Smartlink Holdings Ltd Directors Report.

TO

THE MEMBERS,

The Directors of your Company take pleasure in presenting their 27th annual report along with the audited financial statements for the financial year ended 31st March, 2020. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. FINANCIAL RESULTS

(Rs in Lakhs)

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Revenue 1,515.81 2,071.58 7,515.88 10,645.03
Other income 3.90 3.49 54.35 160.66
(Loss) / Profit before depreciation, exceptional items and tax (796.85) (2,394.73) (750.38) 284.58
Less: Depreciation for the year 142.85 122.79 301.70 265.13
Less: Exceptional Item 424.78 - 424.78 -
(Loss) / Profit before tax (1,364.48) (2,517.52) (1,476.86) 19.45
Less: Provision for tax
a) Current tax 173.38 321.10 173.38 321.10
b) Deferred tax (141.43) (8.23) (141.42) (9.61)
c) Adjustment of Income Tax of earlier year (82.26) 2.84 (82.26) 2.88
Add/Less: Other Comprehensive Income 29.31 (2.53) 45.05 (0.37)
Loss After Tax (1,343.48) (2,830.70) (1,471.61) (294.55)
Earnings Per Share () (8.41) (15.36) (8.95) (1.50)

2. REVIEW OF OPERATIONS

2.1 Review of Standalone Financial

In the financial year 2019-20, the Company achieved an Income from operations of Rs 1,515.81 lakhs as compared to Rs 2,071.58 lakhs in the previous year. The company has made a provision towards diminution in the value of investment in its wholly owned subsidiaries to the extent of Rs 1,235.69 lakhs in the current year as compared to Rs 3,695.16 lakhs in the previous year. During the year the Company has approved a proposal for re-development of the Companys own building at Mumbai, which required demolition of the existing building, and hence its written down value of Rs 424.78 lakhs has been written off in the books and disclosed as exceptional item for the year ended 31st March, 2020. Loss After Tax was Rs 1,343.48 lakhs for the year ending 31st March, 2020 as compared to Rs 2,830.70 lakhs in the previous year.

2.2 Review of Consolidated Financial

In the financial year 2019-20, the Company achieved an Income from operations of Rs 7,515.88 lakhs as compared to Rs 10,645.03 lakhs in the previous year. Loss After Tax was Rs 1,471.61 lakhs for the year ending 31st March, 2020 as compared to Rs 294.55 lakhs in the previous year.

During the year under review there is no change in nature of business.

3. BUYBACK

The Company completed its third buy-back of 36,50,000 equity shares at a price of Rs 130/- per equity share for an aggregate consideration of Rs 4,745 Lakhs. The offer size of the buy-back was 19.65% of the fully paid-up equity share capital and free reserves as per the standalone audited accounts of the Company as on 31st March, 2019 and was within the statutory limits of 25% of the fully paid-up equity share capital and free reserves as per the last audited accounts of the Company. The buy-back process was completed and the shares were extinguished on 19th November, 2019. The Companys first buy-back was completed in FY 2017 and second buyback was completed in FY 2018.

4. DIVIDEND

Your Directors have not recommended any dividend for the year 2019-20. The Board of Directors have decided not to transfer any amount to the NBFC Reserved Fund for the financial year 2019-20.

5. SHARE CAPITAL

The Paid-up Equity Capital of the Company as on 31st March, 2020 stood at Rs 2,66,00,000/- consisting of 1,33,00,000 Equity Shares of Rs 2/- each. During the financial year ended 31st March, 2020, the Company has completed the buyback of 36,50,000 equity shares of Rs 2/- each. Therefore, the Paid-up Equity Share Capital decreased from Rs 3,39,00,000/- to Rs 2,66,00,000/-. The company has paid Listing Fees for the financial year 2019-20 to each of the Stock Exchanges, where its equity shares are listed.

6. COVID-19 IMPACT

The Pandemic ‘COVID-19 has severely impacted business globally, including India. There has been severe disruption in regular business operations. This pandemic is creating disruption in global supply chain and adversely impacting most of the industries which has resulted in a global slowdown, including India.

The Company has evaluated the impact of the pandemic on its business operations, liquidity, internal financial reporting and control and financial position and based on the managements review of the current indicators and economic conditions, there is no material impact on its financial results as at 31st March 2020. The assessment of impact of COVID -19 is a continuing process given the uncertainties associated with the nature and duration of the pandemic. The Company will continuously monitor any material changes to future economic conditions and business of the Company.

