SMC Global Securities Ltd

The Directors of the Company are pleased to present their 30th (Thirtieth) Annual Report on the business performance and operations of the Company, together with the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended 31st March, 2024.

The standalone and consolidated financial performance of your Company for the financial year ended 31st March, 2024 is summarized below:

(Rs.in Lakhs)

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.

During the year 2023-24, on a consolidated basis, your Company has recorded net revenue from operations Rs. 1,63,849.69 lacs which is 35.24% higher as compared to Rs. 1,21,157.33 lacs of the previous financial year. The company has recorded profit before tax of Rs. 24,449.38 which is 50.96% higher against profit before tax of Rs. 161,95.66 lacs of previous financial year. The Company has recorded profit after tax of Rs. 18,827.65 lacs which is 56.38% higher as compared to Rs. 120,39.62 lacs 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 and insurance broking etc.

During the year 2023-24, on a standalone basis, your Company has recorded net revenue from operations Rs. 85,314.14 which is 25.62% higher as compared to Rs. 67,915.41 lacs of the previous financial year. The company has recorded profit before tax of Rs. 17,994.20 lacs which is 50.12% higher against profit before tax of Rs. 11,986.50 lacs of previous financial year. The Company has recorded profit after tax of Rs. 14,102.56 lacs which is 51.04% higher as compared to Rs. 9337.23 lacs in previous year.

The profit of the Company has increased significantly from the previous year both on standalone basis and consolidated basis. This is mainly because; the company has expanded its client base by attracting new investors and strengthening relations with the existing clients. Your Company's client centric approach and tailored investment solutions have contributed to enhanced market share and revenue growth. Further, our continued investments in technology infrastructure and digital platforms have improved operational efficiency, reduced transaction costs, and enhanced the overall trading experience for our clients. On consolidated basis, every segment of the Company has contributed significantly towards the growth in revenue.

Refer to Management Discussion and Analysis report for more details.

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. During the year, your company remained committed to advancing its technological capabilities and expanding its reach in the market. Throughout the reporting period, significant emphasis has been placed on the development and integration of cutting-edge technologies to enhance our products and services. By leveraging our technological expertise and focusing on customer satisfaction, we have successfully attracted new clients and deepened relationships with existing ones.

In this regard, the Company also 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 and insurance.

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

During the fiscal year under review, the Company sanctioned the issuance of non-convertible debentures totaling INR 400 crores, either through a public issue or via private placement, and either in a single tranche or multiple tranches. Subsequently, in a Board of Directors meeting convened on March 30, 2024, it was resolved to issue Secured, Rated, Listed, Redeemable Non-Convertible Debentures amounting to INR 75 crores, with the provision to accommodate oversubscription of up to INR 75 crores. To oversee all matters pertaining to this issuance, the Board of Directors has established a dedicated Non-Convertible Debenture Committee comprising directors. In this regard, the company may conduct frequent issuances up to the overall limit approved by the Board of Directors and within the borrowing limit sanctioned by the shareholders. These debentures are being raised to fulfill general working capital requirements of the Company.

Change in the nature of business

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

Share Capital & Listing information

The Authorized Share Capital of the Company is Rs. 95,51,00,000 and the paid up share capital of the Company is Rs. 20,94,00,000 comprising of 10,47,00,000 equity shares of Rs. 2 each. 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, 2024:

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.

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 the record date i.e. 13th February, 2024. 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 2023- 24. Considering the growth, stability and profits of the Company for the financial year 2023-24, your Directors are pleased to recommend a 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 2023-24. The dividend recommended, if approved by the members, will be paid to the members within the period stipulated under the Companies Act, 2013 ("the Act"). The dividend payout ratio for the current year is at 17.82%. The record date for the purpose of distribution of final dividend is 7th June, 2024 and Book closure period is fixed from 8th June, 2024 to 12th June, 2024.

Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted the Dividend Distribution Policy which is available on the website of the Company at http://smcindiaonline.com/wp-content/uploads/2021/09/DIVIDEND-DISTRIBUTION-POLICY.pdf. The dividend recommended is in accordance with the Company's Dividend Distribution Policy.

Pursuant to section 194 of the Income Tax Act, 1961, the dividend received on equity shares is taxable at the applicable slab rates. The income is taxable in the hands of the receiver, and TDS is applicable and the company paying dividends has to deduct TDS under section 194 @10% if the shareholder's total dividend in a year is more than Rs.5000 from 1st April 2020 onwards.

