SMIFS Capital Markets Ltd Directors Report

TO THE MEMBERS,

Your Directors have pleasure in presenting the Forty First Annual Report of the Company together with the audited financial statements for the year ended March 31, 2024.

1. (a) FINANCIAL SUMMARY OR HIGHLIGHTS/ PERFORMANCE OF THE COMPANY

(Rs in Lakhs)

Particulars	Year ended	Year ended
	31.03.2024	31.03.2023
Profit before Interest, Depreciation & Tax	353.63	96.96
Less: Finance Charge	0.51	0.14
Profit before Depreciation & Tax	353.12	96.82
Less: Depreciation / Amortization	23.88	28.76
Profit before Tax	329.24	68.06
Less: Tax Expenses – Current / Earlier years	56.06	11.28
Less : Deferred Tax for the year	32.09	10.89
Profit after Tax	241.09	45.89
Profit brought forward from earlier year	1,221.12	1,176.27
Profit transfer from OCI Reserve:	-	(1.03)
Profit available for Appropriation	1,462.21	1,221.12
APPROPRIATIONS	-	-
Dividend including Dividend Tax	-	-
Profit carried to Balance Sheet	1,462.21	1,221.12

(b) FINANCIALANDOPERATIONALPERFORMANCE

Profit Before Tax of the Company for the year was Rs 329.24 Lakhs (previous year Rs 68.07 lakhs).

Net worth of the Company as on March 31, 2024 was Rs. 12,960.18 lakhs (previous year Rs. 11,800.06 lakhs).

(c) CAPITAL

The paid up Equity Share Capital as on March 31, 2024 stood at Rs. 558.50 Lakhs divided into 55.85 equity shares of Rs.10/- each.

(d) DIVIDEND

To conserve resources for future growth, your Board of Directors do not recommend any dividend for the year.

(e) TRANSFERTOINVESTOREDUCATIONANDPROTECTIONFUND

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Further, according to the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which the dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred the unclaimed and unpaid dividend and shares.

Attention is also being drawn that the unclaimed/unpaid dividend for the financial year 2016-17 is due for transfer to Investor Education and Protection Fund during October/ November 2024. In view of this, Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts, may write to the Company/ Companys Registrar and Transfer Agents, M/s Maheshwari Datamatics Private Limited.

(f)MANAGEMENTDISCUSSIONANDANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report marked as "Annexure A".

2. FINANCE

The Company continues to focus on judicious management of its working capital. The Companys long term debt as on 31st March, 2024 was Rs. 4.8 lakhs (Previous Year Rs. 0.7 lakhs)

3.1 DEPOSITS

The Company has not accepted any deposit falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 from the public.

3.2 PARTICULARSOFLOANS,GUARANTEESORINVESTMENTS

The particulars of loans, guarantees and investments of the Company and its wholly-owned subsidiary Company namely, SMIFS Capital Services Limited has been disclosed in the financial statements.

4. INTERNALCONTROLSYSTEMSANDTHEIRADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company and its subsidiary. Based on the report of internal auditors, corrective action is undertaken in respective areas and thereby controls are strengthened. Significant audit observations and corrective actions taken thereon are presented to the Audit Committee of the Board.

5. SUBSIDIARYCOMPANY

As on March 31, 2024, there is one wholly-owned subsidiary Company namely, SMIFS Capital Services Limited. Statement required under Section 129(3) of the Companies Act, 2013 in respect of the Subsidiary Company is attached herewith.

FINANCIALSUMMARYORHIGHLIGHTS/PERFORMANCEOFTHESUBSIDIARYCOMPANY

(Rs in Lakhs)

Particulars	Year ended	Year ended
	31.03.2024	31.03.2023
Profit/(Loss) before Interest, Depreciation & Tax	2.37	4.84
Less: Finance Charge	0.31	-
Profit/(Loss) before Depreciation & Tax	2.06	4.84
Less: Depreciation / Amortization	1.97	0.21
Profit/ (Loss) before Tax	0.09	4.63
Less : Tax Expenses	0.29	(0.51)
Profit/ (Loss) after Tax	(0.20)	5.14
Profit/(Loss) brought forward from earlier years	(45.44)	(50.58)
Profit/(Loss) carried to Balance Sheet	(46.64)	(45.44)

6. YEARINRETROSPECTANDFUTUREOUTLOOK

The financial year 2023-24 began on a promising note as supplies of goods were improving, financial markets exuded greater optimism and globally central banks were steering their economies towards a soft landing. However the launch of war by Russia on Ukraine resulted in a sharp increase in prices of various commodities causing high inflation in many countries of the world. The central banks tightened the monetary policies to curb the inflation and are expected to cut interest rates in the later part of current financial year 2024-25 once the inflation comes down within their targeted range. Meanwhile, the recent conflict in the Middle East between Israel and Hamas has also contributed to increase in oil prices and increase in the cost of transportation of goods passing through that area.

