S.M. Gold Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting their Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2021.

1. FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

The Board’s Report is prepared based on the standalone financial statements of the company.

(Rs. in Lakhs)

Particulars 2020-21 2019-20
Total Income for the Year 3,384.39 2,918.31
Operating & Administrative Expenses 3,315.48 2,899.24
Net Profit/(Loss) before Tax 68.91 19.07
Less: Provision for Tax 8.54 5.00
Deferred Tax - -
Profit/(Loss) after Tax 60.38 14.07
EPS 0.60 0.20

2. OPERATION & REVIEW

During the year under review, total income of the company is Rs. 3,384.39 lakhs and the Net Profit after tax is Rs. 60.38 lakhs.

3. DIVIDEND

The Board of Directors of your Company has not recommended any dividend for the Financial Year ended 31st March 2021.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed dividend, the provisions of Section 125 of the Companies Act, 2013 do not apply.

5. TRANSFER TO RESERVES

During the year under review, the Company has not transferred any amount to General Reserves Account.

6. CHANGE IN THE NATURE OF THE BUSINESS

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

7. DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Pulkitkumar Sureshbhai Shah is liable to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer himself for re-appointment.

During the year under review, the Company has appointed Mr. Girishchandra Madhavlal Patel (DIN: 09024026) and Mr. Ganpatbhai Babubhai Nayi (DIN: 09024041) as Additional Directors (Non-Executive Independent) on the Board of the Company w.e.f. 11th January 2021. The Board hereby recommends their appointment as Independent Directors. The relevant details of them are given in the Explanatory Statement to the Notice convening the Meeting.

Mr. Nilesh Babulal Salla (DIN: 08474937) has tendered his resignation as an Independent Director of the Company w.e.f. 19th September 2020. The Board places on record its appreciation for the guidance and support provided by him during his tenure as a Director of the Company.

All the Independent Directors of the Company have given their declarations to the Company under Section 149(7) of the Act that they meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, they fulfil the conditions of independence as specified in the Act and the Listing Regulations and are independent of the management.

Mr. Pulkitkumar Sureshbhai Shah (DIN: 07878190), Managing Director, Mr. Priyank

Sureshkumar Shah (DIN: 07878194), Executive Director & Chief Financial Officer and Mrs. Komalben Tolani, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company as on the date of this Report.

8. NUMBER OF BOARD MEETINGS

The Board of Directors duly met Eleven (11) times on 2nd June 2020, 31st July 2020, 17th August 2020, 27th August 2020, 29th August 2020, 2nd September 2020, 19th September 2020, 12th October 2020, 11th November 2020, 15th December 2020, 11th January 2021 and in respect of said meetings, proper notices were given and proceedings were properly recorded and signed in the Minute Book maintained for the purpose.

The gap between two Board Meetings was within the maximum time gap prescribed under the Act and the Listing Regulations. The requisite quorum was present in all the meetings.

9. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with the provisions of Secretarial Standard 1 (relating to meetings of the Board of Directors) and Secretarial Standard 2 (relating to General Meetings) issued by the Institute of Company Secretaries of India.

10. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulation, 2015, the Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee. The evaluation covered functioning and composition of the Board and its committees, understanding of the roles and responsibilities, experience, competencies, participation at the Board and Committee meetings, corporate governance practices etc.

Evaluation of the Board and its compositions was carried out through a defined process covering the areas of the Boards functioning viz. composition of the Board and Committees, understanding of roles and responsibilities, experience and competencies, contribution at the meetings etc.

11. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to

Directors’ Responsibility Statement, it is hereby confirmed that:

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with explanation relating to material departures;

(b) 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 and of the profit/loss of the company for that period;

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

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

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

(f) 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.

12. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial Controls with reference to Financial

Statements. The Board has inter alia reviewed the adequacy and effectiveness of the Company’s internal financial controls relating to its financial statements.

During the year, such Controls were tested and no reportable material weakness was observed.

13. CHANGE IN CAPITAL SRUCTURE OF THE COMPANY

During the year under review the Company has allotted 33,45,839 fully paid up Equity shares as bonus. The paid-up equity share capital as on March 31, 2021 stood Rs.10,03,75,120.

14. MATERIAL CHANGES AND COMMITMENTS, IF ANY

The Company has been migrated from BSE SME platform to main Board on June 17, 2021.