Your Board of Directors has not proposed to transfer any amount to any reserve during the financial year 2023-24.

As on 31st March, 2024, the Company has total nine (9) subsidiaries including eight (8) wholly owned subsidiaries and one (1) subsidiary. 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. SMC Global USA Inc., wholly owned subsidiary, ceased to be the subsidiary of your company during FY 2023-24 due to dissolution of the entity and divestment made by the Company.

The financial summary of the performance of the Company's subsidiaries during the FY 2023-24 are as under:

(Rs.in Lakhs)

Pursuant to the provisions of Section 129, 134 and 136 of the Act read with rules made thereunder and Regulation 33 of the SEBI Listing Regulations, your Company has prepared Consolidated Financial Statements of your Company and a separate statement containing the salient features of Financial Statement of subsidiary, joint venture and joint operation entities in Form AOC-1, which forms part of this Annual Report.

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/.

During the year, no other company, except the companies as mentioned above, has become or ceased to be subsidiary, joint venture or associate of the Company.

Pursuant to Section 134 of the Act and Rule 8(1) of the Companies (Accounts) Rules, 2014 the report on highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company can be referred in form AOC-1 and the Consolidated Financial Statements of the Company.

Pursuant to Regulation 16(1)(c) of the Listing Regulations and in accordance with Company's policy for determining the 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 financial year 2023-24. The Company ensures compliances relating to subsidiary companies as mentioned in Regulation 24 of the Listing Regulations and other compliances mentioned in Companies Act, 2013.

The policy on determination of material subsidiaries is available at the website of the Company https://smcindiaonline.com/wp-content/uploads/2021/06/POLICY-FOR-DETERMINING-MATERIAL-SUBSIDIARY-COMPANIES.pdf

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 in the Balance Sheet as at March 31, 2024 and the statement of Profit & Loss Account for the financial year ended 31st March, 2024.

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.

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board of Directors on recommendation of 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 framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee, based on need and new compliance requirements.

The annual performance evaluation of the Board, its Committees and each Director has been carried out for the FY 2023-24 in accordance with the framework. The independent directors of the Company, also, at their separate meeting held on 18th March, 2024, 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.

In accordance with the provisions of Regulation 25(7) and 46(2) of the Listing Regulations, the Company familiarizes the newly appointed Directors with respect to their roles and responsibilities, way ahead of the prescription of the regulatory provisions and also at regular intervals with 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/2024/04/DETAILS-OF-FAMILARISATION-PROGRAMME-2023-

During the FY 2023-24, the Company did not accept or renew any deposit pursuant to section 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

Pursuant to section 177 of the

Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has adopted a vigil mechanism policy to provide a formal mechanism to the Directors, employees and stakeholders of the Company to report their genuine concerns including concerns about unethical behavior, actual or suspected fraud, and violation of Company's 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/2021/09/VIGIL-MECHANISM-POLICY.pdf

In this regard, during the year under review, your company has not received any complaint from any Directors, employees and stakeholders of the company pursuant to above said vigil mechanism.

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 2023-24, Internal Complaints Committee (ICC) has received 'nil' complaints of sexual harassment from the employees of the Company. All new employees go through a detailed orientation on anti-sexual harassment policy adopted by your Company. Further, the Company ensures to sensitize its employees on regular basis about prevention and prohibition of sexual harassment. Also, online training programs are run for the employees to enhance awareness and knowledge about sexual harassment within the organization.

Further, as per the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with its allied Rules, the company follows the calendar year for filing the annual report with statutory authority. In this regard, your company submitted nil report with concerned District officer with respect to Sexual Harassment of Women at Workplace for the calendar year from 01st January, 2023 to 31st December, 2023.

With reference to Section 134(3)(h) of the Act, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were approved by the Audit Committee and wherever required, also by the Board of Directors.

The related party transactions, which were in ordinary course of business and at arm's length basis, 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. Further, the Audit Committee on quarterly basis reviewed the related party transactions entered by the Company on the basis of the omnibus approval granted.

Further, during the year, the Company entered into certain contract or arrangement which required prior approval of shareholders by a resolution. The transactions were material in accordance with the provisions of Section 188(1)(f) of the Companies Act, 2013 read with rule 15 Companies (Meetings of Board and its Powers) Rules, 2014, however, were in the ordinary course of business and at arm's length basis. Accordingly, there were no transactions undertaken during the year which were not at an arm's length basis, hence the disclosure under Form AOC-2 is not applicable to the Company.

