including term deposits with banks and in investment securities for which there is an active and liquid market. These assets can be readily sold to meet liquidity requirements. Hence, the Company believes that the above monetary mechanism adequately addresses the liquidity risk.

(iii) Market risk

The Company participates in trading and investing in various asset classes such as equity, debt securities, commodities, foreign currency and derivatives. These assets classes experience volatility due to economic growth levels, inflation, prices, interest rates, foreign exchange rates and other macro-economic factors. Any changes in market prices of these asset classes will affect the Company’s income or the value of its holdings of financial instruments.

The Company segregates its exposure to market risks between price risk, interest rate risk and currency risk.

Management of market risks:

The objective of market risk management is to manage and minimize market risk exposures within acceptable parameters, while optimizing the return on risk. The Company''s exposure to market risk is determined by a number of factors, including size, composition and diversification of positions held and market volatility.

(a) Price risk

Trading and investment portfolios include proprietary positions taken in equities, fixed income securities, commodities, foreign currency and their derivatives mainly for availing arbitrage opportunities. All financial assets and liabilities are accounted on fair value basis. Management actively monitors its market risk by reviewing the effectiveness of arbitrage and setting outstanding position limits. The Company manages market risk with central oversight, analysis and formation of risk policy, specific maximum risk levels to which the individual trader must adhere to and real time continuous monitoring by the senior management.

In respect of the proprietary positions, the Company is exposed to volatility in the price of the underlying securities.

(b) Interest rate risk

Interest rate risk arises from movements in interest rates which could have effects on the Company’s net income or financial position. Changes in interest rates may cause variations in interest income and expenses resulting from interest-bearing assets and liabilities. Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company’s exposure to interest rate risk relates to the loans taken from banks, investment in term deposits placed with banks, investment in debt securities and investments of its excess funds in liquid instruments. A majority of the financing of the Company has come from overdraft facility with banks. The business of the Company is exposed to fluctuation in interest rate for the following activities:

(i) Term deposits placed with banks are generally for short term on fixed interest rates;

(ii) Facilities availed from banks and other financial institutions generally include short term working capital loans on floating interest rates;

(iii) Interest paid by Company on clients’ funds earmarked as fixed margin are generally for short term on fixed interest rates.

Management of Interest Rate Risk

Interest rate risk is managed principally through monitoring interest rate gaps and by having pre-approved limits for repricing bands. However the Company does not use derivative financial instruments to hedge its interest rate risk.

The Company’s investments in majority of term deposits with banks are for both short and long duration, and therefore do not expose the Company to significant interest rate risk. Further significant portion of exposure on term deposits with banks is offset with clients’ funds earmarked as margins on fixed rate basis. The interest rates on the overdraft facility availed are marginally higher than the interest rates on term deposits with the banks and generally linked to the term deposit rates with the bank. Accordingly, there is limited interest rate risk exposure on the company.

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short-term and long-term debt obligations with floating / fixed interest rates, which are included in loans and borrowings. The loans and borrowings represent loans and borrowing taken both fixed and floating interest rate.

(c) Currency risk

The Company is not significantly exposed to currency risk as there is no mismatch between the currencies in which sales of services, purchase of goods/services and borrowings are dominated and the respective functional currencies of Company . Further, the functional currency of the Company is primarily the Indian Rupee and do not expose the Company to significant currency risk. The Company considers the valuation changes in foreign currency derivatives it trades in as part of investment/price risk as those derivatives are exchange traded, managed and monitored based on exchange price and are settled in near term in Indian Rupees.

NOTE NO. 35.06

Capital Management

Risk Management

The Company manages its capital structure and makes necessary adjustments in light of changes in economic conditions and the requirement of financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend

payment to shareholders, return on capital to shareholders, issue new shares or raise / repay debt.

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder value and to ensure the Company''s ability to continue as a going concern. There is no non compliance with any covenants of borrowings.

Transactions and balances with KMPs and their relatives, related parties (except subsidiaries) through stock exchanges / depositories / PMS in the normal course of business have not been disclosed as the same have been transacted at prevailing market prices under online trade mechanism and not material in nature.

