Sharika Enterprises Ltd

TO THE MEMBERS OF

SHARIKA ENTERPRISES LIMITED

The Directors are pleased to present the 26th (Twenty Sixth) Annual Report of the Company together with Consolidated and Standalone Audited Financial Statements of the Company for the financial year ended on March 31, 2024.

1. FINANCIAL PERFORMANCE

(Rs. in Lakhs)

Consolidated:

Revenue from operations for the financial year ending 31st March 24 was Rs. 7842.43 Lakh as against Rs. 5036.60 Lakh for the previous financial year, registering an increase of 55.70%. Profit/(loss) after tax for the year ended 31st March, 2024 is Rs. 153.42 lakh as compared to Net Profit/(Loss) of Rs. (332.28) lakh in the previous year. There was no revenue booked in the subsidiary company for the year under review.

Standalone: -

Revenue from operation for the financial year under review was Rs. 7841.10 Lakh as against Rs. 5036.60 Lakh for the previous financial year, registering an increase of 55.68%. Profit/(loss) after tax for the year ended 31st March 24 is Rs. 225.74 lakh as compared to Net Profit/(Loss) of Rs. (303.37) Lakh in the previous year.

2. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on March 31, 2024 was 21.65 Crore. There was no change in the share capital during the year under review.

3. DIVIDEND

In order to conserve the resources of the Company and to plough back the profits for growth, The Board of Directors of the Company have decided not to recommend any dividend on the equity shares of the Company for the financial year ended March 31, 2024.

4. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has two Subsidiary Company i.e. M/s Sharika Lightec Private Limited and M/s Sharika Smartec Private Limited and One Associate Company i.e. M/s Elettro meccanica India Private Limited.

5. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of sub-section (3) of Section 129 of the Act and relevant SEBI Listing Regulations, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies, forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards prescribed under Section 133 of the Act.

6. RESEARCH & DEVELOPMENT

Continuous efforts on Research & Development activities are being made to expand the domestic and export markets.

7. CORPORATE GOVERNANCE

Company is committed to maintaining the best standards of Corporate Governance and has always tried to build the maximum trust with shareholders, employees, customers, suppliers and other stakeholders.

A separate section on Corporate Governance forming part of the Board's Report and the certificate from the Practicing Company Secretary confirming compliance of the Corporate Governance norms as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is included in the Annual Report in Annexure - A.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34 of SEBI Listing Regulations, a separate section on Management Discussion and Analysis, Business Responsibility and Sustainability Report and Corporate Governance Report together with a certificate from a Practicing Company Secretary confirming compliance with the Regulations relating to Corporate Governance of SEBI Listing Regulations are set out and form part of this Annual Report.

9. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. The Internal Financial control is supplemented by an extensive program of internal audit conducted by in house trained personnelon recommendation of the Audit Committee and the Board. The audit observations and corrective action, if any, taken thereon are periodically reviewed by the Audit committee to ensure effectiveness of the Internal Financial Control System. The internal financial control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons.

10. INTERNAL CONTROLS SYSTEMS

The Internal Control systems are routinely tested and certified by Statutory as well as Internal Auditors and cover all key areas of business. Independence of the internal audit and compliance is ensured by direct reporting to the Audit Committee of the Board.

A Managing Director and CFO Certificate, forming part of the Corporate Governance Report, further confirms the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit Committee and rectify the same.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

(a) Chairman

Mr. Rajinder Kaul is the Chairman of the Board.

(b) Re-appointment and Appointment

Mr. Subir Mulchandani & Mrs. Saroj Chelluri was appointed as Additional Directors of the Company by the board of Directors in their meeting held on November 09, 2023 and further their appointment was approved by the shareholders by passing Special Resolution through Postal Ballot by remote e-voting process.

(c) Status of Directors

Mr. Rajinder Kaul is the Managing Director of the Company. Mr. Sanjay Verma is Non-Independent and Executive Director. Mr. Hitesh Kumar, Ms. Tanu Sharma, Ms. Nidhi Gambhir Ms. Saroj Chelluri, Mr. Subir Mulchandani, Mr. Arvind Kumar Koul are the Independent Directors of the Company.

(d) Cessation of Directors

During the year, Mr. Hitesh Kumar and Mrs. Tanu Sharma and Ms. Nidhi Gambhir and Mr. Ranjeet Kumar Verma ceased to hold office as Directors of the Company.

(e) Declaration from Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

(II) Key Managerial Person

Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following persons are the Key Managerial Personnel of the Company as on March 31, 2024:

Mr. Rajinder Kaul, Managing Director Mrs. Garvita Asati, Chief Financial Officer and Ms. Saumya Jaiswal, Company Secretary*

* Mr. Aditya Sharma has resigned from the post of Company Secretary and Compliance Officer of the Company from November 09, 2023 and Ms. Saumya Jaiswal has been appointed as the Company Secretary and Compliance Officer of the Company with effect from November 09, 2023.

12. DIVERSITY OF BOARD

The Company sees increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives and its sustainable development. In particular, a diverse Board, among others, will enhance the quality of decisions by utilizing different skills, qualifications and professional experience for achieving sustainable and balanced development.