Apart from the aforementioned, during the year, the Company had not entered into any contract or arrangement with related parties which could be considered 'material' under Regulation 23 of the Listing Regulations.

The Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties. As per the process, necessary details for each of the Related Party Transactions as applicable along with the justification are provided to the Audit Committee in terms of the Company's Policy on Materiality and Dealing with Related Party Transactions and as required under SEBI Circular dated 22nd November, 2021.

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/2021/09/POLICY-ON-RELATED-PARTY-TRANSACTIONS-1.pdf

During the year, there are no significant and material orders passed by the regulators or courts or tribunals, Statutory and quasi-judicial bodies which could impact the going concern status of the Company and its future operations.

M/s PNG & Co., Practicing Chartered Accountants were appointed as the Internal Auditors of the Company for financial year 2023-24 by the Board of Directors of the Company at its meeting held on 18th May, 2023. The scope and authority of the internal audit function is well defined and to maintain independence and objectivity in its functions, the internal audit function reports directly to the Audit Committee of the Board.

At the beginning of each financial year, an audit plan is framed which aims to capture the scope of evaluation of the efficacy and adequacy of the internal control system(s) and compliance(s) thereof, robustness of internal processes, policies and accounting procedures and compliance with laws and regulations within the organization. The Audit Committee, comprising of independent directors, regularly reviews the internal audit plan, 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.

The Company's 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 the 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.

Company's risk management process is designed to identify and mitigate risks that have the potential ability to materially impact our business objectives. Your Company being a financial service provider is exposed to various risks, which can be classified as, market risk, credit risk and operational risk.

The Risk Management Committee of the Board is responsible for preparation of Risk Management Plan, reviewing and monitoring the same on regular basis, identifying and reviewing critical risks on regular basis, updating the Risk Register, reporting of key changes in critical risks to the Board on an ongoing basis. The Audit Committee also evaluates the risk management systems on yearly basis and such other functions as may be prescribed by the Board. The Board of Directors of your Company evaluates the risk management systems periodically and takes into account any 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 constituted Risk Management Committee pursuant to regulation 21 of the Listing Regulations. The Company has also formulated the risk management policy which acts as a guiding document for the purpose of identifying and mitigating risk. Further, the risk management committee along with the Audit Committee monitors and reviews the risk existent in the Company time to time.

Refer 'Management Discussion and Analysis Report' for detailed elaboration on risk management undertaken by the Company.

The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the Listing Regulations, with an appropriate combination of Executive, Non-Executive and Independent Directors. As on 31st March, 2024, your Company's Board had sixteen (16) members comprising of ten (10) Non-Executive Independent Director (including one (1) women independent director), one (1) Non-Executive Non-Independent Director, two (2) whole time directors, one (1) director and CEO and two (2) managing directors. The details of Board and Committees composition, tenure of Directors, areas of expertise and other details are available in the Corporate Governance Report, which forms part of this Annual Report.

During the FY 2023-24, following changes took place:

During the year under review, your Company pursuant to the recommendation of the Nomination and Remuneration Committee have made significant strides in enhancing the composition of its Board of Directors by appointing several distinguished individuals as Independent Directors. These appointments were made with strategic focus on augmenting board's expertise, diversity and governance oversight. All the appointments were made as per the Nomination and Remuneration Policy. The directors appointed are as follows:

- Mr. Gobind Ram Choudhary (DIN:01104704) was appointed as Non-Executive Independent Director of the Company w.e.f from 22nd June, 2023 by the Board of Directors at its meeting held on 18th May, 2023 and his appointment was approved by the shareholders at 29th Annual General Meeting of the Company held on 30th June, 2023.

- Mr. Dinesh Kumar Sarraf (DIN: 00147870) and Mr. Hemant Bhargava (DIN: 01922717) was appointed as Non-Executive Independent Director of the Company w.e.f. from 09th August, 2023 by the Board of Directors at its meeting held on 09th August, 2023 and their appointment was approved by the shareholders through postal ballot dated 21st September, 2023.

