Directors Report of Sumedha Fiscal Services Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty-Sixth Annual Report together with the Audited Financial Statements for the year ended March 31,2015,

Financial Highlights (Rs. in Lakhs)

Year ended

31.03.2015 31.03.2014

Total Income 1814.22 1381.36

Cash Profit 438.18 523.50

Less : Depreciation 75.05 39.15

Profit before tax 363.13 484.35

Less : Provision for taxation 120.25 146.00

Add / (Less) : Deferred Tax 10.78 5.08

Profit after tax 253.66 343.43

Add : Surplus brought forward 1841.56 1571.82

Add / (Less) : Adjustment for Earlier years (5.43) 1.04

Balance available for appropriation 2089.79 1916.29

APPROPRIATION

Provision for Dividend (Including Dividend Tax) 76.88 74.73

Balance carried to Balance Sheet 2012.91 1841.56

Operational Review

In 2014-15, your Company's total Income from Operations stood at Rs. 1704.60 lacs as against Rs. 1314.96 lacs during the previous year, an increase of 29.63% over last year.

Your Company continued its focus on fee based activities (Investment Banking) and income therefrom was Rs. 845.47 lacs as against Rs. 1124.10 lacs during the previous year, recording 24.79% decline due to adverse market condition. It continues to be the thrust area for the Company.

Income from Capital Market Operation for the year has been Rs. 192.81 lacs as against Rs. 117.74 lacs during the previous year, an increase of 63.76% over last year.

Income from Other Sources was at Rs. 66.15 lacs as against Rs. 70.82 lacs during the previous year.

There has not been any change in the nature of business of the Company

Dividend & Reserves

Taking into consideration the overall profitability position, the Board of Directors is pleased to recommend a dividend of 80 paise per share (8%) for the year ended March 31,2015, subject to the approval of the Members at the Annual General Meeting.

During the year under review, no amount was transferred to General Reserve.

STOCK EXCHANGE LISTINGS

The Equity Shares of the Company are listed on the Stock Exchanges at Kolkata and Mumbai.

SFSL EMPLOYEES STOCK OPTION SCHEME, 2011

The Company had approved the Employee Stock Option Scheme at its Annual General Meeting on 24th March, 2011 which was further amended on 09th November, 2013 and 18th January, 2014. Disclosure pursuant to Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed hereto - Annexure - I.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of requirements of Clause 49 of the Listing Agreement with Stock Exchanges, a management Discussion and Analysis Report is attached a Annexure - II forming part of this Report.

REPORT ON CORPORATE GOVERNANCE

In terms of requirements of Clause 49 of the Listing Agreement with Stock Exchanges, a Report on Corporate Governance together with Auditors' Certificate regarding compliance of Conditions of Corporate Governance are attached as Annexure - III and Annexure - IV, forming part of this Report.

SUBSIDIARY & ASSOCIATE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As required under Section 129 (3) of the Companies Act, 2013 (the Act) and Clause 41 of the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Company and its following Subsidiary and Associate Companies prepared in accordance with the applicable Accounting Standards issued by The Institute of Chartered Accountants of India are appended in the Annual Report. There has not been any addition or cessation or change in the Subsidiary and Associate Companies during the year under review. The Company is not having any joint venture.

Accordingly a statement in Form AOC-1 is attached to the Financial Statements of the Company for your information.

During the year under review the Company has formulated a Policy for determining "Material Subsidiary" and the same is disclosed on the website of the Company and can be accessed at http://www.sumedhafiscal.com/material_subsidiary.pdf.

The performance of the subsidiary and associate companies are summarized below for your information.

SFSL Commodity Trading Pvt. Ltd. - Subsidiary

During the year the Company recorded Total Revenue of Rs. 13,86,547/- (previous year Rs. 17,98,027/-) and Net Profit of Rs. 3,00,725/- for the year ended 31st March, 2015 (Previous Year : Rs. 3,94,577/-).

The company continues to explore growth opportunities.

PERFORMANCE OF ASSOCIATE COMPANIES

Capita Finance Services Ltd.

During the year the Company recorded Total Revenue of Rs. 3,26,397/- (previous year Rs. 2,61,048/-) and Net Profit of Rs. 2,10,861/- for the year ended 31st March, 2015 (Previous Year : Rs. 1,31,594/-).

The company continues to explore growth opportunities.

SFSL Insurance Advisory Services Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 2,38,086/- (previous year Rs. 1,64,383/-) and Net Profit of Rs. 64,430/- for the year ended 31st March, 2015 (Previous Year: Rs. 24,080/-).

The company continues to explore growth opportunities.

SFSL Risk Management Services Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 1,62,760/- (previous year Rs. 1,05,975/-) and Net Profit of Rs. 36,054/- for the year ended 31st March, 2015 against loss in the Previous Year of Rs. 16,018/-.

The company continues to explore growth opportunities.

US Infotech Pvt. Ltd.

During the year the Company recorded Total Revenue of Rs. 19,62,269/- (previous year Rs. 17,99,536/-) and Net Profit of Rs. 4,71,225/- for the year ended 31st March, 2015 (Previous Year : Rs. 3,33,718/-).

The company continues to explore growth opportunities.

CORPORATE SOCIAL RESPONSIBILITY

The Company is not yet required to comply to with the requirement associated with Section 135 of the Companies Act, 2013.

DIRETORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act. 2013:

(i) that in the preparation of the Annual Accounts for the year ended march 31,2015, the applicable accounting standards have been followed and there are no material departure;

(ii) and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and profits of the Company for the year ended on that date;

(iii) that Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

DIRECTORS

The Board of Directors had on the recommendation of Remuneration and Nomination Committee appointed Mrs. Garima Maheshwari as a Non-Executive Director of the Company, with effect from November 8, 2014. Her tenure in office expires at the forthcoming Annual General Meeting (AGM).

The Board of Directors had on the recommendation of Remuneration and Nomination Committee also appointed Mr. Prabhat Agarwala as an Independent Director of the Company with effect from May 16, 2015 for a period of five consecutive years, subject to approval of the Members at the forthcoming Annual General Meeting of the Company.

The Company has received respective Notices pursuant to Section 160 of the Companies Act, 2013 along with required deposits proposing appointment of Mrs. Garima Maheshwari and Mr. Prabhat Agarwala at the forthcoming AGM.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Anil Kumar Birla and Mr. Bijay Murmuria, Directors, retire by rotation at the forthcoming Annual General Meeting and, being eligible offer themselves for re-appointment.

The company has duly received Declarations from all the Independent Directors pursuant to Section 149(6) & (7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

During the year under review the Company has formulated a Familiarisation Programme for Directors and the same is disclosed on the website of the Company and can be accessed at http://www.sumedhafiscal.com/familiarization_programe.pdf.

KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, the Company had the following officials as Key Managerial Personnel:

Name Designation

Mr. Bhawani Sankar Rathi Wholetime Director & Chief Financial Officer

Mr. Deb Kumar Sett Company Secretary

Mr. Rajesh Kumar Gupta, Wholetime Director, resigned with effect from August 31,2014.

BOARD EVALUAI1ON

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

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

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

AUDIT COMMITTEE

The Audit Committee of the Board as on 31st March 2015 consisted of Mr. Prashant Sekhar Panda (Chairman) and Mr. Atul Chandra Varma, both Independent Directors and Mr. Bijay Murmuria, Non-Executive Director. Mr. Prabhat Agarwala, Independent Director, joined the Audit Committee on May 16, 2015. The Company has established a vigil mechanism / whistle blower policy, commensurate with its size and nature of business, and oversees through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also made provisions for adequate safeguards against victimisation of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of the employees and the Company. The vigil mechanism / whistle blower policy of the Company has been uploaded on the website of the Company and can be accessed at http://www.sumedhafiscal.com/whistle_blower_policy.pdf.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Board as on 31st March, 2015 comprised of Mr. Prashant Sekhar Panda, a Non- Executive Independent Director, as the Chairman, Mr. Atul Chandra Varma, Non-Executive Independent Director, Mr. Vijay Maheshwari and Mr. Bijay Murmuria, Non-Executive Promoter Directors, as its Members. Mr. Prabhat Agarwala, a non-executive Independent Director, has joined the Committee on May 16, 2015.

The Company's Policy relating to appointment of Directors, payment of managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and clause 49 of the Listing Agreement is attached to this report as Annexure - V.

LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186(4) of the Companies Act, 2013 [the Act] are provided in the Notes to Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The particulars of Contracts or Arrangements made with related parties pursuant to subsection (1) of Section 188 of the Companies Act, 2013 furnished in Form AOC -2, is attached to this report as Annexure - VI.

During the year under review the Company has formulated a Policy for Related Party Transaction and the same is disclosed on the website of the Company and can be accessed at http://www.sumedhafiscal.com/policy_on_rpt.pdf.

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

CASH FLOW STATEMENT

Cash Flow Statement for the year ended 31st March, 2015 pursuant to Clause 32 of the Listing Agreements with Stock Exchanges is annexed herewith.

GOING CONCERN STATUS

No significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operation in the future.

MATERIAL CHANGES AND COMMITMENTS

There has not been any material change and commitment affecting the financial position of the Company occurred between the end of the end of the financial year 2014-15 and the date of the Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to firms of Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has an effective Management Information System, which is an integral part of the control mechanism.

The Company is also having well-defined internal compliances structure comprising of vertical heads (as responsibility centers) for ensuring statutory compliance in their respective areas. Department wise quarterly compliance certificates/status reports issued by every Department are placed before the Audit Committee for review.

The Audit Committee of the Board of Directors, Statutory Auditors and the Department Heads are periodically apprised of the internal audit findings and corrective actions taken. Internal Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

COMPLIANCE SYSTEM

Based on the Reports of Statutory Compliance from Departmental Heads/Responsibility Centres, as aforesaid, the Company Secretary issues Certificate under Section 205 of the Companies Act, 2013 (Act) and Rules made thereunder. The Certificate is also endorsed by the Wholetime Director and Chief Financial Officer of the Company.

The status of Statutory Compliance is verified by the Internal Auditors and Secretarial Auditors pursuant to Sections 138 and 204 of the Act.

ANNUAL RETURN

The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached to this Report as Annexure - VII.

SECRETARIAL AUDIT

In terms of the requirements of Section 204 of the Companies Act, 2013 the Secretarial Audit of the Company for the year ended 31st March 2015 was conducted by Mr. Babu Lal Patni, Company Secretary in Practice. The Secretarial Auditors' Report is attached to this Report as Annexure - VIII and forms part of the Directors' Report. There is no qualification or reservation or adverse remark or disclaimer made by the Secretarial Auditor in the Report.

COST AUDIT

The Company is not engaged in production of goods or providing services pursuant to Section 148 of the Act and therefore not required to comply with the requirements thereunder.

AUDITORS AND AUDIT REPORT

Messrs. ARSK & Associates, Chartered Accountants, hold office as the Auditors of the Company upto the conclusion of the forthcoming Annual General Meeting and are eligible, for reappointment. The Company has received a letter from them to the effect that their re- appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment.

There is no qualification, reservation or adverse remark made by Messrs. ARSK & Associates, the Statutory Auditors of the Company in their Report pertaining to the year ended 31st March 2015.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company for the year under review.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Since the Company does not own any manufacturing facility, the other particulars relating to conservation of energy and technology absorption stipulated in the Companies (Accounts) Rules, 2014 are not applicable.

FOREIGN EXCHANGE EARNING AND OUTGO

Foreign Exchange earnings and outgo during the year under review were Rs. 7.75 lacs (previous year Rs. 18.09 lacs) and Rs. 0.94 lac (previous year Rs. 5.75 lacs), respectively.

RISK MANAGEMENT

The Company, as an Intermediary registered with the Securities and Exchange Board of India (SEBI), is required to comply with the prescribed risk management measures. Accordingly, the quarterly status of various risks being faced by the Company and measures for mitigation thereof are placed before the Audit Committee and Board of Directors of the Company, for review and appropriate measures. Further details about the pertinent risks are contained the in the statement of Management Discussion and Analysis (Annexure - II).

PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each Director to the median employee's remuneration and other particulars or details of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached to this Report as Annexure - IX. None of the employees of the Company is in receipt of remuneration coming under purview of the said Section/Rule.

EMPLOYEE RELATIONS

Work atmosphere of the Company has been harmonious.

In terms of requirements of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Rehabilitation) Act, 2013, the Company has formed Internal Complaints Committees. During the year, no complaint regarding sexual harassment was received by the said Committee.

APPRECIATION

We acknowledge our appreciation to Shareholders, Bankers, Regulators, National Stock Exchange, Multi-Commodity Exchange, Bombay Stock Exchange, and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels. We look forward to the future with confidence and stand committed to creating a brighter future for all shareholders.

On Behalf of the Board

Place: Kolkata Ratan Lal Gaggar Date: 16th May, 2015 Chairman

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Mar 31, 2014

TO THE SHAREHOLDERS

The Directors present their 25th Annual Report and the Audited Accounts for the financial year ended March 31, 2014.

Financial Highlights

(Rs.in Lakhs)

Year ended 31.03.2014 31.03.2013

Total Income 1381.12 1272.14

Cash Profit 523.50 271.85

Less : Depreciation 39.15 40.39

Profit before tax 484.35 231.46

Less : Provision for taxation 146.00 61.50

Add / (Less) : Deferred Tax 5.08 (7.82)

Profit after tax 343.43 162.14

Add : Surplus brought forward 1571.82 1467.15

Add / (Less) : Adjustment for Earlier years 1.04 (10.76)

Balance available for appropriation 1916.29 1618.53

APPROPRIATION

Provision for Dividend (Including Dividend Tax) 74.73 46.71

Balance carried to Balance Sheet 1841.56 1571.82

Operational Review

In 2013-14, your Company''s total Income from Operations stood at Rs. 1314.96 lacs as against Rs. 1201.31 lacs during the previous year, an increase of 9.5% over last year.