There are no other material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of Directors’ Report.

15. ANNUAL RETURN

In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at www.smgoldltd.com.

16. AUDITORS AND THEIR REPORT

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. BHAGAT & CO, Chartered Accountants (FRN: 127250W), the Statutory Auditors of the Company have been appointed in the annual General Meeting held on 30th September 2018 for a term of 5 years.

The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company. The Auditors’ Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

COST AUDITORS

The Company has not appointed the Cost Auditor as pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit is not applicable to the Company.

SECRETARIAL AUDITORS

In terms of Section 204 of the Companies Act, 2013, the Company has appointed Practicing Company Secretary as Secretarial Auditors of the Company. The report of the Secretarial Auditor is enclosed as "Annexure A".

The Board of Directors has duly reviewed the Secretarial Audit Report which does not contain any qualification, reservation or adverse remark.

17. INTERNAL AUDIT & CONTROLS

The Company has appointed external firm as its Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Findings of Internal Auditors are discussed with the process owners and suitable corrective actions were taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

18. DEPOSITS

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable.

19. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

20. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of rule (9) of the Companies (Accounts) Rules, 2014, the Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year, the Company has not given any loan, guarantee or provided security in connection with the loan to any other body corporate or person or made any investments. Hence, no particulars of the loans, guarantees or investments falling under the provisions of Section 186 of the Companies Act, 2013 are provided by the Board.

22. PARTICULARS REGARDING EMPLOYEES

During the year under review, none of the employees were in receipt of remuneration exceeding the limit prescribed under Section 197 of the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

23. RELATED PARTY TRANSACTIONS

During the year under review, contracts or arrangements entered into with the related party, as defined under section 188 of the Companies Act, 2013 were in ordinary course of business and on arms’ length basis. Details of the transactions pursuant to compliance of section 134(3)(h) of the Companies Act, 2013 and rule 8(2) of the Companies (Accounts) Rule, 2014 are annexed herewith as per "Annexure B".

However, there are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

24. SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There is no significant and material order passed by regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

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

Disclosures pertaining to conservation of energy, technology absorption and foreign exchange earnings & outgo, were not applicable to the Company during the year under review.

26. DETAILS OF COMMITTEES OF THE BOARD

Audit Committee

The Company has formed the Audit Committee as per the applicable provisions of Section 177 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended) and also to comply with Regulation 18 of SEBI LODR Regulations. The Committee was constituted with the primary objective to monitor and provide effective supervision of the

Managements’ Financial Reporting Process with the view to ensure accurate, timely and proper disclosures and transparency, integrity and quality of financial reporting.

All the recommendations / submissions made by the Committee during the year were accepted by the Board.

The composition of the Committee and details of meetings attended by the members are given below:

Name Designation Category

No. of Meetings held during the Period

Held Attended
Mr. Girishchandra Madhavlal Patel* Chairman Non-Executive Independent Director 1 1
Mr. Nilesh Babulal Salla** Chairman Non-Executive Independent Director 3 3
Mr. Ganpatbhai Babubhai Nayi* Member Non-Executive Independent Director 1 1
Mr. Priyank Sureshkumar Shah Member Executive Director 5 5
Mrs. Nitaben Sureshkumar Shah Member Non-Executive Director 5 5

*Appointed as an Independent Director of the Company w.e.f. 11 January 2021.

**Resigned as an Independent Director of the Company w.e.f. 19th September 2020.

Nomination and Remuneration Committee

In compliance with the provisions of Section 178 of the Act and Regulation 19 of the Listing Regulations, the Board has constituted Nomination and Remuneration Committee (NRC). NRC of the Board has been constituted mainly to determine and recommend to the Board, the Company’s policies on remuneration packages for Executive and Non-Executive Directors and policies on Nomination for Appointment of Directors, Key Managerial Personnel and Senior Management Personnel.

All the recommendations / submissions made by the Committee during the year were accepted by the Board.

The composition of the Committee and details of meetings attended by the members are given below:

Name Designation Category

No. of Meetings held during the Period

Held Attended
Mr. Girishchandra Madhavlal Patel* Chairman Non-Executive Independent Director N.A. N.A.
Mr. Nilesh Babulal Salla** Chairman Non-Executive Independent Director Nil Nil
Mr. Ganpatbhai Babubhai Nayi* Member Non-Executive Independent Director N.A. N.A.
Mrs. Nitaben Sureshkumar Shah Member Non-Executive Director 1 1

*Appointed as an Independent Director of the Company w.e.f. 11th January 2021.

