aasheesh securities ltd Directors report

TO THE MEMBERS,

Your Directors take pleasure in presenting the twenty ninth (29th) Annual Report on the business performance and operations of the Company, along with the audited standalone and consolidated financial statements for the year ended 31st March, 2023.

Financial Summary

The financial performance of your Company for the financial year ended 31st March, 2023 is summarized below:

(Rs. in Lakhs)

		Standalone		Consolidated
PARTICULARS
	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Revenue from operations	67915.41	66994.06	121667.59	111693.61
Other Income	1365.19	1415.55	408.13	388.47
Total Income	69280.60	68409.61	122075.72	112082.08
Total Expenses	57294.10	50192.66	105880.20	89942.54
Profit before share of profit/loss from joint ventures, exceptional items and tax	11986.50	18216.95	16195.52	22139.54
Share of profit/(loss) from associates or joint ventures	0	0	0.14	0.96
Profit before exceptional items and tax	11986.50	18216.95	16195.66	22138.58
Add/less: Exceptional items
Tax expense	2649.27	3755.92	4156.04	4681.73
Profit after tax for the year	9337.23	14461.03	12039.62	17456.85

Notes:

(1) The above figures are extracted from the audited standalone and consolidated financial statements of the Company.

(2) The amount shown in bracket () in the above table are negative in value

The financial results and revenue from operations, including major developments which have been discussed in detail in the Management Discussion and Analysis Report which forms part of this Annual Report.

The standalone and the consolidated financial statements have been prepared in accordance with the Indian Accounting Standards (IND AS) applicable on the Company.

Financial Performance

Consolidated

On a consolidated basis, your

Company has recorded a performance with turnover of Rs. 122075.72 lakhs as against Rs. 112082.08 lakhs in previous year and profit after tax of Rs. 12039.62 lakhs as against Rs. 17456.85 lakhs in previous year. The revenue earned by the Company on consolidated basis largely comprises of income from equity, commodity and currency, brokerage & trading, clearing services, income from depository business, financing, capital market operations etc. The slight shift in the earnings is due to the global economic headwinds and Companys focus shift towards technology investment beside other expenditure and investments.

Standalone

On a standalone basis, your Company recorded a performance with turnover of Rs. 69,280.60 lakhs as against Rs. 68,409.61 Lakhs in previous year and profit after tax stood at Rs.9337.23 Lakhs as against Rs. 14,461.03 Lakhs in previous year. The shift is mainly due to exhibition of varying degrees of volatility in stock market during the year. Refer to Management Discussion and Analysis report for more details.

State of Companys Affairs

Your Company along with its subsidiaries and joint venture company, is involved in diversified portfolio of offering of services to its customers such as brokerage, clearing services, depository participant services, investment, wealth management, PMS, real estate broking, mortgage and loan advisory, NRI & FPI services etc. categorized under Broking, Distribution and Trading segment apart from Financing business and Insurance Broking business. The Authorized Share Capital of the Company is Rs. 95,51,00,000 and the paid up share capital of the

Company is Rs. Rs. 20,94,00,000 comprising of 10,47,00,000 equity shares of Rs. 2 each. The Company intends to strengthen and extend its position as leading diversified financial services provider by intensifying the cross-selling efforts across the client base, expanding geographic presence, expanding service and product portfolio, strategic alliances and acquisitions and by expanding financing and discount broking business.

During the year, your Company has recorded good performance and intends to keep up the growth prospects in coming future.

Change in the nature of business

During the year, there has been no change in the nature of business of the Company.

Listing information

The equity shares of the Company are listed on nationwide trading platforms i.e. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The below mentioned table depicts the listing information of the Company as on 31st March, 2023:

The below mentioned table depicts the listing information of the Company as on 31st March, 2023:

Sl. No.	ISIN/Scrip No.	Stock Exchange	Type of Security	No. of Securities Listed	Status
1.	INE103C01036/Sc rip Code: SMCGLOBAL	National Stock Exchange	Equity Shares	10,47,00,000*	Active listing
2.	INE103C01036/Sc rip Code No. 543263	Bombay Stock Exchange	Equity Shares	10,47,00,000*	Active listing

*The face value of each equity shares is Rs. 2.

Material changes and commitments affecting the financial position between the end of financial year and date of the report

There have been no material changes and commitments that have occurred after the closure of the financial year until the date of the report, which may affect the financial position of the Company.