Your Company continued its focus on fee based activities (Investment Banking) and income therefrom was Rs. 1124.10 lacs as against Rs. 730.81 lacs during the previous year, recording 53% increase. It continues to be the thrust area for the Company.

Income from Capital Market Operation for the year has been Rs. 117.74 lacs as against Rs. 124.98 lacs during the previous year due to subdued market condition for major portion of the year.

Income from Other Sources was at Rs. 66.15 lacs as against Rs. 70.82 lacs during the previous year.

In spite of downward trend in the market your Company has increased its total revenue and profits, mainly due to improved performance of Investment Banking Segment. However performance of other segments (Stock Broking, Depository Participant, Portfolio Management and Mutual Fund Distribution) are yet to pick up.

Dividend

Taking into consideration the overall profitability position, the Board of Directors is pleased to recommend a dividend of 80 paise per share (8%) for the year ended March 31, 2014, subject to the approval of the Members at the Annual General Meeting.

Business Outlook

The long spell of slow growth and high inflation appears to be over and green shoots of revival is apparent in the Index of Industrial Production (IIP). Government Policy to revive infrastructure projects has encouraging impact on the investment climate. The Company should benefit from improvement in the business sentiments. Improvement in relations with neighbouring countries has also opened up opportunities for Indian domestic industries.

DIRECTORS

In accordance with provisions of Section 149 and 152 of the Companies Act, 2013 read with Article 145 & 146 of the Articles of Association of the Company, Mr. Vijay Maheshwari and Mr. Bijay Murmuria, Directors of the Company would retire by rotation at the ensuring Annual General Meeting, and are eligible for reappointment. Your directors recommend their re-appointment as Directors of your Company, subject to retirement by rotation.

Mr. Bhawani Sankar Rathi, Wholetime Director and Chief Financial Officer of the Company was re-appointed at the Annual General Meeting held on August 10, 2013. In terms of re-appointment, he is not liable to retirement by rotation. However Section 152 of the new Companies Act, 2013 and Rules made there under, require at least 2/3rds of total number of directors to retirement by rotation. To bring the composition of the Board in line with the aforesaid provisions of the Act, your Directors recommend a partial modification to the terms of the aforesaid appointment/re-appointment of Mr. Rathi by making the same subject to retirement by rotation.

In terms of Section 149 of the new Companies Act, 2013 and Rules made there under, the Office of the Independent Directors shall be for a term upto five consecutive years. Your Directors recommend appointment of Mr. Ratan Lal Gaggar, Dr. Basudeb Sen, Mr. Atul. C. Varma and Mr. P. S. Panda as Independent Directors of your Company to hold Office for a period of five consecutive years. Presently they hold office as Independent Directors pursuant to Clause 49 of the Listing Agreement.

CEO/CFO Report on Accounts

As required under revised Clause 49 of the Listing Agreement, the CEO/CFO''s Report on the Accounts is attached.

Directors'' Responsibility Statement

In terms of provisions of Section 217(2AA) of the Companies Act, 1956 your Directors declare:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

Auditors

Messrs. ARSK & Associates, Chartered Accountants, Kolkata, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them to the effect that their reappointment, if made, would be in compliance with applicable provisions of the Companies Act, 2013 and they are not disqualified for re-appointment.

Subsidiary

The consolidated financial statements presented by the Company include the financial information of the subsidiary prepared in accordance with the applicable accounting standard. In view of general exemption granted by the Ministry of Corporate Affairs, the Reports and Accounts of the subsidiary Company is not required to be attached to your Company''s Accounts. Shareholders desirous of obtaining the Report and Accounts of your Company''s subsidiary may obtain the same upon request. The Report and Accounts of the subsidiary Company will be kept for inspection at your Company''s Registered Office and those of the subsidiary concerned. Further the Report and Accounts of the subsidiary Company will also be available under the head ''Financial'' of ''About us'' section of your Company''s website, www.sumedhafiscal.com, in a downloadable format.

SFSL Commodity Trading Pvt. Ltd. (SCT) is a Trading-Cum-Clearing Member of Multi Commodity Exchange of India Ltd., Mumbai (MCX) that offers dealing facility in various commodities and foreign currencies including derivatives thereof. SCT is also a Trading Member of Currency Derivative Segment of MCX.

Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

Stock Exchange Listings

The Equity Shares of the Company are listed on the Stock Exchanges at Kolkata and Mumbai. Annual Listing Fees to both of them were paid in time.

SFSL Employees Stock Option Scheme, 2011

The Company had approved the Employee Stock Option Scheme at its Annual General Meeting on 24th March, 2011 which was further amended on 09th November, 2013 and 18th January, 2014. Disclosure pursuant to Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed hereto - Annexure - "A".

Corporate Governance

Your Company has implemented all the mandatory provisions of "Corporate Governance" as provided in the Listing Agreement. A separate Report of the Board of Directors on Corporate Governance is annexed hereto as Annexure - "B"along with Auditors'' Certificate on compliance of conditions of Corporate Governance as Annexure - "B.1", respectively as part of the Annual Report.

Management Discussion & Analysis

Management Discussion and Analysis have been appended to this Report in terms of the Listing Agreement as Annexure - "C".

Statutory Information

1) Conservation of Energy/Technology Absorption/Foreign Exchange Earning and Outgo:

Information pertaining to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

Earning and Outgo in foreign currency during the year:

During the year foreign exchange outgo was Rs. 5.75 Lacs (previous year Rs. 39.79 Lacs) by way of Traveling Expenses. Foreign exchange earnings for the said period were Rs. 18.09 Lacs (previous year Rs. 19.59 Lacs).

2) Deposit

The Company did not invite or accept any deposit from public and therefore was not required to comply with the prescribed statutory formalities.

3) Personnel

There was no employee in receipt of remuneration coming under purview of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, as amended.

None of the employees of the Company is holding two per cent or more of the Equity Shares of the Company in terms of Section 217(2A)(a)(iii) of the Act.

4) Cash Flow Statement for the year ended 31st March, 2014 pursuant to Clause 32 of the Listing Agreements with Stock Exchanges is annexed herewith.

APPRECIATION

We acknowledge our appreciation to Shareholders, Bankers, Regulators, National Stock Exchange, Multi-Commodity Exchange, Bombay Stock Exchange, and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels. We look forward to the future with confidence and stand committed to creating a brighter future for all shareholders.