As the liabilities for gratuity and compensated absences are provider on actuarial basis for the company as a whole, the amounts pertaining to individual key management Personnel are not separately available

NOTE NO.37

Disclosure under The Micro, Small and Medium Enterprises Development Act, 2006

The Company has sent letters to vendors to confirm whether they are covered under micro, small and medium enterprise development act 2006 as well as they have filed required memorandum with prescribed authority. Out of the letter sent to the party, based on the confirmation received till the date of finalisation of balance sheet. Based on and to the extent of the information received by the Company from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and relied upon by the auditors, the relevant particulars as at the year end are furnished below:

NOTE NO. 38

Segment reporting

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about products and services, geographic areas, and major customers. Based on the "management approach" as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on analysis of various performance indicators by business segments and geographic segments. Accordingly, information has been presented both along industry classes and geographic segmentation of customers, industry being the primary segment. Secondary segmental reporting is performed on the basis of the

geographical location of customers. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the note on significant accounting policies.

a. Business Segment

The Company’s primary business comprises of dealing in shares, securities, commodities, derivatives and portfolio management services either on its own or on behalf of its constituents and other related ancillary services.

Accordingly the primary business segment has been identified as below:

Broking, Distribution & Trading : Comprises of brokerage income earned on secondary market transactions done on behalf of clients, services rendered as depository participant, clearing services, research support services, proprietary trading in securities, commodities, derivatives and portfolio management services.

b. Geographical Segment

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

NOTE NO. 40

Additonal Regulatory disclosures

i. Title Deeds of all Immovable properties are held in the name of the company

ii. The company does not have any investment property, hence disclosure relating to its valuation are not applicable.

iii. During the year the company has not revalued its property, plant and Equipment.

iv. During the year the company has not revalued its intangible assets.

v. Disclosure for loans and advances in the nature of loans granted to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013)

viii. No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ix. Quarterly statements of current assets filed with banks and financial institutions for fund borrowed from those banks and financial institutions on the basis of security of current assets are in accordance with terms and conditions.

x. The company has not been declared as wilful defaulter by any bank or financial institution. Hence the clause is not applicable.

Companies Act, 2013.

xvi. Utilisation of Borrowed funds and

share premium:-

A) The company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

(i) directly or indirectly lend or

invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

xii. No charges or satisfaction yet to be registered with ROC beyond the statutory period.

xiii. The company has complied with the number of layers prescribed under clause (87) of section 2 of the act read with companies (Restriction on number of layers) rule 2017.

xiv. Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios, is not applicable to the Company as it is in broking business and not an NBFC registered under Section 45-IA of Reserve Bank of India Act, 1934.

xv. During the year no Scheme of Arrangements related to the company has been approved by the Competent Authority in terms of sections 230 to 237 of the

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

(B) The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

NOTE NO. 41

The company does not have any transactions which are not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax 1961( such as search or survey or any other relevant provisions of the Income Tax 1961).

NOTE NO. 42

Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold , needs to spend atleast 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013:

NOTE NO. 43

The company has not traded or invested in Crypto Currency or Virtual currency during the year.

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Mar 31, 2012

CONTINGENT LIABILITIES

(Amount in Rs.)

Particulars Current Year Previous Year

Corporate guarantee executed by the Company for credit 54,62,50,000 47,00,00,000

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

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

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

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

1.4 SEGMENTACCOUNTING

a. Business Segment

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

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

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

Accordingly the primary business segment has been identified as below:

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

b. Geographical Segment

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

1.5 RELATED PARTY DISCLOSURES

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

1) Name of Related Parties and description of relationship:

A. Key Management Personnel

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

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

c) Sh. Ajay Garg (Whole time Director)

d) Sh. Pradeep Kumar (Whole time Director)

e) Sh. Anurag Bansal (Whole time Director)

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

*resigned during the year

B. Companies where control exists:

a) SMC Comtrade Limited (Subsidiary)

b) SMC Insurance Brokers Private Limited (Subsidiary)

c) SMC ARC Limited (Subsidiary)

d) SMC Investments and Advisors Ltd. (Subsidiary)

e) Moneywise Financial Services Private Limited (Subsidiary)

f) SMC Capitals Limited (Subsidiary)

g) SMC Comex International DMCC (Subsidiary)

h) Moneywise Finvest Ltd. (Subsidiary)

(Control the composition of Board of Directors)

i) SMC Finvest Ltd. (Subsidiary)

(Control the composition of Board of Directors)

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

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

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

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

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Mar 31, 2011

I) CONTINGENT LIABILITIES

(Rs.in Lacs) Particulars Current Year Previous Year

Corporate guarantee executed By the Company 4,700.00 2,707.50 Bank Guarantee issued by the Bankers

- in favor of Stock Exchanged. 14,635.00 13,560.00 (Against the above guarantee, FDR of Rs. 6,780.(30 Lacs (PY Rs.6,186.25 lacs) is kept as margin.