- Ms. Neeru Abrol has been appointed as Additional Director in the Non-Executive Independent Director capacity of the Company w.e.f. 30th March, 2024 by the Board of Directors at its meeting held on 30th March, 2024, subject to shareholders' approval at the ensuing 30th Annual General Meeting of the Company scheduled to be held on 22nd June, 2024. The Company has received necessary disclosures and notice with respect to appointment of Ms. Neeru Abrol.

The newly appointed independent directors, hailing from diverse professional backgrounds and industries, bring a wealth of knowledge, experience and fresh perspectives to the Board room. Their varied skill set and insight complement the existing board composition.

Apart from the Independent Directors, Mr. Anurag Bansal, Whole Time Director (DIN: 00003294) was also re-appointed as Whole Time Director of the Company for another term of 5 (Five) consecutive years with effect from 28th March, 2024 to 27th March, 2029, by the shareholders of the Company at the 29th Annual General Meeting of the Company held on 30th June, 2023.

Further, the Board of Directors pursuant to the recommendation of the Nomination and Remuneration Committee at its meeting held on 13th May, 2024, has recommended reappointment of Mr. Subhash Chand Aggarwal, Chairman and Managing Director (DIN: 00003267) as the Chairman and Managing Director of the Company, whose term expires as Managing Director of the Company on 28th January, 2025, for another term of 5 (Five) consecutive years with effect 29th January, 2025 to 28th January, 2030, subject to the approval of the shareholders at the ensuing 30th Annual General Meeting of the Company scheduled to be held on 22nd June, 2024. The Company has received necessary disclosures and notice with respect to appointment of Mr. Aggarwal.

A brief resume of the directors proposed to appointed/ re-appointed at the ensuing AGM, the nature of expertise in specific functional areas, names of companies in which they hold directorships, committee memberships/ chairmanships, their shareholding in the Company, etc., have been furnished in the explanatory statement to the notice of the ensuing AGM.

In the opinion of the Board, all directors including the directors appointed / re-appointed during the year possess requisite qualifications, experience and expertise and hold high standards of integrity. The list of key skills, expertise and core competencies of the Board is provided in the Report on Corporate Governance.

In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of your Company, Mr. Anurag Bansal, Whole Time Director (DIN: 00003294) retired by rotation at the 29th Annual General Meeting and being eligible was reappointed by the shareholders. Further, Mr. Himanshu Gupta, Non-Executive Director (DIN: 03187614) is liable to retire by rotation and being eligible offers himself for reappointment at the ensuing Annual General Meeting of the Company.

During the year under review, the Board of Directors obtained the approval of the shareholders by way of postal ballot on 21st September, 2023 for change in designation of Mrs. Shruti Aggarwal from Non-Executive Director to Whole Time Director of the Company w.e.f. 9th August, 2023 in accordance with the applicable provisions of law.

Cessation

In accordance with the provisions of section 149 and 152 of the Act read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the second term of appointment of four (4) Independent Directors of the Company namely Mr. Chandra Wadhwa, Mr. Hari Das Khunteta, Mr. Kundan Mal Agarwal and Dr. Madhu Vij completed with the closure of working hours of 31st March, 2024.

The Board placed on record its appreciation for the valuable services rendered by all outgoing Directors.

Declaration by Independent Directors

The Company has received necessary declaration from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations confirming that they meet the criteria of independence as laid down in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Company has also received from them declaration of compliance of Rule 6(1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, regarding online registration with the Indian Institute of Corporate Affairs, Manesar, for inclusion/ renewal of name in the data bank of Independent Directors. With regard to integrity, expertise and experience (including the proficiency) of the Independent Directors, the Board of Directors have taken on record the declarations and confirmations submitted by the Independent Directors and is of the opinion that they are persons of integrity and possesses relevant expertise and experience and their continued association as Director will be of immense benefit and in the best interest of the Company.

As at 31st March, 2024, the Key Managerial Personnel of the Company pursuant to section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 were as follows:

The detailed information with respect to Board of Directors and Key Managerial Personnel (KMP) is prescribed in the Corporate Governance Report which is forms part of this Annual Report.

Your Company has in place, a policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel of the Company i.e. 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 broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), Key Managerial Personnel & Senior Management Personnel.

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.

All the appointments/reappointments and revision in remuneration of directors, KMP and SMP is executed in accordance with the said policy.

The policy is available on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2021/09/NOMINATIO N-AND-REMUNERATION-POLICY.pdf

The Board has also formulated and adopted the policy on the 'Diversity of the Board'.