On Behalf of the Board

Place: Kolkata Ratan Lal Gaggar

Date: 17th May, 2014 Chairman

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Mar 31, 2013

The Directors present their 24th Annual Report and the Audited Accounts for the financial year ended March 31, 2013.

Financial Highlights

(Rs. in Lakhs)

Year ended 31.03.2013 31.03.2012

Total Income 1272.14 1451.37

Cash Profit 271.85 513.00

Less : Depreciation 40.39 41.00

Profit before tax 231.46 472.00

Less : Provision for taxation 61.50 97.50

Add / (Less): Deferred Tax (7.82) (30.80)

Profit after tax 162.14 343.70

Add : Surplus brought forward 1467.15 1198.03

Add / (Less) : Adjustment for Earlier years (10.76) (0.34)

Balance available for appropriation 1618.53 1541.39

APPROPRIATION

Provision for Dividend (Including Dividend Tax) 46.71 74.24

Balance carried to Balance Sheet 1571.82 1467.15

Operational Review

In 2012-13, your Company''s total Income from Operations stood at Rs. 1201.31 Lakhs as against Rs. 1276.68 Lakhs during the previous year. Your Company continued its focus on fee based activities (Investment Banking) and income therefrom was to Rs. 730.81 Lakhs as against Rs. 991.13 Lakhs during the previous year. It continues to be thrust area for the Company inspite of subdued performance for the year under consideration.

Income from Capital Market Operation for the year has been Rs. 124.98 Lakhs as against Rs. 146.62 Lakhs during the previous year. Income from Other Sources was at Rs. 70.82 Lakhs as against Rs. 174.68 Lakhs during the previous year.

Though the performance is less than expectations your company has performed reasonably considering overall economic environment characterized by slump in economy, rising NPA of Banks and decline in fresh investment and overall stagnation.

Level of activity in Depository Participant Services are linked to Stock Broking Services and both are moving slowly.

Currency derivative trading is yet to pick up at the exchange platform. Volume of business is expected to pick up gradually with the market sentiment.

Retail financial products distribution business has been facing negative market sentiment and it is being reflected in the performance of this segment. The Company is in the process to commence trading in the Debt Segment introduced by the NSE recently. Performance of the Portfolio Management Service is yet to pick-up. The SEBI''s raising of minimum volume of such investment from Rs. 5 Lakhs to Rs. 25 Lakhs has hit the segment really hard. The activity is expected to pick up gradually once investment sentiments improve.

Dividend

Taking into consideration the overall profitability position, the Board of Directors is pleased to recommend a dividend of 50 paise per share (5%) for the year ended March 31, 2013, subject to the approval of the Members at the Annual General Meeting.

Business Outlook

Economic environment in India continues to be depressed with GDP growth rate of around 5% and Inflation rate hovering around 9%. The prevailing low aggregate demand and high lending rate offers little promise in the short-run. Banks, both government and non- government, as well as big corporate have been sourcing cheaper funds abroad. However steep depreciation in the value of Rupee poses a serious challenge to the financial health of such borrowers in the long run. Sustained injections of Quantitative Easing have not yet achieved desired growth in aggregate demand in the USA. Euro Zone continues its fire fighting, one after another and welfare spending by governments is shrinking. These provide a narrower export market for Indian goods and services. However some experts are of the opinion that the down-slide has bottomed out and green shoots for revival are visible. Your Company is well prepared to take advantage of the turnaround whenever it happens as business cycle or otherwise.

Directors

In terms of Article 162 of the Articles of Association of the Company Mr. Bhawani Sankar Rathi has been re-appointed as a Wholetime Director and Chief Financial Officer of the Company with effect from April 1, 2013, by the Board of Directors as per recommendation of the Remuneration Committee of the Company. The appointment and terms of appointment has been placed before the Members for consideration and approval at the forthcoming Annual General Meeting.

In terms of Article 145 of the Articles of Association of the Company, Mr. Vijay Maheshwari and Mr. Bijay Murmuria, retire by rotation and being eligible, offered themselves for re-appointment at the ensuing Annual General Meeting.

Brief resume of the Directors proposed to be re-appointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges, are provided in the Report on Corporate Governance forming part of the Annual Report. The Company has obtained necessary intimations from them in terms of the Companies (Disqualification of Directors under Section 274(1)(g) of the Companies Act, 1956) Rules, 2003 to the effect that they have not incurred any disqualification under Section 274(1)(g) of the Companies Act, 1956 and they are eligible to be appointed as Directors of the Company.

CEO/CFO Report on Accounts

As required under revised Clause 49 of the Listing Agreement, the CEO/CFO''s Report on the Accounts is attached.

Directors'' Responsibility Statement

In terms of provisions of Section 217(2AA) of the Companies Act, 1956 your Directors declare:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

Auditors

Messrs. ARSK & Associates, Chartered Accountants, Kolkata, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

Notes on Subsidiary

The consolidated financial statements presented by the Company include the financial information of the subsidiary prepared in accordance with the applicable accounting standard. In view of general exemption granted by the Ministry of Corporate Affairs, the Reports and Accounts of the subsidiary Company is not required to be attached to your Company''s Accounts. Shareholders desirous of obtaining the Report and Accounts of your Company''s subsidiary may obtain the same upon request. The Report and Accounts of the subsidiary Company will be kept for inspection at your Company''s Registered Office and those of the subsidiary concerned. Further the Report and Accounts of the subsidiary Company will also be available under the head ''Financial'' of ''About us'' section of your Company''s website, www.sumedhafiscal.com, in a downloadable format.

SFSL Commodity Trading Pvt. Ltd. (SCT) is a Trading-Cum-Clearing Member of Multi Commodity Exchange of India Ltd., Mumbai (MCX) that offers dealing facility in various commodities and foreign currencies including derivatives thereof. SCT is also a Trading Member of Currency Derivative Segment of MCX.

Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

Stock Exchange Listings

The Equity Shares of the Company are listed on the Stock Exchanges at Kolkata and Mumbai. Annual Listing Fees to both of them were paid in time.

SFSL Employees Stock Option Scheme, 2007

Details of the Options granted up to 31st March, 2013, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the ''SEBI Guidelines'') are set out in the Annexure - A to this Report.

The Company''s Auditors, Messrs. ARSK & Associates, have certified that the Company''s Employee Stock Option Schemes have been implemented in accordance with the SEBI Guidelines and the resolutions passed by the Members in this regard.

Corporate Governance

Your Company has implemented all the applicable provisions of "Corporate Governance" as provided in the Listing Agreement. A separate Report of the Board of Directors on Corporate Governance is annexed hereto as Annexure - "B" along with Auditors'' Certificate on compliance of conditions of Corporate Governance as Annexure - "C", respectively as part of the Annual Report.