ESI demand in dispute 31.24 NIL

II) Convertible Equity Share Warrant which were issued during previous year to SANLAM International Investment Partners Limited for amounting Rs.467,371 @ Rs. 265.31 each having option of conversion in to equity shares of Rs 10 each were forfeited during the year due to expiry of last date of further payment of Rs. 2,387 each and hence the forfeited amount of Rs. 12,39,98,200 has been transferred to capital reserve.

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

IV) Income from operation besides income from arbitrage and trading in shares &securities, includes brokerage (gross) on share trading on account of its constituents Rs. 95,78,71,082 (P.Y. Rs. 95,83,57,293) TDS Rs. 19,08,348 (P. Y. Rs. 22,87,037) and interest (gross) on FDR kept as Margin with stock exchanges or banks Rs. 11,87,15,003 (P.Y. Rs. 13,02,05,999) TDS Rs. 1,26,95,812 (P.Y.Rs. 1,56,27,241).

V) Fixed Deposit with Schedule Banks includes Rs. 10,171.4-2 laces (P.Y.Rs. 7,496.75 laces) lender lien in favor of the bank as margin deposit for the guarantees issued/credit facilities or otherwise and Rs. 6,615.00 laces (P.Y. Rs. 3,110.63 laces) pledge with stock exchanges as margin.

VI) Sundry Debtors includes amount recoverable from the constituents which have been shown on gross of credit balances, if any, due to the constituents.

VII) Provision for doubtful debts of Rs. 1,33,786 (Previous Year Rs. 33,25,871) is net of bad debts written off Rs. 1,75,23,970 (Previous Year Rs. 1,13,20,207). No provision has been made in respect of certain overdue sundry debtors amounting to Rs. 30,82,29,412 (P. Y. Rs. 31,16,31,303) since the company has taken suitable measures to recover the sati dues including filling of legal cases wherever considered appropriate.

VIII) (a) Included in Current Assets, Loans and Advances are:

Dues recoverable from the companies under the same management within the meaning of sub section (1B) of section 370 of the Companies Act, 1956

IX) SEGMENT ACCOUNTING

a. Business Segment

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

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

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

Accordingly the primary business segment has been identified as below:

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

b. Geographical Segment

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

X) RELATED PARTY DISCLOSURES

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

XI) Information pursuant to part IV of Schedule VI is attached and marked as Annexure A.

XII) Statement of Stock in Trade sat the Balance sheet dated is annexed and marked as Annexure

XIII) Previous year''s figures have been rearranged and re- grouped wherever found necessary to make comparable with those of the current year and the figures has been rounded of to the nearest rupee.

XIV) Schedule 1 to 14 form an integral part of accounts, balance sheet and profit & loss account.

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Mar 31, 2009

I) Contingent Liabilities

Current Year Previous Year Rs, In Lacs Rs, In Lacs

a) Corporate Guarantee executed by the 2.707.50 9.450 00 Company

b) Bank Guarantees issued by the Bankers and 14.075.00 17,125 00 Provided in favor of Stock Exchange, etc (Against This FDR of Rs. 6443.75 Lacs (Previous Year Rs. 8025 Lacs) Is kept as Margin)

II) Earning and expenditure in foreign currency (Rs .In Lacs) Expenses in ForeignTraveling 3.75 2.03

III.Estimated amount of contracts remaining to be executed on capital accounts and not provided for-Nil (Previous Year Nil)

(IV) Previous yean figures have been rearranged and re- grouped wherever found necessary to make comparable with those of the current year and the figures has been rounded of to the nearest to rupees.

V) In the opinion of the Board of Directors and to the best of their knowledge and belief the realizable value of Current Assets, Loans and Advances in ordinary course of business is not less then the value staled in the Balance Sheet-

VI) SEGMENT ACCOUNTING The companys operation primarily comprises dealing in Capital Market (Primary and Secondary] and derivatives Market broadly falling in one segment i e dealing in share & securities Therefore the Board of Directors are of the opinion that there is no reportable segments as required by Accounting Standard 17

Segment Reporting- issued by ICAI.