As on March 31, 2024, the Board has following statutory Board committees in the Company:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholder's Relationship Committee

5. Risk Management Committee Due to the cessation of some independent directors in the Company, there was a need of reconstitution as well as introduction of new Directors on Board of the committees in the Company. Accordingly, the Board of Directors reconstituted the abovementioned statutory committees effective from 1st April 2024. In this regard, the updated terms of reference was also approved for all the committees. 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.

Apart from above said statutory committees of the Board, the Company also has the following non-statutory Board Committees:

1. Borrowing, Investments and Loan (BIL) Committee.

2. Operational Decision Making (ODM) Committee.

3. Business Responsibility and Sustainability Committee

4. Non-Convertible Debenture Committee.

Your Company has in place, a Code of Conduct for the Board of Directors and Senior management personnel, which reflects the legal and ethical values to which your Company is strongly committed. The Directors and Senior management personnel of your Company have complied with the code as mentioned hereinabove.

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 Company's Code of Conduct for Directors and Senior Management during the financial year 2023-24 and a declaration to that effect, signed by the CEO of the Company is enclosed to this Annual Report.

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

During the year 2023-24, Five (5) Board Meetings were conducted i.e. on 18th May 2023, 09th August, 2023, 07th November, 2023, 05th February, 2024 and 30th March, 2024 in accordance with the provisions of Companies Act, 2013 and SEBI Listing Regulations. 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 29th Annual General Meeting (AGM) of the Company was held on Friday, 30th June, 2023. Further, the 30th Annual General Meeting of the Company for the financial year 2023-24 is scheduled to be held on Saturday, 22nd June, 2024.The details of agenda to be discussed at the 30th Annual General Meeting of the Company forms part of the Notice of the Meeting.

Apart from the above said 29th Annual General Meeting of the Company, no Extra-Ordinary General Meetings were conducted/held during the financial year 2023-24.

During the year, the Company conducted two postal ballots to obtain shareholders' approval on significant matters impacting corporate governance and strategic appointments. These ballots were facilitated through e-voting facilities, ensuring shareholder participation and transparency in decision-making processes.

The first postal ballot, conducted from 23rd August, 2023, to 21st September, 2023, sought shareholder approval for the appointment of Mr. Hemant Bhargava and Mr. Dinesh Kumar Sarraf as Non-Executive Independent Directors of the Company for a period of five years, effective from 09th August, 2023. Additionally, the ballot included a proposal for the change in designation of Mrs. Shruti Aggarwal from Non-Executive Director to Whole Time Director of the Company, also effective from 09th August, 2023. The approval of shareholders for the above resolutions became effective from 21st September, 2023.

The second postal ballot, conducted from 15th November, 2023, to 14th December, 2023, sought approval for the appointment of Mrs. Shweta Aggarwal to hold an office or place of profit as Consultant in the wholly owned subsidiary of the Company, namely SMC Capitals Limited, effective from 07th November, 2023. This appointment was approved by the Board of Directors of the Company at its meeting held on 07th November, 2023. The approval of shareholders for the appointment of Mrs. Shweta Aggarwal became effective from 14th December, 2023.

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 of the Company has been conducted on 18th March, 2024 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

Pursuant to Regulation 34(2) (f) of the Listing Regulations and SEBI circular no. SEBI/LAD-NRO/ GN/2021/2 dated May 5, 2021; your Company provides the prescribed disclosures in new reporting requirements on Environmental, Social and Governance ("ESG") parameters called the Business Responsibility and Sustainability Report ("BRSR") which includes performance against the nine principles of the National Guidelines on Responsible Business Conduct and the report under each principle which is divided into essential and leadership indicators.

The BRSR is mandatory for the top 1000 listed companies by market capitalization as per the provisions of the Listing Regulations. 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.

During the year under review, your company did not fall under top 1000 listed companies in India on the basis of market capitalization; however above said provisions relating to BRSR is still applicable on the Company for the financial year 2023-24.

Accordingly, BRSR report drafted as per the provisions of the SEBI Listing Regulations and SEBI Circular issued time to time in this regard, describing the initiatives undertaken by the Company during financial year 2023-24 from an environmental, social and governance perspective has been annexed to this annual report.