Return of surplus funds to shareholders

During the year, the Company has distributed an interim dividend of 60% on the face value of the equity shares of the Company i.e. Rs. 1.20 per equity share. The dividend was paid to those shareholders whose name was registered in the Register of Members as on being the record date. The Company has spent approximately Rs.12,56,40,000/- (Rupees Twelve Crore Fifty Six Lakhs and Forty Thousand Only) on account of interim dividend distribution pertaining to FY 2022-23 during the financial year. Considering the financial statements including capital buffers and liquidity levels of the Company for the financial year, the Board considered that the performance of the Company was good and accordingly, recommended declaration of final dividend of 60% on the face value of equity shares i.e. Rs. 1.20 per equity share, which if approved, shall result in payment of total dividend @ 120% i.e. Rs. 2.4 on the face value of equity shares of Rs. 2 each for the FY 2022-23. The record date for the purpose of distribution of final dividend is 16th June, 2023 and Book closure period is fixed from 17th June, 2023 to 21st June, 2023.

Particulars	Per Share (in )	FY 2022-23 (	Payout in crores)	Per Share (in )	FY 2021-22 (	Payout in crores)
Interim Dividend	1.20		12.56	1.20		13.58
Final Dividend	1.20*		12.56*	1.20		13.40
Total Dividend	2.40		25.12	2.40		26.98
Payout ratio		120%			120%

*Recommended by the Board of Directors in its meeting held on 18th May, 2023. The payment is subject to approval by the shareholders in the Annual General Meeting proposed to be held on 30th June, 2023.

Pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the shareholders effective April 1, 2020 and the Company is required to deduct tax at source from dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

Your Company complies with the Dividend Distribution Policy while recommending, declaring and payment of dividend. Further, in compliance with the requirements of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the policy is published on the website of the Company and is available at http://smcindiaonline.com/wp-content/uploads/2021/09/DIVIDEND-DISTRIBUTION-POLICY.pdf

In addition to this the Company, during the financial year, the Company also came up with Buyback of its fully paid equity shares of the Company on basis of the profits for the FY 2021-22. The Board of Directors of the Company had approved buyback of fully paid up equity shares of the Company from open market through stock exchange mechanism in accordance with the provisions of SEBI (Buy Back of Securities) Regulations, 2018 for an amount not exceeding 75,00,00,000 (Rupees Seventy Five Crores Only) excluding transaction costs and applicable taxes on Buyback and at a price not exceeding 115/- per equity share, payable in cash. The Company commenced buyback on 20th May, 2022 and bought back 84,34,450 equity shares till 16th August, 2022. The total amount utilized in the Buyback was Rs. 74, 72, 84,912.60 (excluding transaction costs) which represents 99.64% of the Maximum Buyback Size of Rs.

75,00,00,000 ((excluding transaction costs). The price at which the equity shares were bought back was dependent on the price quoted on BSE and NSE. The highest price on which the equity shares were bought back was Rs. 94.04/- per equity share while the lowest price was Rs. 85.20/- per equity share. Hence, during the year, the Company extinguished 84,34,450 fully paid equity shares of the Company.

Transfer to Reserves

The Company has not transferred any amount to any reserve for the financial year ended 31st March, 2023.

Subsidiaries, associates and joint ventures

As on 31st March, 2023, the Company has ten (10) subsidiaries which include eight (8) wholly owned subsidiaries and two (2) partially owned subsidiaries. The Company also has a joint venture company which is partially owned by its subsidiary i.e. SMC

Investments and Advisors Limited with 50% control over the said joint venture company. The Company does not have any associate company as defined under section 2(6) of the Companies Act, 2013. In this regard, Moneywise Financial Services Private Limited and SMC Insurance Brokers Private Limited are recognised as material subsidiary by the Board of Directors in accordance with the provisions of Listing Regulations and in accordance with Companys policy for determining material subsidiaries.

The highlights of the performance of the Companys subsidiaries during the FY 2022-23 are as under:

(Rs. in Lakhs)

Company Name	Total Income	Profit before tax	Profit after tax
Moneywise Financial Services Private Limited	13713.28	4733.53	3614.40
SMC Insurance Brokers Private Limited	34821.94	1084.06	775.83
Moneywise Finvest Limited	2049.53	162.30	116.60
SMC Global IFSC Private Limited	370.50	266.77	266.77
SMC Capitals Limited	1604.29	98.16	73.49
SMC Real Estate Advisors Pvt Limited	2077.87	(1102.97)	(1103.46)
SMC Investments and Advisors Limited*	381.51	(471.12)	(471.12)
SMC Comtrade Limited	112.85	33.86	25.31
SMC Comex International DMCC	902.30	198.36	198.36
SMC Global USA Inc.	0	(75.81)	(75.81)

The amount shown in () in the above table are negative in value. *excludes profit of SMC & IM capitals investment manager LLP.