Management Discussion & Analysis

Management Discussion and Analysis have been appended to this Report in terms of the Listing Agreement as Annexure - "D" Statutory Information

1) Conservation of Energy/Technology Absorption/Foreign Exchange Earning and Outgo:

Information pertaining to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

Earning and Outgo in foreign currency during the year:

During the year foreign exchange outgo was Rs. 39.79 Lakhs (previous year Rs. 9.37 Lakhs) by way of Traveling Expenses and purchase of Investment and professional fees for the purpose of Business Development. Foreign exchange earnings for the said period were Rs. 19.59 Lakhs (previous year Rs. 11.54 Lakhs).

2) Deposit

The Company did not invite or accept any deposit from public and therefore was not required to comply with the prescribed statutory formalities.

3) Personnel

There was no employee in receipt of remuneration coming under purview of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, as amended.

None of the employees of the Company is holding two per cent or more of the Equity Shares of the Company in terms of Section 217(2A)(a)(iii) of the Act.

4) Cash Flow Statement for the year ended 31st March, 2013 pursuant to Clause 32 of the Listing Agreements with Stock Exchanges is annexed herewith.

APPRECIATION

We acknowledge our appreciation to Shareholders, Bankers, Regulators, National Stock Exchange, Multi-Commodity Exchange, Bombay Stock Exchange, OTC Exchange of India, and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels.

On Behalf ofthe Board

Kolkata Ratan Lai Gaggar

18th May, 2013 Chairman

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Mar 31, 2012

The Directors present their 23rd Annual Report and the Audited Accounts for the financial year ended March 31, 2012.

Financial Highlights (Rs in Lacs)

Year ended 31.03.2012 31.03.2011 Total Income 1265.54 1321.72

Cash Profit 513.00 634.13

Less : Depreciation 41.00 37.27

Profit Before Tax 472.00 596.86

Less : Provision for Taxation (Net) 97.50 170.00

Add / (Less) : Deferred Tax (30.80) (18.88)

Add / (Less) : Adjustment for Earlier years (0.34) 3.11

Profit After Tax 343.36 411.09

Add : Surplus brought forward 1198.03 850.62

Balance available for appropriation 1541.39 1261.71 APPROPRIATION

Provision for Dividend (Including Dividend Tax) 74.24 63.68

Balance carried to Balance Sheet 1467.15 1198.03 Operational Review

In 2011-12, your Company's total Income from Operations stood at Rs. 1092.38 lacs as against Rs. 1267.22 lacs during the previous year. Your Company continued its focus on fee based activities (Investment Banking) and income there from was to Rs. 991.13 lacs as against Rs. 1041.65 lacs during the previous year.

Income from Capital Market Operation for the year has been Rs. 101.25 lacs as against Rs. 225.57 lacs during the previous year.

Income from other sources was at Rs. 173.16 lacs as against Rs. 54.49 lacs during the previous year.

Investment Banking continues to be thrust area for the Company with larger client and geographical base along with transaction execution capabilities. Your Company closed a number of debt transactions during the year.

With the markets stagnating and slump in the economy, performance is less than expectations an overall conservative approach towards risk management has been adopted.

Level of activity in Depository Participant services are linked to Stock Broking Services and both are moving slowly.

Currency derivative trading is yet to pick up at the exchange platform. Volume of business would pick up gradually with the market sentiment.

Retail financial products distribution business has been facing negative market sentiment and it is been reflected in the performance of this segment.

The Company has commenced Portfolio Management Service during the year. However shortly after the commencement the SEBI has raised the minimum volume of such investment from Rs. 5 lacs to Rs. 25 lacs. The activity is expected to pick up gradually.

Dividend

Taking into consideration the overall profitability position, the Board of Directors is pleased to recommend a dividend of 80 paise per share (8%) during the year under review, subject to approval of the Members.

Business Outlook

The fundamental drivers of India's growth prospects have slowed down. However global economic and financial concerns, more so in the aftermath uncertainties emanating from Euro Zone, are likely to throw more challenges. In India, inflationary pressure along with overall supply bottle necks shall moderate overall growth rate.

Sustained depreciation of Rupee against the USD has triggered outflow of FII funds. Import oriented segment of the economy has been hit very hard. This along with high borrowing cost has tempered the overall growth rate. Tax issues have again become determinant for inflow of FDI. However long term growth prospect remains intact.

Directors

In terms of Article 162 of the Articles of Association of the Company Mr. Rajesh Kumar Gupta who has been heading the Investment Banking vertical of the Company has been appointed as a Whole time Director of the Company with effect from May 26, 2012, by the Board of Directors as per recommendation of the Remuneration Committee of the Company. The appointment and terms of appointment has been placed before the Members for consideration and approval.

In terms of Article 145 of the Articles of Association of the Company, Dr. Basudeb Sen and Mr. Prashant Sekhar Panda, retire by rotation and being eligible, offered themselves for re-appointment at the ensuing Annual General Meeting.

Brief resume of the Directors proposed to re-appointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges, are provided in the Report on Corporate Governance forming part of the Annual Report. The Company has obtained necessary intimations from them in terms of the Companies (Disqualification of Directors under Section 274(1)(g) of the Companies Act, 1956) Rules, 2003 to the effect that they have not incurred any disqualification under Section 274(1)(g) of the Companies Act, 1956 and they are eligible to be appointed as Directors of the Company.

CEO/CFO Report on Accounts

As required under revised Clause 49 of the Listing Agreement, the CEO/CFO's Report on the Accounts is attached.

Directors' Responsibility Statement

In terms of provisions of Section 217(2AA) of the Companies Act, 1956 your Directors declare:

(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

Auditors

Messrs. ARSK & Associates, Chartered Accountants, Kolkata, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

Notes on Subsidiary

The consolidated financial statements presented by the Company include the financial information of the subsidiary prepared in accordance with the applicable accounting standard. In view of general exemption granted by the Ministry of Corporate Affairs, the Reports and Accounts of the subsidiary Company is not required to be attached to your Company's Accounts. Shareholders desirous of obtaining the Report and Accounts of your Company's subsidiary may obtain the same upon request. The Report and Accounts of the subsidiary Company will be kept for inspection at your Company's Registered Office and that of the subsidiary. Further the Report and Accounts of the subsidiary Company will also be available under the Financial of "About us" section of your Company's website, www.sumedhafiscal.com, in a downloadable format.

SFSL Commodity Trading Pvt. Ltd. (SCT) is a Trading-Cum-Clearing Member of Multi Commodity Exchange of India Ltd., Mumbai (MCX) that offers dealing facility in various commodities and foreign currencies including derivatives thereof. SCT is a Trading Member of Currency Derivative Segment of MCX.

Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

Stock Exchange Listings

The Equity Shares of the Company are listed on the Stock Exchanges at Kolkata and Mumbai. Annual Listing Fees to both of them were paid in time.