7. EXTRACT OF ANNUAL RETURN

As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the extract of the annual return for FY 2020 is given in "Annexure G" in the prescribed Form No. MGT-9 which is a part of this report. The Annual Return of the Company is available on the website of the Company at www.smartlinkholdings.com.

8. DIRECTORS AND KEY Managerial PERSONNEL

a. Key managerial Personnel

Mr. Kamalaksha Naik, Executive Chairman, Mr. K. G. Prabhu, Chief Financial Officer and Ms. Urjita Damle, Company Secretary have been designated as Key Managerial Personnel in accordance with provisions of Section 203 of the Companies Act, 2013. There was no change in Key Managerial Personnel during the year under review.

b. Re-appointments of Directors

Mr. K. R. Naik was re-appointed for a further period of five year as an Executive Chairman of the Company with effect from 26th December, 2019 at last Annual General Meeting of the Company.

Ms. Arati Naik was appointed for a period of three years as an Executive Director of the Company with effect from 1st April, 2019 at last Annual General Meeting of the Company.

As per recommendation of the Nomination and Remuneration Committee of the Company, Mr. Pankaj Baliga, K. M Gaonkar and Mr. Bhanubhai Patel were reappointed as Independent Director of the Company to hold office for second term of five consecutive years at previous Annual General Meeting of the Company.

Ms. Arati Naik retires by rotation and being eligible, offers herself for re-appointment. A resolution seeking shareholders approval for his re-appointment forms part of the AGM Notice.

Mr. Pradeep Pande was appointed as an independent director at the Twenty Second Annual General Meeting (AGM) held on 14th August, 2015 for a period of five years. Based on the recommendation of the Nomination and Remuneration Committee, the re-appointment for a second term of two years is proposed w.e.f. 5th January 2020 at the ensuing AGM for the approval of the Members by way of a special resolution.

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent directors) which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. The evaluation process inter-alia considers attendance of the Directors at Board and Committee meetings, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, etc.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

c. Declaration by Independent Director

Pursuant to sub-section (7) of Section 149 of the Companies Act, 2013 read with the rules made thereunder, all the Independent Directors of the Company have given the declaration that they meet the criteria of independence as laid down in sub-section (6) of section 149 of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

9. MEETINGS

During the year 6 Board Meetings of the Board of Directors and 4 Audit Committee Meetings were held. The details of the same are given in the Corporate Governance Report which is part of this report. The intervening gap between the Meetings was within the period prescribed under the Act.

Pursuant to provisions of part VII of the Scheduled IV of the Companies Act, 2013 and regulation 25 of the SEBI (Listing Obligations and Disclosure Requirement) Regulation, 2015, two Separate meeting of Independent Directors were held on 15th May, 2019 and 11th February, 2020 for transacting the business enumerated under the said provisions.

10. BOARD EVALUATION

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent directors) which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors. The evaluation process inter-alia considers attendance of the Directors at Board and Committee meetings, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, etc.

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees.

a) Observations of board evaluation carried out for the year - There were no observations in the Board Evaluation carried for the year

b) Previous years observations and actions taken - There were no observations of the Board for the last financial year

c) Proposed actions based on current year observations - Not applicable

The manner in which the evaluation has been carried out has been given in the Corporate Governance Report.

11. AUDIT COMMITTEE

The composition of the Audit Committee is in line with the provisions of Section 177 of the Act read with Regulation 18 of SEBI Listing Regulations. The Chairman of the Audit Committee is an Independent Director. The details of the composition of the Audit Committee are given in the Corporate Governance Report which is part of this report. During the year all the recommendation of the Audit Committee were accepted by the Board.

Further, in terms of section 177(8) of the Companies Act, 2013, it is stated that there were no such instances where the Board of Directors have not accepted the recommendations of the Audit Committee during the year 2019-20.

12. NOMINATION AND REMUNERATION COMMITTEE

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

The Companys remuneration policy is driven by the success and performance of the individual employees, senior management executive directors of the Company and other relevant factors including the following criteria.

a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company;

b) Relationship of remuneration to performance is clear and meets appropriate performance industry benchmarks; and

c) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.