During the year, no new company was acquired as a subsidiary or associate or joint venture by the Company. Further, there was no change in the holding of the Company, in its subsidiary companies or Joint Venture Company during the period of review.

The Board of Directors of the Company reviewed the affairs of the subsidiaries. A statement containing the salient features of the financial statements of the subsidiary and joint venture in accordance with the provision of section 129(3) of the Companies Act, 2013 is provided in Form AOC-1 as annexed to the Annual Report as Annexure 1.

Further, pursuant to the provisions of section 136 of the Companies Act, 2013, the financial statements and relevant information relating to subsidiary companies are also available on the website of the Company at https://smcindiaonline.com/investors/.

Material subsidiaries

Pursuant to Regulation 16(1) (c) of the Listing Regulations and in accordance with Companys policy for determining material subsidiaries, Moneywise Financial Services Private Limited and SMC Insurance Brokers Private Limited were recognized as material subsidiary by the Board of Directors of Company during the year. The Company ensures compliances relating to subsidiary companies as is mentioned in Regulation 24 of the Listing Regulations and other compliances mentioned in Companies Act, 2013.

The policy can be accessed at the website of the Company https://smcindiaonline.com/wp-content/uploads/2021/06/POLICY-FOR-DETERMINING-MATERIAL-SUBSIDIARY-COMPANIES.pdf

Directors Responsibility Statement

Pursuant to the section 134(3) (c) & 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state the following:

1. That in preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

2. That such accounting policies have been selected and applied consistently and judgements and estimates have been made 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, 2023 and of the profit of the Company for the year ended on that date.

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the annual financial statements have been prepared on a going concern basis.

5. Those proper internal financial controls were in place and that the financial control was adequate and was operating effectively.

6. Those proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Performance evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board of Directors on recommendation from the Nomination and Remuneration Committee has adopted a formal mechanism for evaluation of annual performance of the individual Directors, Board as a whole and Board Committees. The same was carried out by the Board of Directors for the financial year 2022-23 in accordance with the Guidance Note on Board Evaluation issued by Securities and Exchange Board of India on 5th January, 2017.

The independent directors of the Company, also, at their separate meeting held during the year, reviewed the performance of non-independent directors, Chairperson and Board as a whole including evaluation of timeliness and flow of information in the Company and provided their suggestions if any.

In this regard, the Board of Directors considers that the Independent Directors on the Board of the Company has the required level of expertise, experience and integrity as is required for the position.

Familiarization program for independent director

In accordance with the provisions of

Regulation 25(7) and 46(2) of the Listing Regulations, the Company familiarizes its independent directors at regular intervals, with their roles and responsibilities and the business strategies of the Company. Apart from the aforementioned, the Company also updates the independent directors periodically with the recent changes in statutory provisions applicable on the Company and/or any change /addition in the business operations of the Company. The details of training and familiarization program conducted during the year are provided in the Corporate Governance Report and is also available on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2023/03/Familiarizati on-program-2022-23.pdf

Deposits

During the FY 2022-23, the Company did not accept any deposit within the meaning of section 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Vigil Mechanism Policy

The Company has in place a vigil mechanism policy to provide a formal mechanism to the Directors, employees and stakeholders of the Company to report their concerns including concerns about unethical behaviour, actual or suspected fraud, and violation of Companys code of conduct and/or disclosure of unpublished price sensitive information. In this regard, the Policy provides an adequate safeguard to the whistle blower against any victimization and also provides direct access to the Chairman of Audit Committee in exceptional circumstances. An update/report on the functioning of the mechanism including the complaints received and actions taken is presented to the Audit Committee on yearly basis.

The Audit Committee receives, investigates and redresses the complaints received under the vigil mechanism. The Policy on vigil mechanism is available on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2021/06/VIGIL-MECHANISM-POLICY.pdf .