Preferential Issue of Shares

The Company has issued 11,35,484 Equity Shares of Rs. 10/- each on March 30, 2012 on conversion of 1 (one) Zero Percent Fully Convertible Debenture of Rs. 2,90,00,000/- as well as 2,00,000 Convertible Share Warrants of Rs. 31/- each, both issued on preferential basis, at a conversion price of Rs. 31/- per Equity Share (including premium of Rs. 21/-).

SFSL Employees Stock Option Scheme, 2007

Details of the Options granted up to 31st March, 2012, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the 'SEBI Guidelines') are set out in the Annexure - A to this Report.

The Company's Auditors, Messrs. ARSK & Associates, have certified that the Company's Employee Stock Option Schemes have been implemented in accordance with the SEBI Guidelines and the resolutions passed by the Members in this regard.

Corporate Governance

Your Company has implemented all the applicable provisions of "Corporate Governance" as provided in the Listing Agreement. A separate Report of the Board of Directors on Corporate Governance is annexed hereto as Annexure - "B" along with Auditor's Certificate for its due compliance of conditions of Corporate Governance as Annexure - "C", respectively as part of the Annual Report.

Management Discussion & Analysis

Management Discussion and Analysis have been appended to this Report in terms of the Listing Agreement as Annexure - "D"

Statutory Information

1) Conservation of Energy/Technology Absorption/Foreign Exchange Earning and Outgo:

Information pertaining to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company.

Earning and Outgo in foreign currency during the year:

During the year foreign exchange outgo was Rs. 9.37 Lacs (previous year Rs. 6.85 Lacs) by way of Traveling Expenses and Advertisement for the purpose of Business Development. Foreign exchange earnings for the said period were Rs. 11.54 Lacs (previous year - nil).

2) Deposit

The Company is not holding any Public Deposit and has complied with all relevant statutory formalities.

3) Personnel

There was no employee in receipt of remuneration coming under purview of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, as amended.

None of the employees of the Company is holding two per cent or more of the Equity Shares of the Company in terms of Section 217(2A)(a)(iii) of the Act.

4) Cash Flow Statement for the year ended 31st March, 2012 pursuant to Clause 32 of the Listing Agreements with Stock Exchanges is annexed herewith.

APPRECIATION

We acknowledge our appreciation to Shareholders, Bankers, Regulators, National Stock Exchange, Multi - Commodity Exchange, OTC Exchange of India and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels.

On Behalf of the Board

Ratan Lal Gaggar

Kolkata Chairman

May 26, 2012

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Mar 31, 2010

The Directors present their 21st Annual Report and the Audited Accounts for the financial year ended 31.03.2010.

FINANCIAL HIGHLIGHTS

(Rs in Lacs)

Year ended Year ended

31.03.2010 31.03.2009

Total Income 1402.57 919.67

Cash Profit 765.15 382.36

Less:Depreciation 26.97 26.46

Profit before tax 738.18 355.90

Less:Provision for taxation (net) 243.00 117.50

Less:Provision for Fringe Benefit Tax - 3.83

Add / (Less) : Deferred Tax (4.10) (19.21)

Add / (Less) : Adjustment for E arlier years 0.05 5.79

Profit after tax 491.13 221.15

Add:Surplus brought forward 423.15 269.58

Balance available for appropriation 914.28 482.53

APPROPRIATION

Less:Amortisation of Goodwill - 8.19

Provision for Dividend (Including Dividend Tax) 63.66 59.39

Balance carried to Balance Sheet 850.62 414.95

OPERATIONAL REVIEW

Your Company has reached new height in its earnings. Despite substantial economic downturn and financial meltdown Total Income from Operations increased by 56.90% to Rs.1372.53 lacs as against Rs. 874.77 lacs during the previous year.

Your Company continued its focus on fee based activities (Loan Syndication and Project Consultancy Services) and income there from was to Rs. 1158.89 lacs as against Rs. 787.63 lacs during the previous year (47.14% increase).

Income from Capital Market Operation also registered a modest increase of 145.17% to Rs. 213.64 Lacs as against Rs. 87.14 Lacs during the previous year.

Income from other sources was at Rs. 30.04 lacs as against Rs. 44.89 lacs during the previous year.

INVESTMENT BANKING

Investment Banking continues to be the thrust area for the Company and experience gained over years has propelled it to climb the value chain and propelled to larger client-base. Increase in human capital has started contributing results and efforts are on for taking it to the next level.

SECURITY DEALING

This segment continues to underperform due to volatile market condition and conservative approach adopted by the Company. In order to ensure better risk management the Company is not very aggressive in this segment. A dedicated Equity Research Team is continuing its value addition by way of publishing periodical News Letters and market insights.

DP OPERATION

Depository Services is provided by your Company as an extension of broking services to its Clients.

CURRENCY DERIVATIVE OF NSE

Your Company has also commenced Currency Derivative Trading on NSE and MCX as further extension of services to its Clients.

MUTUAL FUND/BONDS DISTRIBUTION

This segment has come under stringent regulatory restriction and thereby the distribution channel is undergoing a transition phase. The Company is confident on reaping greater benefits in future.

DIVIDEND

Taking into consideration the overall profitability position, the Board of Directors is pleased to recommend a dividend of 80 paisa per share (8%) during the year under review, subject to approval of the Members.

BUSINESS OUTLOOK

The Indian financial services sector is poised to remain buoyant in the backdrop of strong economic performance, large inflows. The ongoing crisis originating from Greece is having spillover effect globally and India is impacted marginally only i.e. reduced market for goods and services. India offers a stable and better destination for global investible funds consequent to burst of the Chinese Property Bubble.

Sustained economic growth and higher disposable income in rural sector have opened up new markets. Percolation of technological benefits (viz. telecommunication, ATM and internet facilities in remote areas), expansion of Highway network and other infrastructural facilities have created new avenues of opportunities, earlier unheard of. All these should result in wider market for financial services to which your Company belongs. SFSL with multiple-products and geographical spread is well positioned to leverage its current position for even better performance.

Transparency is gaining growing importance in regulatory focus and your Company is taking measures to promote it in tune with the requirement. National Population Register and National Business Register shall provide a new platform for addressing specific social and economic goals to broad base the market further.

DIRECTORS

In terms of Article 145 of the Articles of Association of the Company, Mr. Vijay Maheshwari and Mr. Rajeev Tandon, retire by rotation and being eligible, offered themselves for re-appointment at the ensuing Annual General Meeting.

The Board of Directors as per recommendation of the Remuneration Committee has approved re-appointment of Mr. Bhawani Shankar Rathi for a period of 3 (three) years with effect from April 1, 2010, subject to approval of the Members. Details of the terms and conditions thereof are stated in the Notice convening the 21st AGM and forming part of the Annual Report.