VII) RELATED PARTY DISCLOSURES The company being a broking concern, the transaction in the normal course of business have not been disclosed as the same have been transacted at prevailing market prices. The following are the details of transactions other than as mentioned above with related parties as defined in the Accounting Standard -18 of related party disclosures issued by the Institute of Chartered Accountants of India

I) LIST OF RELATED PARTY

A) KEY MANAGEMENT PERSONNEL

1) Shri S.C Aggarwal ( Chairman A Managing Director )

2) Shri Maheih C Gupta

3> Shri Ajay Garg ( whole-time Director)

4) Shri Rakesh Gupta (Whole-time Director)

5) Shri Pradeep Kumar ( Whole-time Director)

6} Shri Anurag Bansal (Whole-time Director)

7} Shri Ravinder Kumar* ( Whole time Director

8) Shri Finney Cherien ( Director)

9) Shri Kundan Mal Agarwal (independent Non-Executive Director)

10) Shri Pawan Kumar Bansal (Independent Nonexecutive Director)

11) Shri Roop Cnand Jindal (Independent Nonexecutive Director )

12) Shri Narain Dass Gupta (Independent Non Executive Director)

VIII) Due to changes in Income tax Provisions for treatment of Security Transaction Tax paid during the year, the same has been treated as an trading expense and has been grouped with Stock Exchange & Other Trading Expenses, as a resultant current year figure does not commensurate with the previous years.

Ix) Fluctuation In foreign exchange transactions and profit/loss thereon, if any has appropriately been provided in the accounts

X)Additional information as required under part II of Schedule VI of the Companies Act,1956 is enclosed.

xI) Schedule I to XIII form an balance sheet and profit & ended 31.03.2009, integral part of accounts, loss account for the year

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Mar 31, 2007

I) Contingent Liabilities As at 31st As at 31st March 2007 March 2006 Rs. In Lacs Rs. In Lacs

Bank Guarantees issued by the Bankers 9,500.00 5,950.00 and Provided in favor of Stock Exchange, etc.

(Against This FDR of Rs. 4,750 Lacs (Previous Year Rs. 2,975.01 Lacs) is kept as Margin)

II) Earning and expenditure in foreign currency (Rs. In Lacs)

Expenses in Foreign Traveling 0.79 0.52

III) Estimated amount of contracts remaining to be executed on capital accounts and not provided for-Nil (Previous Year Nil)

IV) Previous years figures have been rearranged and re-grouped wherever found necessary to make comparable with those of the current year and the figures has been rounded off to the nearest to rupees.

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

VI) Events occurring after balance sheet date

The company has become holding company of SMC Comtrade Ltd and its subsidiaries w.e.f 26/04/2007. Therefore no treatment of its investment in subsidiary companies has been made in the accounts for the year ended 31.03.2007.

VII) Segment Accounting

The companys operation primarily comprises dealing in Capital Market (Primary and Secondary) and derivatives Market broadly falling in one segment i.e dealing in share & securities. Therefore the board of Directors are of the opinion that there is no reportable segment as required by Accounting Standard-17 on "Segment Reporting" issued by ICAI.

IX) As per information available with the Company, no amount is due to any Undertaking /Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006.

X) Loan from HDFC and Citi Bank is secured against pledge of shares and personal guarantees of director .

XI) Loans from Lord Krishna Bank, HDFC Bank, State Bank of Bikaner & Jaipur (SBBJ), Punjab National Bank, Bank Of India and Canara Bank are secured against Fixed Deposits/ Units.

XII) In the normal course of Business in share dealing it is not practically possible to differentiate between a debtor and a creditor, therefore the year end outstanding are shown on net basis and is being reflected under the head Parties Control Account shown in Current Assets.

XIII) The company has taken a policy of gratuity fund from Reliance Life Insurance Company limited and has contributed a sum of Rs 500000 towards its premium, hence no provision for the same is required in the books of accounts.

XIV) During the year the foreign currency expenditure is to the tune of Rs.78675/- and the loss/profit, if any to that effect has been appropriately provided in the accounts.

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Mar 31, 2000

1 Figure of the previous year have been re-grouped and rearranged to make them comparable with those of the current year.

2 Balance of parties in parties control account, whether in debit or credit are subject to continuations and reconciliation.

3 No provision for gratuity has been made in the books of accounts and it shall be made in the year when it becomes payable at the time of termination, retirement or resignation of employee{s).

4 In the opinion of the Board of directors the current assets, loan and advances have their value of realization in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet as on 31.03.2000.

5 Figures have been rounded off to the nearest of rupee.

6 Contingent liabilities .

Bank Guarantee Rs. 400 Lacs (Previsous Year-Rs. 125 lacs) against which company has kept FDRs of Rs. 90 Lacs (Previous Year Rs. 17.50 lacs) as margin.

7 Value of Income and Expenditure in foreign currecy. Nil

8. Schedules "1" to "14" forms an integral part of the Balance Sheet and Profit and Loss A/c.