Amongst the global turmoil and near recessionary conditions in many countries, India remains one of the fastest growing economies in the world. Reserve Bank of India in its April 2024 policy meet has projected Indias GDP growth rate for the financial year 2024-2025 at 7% as compared to expected GDP growth of 7.6% in 2023-24 and has estimated CPI inflation to come down in 2024-25 to 4.5%. IMF has raised Indias GDP growth forecast to 7.8% for 2024-25, higher than RBIs projection.

Indias retail inflation has also eased to a 11 month low of 4.83% in April 2024. Both IMD and Skymet have forecasted normal monsoon for India in 2024. Therefore, moderating inflation pressures and forecast of normal monsoon have opened up possibility of interest rate cuts in India in the second half of 2024-25.

Our economy is growing at a fast pace and this is evidenced by highest GST revenue collection for April 2024 at Rs. 2.10 lakh crores. This represents a significant 12.4% year on year growth driven by a strong demand in domestic transactions (UP 13.4%) and imports (UP 8.3%). Indias Industrial growth (IIP) for the financial year 2023–24 was at 5.8% compared to 5.2% for the year 2022–23. With a record $776.68 billion worth of exports in financial year 2023–24, Indias trade deficit narrowed to $78 billion. Indias services exports grew at one of the fastest rates over the last 18 years and Indias defence and electronics exports have risen rapidly. Indias fiscal deficit in 2024–25 is estimated to come down to 5.1% of GDP and around 4.5% in 2025–26. Inspite of geopolitical developments affecting crude prices, India has managed its crude imports well by negotiating appropriate discounts from Russia and other exporting countries.

Amidst this volatility, our banking and non-banking financial service sectors in India remain healthy and are well governed by the Regulators. The Indian Rupee has also moved in an orderly manner in the financial year 2023 – 24.

As per IMF, India is likely to become the third largest economy in 2027. Capital expenditure has emerged as a key growth driver in India. Government has accelerated public sector capital expenditure and private sector capital expenditure is now catching up. Capacity utilization has now reached around 75 percent and corporates are considering setting up new capacities. The Government has also come out with production linked incentive schemes in various sectors which is boosting capital expenditure and manufacturing.

Your company is registered as a Category I Merchant Banker and executes assignments in areas of mergers and acquisitions, debt syndication, placement of equity shares and debentures and is cautiously optimistic for the year 2024 as good monsoon, rural recovery and policy reforms are driving growth momentum in the economy.

7. LISTING OF THE SECURITIES OF THE COMPANY

Equity Shares of your Company continue to be listed on BSE Limited and The Calcutta Stock Exchange Limited and the listing fees for the year 2023-24 have been paid and 99.19 percent of the equity shares of your Company are held in dematerialized form.

8. DIRECTORSRESPONSIBILITYSTATEMENT

Pursuant to the requirement under section 134(3)(c) 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 proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and made judgment 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 the profit and 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 provision 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 control to be followed by the company and that such internal financial control are adequate and were operating effectively, and

(f) the directors have devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

9. RELATEDPARTYTRANSACTIONS

All related party transactions that were entered, into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and are of repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are of audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a yearly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website. None of the Directors have any pecuniary relationship or transactions vis-?-vis the Company. The particulars of contracts or arrangements with related parties referred to in sub section (1) of section 188 entered by the Company during the financial year ended 31st March, 2024 has been disclosed in the financial statements in prescribed Form AOC-2.

10. DETAILSINRESPECTOFFRAUDSREPORTEDBYAUDITORSUNDERSUBSECTION(12)OF

SECTION 143 OF COMPANIES ACT 2013, OTHER THAN THOSE REPORTABLE TO THE CENTRALGOVERNMENT

No material fraud by the company or on the company by its officers or employees has been noticed or reported during the course of audit.

11. MATERIALCHANGESANDCOMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.

12. SECRETARIALSTANDARDS

The Company is compliant with all the mandatory secretarial standards as issued by the Institute of Company Secretaries of India (ICSI).

13. VIGILMECHANISMFORDIRECTORSANDEMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism is explained in the Corporate Governance Report and also posted on the website of the Company.

14. COSTRECORDS

Maintenance of cost records specified by the Central Government under section 148(1) of the Companies Act, 2013 is not required as the company does not fall under the ambit of prescribed class of companies who are required to make and maintain cost records.

15. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right of gender equality and guarantee against sexual harassment and abuse, more particularly against sexual harassment at work place, your Company has a Policy on Prevention of Sexual Harassment at the Workplace duly approved by the Board of Directors.

During the year, no complaint was reported under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

16. CONSERVATIONOFENERGY,TECHNOLOGYABSORPTION,FOREIGNEXCHANGEEARNING

ANDOUTGO

Particulars required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, under the heads (a) conservation of energy; and (b) technology absorption, are not applicable to the Company.

