Smartlink Holdings Ltd

TO

THE MEMBERS,

The Directors of your Company (“the Company” or “Smartlink”) are delighted to present the 31^st Annual Report along with the audited financial statements for the financial year (“FY”) ended March 31, 2024. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. FINANCIAL PERFORMANCE

Key highlights of standalone and consolidated financial performance for the year ended March 31, 2024, are summarized as under:

Note: The standalone and consolidated financial statements of the Company for the financial year ended March 31, 2024, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs and as amended from time to time.

2. STATE OF COMPANY'S AFFAIRS

2.1 Review of Standalone Financial Results

The revenue from operations of the Company for the year ended March 31, 2024 stood at INR 1,253.72 lakhs as against INR 954.49 lakhs in the previous financial year. The total Income stood at INR 1,271.12 lakhs for the year ended March 31,2024 as compared to INR 1,105.18 lakhs in the previous financial year.

The standalone profit before tax was INR 435.08 lakhs as compared to INR 2,112.54 lakhs in the previous financial year. The profit after tax stood at INR 320.44 lakhs as compared to INR 1,774.08 lakhs in the previous financial year.

2.2 Review of Consolidated Financial Results

The consolidated revenue from operations of the Company for the year ended March 31, 2024 stood at INR 20,918.02 lakhs as against INR 16,305.26 lakhs in the previous financial year. The Total Income stood at INR 20,994.41 lakhs for the year ended March 31,2024 as compared to INR 16,433.94 lakhs in the previous financial year.

The consolidated profit before tax was INR 869.85 lakhs as compared to INR 2,274.79 lakhs in the previous financial year. The profit after tax stood at INR 705.95 lakhs as compared to INR 1,923.94 lakhs in the previous financial year.

For the FY 2022-23, Standalone & Consolidated profits included an exceptional gain to the tune of INR 2,091.57 lakhs on account of sale of land by the company.

3. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended March 31,2024.

4. DIVIDEND

Your Directors have not recommended any dividend for the current financial year due to conservation of profits and continued investment in the business.

5. TRANSFER TO RESERVES

Your Board of Directors have transferred an amount of INR 64.09 lakhs to the Statutory Reserve maintained under Section 45 IC of the RBI Act, 1934 for the FY 2023-24.

6. SHARE CAPITAL

The Paid-up Equity Capital of the Company as on March 31, 2024 stood at INR 1,99,50,000 consisting of 99,75,000 equity shares of INR 2 each. The Company has not issued shares with differential voting rights, employee stock options and sweat equity shares. The Company has paid Listing Fees for the FY 2023-24 to each of the Stock Exchanges, where its equity shares are listed.

7. ANNUAL RETURN

As provided under Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 (“the Act”), the Annual Return for FY 202324 is uploaded on the website of the Company and can be accessed at https://www.smartlinkholdings.com/investor-relations.

8. MEETINGS

The Board meets at regular intervals to discuss and decide on the Company/business policy and strategy apart from other Board business.

During the year, four Board Meetings and four Audit Committee Meetings were held. The details of the same are given in the Corporate Governance Report which forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”).

Pursuant to provisions of part VII of the Schedule IV of the Act and Regulation 25 of the LODR Regulations, one meeting of Independent Directors was held on May 17, 2023 for transacting the business enumerated under the said provisions.

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

The Company has provided Guarantees to its wholly owned subsidiaries, Digisol Systems Limited and Synegra EMS Limited in compliance with Section 186 of the Companies Act, 2013. Particulars of the guarantees given during the year under review in accordance with Section 186 of the Act, have been disclosed in the financial statements.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions (RPTs) that were entered into during the financial year were on arm's length basis and in the ordinary course of business. These RPTs did not attract the provisions of Section 188 of the Companies Act, 2013 and were also not material RPTs under Regulation 23 of the LODR Regulations. None of the transactions with related parties falls under the scope of Section 188(1) of the Act.

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

The disclosures as required under IND-AS have been made in the notes to the Standalone Financial Statements. The particulars of contracts or arrangements entered into 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 - J in Form AOC-2 and the same forms part of this Directors' report. The Policy on RPT as approved by the Board of Directors of the Company is available on the Company's website at https://www.smartlinkholdings.com/wp-content/uploads/2021/05/Related-Partv-Transactions-Policv-Smartlink-2021 .pdf.

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

There were no material changes/ commitments affecting the financial position of the Company during the period from the end of the financial year on March 31,2024 to the date of this Report.

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

Your Company being a Non-Banking Finance Company, has no activities involving conservation of energy and adoption of any specific technology.

Foreign Exchange earnings and outgo is given in the notes to the standalone Financial Statements of the Company forming part of this report.

13. SCHEME OF AMALGAMATION

The Board of Directors at its meeting held on February 09, 2024 approved the Scheme of amalgamation of Synegra EMS Limited (‘Synegra'), wholly owned subsidiary with the Company. Synegra is engaged in the business of manufacturing of various categories of electronic and IT products on job work basis and also engaged in contract manufacturing for original equipment manufacturers.