Prevention of Sexual Harassment of Women at Workplace

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a ‘Policy for prevention of sexual harassment to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide a procedure for redressal of complaints pertaining to such harassment. In order to sensitize the employees about the policy, the Company has placed the policy on the online employee portal of the Company for ease of access and unified dissemination of the policy to each and every employee of the Company.

The Company also has an Internal Complaints Committee (ICC) constituted in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with its allied Rules. The ICC comprises of majority women members. The committee is responsible for conducting inquiries pertaining to complaints under the Act.

During the year, ICC has received ‘nil complaints of sexual harassment from the employees of the Company. The Company ensures to sensitize its employees on regular basis about prevention and prohibition of sexual harassment. Also, online training programs were run for the employees of the Company to enhance awareness and knowledge about sexual harassment within the organization.

Particulars of Contracts or Arrangements with related parties

During the year, the Company has not entered into any materially significant transaction which may have potential conflict of interest in the Company. All the related party transactions entered during the year were in ordinary course of business and at arms length basis. The Company did not execute any material related party transactions as is prescribed under section 188(1) of the Companies Act, 2013 read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 and as per Listing Regulations. Further, there were no material related party transactions which were entered in ordinary course of business or arms length basis. Accordingly, the reporting in form AOC-2 as per section 134 of the Companies Act, 2013 is not applicable and hence does not form part of this report. However, members can refer to the notes to the financial statements for the disclosure related to related party transactions.

During the year, the Company has entered into related party transactions which were in ordinary course and at arms lenght basis and were executed by virtue of an omnibus approval granted by the Audit Committee. In this regard, transactions for which omnibus approval was not obtained, specific approval of Audit Committee was obtained as and when required. The Audit Committee on quarterly basis reviewed the related party transactions entered into on the basis of the omnibus approval granted.

The suitable disclosures as required by the Accounting Standards (IND AS 24) and the Listing Regulations have been made in the notes to the Financial Statements forming part of this annual report.

For the purpose of determination of related party and related party transactions and to ensure compliance of approval and review mechanism relating to such transactions, the Company has formulated a policy for related party transactions. The policy on related party transactions ensures proper identification, approval, review and reporting of related party transactions. The same is published on the website of the Company and can be accessed at https://smcindiaonline.com/wp-content/uploads/2021/06/POLICY-ON-RELATED-PARTY-TRANSACTIONS-01.pdf

Significant and Material Orders Passed by Regulators or Courts or Tribunals

No significant or material orders were passed by the regulators or courts or tribunals which could impact the going concern status of the Company and its future operations.

Internal Control and Audit

Your Board of Directors had appointed M/s PNG & Co., Practicing Chartered Accountants as the Internal Auditors of the Company for FY 2022-23 to review, monitor and evaluate the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, procedures and policies of the Company. The scope of internal audit and authority are internally determined by the internal auditor and the management.

The Audit Committee, comprising of independent directors, regularly reviews the significant audit findings, adequacy of internal controls, compliance with accounting standards as well as evaluates the reasons for any changes in accounting policies and practices, if any.

Internal Financial Control and their adequacy

The Companys has in place adequate internal financial controls with reference to financial statements which commensurate with the size, scale and complexity of its operations. The internal financial control is supplemented by extensive internal audits, regular reviews by the Management and standard policies and guidelines to ensure reliability of financial statements and its reporting and other data. The Audit Committee of the Board reviews internal audit reports given along with management responses, at regular intervals. Detailed discussion on internal financial control can be referred in the Management Discussion and Analysis Report which forms part of this Annual Report.

Risk Management

Companys risk management process is designed to identify and mitigate risks that have the potential ability to materially impact our business objectives. Your Company being in stock broking business is exposed to various risks, which can be classified as, market risk, credit risk and operational risk. The Board of Directors of your Company evaluates the risk management systems periodically and takes into account the recommendation(s) of the Risk Management Committee and the Audit Committee.

The Company adopts mitigation measures to reduce the adverse effects of such risks on real time basis. In this regard, the Company has a risk management policy which acts as a guiding document for the purpose of identifying and mitigating risk. Further, the Company has a risk management committee which along with the Audit Committee monitors and reviews the risk existent in the Company.

