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/ Company's 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
Company's 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 it's
April 2024 policy meet has projected India's 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 India's GDP growth forecast
to 7.8% for 2024-25, higher than RBI's projection.
India's 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%). India's 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, India's trade deficit narrowed to $78 billion.
India's services exports grew at one of the fastest rates over the last 18 years and
India's defence and electronics exports have risen rapidly. India's 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. DIRECTOR'SRESPONSIBILITYSTATEMENT
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 arm's 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 Company's 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 Auditor's 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. AUDITORS'QUALIFICATION
(i) STATUTORYAUDITORS'QUALIFICATIONS
Qualifications contained in the Auditors' Report if any have been dealt with in the
Notes to financial statements and are self-explanatory.
(ii) SECRETARIALAUDITORS'QUALIFICATIONS
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) |
|