The amalgamation is being done to foray into design, development, research in the field of Information Technology on networking products at the holding company level, reduce managerial overlaps, regulatory compliances which are necessarily involved in running multiple entities and elimination of duplication of administrative expenses, consequently enabling cost savings, ease in raising funds at Holding Company level and economies of scale, greater integration, flexibility and market reach for the amalgamated entity.

The amalgamation is in its initial phase and the Company has filed the application with the Honorable National Company Law Tribunal, Mumbai.

14. DETAILS OF SUBSIDIARY COMPANIES

The Company has two subsidiaries, namely Digisol Systems Limited and Synegra EMS Limited as on March 31,2024.

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

In accordance with Section 136 of the Act, 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 on specific request made to it in this regard. The same will also be available at the Registered Office and corporate office of the Company for inspection during office hours.

Digisol Systems Limited and Synegra EMS Limited are unlisted Material Subsidiaries of the Company. The Company has formulated a Policy on Material Subsidiary as required under LODR Regulations and the policy is uploaded on the website of the Company at https://www.smartlinkholdings.com/wp-content/uploads/2020/03/Subsidiary-Policy-2019-amended.pdf.

15. RISK MANAGEMENT

Pursuant to section 134(3)(n) of the Act, 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 Company's 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. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Key Managerial Personnel

Mr. Kamalaksha Rama 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 the provisions of Section 203 of the Act. There was no change in the Key Managerial Personnel during the year under review.

b. Appointment of Directors

Mr. Satish Vishnu Godbole (DIN 02596364) has been appointed as an Additional Director designated as Non-Executive Independent Director of the Company with effect from March 31,2024.

Dr. Lakshana Amit Sharma (DIN 10525082) has been appointed as an Additional Director designated as Non-Executive Non-Independent Director of the Company with effect from March 31,2024.

Mr. Chandrashekhar Maruti Gaonkar (DIN 00002016) has been appointed as an Additional Director designated as Non- Executive Independent Director of the Company with effect from May 09, 2024.

c. Re-appointment of Directors

Mr. Kamalaksha Naik (DIN 00002013), Executive Chairman of the Company was appointed for a term of 5 years with effect from December 26, 2019 to hold office upto December 25, 2024. His term of appointment is due to expire on December 25, 2024. The Board of Directors upon recommendation of the Nomination and Remuneration Committee, at its meeting held on May 09, 2024, approved the reappointment of Mr. Naik as Executive Chaiman (Wholetime-Director) of the company for a further period of 5 years to take effect from December 26, 2024. The reappointment is subject to approval of the shareholders in the general meeting. A resolution proposing his reappointment for a further period of 5 years with effect from December 26, 2024 forms part of the Annual General Meeting (“AgM”) Notice.

Mr. Kamalaksha Naik (DIN 00002013), Executive Chairman of the Company, who retired by rotation in terms of Section 152(6) of the Companies Act, 2013 was re-appointed as Executive Director of the Company at the 30th AGM held on August 25, 2023. Ms. Arati Naik (DIN 06965985), Executive Director retires by rotation and being eligible, offers herself for re-appointment. The Business item seeking shareholders' approval for her re-appointment forms part of the AGM Notice.

In the opinion of the Board, Mr. Satish Godbole and Mr. Chandrashekhar Gaonkar appointed as an Additional Directors designated as Non - Executive Independent Directors possesses requisite integrity, expertise, experience and proficiency. 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.

d. Retirement of Directors

During the year under review, Mr. Pankaj Madhav Baliga (DIN 00002864) and Mr. Krishnanand Maruti Gaonkar (DIN 00002425), Independent Directors of the Company ceased to be directors of the Company due to completion of tenure on March 31,2024. The Board places on record its appreciation for the assistance and guidance provided by Mr. Baliga and Mr. Gaonkar during their tenure as Independent Directors of the Company.

e. 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 LODR Regulations.

17. 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.

18. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Financial Control System, 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.

19. DEPOSITS FROM PUBLIC

The Company has neither invited nor accepted any deposits from the public during the FY 2023-24. The Company does not intend to invite or accept any deposits during the FY 2024-25 and 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. SECRETARIAL AUDITOR AND AUDITORS' REPORT

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Shivaram Bhat, Company Secretary in Practice (ACS No. 10454, Certificate of Practice No. 7853), to carry out the Secretarial Audit of the Company. The Report of the Secretarial Auditor for FY 2023-24 is attached herewith as Annexure - B. There are no qualifications, observations or adverse remarks or disclaimer in the said report. Pursuant to Regulation 24A of LODR Regulations read with SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Secretarial Audit Report of Material unlisted Subsidiaries of the Company namely Digisol Systems Limited and Synegra EMS Limited is annexed as Annexure - C and Annexure - D respectively to this Directors' report.