Directors and Key Managerial Personnel who were appointed or have resigned during the year

During the period, Mr. Roop Chand Jindal, Non-Executive Independent Director (DIN: 01450916) of the Company tendered his resignation from the position of Independent Director of the Company due to his advanced age and related health issues and his resignation was effective from 23rd June, 2022. Apart from Mr. Roop Chand Jindal, no director has resigned or was removed from the Company. The Board places on record its appreciation for the invaluable contribution and guidance of Mr. Roop Chand Jindal during his tenure as an Independent director of the Company.

During the year, the Company appointed Mr. Narendra Kumar (DIN: 02307690) as the Non-Executive Independent Director of the Company and his appointment was effective from the date of approval of the exchanges where the Company is a trading/clearing member i.e. 16th September, 2022. The appointment of Mr. Narendra Kumar as a Non-Executive Independent Director of the Company was also approved by the shareholders by way of postal ballot dated 7th December, 2022.

Further, on the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the Company, Mr. Naveen ND Gupta, Non-Executive Independent Director (DIN: 00271748) whose first term as Independent Director of the Company was expiring on 30th January, 2023 was reappointed by the shareholders of the Company for another term of five years i.e. from 31st January, 2023 to 30th

January, 2028 at the 28th Annual General Meeting of the Company held on 25th June, 2022.

Further, based on the recommendation of the Nomination and Remuneration Committee and the Board of Directors, Mr. Mahesh C. Gupta, Vice Chairman and Managing Director (DIN: 00003082) whose term of appointment as a Managing Director was expiring on 31st August, 2023 was reappointed by the shareholders of the Company another term of five years i.e. from 1st September, 2023 to 31st August, 2027 on the basis of the consent received from Mr. Mahesh C. Gupta at the Annual General Meeting of the Company held on 25th June, 2022.

Mr. Ajay Garg, Director and CEO of the Company (DIN:00003166), also retired by rotation at the 28th Annual General Meeting of the Company held on 25th June, 2022 and being eligible was reappointed. Further, the Company in the upcoming Annual General Meeting scheduled to be held on 30th June, 2023 recommends reappointment of Mr. Anurag Bansal, Whole Time Director of the Company who retires by rotation and being eligible offers himself for reappointment. The Board of Directors have also recommended to the shareholders for reappointment of Mr. Anurag Bansal (DIN: 00003294) as the Whole Time Director whose tenure is expiring on 27th March, 2024 by way special resolution for another term of five years i.e. from 28th March, 2024 to 27th March, 2029.

In this regard, the Board of the Company is diverse with skills such as financial skills, accounting skills, marketing skills, business development and strategic decision making, technology skills etc. The details of skills and expertise of the directors is provided in detail in the Corporate Governance Report of the Company annexed to this Annual Report. The Company also has a policy on Board diversity which sets out the approach of the Company to diversity.

Committees of Board

As on March 31, 2023, following statutory Board committees were functional in the Company:

1. Audit Committee

2. Nomination and Remuneration Committee 3. Corporate Social Responsibility Committee 4. Stakeholders Relationship Committee 5. Risk management committee

The details of composition, terms of reference and number of meetings conducted during the year is provided in the Corporate Governance Report annexed to this Annual Report.

During the year, all recommendations made by the committees were approved by the Board.

Code of Conduct for Directors and Senior Management Personnel

The code of conduct for directors and senior management personnel of the Company is in conformity with the requirements of the Listing Regulations and is placed on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2018/04/Code-of-Conduct.pdf.

All the directors of the Company and Senior Management Personnel have affirmed compliance with Companys Code of Conduct for Directors and Senior Management Personnel during the year and a declaration to that effect, signed by the CEO of the Company is enclosed to this Annual Report.

Management Discussion and Analysis Report

Pursuant to the provisions of Regulation 34 of Listing Regulations, the Management discussion and analysis report is annexed to the annual report.

Board Meetings and Annual General Meeting

During the year, four Board Meetings were held on 07thMay 2022, 28thJuly 2022, 06th November, 2022 and 31st January, 2023 in accordance with the provisions of Companies Act, 2013. A detailed discussion on Board Meetings including the attendance of the directors can be referred in the Corporate Governance Report annexed to this Annual Report.

The 28th Annual General Meeting (AGM) of the Company was held on Saturday, 25th June, 2022. Further, the 29th Annual General Meeting of the Company for the FY 2022-23 is scheduled to be held on Friday, 30th June, 2023.The details regarding the Annual General Meeting are made available in the Notice of the Meeting as set out in this Annual Report.

Apart from the Annual General Meeting, no Extra-Ordinary General Meetings were conducted/held during the year.