Your Company strives to be a socially responsible Company and strongly believes in development, which is beneficial for the society at large, as a part of its Corporate Social Responsibility ("CSR") initiatives. The Company has in place a CSR policy in line with Schedule VII of the Act. The focus areas for the purpose of CSR during the year were:

1. Promoting Health care including preventive health care.

2. Promotion of Education.

3. Upliftment of weaker sections of the society

As per the Companies Act, 2013, as prescribed, companies are required to spend at least 2% of their average net profits of the three immediately preceding financial years. Accordingly, your Company has spent Rs. 244.09 lakhs, towards the CSR activities on standalone basis and Rs. 320.50 Lakhs on consolidated basis during FY 2023-24.

The Company complies with the provisions of section 135 of the Companies Act, 2013 and rules made there under, if any and has framed and implemented a CSR policy, which is available on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2021/09/CORPORATE-SOCIAL-RESPONSIBILITY-POLICY-1.pdf

Further, the detailed elaboration on the 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 criteria of making the payments to the Non-Executive Directors are published on the website of the Company at https://smcindiaonline.com/wp-content/uploads/2021/09/CRITERIA-FOR-MAKING-PAYMENTS-TO-NED.pdf

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. The policies are available on the website of the Company at https://smcindiaonline.com/index.php /investors/

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.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied by the Company.

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.

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, 2024 in the prescribed format is available at company's website at https://smcindiaonline.com/wp-content/uploads/2021/09/Annual-Retrun-F.Y-2023-24.pdf

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are as set out in the notes to the accompanying financial statements of your Company.

Pursuant to the provisions of Section 139 of the Act and Rules made thereunder, M/s R. Gopal & Associates, Chartered Accountants bearing firm registration no. 000846C were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the 25th Annual General Meeting until the conclusion of the 30th Annual General Meeting of the Company.

M/s R. Gopal & Associates, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2023-24, which forms part of this Annual Report 2023- 24. There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in the Audit Reports issued by them which call for any explanation/comment from the Board of Directors.

The Auditors have also confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

In this regard, the term of the above said statutory auditors is going to expire at the ensuing 30th Annual General Meeting of the Company. Hence, your Board of Directors recommends appointment of M/s P. C. Bindal & Co., Chartered Accountants (FRN 003824N) as Statutory Auditors of the Company by the Members at the 30th Annual General Meeting of the Company for a term of five consecutive years, to hold office from the conclusion of the 30th Annual General Meeting until the conclusion of the 35th Annual General Meeting of the Company.

During the year under review, 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 2023-24 which are prohibited non-audit services mentioned under clause (a) to (i) of section 144 of the Companies Act, 2013.

The Auditor's Report for the FY 2023-24 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.

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.

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 2023-24. The Secretarial Audit Report in form MR-3 for the financial year ended 31st March, 2024 is annexed herewith and marked as Annexure 3.

There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report pertaining to financial year 2023-24.

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 their secretarial audit for FY 2023-24.

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

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 had appointed M/s A. K. Roy & Associates, Practicing Company Secretaries Firm to conduct annual secretarial audit for FY 2023-24 pertaining to compliance of all applicable SEBI Regulations and circulars/guidelines issued there under.

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

During the year, ended 31st March, 2024, there were foreign currency earnings of Rs. 658.52 Lakhs and the foreign exchange outgo was of Rs. 43.89 Lakhs.

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.

The SMC Group employs around 4,264+ employees as on 31st March, 2024 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

Disclosures pertaining to remuneration and other details of Directors 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.

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 2015-16 of Rs. 2,14,790 (Two Lakh Fourteen Thousand Seven Hundred And Ninety Only) and Interim Dividend pertaining to FY 2016- 17 of Rs. 1,91,580 (One Lakh Ninety One Thousand Five Hundred And Eighty 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, 2024, total, 3,31,417 (Three Lakhs Thirty One Thousand and Four Hundred Seventeen Only) equity shares of face value Rs. 2/- each are held in IEPF Demat account.

In this regard, the notice of the ensuing Annual General Meeting provides the detailed list of unpaid dividend declared up to the date. Hence, Shareholders are requested to check the said lists and if any dividend due to them remains unpaid in the said lists, can approach the Company for release of their unpaid dividend.

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.

Further, there is no incident and threat has been reported during the financial year 2023-24 pertaining to Cyber Security.

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.

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.

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.

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.

The statements in the Board's Report and Management Discussion and Analysis, describing the Company's 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 Company's 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.