**Resigned as an Independent Director of the Company w.e.f. 19th September 2020.

The Policy of Nomination and Remuneration Committee has been placed on the website of the Company at www.smgoldltd.com and the salient features of the same are annexed herewith as

"Annexure C".

Stakeholders’ Relationship Committee

The Company has formed the Stakeholders’ Relationship Committee as per Section 178 and other applicable provisions of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended) and also to comply with Regulation 20 of SEBI Listing Regulations.

The composition of the Committee and details of meetings attended by the members are given below:

Name Designation Category

No. of Meetings held during the Period

Held Attended
Mrs. Nitaben Sureshkumar Shah Chairman Non-Executive Director 1 1
Mr. Girishchandra Madhavlal Patel* Member Non-Executive Independent Director 1 1
Mr. Ganpatbhai Babubhai Nayi* Member Non-Executive Independent Director 1 1
Mr. Nilesh Babulal Salla** Member Non-Executive Independent Director Nil Nil
Mr. Priyank Sureshkumar Shah Member Executive Director 1 1

*Appointed as an Independent Director of the Company w.e.f. 11th January 2021.

**Resigned as an Independent Director of the Company w.e.f. 19th September 2020.

27. MEETING OF INDEPENDENT DIRECTORS

During the year under review, a separate meeting of Independent Directors was held on 8th March 2021, inter-alia, to discuss:

1. Evaluation of performance of Non-Independent Directors and the Board of Directors as a whole

2. Evaluation of performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors and

3. Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary to effectively and reasonably perform its duties.

All the Independent Directors were present at the meeting.

28. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has formulated and adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

The Company always endeavors to create and provide an environment to its employees and external individuals engaged with the Company that is free from discrimination and harassment including sexual harassment. The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment.

During the year under review, there were no incidences of sexual harassment reported and received.

29. VIGIL MECHANISM

The Company has established the vigil mechanism through Whistle Blower Policy for all the stakeholders of the Company, which also provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases as per the Policy. The details of the Whistle Blower Policy is available on the website of the Company i.e. www.smgoldltd.com.

30. RISK MANAGEMENT

The Company recognizes that risk is an integral part of business and is committed to managing the risks in proactive and efficient manner. The Company periodically assesses risk in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans.

The Company, through its risk management process, strives to contain impact and likelihood of the risk within the risk appetite as agreed from time to time with the Board of Directors.

Management Discussion and Analysis Report of the Annual Report identifies key risks, which can affect the performance of the Company.

The Company has adopted a Risk Management Policy for a systematic approach to control risks. The Risk Management Policy of the Company developed in line with the business strategy lays down procedures for risk identification, evaluation, monitoring, review and reporting.

31. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as Required under Regulation 34 and Schedule V of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report, and provides the Company’s current working and future outlook. The Report is annexed herewith as "Annexure D".

32. CORPORATE GOVERNANCE

As per Regulation 15(2) of the Listing Regulations, the compliance with the corporate governance provisions as specified in Regulations 17, 17A, 18, 19, 20, 21, 22, 23, 24, 24A, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V shall not apply, in respect of -

A listed entity having paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty five crore, as on the last day of the previous financial year.

The paid up equity share capital of the Company is Rs. 10,03,75,120/- (Rupees Ten Crore Three Lakh Seventy Five Thousand One Hundred Twenty Only) but the Net-worth of the Company is less than Rs. 25,00,00,000/- (Rupees Twenty Five Crore Only) as on the last day of the previous financial year ended on March 31, 2021. Accordingly, the provisions relating to Corporate Governance is not applicable to the Company.

33. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation for the continuous support received from the Members, customers, suppliers, bankers, various statutory bodies of the Government of India and the Company’s employees at all levels and look forward to their continued support in future.

For and on behalf of Board
Date: 07/09/2021 Sd/- Sd/-
Place: Ahmedabad Pulkit S. Shah Priyank S. Shah
Managing Director Executive Director
(DIN: 07878190) (DIN: 07878194)