Postal Ballot

During the year, the Company conducted postal ballot through e-voting from 8th November, 2022 to 7th December, 2022 for the purpose of obtaining approval of the shareholders of the Company for appointment of Mr. Narendra Kumar having DIN: 02307690 as the Non-Executive Independent Director of the Company for a term of five years w.e.f 16th September, 2022 and shall not be liable to retire by rotation. In this regard, the special resolution for appointment of Mr.

Narendra Kumar as the Independent Director of the Company was passed by the Members with requisite majority. The result of the remote e-voting and the report of scrutinizer was hosted on the website of the Company and was duly intimated to the stock exchanges where the securities of the Company are listed.

Meetings of Independent Director

The Independent Directors of your Company meet at least once in a financial year, without the presence of other executive or non-executive directors. During the year, a separate meeting of independent directors was convened on 25th March, 2023 inter alia, to perform the following:

a) Review the performance of Non-Independent Directors and the Board as a whole,

b) Review the performance of the Executive Chairman of the Company (considering the views of the Executive and Non-Executive Directors),

c) Review the performance of the Company, assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The aforementioned exercise was duly carried out by the Independent Directors in accordance with the provisions of law.

Business Responsibility and Sustainability Report

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under “Business Responsibility and Sustainability Report” (‘BRSR). The BRSR seeks disclosure on the performance of the Company against nine principles of the “National Guidelines on Responsible Business Conduct (‘NGRBCs). As per the SEBI Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalization. Accordingly, the requirement of business responsibility and Sustainability reporting has become applicable on the Company for the first-time on the basis of its ranking among the top 1000 listed companies in India as per the market capitalization issued by NSE and BSE as on 31st March, 2022.

The business responsibility and sustainability report drafted in accordance with SEBI circular : SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated 10th May, 2021 read along with Regulation 34(2)(f) of Listing Regulations, describing the initiatives undertaken by the Company during FY 2022-23 from an environmental, social and governance perspective has been annexed to this annual report.

In this regard, the Board of Directors of the Company has approved constitution of a voluntary committee named as “business responsibility and sustainability committee for the purpose of implementation of business responsibility policies existent in the Company and for preparing and finalizing business responsibility and Sustainability report annually.

Nomination and Remuneration Policy

The Board of Directors of the Company has an appropriate mix of executive and non-executive directors. As on 31st March, 2023 the Board of Directors of the Company consists of four executive directors, two non-executive non-independent director and six non-executive independent directors. The details of Board of Directors and committees of the Board are provided in the Corporate Governance Report annexed to this Annual Report.

The Board has on the recommendation of Nomination and Remuneration Committee adopted the Nomination and Remuneration policy, which inter alia includes the criteria for determining the qualifications, positive attributes, independence of directors and other matters relating to appointment and payment of remuneration to directors and senior management personnel of the Company. The policy ensures that the remuneration is aligned to the overall performance of the Company. Further, the remuneration paid to the directors and senior management is in line with the remuneration policy of the Company.

The policy is available on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2021/06/NOMINATION -AND-REMUNERATION-POLICY.pdf

Corporate Social Responsibility

During the year, the Company has focused its CSR spending on two major activities mentioned in Schedule VII of the Companies Act, 2013 i.e. Health Care and Education.

The Company has incurred a CSR expenditure of Rs.181.7 lakhs and the entire SMC group have spent approximately Rs. 244.97 Lakhs towards CSR during the FY 2022-23. In this regard, the Company along with its material subsidiary Moneywise Financial Services Private Limited has formed a trust named SMC Global Foundation for the purpose of execution of CSR activities on behalf of SMC Global Securities Limited and the entire SMC group. The trust is a registered trust under the Indian Trusts Act, 1882 and has also acquired necessary registrations as prescribed under the CSR Rules.

The Company complies with the provisions of section 135 of the Companies Act, 2013 and has framed and implemented a CSR policy, which is available on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2021/06/CORPORATE-SOCIAL-RESPONSIBILITY-POLICY.pdf .

Further, the details of actual CSR spending of the Company on various activities can be referred from the Annual Report on Corporate Social Responsibility Activities as is annexed to this Report as Annexure 2.

The CSR committee of the Company comprises of three directors including one independent director. The detailed composition and terms of reference of the committee can be referred in the Corporate Governance Report annexed to this Annual Report.