Brief resume of the Directors proposed to appointed/re-appointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges, are provided in the Report on Corporate Governance forming part of the Annual Report. The Company has obtained necessary intimations from them in terms of the Companies (Disqualification of Directors under Section 274(1)(g) of the Companies Act, 1956) Rules, 2003 to the effect that they have not incurred any disqualification under Section 274(1)(g) of the Companies Act, 1956 and they are eligible to be appointed as Directors of the Company.

CEO/CFO REPORT ON ACCOUNTS

As required under revised Clause 49 of the Listing Agreement, the CEO/CFOs Report on the Accounts is attached.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1956 your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

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

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors have prepared the annual accounts on a `going concern basis.

AUDITORS

Messrs. ARSK & Associates, Chartered Accountants, Kolkata, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

BRANCH AUDITORS

The Company has installed required hardware, software and system for centralized operation, monitoring and control of operations at the Branches, from the Registered and Corporate Office at Kolkata. Therefore requirement for appointment of Branch Auditor has ceased.

SUBSIDIARY

Pursuant to Section 212 of the Act the audited statement of accounts of SFSL Commodity Trading Pvt. Ltd. (SCT) along with the Report of the Board of Directors and Auditors Report thereon for the year ended 31st March, 2010, is annexed.

SCT is a Trading-Cum-Clearing Member of Multi Commodity Exchange of India Ltd., Mumbai that offers dealing facility in various commodities and foreign currencies including derivatives thereof. SCT has also become Trading Member of Currency Derivative Segment of MCX.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

STOCK EXCHANGE LISTINGS

The Equity Shares of the Company are listed on the Stock Exchanges at Kolkata and Mumbai. Annual Listing Fees to both of them were paid in time.

EMPLOYEES STOCK OPTION SCHEME

The Compensation Committee of the Board of Directors, at its meeting held on March 30, 2010 issued and allotted 56,600 Equity Shares of Rs. 10/- each, upon exercise of 96,000 Options; such shares rank pari passu with the existing Equity Shares of your Company. Consequently, the Issued and Subscribed Share Capital of your Company as at 31st March, 2010 stands increased to Rs. 6,82,45,400/- divided into 68,24,540 Ordinary Shares of Rs.10/- each.

Details of the Options granted up to 31st March, 2010, and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the ‘SEBI Guidelines) are set out in the Annexure – A to this Report.

The Companys Auditors, Messrs. ARSK & Associates, have certified that the Companys Employee Stock Option Schemes have been implemented in accordance with the SEBI Guidelines and the resolutions passed by the Members in this regard.

CORPORATE GOVERNANCE

Your Company has implemented all the applicable provisions of "Corporate Governance" as provided in the Listing Agreement. A separate Report of the Board of Directors on Corporate Governance is annexed hereto as Annexure - "B" along with Auditors Certificate for its due compliance of conditions of Corporate Governance as Annexure - "C", respectively as part of the Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis have been appended to this Report in terms of the Listing Agreement as Annexure - "D".

STATUTORY INFORMATION

1) Conservation of Energy/Technology Absorption/Foreign Exchange Earning and Outgo: Information pertaining to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable to the Company. Earning and Outgo in foreign currency during the year: During the year foreign exchange outgo was Rs. 321,389/- (previous year Rs. 462,925/-) by way of Traveling Expenses and Advertisement for the purpose of Business Development. Foreign exchange earning for the said period was Nil.

2) Deposit

The Company is not holding any Public Deposit and has complied with all relevant statutory formalities.

3) Personnel

There was no employee in receipt of remuneration coming under purview of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, as amended. None of the employees of the Company is holding two per cent or more of the Equity Shares of the Company in terms of Section 217(2A)(a)(iii) of the Act.

4) Cash Flow Statement for the year ended 31st March, 2010 pursuant to Clause 32 of the Listing Agreements with Stock Exchanges is annexed herewith.

APPRECIATION

We acknowledge our appreciation to shareholders, Bankers, National Stock Exchange, Multi - Commodity Exchange, OTC Exchange of India and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels.



On Behalf of the Board

Kolkata Ratan Lal Gaggar

May 15, 2010 Chairman

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Mar 31, 2009

The Directors present the 20th Annual Report and the Audited Accounts for the financial year ended March 31 ,.2009.

FINANCIAL HIGHLIGHTS

(Rs in Lacs)

Year ended Year ended 31.03.2009 31.03.2008

Total Income 919.67 775.70

Cash Profit 382.36 298.57

Less : Depreciation 26.46 22.83

"Profit before Tax 355.90 275.74

Less : Provision for taxation (net) 117.50 86.00

Less : Provision for Fringe Benefit Tax 3.83 4.45

Add / (Less) : Deferred Tax -19.21 -4.88

Add / (Less) : Adjustment for Earlier years 5.79 -0.17

Profit after tax 221.15 180.24

Add : Surplus brought forward 269.58 152.12

Balance available for appropriation 482.53 323.98

Appropriation

Less : Amortisation of Goodwill 8.19 8.19

Provision for Dividend (Including Dividend Tax) 59.39 54.40

Balance carried to Balance Sheet 423.15 269.58

OPERATIONAL REVIEW

Your company has reached new height in its earnings. Despite substantial melt-down in securities market Total Income from Operations increased by more than 1 5.29% to Rs 874.77 lacs as against Rs 758.76 lacs during the previous year.

Your company continued its focus on fee based activities (Loan Syndication and Project Consultancy Services) and income there from was Rs 787.63 lacs as against Rs 447.41 lacs during the previous year (76.04% increase).

Income from Capital Market Operation was reduced 72.01% to Rs 87.14 lacs as against Rs 311.35 lacs during the previous year.

Income from Other Sources was at Rs 44.89 lacs as against Rs 1 6.95 lacs during the previous year.

INVESTMENT BANKING

The company continues to concentrate on its greatest strength arising out of loan syndication, equity placement and project consultancy services. The company is consolidating its positions and targeting larger sized projects and assignments for accelerated growth of this Segment. Your company has added many new large clients during the previous year. During the current year it continues to make endeavor to add more new clients and execute large assignments.

SECURITY DEALING

In its further efforts for better risk management the company has fully centralised its Broking operation to its Corporate Office at Kolkata. A dedicated team has been entrusted with the Equity Research for value added feed back to clients on one-to- one basis as well by way of periodical News Letters. Your company is now poised to commence Online Trading of Securities.

DP OPERATION

Your company has commenced Depository Services (being members to NSDL) as extension of Broking Services to its Clients.

CURRENCY DERIVATIVES ON NSE

Your company has also commenced Currency Derivative Trading on NSE and obtained membership of MCX-SX as further extension of services to its Clients.

MUTUAL FUND/BONDS DISTRIBUTION

The company is carrying the distribution activity from last several years and volume of yearly fund mobilisation is growing steadily. Effect of equity market meltdown was more than offset by increase in clients towards debt segment. The company is continuously focusing towards business development and adding branches for geographical penetration so as to have incremental revenue.