The Annual Secretarial Compliance Report of the Company for the financial year ended March 31,2024 on compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder was obtained from Mr. Shivaram Bhat, Secretarial Auditor. The report is uploaded on the website of the company at https://www.smartlinkholdings.com/wp-content/uploads/2024/05/ Smartlink-Secretarial-Compliance-Report-31-03-2024.pdf

21. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Act, read with rules made thereunder, the Company has formulated 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 of the Company may be accessed on the Company's website at https://www.smartlinkholdings.com/ wp-content/uploads/2020/03/3.-Corporate-Social-Responsibilitv-Policv.pdf

Under Section 135 of the Act, the Company was not required to spend any amount on CSR activities in the FY 2023-24. 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 - H to this Report.

22. 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 LODR 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 Directors' report. During the year, all the recommendations of the Audit Committee were accepted by the Board.

Further, in terms of section 177(8) of the Act, 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 FY 2023-24.

23. ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

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 Act, and the LODR 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 out during the financial year;

b) Previous year's 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.

24. 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 Company's 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 Section 178 of the Act read with Regulation 19 of LODR Regulations. The details of meetings and their attendance are included in the Corporate Governance Report.

25. STAKEHOLDERS RELATIONSHIP COMMITTEE

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

26. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177 of the Act, 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://www.smartlinkholdings.com/wp-content/uploads/2020/03/Whistle-Blower-Policv-Final-2019.pdf.

During the year under review, the Company through its Audit Committee has not received any complaints relating to unethical behavior, actual or suspected fraud or violation of company's code of conduct from any employee or director.

27. CORPORATE GOVERNANCE

As required under Schedule V of the LODR Regulations, the Report on Corporate Governance as well as the Auditor's Certificate regarding compliance of Conditions of Corporate Governance forms a part of Directors' Report as Annexure - E and Annexure - F respectively.

28. 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 - G to this Directors' report.

29. DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As the 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.

There were no complaints relating to sexual harassment, pending at the beginning of financial year, received during the year and pending as at the end of the FY 2023-24.

30. REPORTING OF FRAUDS

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

31. STATUTORY AUDITOR AND AUDIT REPORTS

M/s Shridhar & Associates, Chartered Accountants (having FRN 134427W) were appointed as the Statutory Auditors of the Company for a period of four years of the first term, commencing from FY 2022-23. The Statutory Auditors have given a confirmation to the effect that they are eligible to be appointed and not disqualified from continuing as the Statutory Auditors. During the year under review, the auditors have not reported any matter under Section 143(12) of the Act.

The statutory auditor's report does not contain any qualifications, reservations, or adverse remarks or disclaimer.

32. COST AUDIT

During the relevant period for the purpose of Section 148 of the Act, read with the rules made thereunder, maintenance of cost records and requirement of cost audit are not applicable for the business activities carried out by the Company.

33. 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 LODR Regulations, is appended to the Directors' report as Annexure - A.

34. 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 ended March 31,2024, 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 March 31,2024 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 frauds 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.

35. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

a) Transfer of unclaimed dividend

Pursuant to the applicable provisions of the Act, 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. No dividend remained unpaid or unclaimed which was required by the company to be transferred to the IEPF Authority in the FY 2023-24.

b) Transfer of Shares to IEPF

According to the provisions of section 124 of the Act, and Rules made thereunder, the shares on which dividend has not been paid or claimed by shareholders for seven consecutive years shall be transferred to Demat account of IEPF Authority. There were no shares transferred to the IEPF Authority during the FY 2023-24.

The following table provides details of unclaimed dividend and their corresponding shares which would become due to be transferred to the IEPF on the dates mentioned below:

36. 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 designated persons of the Company.

37. SECRETARIAL STANDARDS

The Institute of Company Secretaries of India has currently mandated compliance with the Secretarial Standards on board meetings and general meetings. During the year under review, the Company has complied with the applicable Secretarial Standards.

38. GREEN INITIATIVE

As part of our green initiative, the electronic copies of this Annual Report including the Notice of the 31st AGM are sent to all members whose email addresses are registered with the Company / Registrar / Depository Participant(s). The Company welcomes and supports the ‘Green Initiative' undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report, quarterly and half-yearly results, amongst others, to Shareholders at their e-mail address previously registered with the DPs and RTA.

The requirement of sending physical copies of Annual Report to those shareholders who have not registered their email addresses is dispensed with for Listed Entities who would be conducting their AGMs upto September 30, 2024 vide SEBI CIRCULAR NO. SEBI/HO/DDHS/P/CIR/2023/0164 dated October 07, 2023. In this respect the physical copies are not being sent to the shareholders. The copy of the same would be available on the website of the Company at www.smartlinkholdings.com. However, the Shareholders of the Company may request physical copy of the Notice and Annual Report from the Company by sending a request at companv.secretarv@smartlinkholdings.com in case they wish to obtain the same.

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 Act, and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting are provided in the AGM Notice.

39. ACKNOWLEDGEMENT

The Directors wish to convey their deep appreciation to all the customers, vendors, dealers, distributors, resellers, bankers, investors, Goa Industrial Development Corporation, State Industries, Electricity and other Government departments for their sincere and dedicated services as well as their collective contribution to the Company's performance.

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

For and on behalf of the Board of Directors