Declaration by Independent Directors

The Company has received necessary declarations pursuant to section 149(7) of the Companies Act, 2013 from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and in terms of Regulation 16 and 25 of Listing Regulations.

Criteria of making payments to Non-Executive Directors

The criteria of payments to the Non-Executive Directors are published on the website of the Company at https://smcindiaonline.com/investors/

Policies

During the year, the Company had implemented all the policies required under the Companies Act, 2013 and the Listing Regulations. The Company ensures compliance of all the provisions mentioned in the policies read along with the applicable law.

Directors & Officers Insurance Policy

The Company has an appropriate Directors and Officers Liability Insurance Policy which provides indemnity in respect of liabilities incurred as a result of their office. The policy is renewed every year by the Company.

The coverage of the insurance extends to all directors of the Company including the Independent directors.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards, i.e. SS-1 for Meetings of Board of Directors and SS-2 for General Meetings.

Corporate Governance Report

In compliance with the provisions of Regulation 34 of Listing Regulations, a separate report on Corporate Governance, along with certificate from the Auditors on its compliance, forms part of this Annual Report.

Annual Return

Pursuant to the provisions of section 92(3) and section 134(3)(a) of the Companies Act, 2013, the annual return as on 31st March, 2023 in the prescribed format is available at companys website at https://smcindiaonline.com/wp-content/uploads/2021/09/Annual-return-2.pdf

Particulars of Loans, Guarantee and Investments

Particulars of loans, guarantee and investments outstanding during the financial year as per section 186 of the Companies Act, 2013 forms part of the

Notes to the financial statements provided in this Annual Report.

Auditor and Auditors Report

M/s R. Gopal & Associates, Chartered Accountants bearing firm registration no. 000846C have been appointed as the statutory auditors of the Company for a term of five years at the 25th Annual General Meeting of the Company and shall hold office until conclusion of 30th Annual General Meeting of the Company. The statutory audit of the financial statements of the Company for FY 2022-23 was conducted by the said auditors. The statutory auditors have confirmed that the auditors are competent, qualified and independent of the Board and management and there was no conflict of interest in accordance with the provisions of the Companies Act, 2013 and the Code of Ethics issued by the Institute of Chartered Accountants of India.

In this regard, the Company or its subsidiaries or its joint venture company has not availed any service from the statutory auditor of the Company during the FY 2022-23 which are prohibited non-audit services mentioned under clause (a) to (i) of section 144 of the Companies Act, 2013.

The Auditors Report for the FY 2022-23 is enclosed with the financial statements in this Annual Report. In this regard, the report does not contain any qualification, reservation or adverse remark. Further, there are no instances of any fraud reported by the Auditors of the Company in pursuance of section 143(12) of the Companies Act, 2013.

Qualification/Reservation/Adverse Remarks of the Statutory Auditor

The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor and its Audit Report

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s A. K. Roy & Associates, Practicing Company Secretaries Firm, to conduct the secretarial audit for FY 2022-23. The Secretarial Audit Report in form MR-3 for the financial year ended 31st March, 2023 is annexed herewith and marked as Annexure 3. The Report does not contain any qualification, reservation, or adverse remark.

Further, in accordance with the provisions of Regulation 24A of the Listing Regulations, the material subsidiaries of the Company i.e. Moneywise Financial Services Private Limited and SMC Insurance Brokers Private Limited have also conducted secretarial audit for FY 2022-23.

The Secretarial audit report of SMC Insurance Brokers Private Limited and Moneywise Financial Services Private Limited does not contain any qualification, reservation or adverse remark.

Annual Secretarial Compliance Report

Pursuant to the provisions of Regulation 24A of the Listing Regulations read with SEBI circular dated 8th February, 2019, the Board of Directors of the Company has appointed M/s A. K. Roy & Associates, Practicing Company Secretaries Firm to conduct annual secretarial audit for

FY 2022-23 on compliance of all applicable SEBI Regulations and circulars/guidelines issued there under.

Qualification/Reservation/Adverse Remarks of the Auditor

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Particulars regarding conservation of energy, technology absorption and foreign exchange earnings and outgo

During the year, ended 31st March, 2023, there were foreign currency earnings of Rs.6,19,982 and the foreign exchange outgo was of Rs.33,24,690

The Company being in a stock broking business does not have any industrial or energy intensive operations. Hence, the provisions mentioned under Rule 8(3) of Companies (Accounts of Companies) Rules, 2014 are not applicable on the Company.