DIVIDEND

Taking into consideration the overall profitability position, the Board of Directors is pleased to declare a dividend of 75 paise per share (7.5%) during the year under review.

BUSINESS OUTLOOK

Unprecedented meltdown of banking and financial sector starting with USA and spreading to Europe and beyond has impacted economies globally. Viability and sustainability of age-old minimum interference and self regulatory frame-work has been put to question. Credibility of US Dollars as currency of reserve/investment has become a matter of open discussion globally. Overall scenario has brought in a common consequence - substantial fall in aggregate demand in almost all the economies. Large-scale government rescue packages over a prolonged period of time are yet to have tangible positive impact.

Direct impact of the global financial tsunami over India has been limited. Regulatory frame-work and conservative approach followed by RBI and SEBI finally received its due accolade. Rural economy has become engine for growth even for white goods market. Micro finance is gradually emerging as the most profitable portfolio for bonks and funding institutions as well as most effective catalyst for rural growth and development. Protection of environment, corporate social responsibility, transparency and accountability are drawing more attention than ever.

Fall in aggregate demand and employment due to external and internal factors are being addressed by the Government of India on war footing. Bringing down the cost of funds has become a priority for the Government and the RBI. Proposal to issue of biometric identity card for the entire population by 2011, introduction of mobile banking Guidelines by RBI and free access to ATMs will deepen inclusive growth of the Indian economy. Political stability has witnessed steady improvement in the market sentiment and growth rate is gaining momentum. Sumedha Fiscal with its multiple-products, geographical spread and strong client base is well positioned to seize such opportunities and hopes to have even better performances.

DIRECTORS

Pursuant to Section 260 of the Companies Act, 1956 and Article 138 of the Articles of Association of the company Mr. Prashant Sekhar Panda was appointed with effect from 24th January, 2009 as an Additional Director (non-executive) of the company. Mr. Panda holds his office up to the date of the ensuing Annual General Meeting. The company has received notice in writing from a member of the company proposing candidature of Mr. Panda for the office of Director, liable to retire by rotation.

In terms of Article 145 of the Articles of Association of the company, Dr. Basudeb Sen and Mr. Bijay Murmuria, retire by rotation and being eligible, offered themselves for re-appointment at the ensuing Annual General Meeting.

Brief resume of the Directors proposed to appointed/re-appointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreements with the Stock Exchanges, are provided in the Report on Corporate Governance forming part of the Annual Report (Annexure-A.2). The company has obtained necessary intimations from them in terms of the Companies (Disqualification of Directors under Section 274(1 )(g) of the Companies Act, 1956), Rules, 2003 to the effect that they have not incurred any disqualification under Section 274( 1 )(g) of the Companies Act, 1956 and they are eligible to be appointed as Directors of the company.

Mr. Pawan Kumar Agarwal and Mr. Ashish Mitral, Directors of the company tendered their respective resignations on 16- May-2005. As a Trading Member of the National Stock Exchange of India Ltd. (NSE), the company requires their approval for effecting the said resignations. NSE by its letter dated 5-Jun-09 intimated their approval and thereupon the formalities under the Companies Act, 1 956 and the Listing Agreement have been complied with. Your Directors acknowledge valuable services to the company by Mr. Agarwal and Mr. Mittal.

CEO/CFO REPORT ON ACCOUNTS

As required under revised Clause 49 of the Listing Agreement, the CEO/CFOs Report on the Accounts is attached.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1 956 your Directors declare:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31 st March, 2009 and profit of the company for that year;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) that the Directors have prepared the annual accounts on a going concern basis.

AUDITORS

Messrs. ARSK & Associates, Chartered Accountants, Kolkata, Statutory Auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1 956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

SUBSIDIARY

Pursuant to Section 21 2 of the Act the audited statement of accounts of SFSL Commodity Trading Pvt Ltd. (SCT) along with the Report of the Board of Directors and Auditors Report thereon for the year ended 31st March, 2009, is annexed.

SCT is a Trading-Cum-Clearing Member of Multi Commodity Exchange of India Ltd., Mumbai that offers dealing facility in various commodities and also derivatives thereof.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report.

STOCK EXCHANGE LISTINGS

The Equity Shares of the company are listed on the Stock Exchanges at Kolkata and Mumbai. Annual Listing Fees to both of them were paid in time.

EMPLOYEE STOCK OPTION SCHEME

Market price of the Equity Shares of the company has been below par for most part of the year under consideration. Therefore Employee Stock Option Scheme, 2007 introduced by the company remained non-starter. However statutory requirement are being duly complied with.

PREFERENTIAL ISSUE

The company has issued 125,000 Equity Shares of Rs 10/- each at a Premium of Rs 15/- per share aggregating to Rs 3,125,000/- to Promoters of the company and others.

CORPORATE GOVERNANCE

Your company has implemented all the applicable provisions of "Corporate Governance" as provided in the Listing Agreement. A separate Report of the Board of Directors on Corporate Governance is annexed hereto as Annexure - A along with Auditors Certificate confirming due compliance of conditions of Corporate Governance as Annexure - B respectively, as part of the Annual Report.

INVESTORS GRIEVANCE COMMITTEE

Investors Grievance Committee consists of two Independent Directors i.e. Mr. Rajeev Tandon and Mr. Anil Kumar Birla and they have powers in terms of Clause 49 of the Listing Agreement (as modified from time to time). Besides, the Company Secretary & Compliance Officer is also authorised to take all required steps with regard to routine problems.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis have been appended to this Report in terms of the Listing Agreement as Annexure - C.

STATUTORY INFORMATION

1) Conservation of Energy/Technology Absorption/Foreign Exchange Earnings and Outgo:

Information pertaining to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is not applicable to the company.

Earnings and Outgo in foreign currency during the year:

During the year foreign exchange outgo was Rs 462,925/- (previous year Rs 122,025/-) by way of traveling expenses for the purpose of business development. Foreign exchange earnings for the said period was Nil.

2) Deposit

The company is not holding any Public Deposit and has complied with all relevant statutory formalities.

3) Personnel

There was no employee in receipt of remuneration coming under purview of Section 217(2A) of the Act read with the Companies (Particulars of Employees) Rules, 1975, as amended.

None of the employees of the company is holding two percent or more of the Equity Shares of the company in terms of Section 217(2A)(a)(iii) of the Act.

4) Cash Flow Statement for the year ended 31st March, 2009 pursuant to Clause 32 (as amended) of the Listing Agreements with Stock Exchanges is annexed herewith.

APPRECIATION

We acknowledge our appreciation to shareholders, Bankers, Regulators, National Stock Exchange, Multi - Commodity Exchange, OTC Exchange of India and Clients for their continued support. The Board also takes this opportunity to express its whole-hearted appreciation of the efforts put in by the employees at all levels.

On Behalf of the Board

Kolkata Ratan Lal Gaggar

June 26, 2009 Chairman