The composition of the Nomination and Remuneration Committee (NRC) is in line with the Section 178 of the Act read with Regulation 19 of SEBI Listing Regulations. The details of meetings and their attendance are included in the Corporate Governance Report.

13. STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition of the Stakeholders Relationship Committee (SRC) is in line with the Section 178 of the Act read with Regulation 20 of SEBI Listing Regulations. The details of the composition of the Stakeholders Relationship Committee are given in the Corporate Governance Report which is part of this report.

14. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177 of the Companies Act, 2013 read with rules made thereunder, the Company has established a vigil mechanism for Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of code of conduct which provides for adequate safeguards against victimization of director(s) / employee(s) and also provides for direct access to the Chairman of the Audit committee in exceptional cases. The Audit Committee and the Board of Directors have approved the Whistle Blower Policy and the details are available on the website of the Company under the weblink https://smartlinkholdings.com/wp-content/uploads/2018/02/Whistle-Blower-Policy-Final-2019.pdf

15. RISK MANAGEMENT

Pursuant to section 134(3)(n) of the Companies Act, 2013, the Company has a Risk Management (RM) framework to identify, evaluate Business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companys competitive advantage.

The risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework helps in identifying risk trend, exposure and potential impact analysis at a Company level.

The Risk Management policy formulated by the Company has identified the key business risks and also the plans to mitigate the risks.

16. SUBSIDIARY COMPANIES

The Company has three subsidiary companies, namely Digisol Systems Limited, Synegra EMS Limited and Telesmart SCS Limited as on 31st March, 2020.

In accordance with Section 129(3) of the Act, 2013, we have prepared financial statements of the Company. Further, a statement containing salient features of the financial statement of our subsidiaries in prescribed format AOC-1 is appended as Annexure - J to the Boards Report. The statement also provides the details of performance and financial position of each subsidiaries.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including consolidated financial statements will be available on our website www.smartlinkholdings.com. The Company would provide the annual accounts of the subsidiaries and the related detailed information to the shareholders of the Company by electronic means on specific request made to it in this regard.

The Company has formulated a Policy on Material Subsidiary as required under Listing Regulations and the policy is uploaded on the website of the Company at https://smartlinkholdings.com/wp-content/uploads/2017/06/Smartlink-Subsidiary-Policy. pdf.

17. STATUTORY AUDITOR AND AUDIT REPORTS

Pursuant to the provisions of section 139 of the Companies Act, 2013, at the twenty-fifth AGM held on 7th August, 2018 the Members approved appointment of MSKA & Associates, Chartered Accountants (firm registration number 105047W) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the thirtieth AGM.

The Ministry of Corporate Affairs vide its Notification dated 7th May, 2018, has dispensed with the requirement of ratification of Auditors appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditors, appointment is not included in the Notice of the ensuing Annual General Meeting.

The statutory auditors report do not contain any qualifications, reservations, or adverse remarks or disclaimer

18. SECRETARIAL AUDIT

The secretarial audit report does not contain any qualifications, reservations, or adverse remarks or disclaimer. Secretarial audit report is attached to this report as Annexure B.

19. DEPOSITS From PUBLIC

The Company has neither invited nor accepted any deposits from the public during the financial year 2019-20. The Company does not intend to invite or accept any deposits during financial year 2020-21 as such no amount on account of principal or interest on deposit from public was outstanding as on the date of the balance sheet.

20. PARTICULARS OF LOANS / ADVANCES / GUARANTEE / INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR

None

21. RELATED PARTY TRANSACTIONS

None of the transactions with related parties fall under the scope of Section 188(1) of the Act.

All Related Party Transactions are placed before the Board for approval. The Company has developed a Related Party Transactions Policy for the purpose of identification and monitoring such transactions.

The disclosures as required under IND-AS have been made in Note 39 to the Standalone Financial Statements. The particulars of contracts or arrangements entered by the Company with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - K in Form AOC-2 and the same form a part of this report.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is available on the Companys website at https://www.smartlinkholdings.com/wp-content/uploads/2018/02/5.-Related-Party-Transaction-Policy.pdf

22. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Financial Control Systems, commensurate with the size, scale and complexity of its operations. The Management evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company.

23. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There was no material change/ commitment affecting the financial position of the Company during the period from the end of the financial year on 31st March, 2020 to the date of the Report.

24. PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

As per provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has constituted an Internal Complaints Committee for redressal of complaints against sexual harassment and there were no complaints received during the financial year.

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

The particulars in respect of conservation of energy and technology absorption are not applicable to the Company as it is a NBFC company.

Foreign Exchange Gain (net) is given in note No. 27 of the standalone Financial Statements of the Company forming part of this report.

26. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013 read with rules made thereunder, your Company has constituted a Corporate Social Responsibility Committee (CSR Committee). The constitution of the committee is given in the Corporate Governance Report. The Corporate Social Responsibility Committee (‘CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (‘CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy is displayed on the website of the Company at https://smartlinkholdings.com/ wp-content/uploads/2018/02/3.-Corporate-Social-Responsibility-Policy.pdf. The requisite details on CSR activities pursuant to Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure - I to this Report.

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

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

28. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis including the result of operations of the Company for the year, as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is appended to the Annual Report as Annexure - A.

29. CORPORATE GOVERNANCE

As required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on Corporate Governance as well as the Auditors Certificate regarding compliance of Conditions of the Corporate Governance forms a part of Annual Report as Annexure - C and Annexure - D respectively.

30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

a) Transfer of unclaimed dividend

Pursuant to the application provisions of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules), all unpaid and unclaimed dividend are required to be transferred to the IEPF established by the Government of India, after completion of seven years. Accordingly the Company has transferred the unclaimed and unpaid dividend of Rs 2,27,230/- during the year.

b) Transfer of Shares to IEPF

According to the provisions of 124 of the Companies Act, 2013 and Rules made thereunder, the shares on which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall be transferred to demat account of IEPF Authority. Accordingly 2,135 shares were transferred as per the requirements of IEPF Rules during FY 2019-20.

31. EMPLOYEE STOCK OPTION SCHEME

The Company has not issued any ESOPS to its employees during the year.

32. REPORTING OF FRAUDS

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.

33. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading in compliance with SEBI (Prohibition & Insider Trading) Regulation, 2015 duly amended and approved at its board meeting with a view to regulate trading in securities by the Directors and designated employees of the Company.

34. DISCLOSURE Requirements

As per SEBI Listing Regulations, Management Discussion and Analysis is annexed as "Annexure - A" to the report. Secretarial Audit Report is annexed as "Annexure - B". A separate section on the corporate governance is annexed as "Annexure - C", together with a certificate from the Mr. Shivaram Bhat confirming compliance is annexed as "Annexure - D". Declaration by the Executive Chairman is annexed as "Annexure - E". Certificate of Non Disqualification of directors is annexed as "Annexure - F". The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standard issued by Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

35. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

The information required under section 197 of the Act read with Rule 5(1)(i) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company and Directors is enclosed as "Annexure - H" to this report.

36. GREEN INITIATIVE

As part of our green initiative, the electronic copies of this Annual Report including the Notice of the 23rd AGM are sent to all members whose email addresses are registered with the Company / Registrar / Depository Participant(s).

As per SEBI Circular SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May, 2020 the requirement of sending physical copies of annual report to those shareholders who have not registered their email addresses was dispensed with for Listed Entities who would be conducting their AGMs during the calendar year 2020. In this respect the physical copies are not being sent to the shareholders. The copy of the same would be available on the website www.smartlinkholdings.com. The initiatives were taken for asking the shareholders to register or update their email addresses.

The Company is providing e-voting facility to all its Members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting are provided in the Notice.

37. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, hereby state and confirm that:

a) in the preparation of annual accounts for the financial year end 31st March, 2020, the applicable accounting standards have been followed and that no material departures have been made from the same.

b) appropriate accounting policies have been selected and applied consistently and judgments 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 31st March, 2020 and the profit/loss of the Company for that period.

c) 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.

d) the annual accounts have been prepared on a ‘going concern basis.

e) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

38. ACKNOWLEDGEMENTS

Directors place on record their appreciation for the continuing support and co-operation from the customers, vendors, dealers, distributors, resellers, bankers, shareholders, Goa Industrial Development Corporation, State Industries Electricity and other Government departments.

The Directors also take this opportunity to thank the employees for their dedicated service throughout the year.

For and on behalf of the Board
Place : Verna, Goa K. R. Naik Arati Naik
Date : 14th July, 2020 Executive Chairman Executive Director
DIN: 00002013 DIN:06965985