During the year there was no foreign exchange earnings (previous year nil). Foreign Exchange outgo during the year aggregated to Nil. (previous year Nil).

17. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with fifty per cent of the Directors being Independent Directors. Your Board comprises of 6 (six) directors out of which 3 (three) are independent directors.

During the year, Mr. Nitin Daga and Mr. Pratik Ghose were appointed as Additional, Non-Executive Independent Directors on March 27, 2024. Further in line with the provisions of the Companies Act, 2013 and other applicable laws, their appointment is proposed to be regularized for a period of 5 years at the Postal Ballot being held in the month of May 2024. Additionally, Mr. Ramesh Maheshwari (DIN: 00170811) and Mr. Santosh Kumar Mukherjee (DIN: 00170646), Non-Executive Independent Directors ceased to be Directors on the Board of the Company and its Committees w.e.f. close of business hours on March 31, 2024, upon completion of their tenure.

Mr. Utsav Parekh is the Non- Executive Chairman.

Re-appointment of Managing Director

The three-year term of Mr. Kishor Shah as Managing Director ended on March 31, 2024 and on recommendation of the Nomination and Remuneration Committee and on approval of the Board of Directors in its meeting held on February 09, 2024 subject to the same being ratified by the members at the ensuing Annual General Meeting by passing a Special Resolution, Mr. Kishor Shah has been re-appointed as Managing Director of the Company with effect from April 1, 2024 for a further period of 3 (three) years. Terms of appointment include payment of managerial remuneration as per the provisions of Sections 196, 197, 203 and other applicable provisions, if any, read with Schedule V, Part II, Section II (A) to the Companies Act, 2013.

Retirement by Rotation

Mr. Ajay Kumar Kayan, Non- Executive Director, retires by rotation in accordance with the requirements of Companies Act, 2013 and Articles of Association of the Company. He being eligible offers himself for re-appointment.

Brief resume of Mr. Ajay Kumar Kayan, nature of his expertise in specific functional areas, names of companies in which he holds directorships and/or memberships/chairmanships of committees of Board, his shareholdings are furnished in section on Corporate Governance elsewhere in the Annual Report.

Resignation / Appointment of the Key Managerial Personnel

The former Company Secretary cum Compliance Officer Ms. Ayanti Sen tendered her resignation due to personal reasons during the Financial Year 2023-24 w.e.f. October 7, 2023 and Mrs. Poonam Bhatia was appointed as the Company Secretary cum Compliance Officer w.e.f. October 9, 2023.

Apart from the aforesaid matter there were no other changes in the Key Managerial Personnel and in the Management of the Company.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

18.1 ANNUALPERFORMANCEEVALUATIONOFTHEBOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, Key Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

18.2 NOMINATION&REMUNERATIONPOLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration the contents of which are placed on the website of the Company at www.smifscap.com

18.3 MEETINGS

During the year six (6) Board Meetings and four (4) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

19. AUDITORSANDTHEIRREPORTS 19.1 STATUTORY AUDITORS

M/s S K Agarwal and Co Chartered Accountants LLP, Statutory Auditors of the Company hold office in accordance with the provisions of the Companies Act, 2013.

M/s S K Agarwal and Co Chartered Accountants LLP were appointed as the Statutory Auditors of the Company for the second term of 5 years from the conclusion of the Thirty Ninth Annual General Meeting until the conclusion of the Forty Fourth Annual General Meeting of the Company subject to the ratification by the Members at every Annual General Meeting, at a remuneration to be decided by the Board of Directors.

Since, the first proviso of Section 139 has been omitted w.e.f. May 7, 2018 by the Companies (Amendment) Act, 2017 which requires companies to place the appointment of Statutory

Auditors for ratification before the members at every Annual General Meeting of the Company, the ratification of appointment of M/s S K Agarwal and Co Chartered Accountants LLP as the Statutory Auditors of the Company will not be placed before the Members at the ensuing Annual General Meeting of the Company.

The observation made in the Auditors Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

19.2 SECRETARIALAUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Sudhansu Sekhar Panigrahi, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure B".

20. AUDITORSQUALIFICATION

(i) STATUTORYAUDITORSQUALIFICATIONS

Qualifications contained in the Auditors Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

(ii) SECRETARIALAUDITORSQUALIFICATIONS

Qualifications contained in the Secretarial Auditors Report if any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

21. PARTICULARSOFEMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in "Annexure C".

22. ANNUALRETURN

Pursuant to the provisions of Section 92 (3) read with section 134(3)(a) of the Companies Act, 2013 the draft copy of the annual return for the F.Y. 2023-24 is uploaded on the website of the Company www.smifscap.com and the same can be viewed by the members and stakeholders.

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

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

24. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.

	For and on behalf of the Board of Directors
Regd.Office:
‘Vaibhav (4F), 4 Lee Road,	Sd/-
Kolkata - 700 020	(UTSAVPAREKH)
	Chairman
The 27th day of May, 2024	(DIN No. 00027642)