In this regard, the Company is cognizant of the importance of adopting measures for optimum energy utilisation and conservation.

Particulars of employees and related disclosures

The SMC Group employs around 3,900+ employees as on 31st March, 2023 leveraging a strong partnership and ownership culture. In terms of the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory amendment or modification thereof), a statement showing the names and other particulars of top ten employees of the Company and such other employees drawing remuneration in excess of the limit said out in the said Rules are provided in this Report and marked as

Annexure 4.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any amendment or modification thereof) are also provided in this Report and marked as

Annexure 5.

Unclaimed dividend and shares

Pursuant to the provisions of section 124(5) of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, relevant amount which remained unpaid or unclaimed for a period of seven years should be transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund (IEPF). During the year, your Company has transferred the Unpaid and Unclaimed Final Dividend pertaining to FY 2014-15 of Rs.1,99,397 (One Lakh Ninety Nine Thousand Three Hundred And Ninety Seven Only) and Interim Dividend pertaining to FY 2015-16 of Rs. 1,31,882 (One Lakh Thirty One Thousand Eight Hundred And Eighty two Only) to IEPF in accordance with IEPF Rules.

Pursuant to Section 124 (6) of the Companies Act, 2013 and read with Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time) read with applicable provisions of the Companies Act, 2013 all the underlying shares in respect of which dividends are not claimed/paid for the last seven consecutive years or more are liable to get transferred to the IEPF DEMAT Account with a Depository Participant as identified by the IEPF Authority. Accordingly, as on 31st March, 2023, total, 3,20,897 (Three Lakhs Twenty Thousand and Eight Hundred Ninety Seven Only) equity shares of face value Rs. 2/- each are held in IEPF Demat account.

Credit Rating

During the year, CARE Ratings Limited has provided a short term rating of ICRA A1+ and long term rating of ICRA A (Stable) to the Company together with that of its subsidiary companies i.e. for the entire SMC Group as on 31st March, 2023.

Cyber Security

The Company has formulated and implemented cyber security policies. The Company has been very adaptive and resilient to the changes in the environment and continues to ensure optimum level of cyber security in the Company.

Further, during the year, the Company has created awareness about cyber security among senior officials, including Directors of Company by organizing a seminar/ webinar.

Human resource engagement and development

Employee engagement is becoming one of the most important indicators in gauging work satisfaction. Your Company believes in investing in employee engagement by increasing their productivity, work quality and retaining the talent in the organization. Every employee of the Company is imparted with an orientation programme called ‘Abhinandhan so as to familiarize the employee with the culture and processes of the organization.

Further, the Senior Management Personnel of the Company continuously interact with the concerned employees of each department, for keeping them motivated and conveying the expectation of the Company. HR regularly talks about Career Progression, Culture and Values followed within the Organization for establishing a mutual connect. The Company periodically undertakes sessions/webinars, both physically and virtually on subjects such as mental health, emotional and psychic wellbeing etc for the overall wellbeing of employees.

Cost records and Cost Audit

The maintenance of cost records and conducting of cost audit in accordance with the provisions of section 148(1) of the Companies Act, 2013 are not applicable as the Company is not involved in the business of production or manufacturing of goods or providing of services as is mentioned under Rule 3 of Companies (Cost Records and Audit) Rules, 2014.

Fraud Reporting

During the year, neither the statutory auditors nor the secretarial auditor have reported to the Audit Committee under section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees which has to be reported in the Annual Report.

Acknowledgements

Your directors value the professionalism and commitment of all employees of the Company and place on record their appreciation and contribution to the excellence of the Company. Your Board also expresses their gratitude to the stakeholders of the Company for their continuous support and cooperation.

Cautionary Statement

The statements in the Boards Report and Management Discussion and Analysis, describing the Companys objectives, outlook, opportunities and expectations which may constitute “Forward Looking Statements”. Accordingly, the actual results may differ from those expressed or implied expectations or projections, among others. Several factors make a significant difference to the Companys operations including the government regulations, taxation and economic scenario affecting demand and supply, natural calamity and other such factors over which the Company does not have any direct control.

For and on behalf of the Board
SD/-	SD/-
Subhash Chand Aggarwal	Mahesh C. Gupta
Chairman and Managing Director	Vice Chairman and Managing Director

Place: New Delhi Date: 18th May, 2023