13. STATEMENT OF BOARD OF DIRECTORS

The Board of Directors of the Company are of the opinion that all the Independent Directors of the Company appointed during the year possesses integrity, relevant expertise and experience required to best serve the interest of the Company. The Independent Directors have confirmed compliance of relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of Directors) Rules, 2014.

14. DECLARATION BY INDEPENDENT DIRECTOR

In terms of the provisions of sub-section (6) of Section 149 of the Act and Regulation 16 of SEBI Listing Regulations including amendments thereof, the Company has received declarations from all the Independent Directors of the Company that they meet the criteria of independence, as prescribed under the provisions of the Act and SEBI Listing Regulations, as amended from time to time. There has been no change in the circumstances affecting their status as an Independent Director during the year. Further, 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, if any, incurred by them for the purpose of attending meetings of the Board/Committee(s) of the Company. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity. As per the proviso to Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors of the Company are exempted from undertaking the online proficiency self assessment test.

15. FAMILIARISATION PROGRAMME FOR

INDEPENDENT DIRECTORS

At the time of appointing a Director, a formal letter of appointment is given to him, which inter- alia explains the role, function, duties and responsibilities expected of him as a Director of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 and other relevant regulations and affirmation taken with respect to the same.

Management does one to one discussion with the newly appointed Director to familiarize him with the Company's operations. Further the Company has put in place a system to familiarize the Independent Directors about the Company, its products, business and the ongoing events relating to the Company.

The details of the familiarization programme may be accessed on the Company's website (www.sharikaindia.com).

16. EVALUATION OF BOARD'S PERFORMANCE

In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Corporate Governance Report.

17. PERFORMANCE EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

In terms of provisions of the Companies Act, 2013 read with the Rules issued there under and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has adopted a formal mechanism for evaluating the performance of its Board, Committees and individual Directors, including the chairman of the Board. Further, a structured performance evaluation exercise was carried out based on criteria such as:

• Board/Committees composition;

• Structure and responsibilities thereof;

• Ethics and Compliance;

• Effectiveness of Board processes;

• Participation and contribution by members;

• Information and functioning;

• Specific Competency and Professional Experience / Expertise;

• Business Commitment & Organizational Leadership;

• Board/Committee culture and dynamics; and

• Degree of fulfilment of key responsibilities, etc.

The performance of Board, Committees thereof, Chairman, Executive and Non-Executive Directors and individual Directors is evaluated by the Board/ Separate meeting of Independent Directors. The results of such evaluation are presented to the Board of Directors.

18. MEETING OF THE BOARD OF DIRECTORS

During the year under review, the Board of Directors met eight times. The details are given in the Corporate Governance Report which forms a part of the Annual Report. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013.

Details of the composition of the Board and its Committees and of the Meetings held, the attendance of the Directors at such meetings and other relevant details are provided in Corporate Governance Report.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. The company has neither made any investment nor given any guarantee during the financial year 2023-24.

20. DEPOSITS

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

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3) of the Companies Act, 2013, read with the Rule 8 of Companies (Accounts of Companies) Rules, 2014 is annexed herewith as Annexure - C to this report.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy without fear of reprisal. The policy may be accessed on the Company's website.

23. REMUNERATION POLICY

Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors.

Members can download the complete remuneration policy on the Company's website (www.sharikaindia. com).

Disclosure of details of payment of remuneration to Managerial Personnel under Schedule V Part II, Section II (A) forms part of this Corporate Governance Report.

24. RELATED PARTY TRANSACTIONS

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered into by the Company during the financial year, were in the ordinary course of business and on an arm's length basis. The details of the related party transactions as required under Accounting Standard-18 are set out in Note 34 to the financial statements forming part of this Annual Report.

During the year, there were no transactions with related parties which qualify as material transactions under SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. The Disclosure required in Form AOC-2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 is Not Applicable.

The Company has developed a Policy for Consideration and Approval of Related Party Transactions which can be accessed on Company's website (www.sharikaindia. com).

25. ANNUAL RETURN

Pursuant to the provisions of section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link:http://www. sharikaindia.com/annnal-retnrn.php.

26. RISK MANAGEMENT

Every organization is exposed to a number of risks that it needs to effectively identify, manage and mitigate. Company has a process in place to identify key risks across the organization and relevant action plans to mitigate these risks. The Audit Committee has been entrusted with the responsibility to assist the Board members about the risk assessment and its minimization procedures.

There are no risks which in the opinion of the Board threaten the existence of your Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this Report.

27. AUDITORS Statutory Audit:

M/s. WDK & Associates, Chartered Accountants (ICAI Firm's Registration No. 016389N), the existing statutory auditors would retire from the conclusion of the ensuing Annual General Meeting of the Company and shall not be eligible for reappointment as per the provisions of rotation of auditors under Companies Act, 2013.

The Company has received a letter from M/s. R D V & Associates, Chartered Accountants, New Delhi expressing their willingness to be appointed as statutory auditors of the Company and further confirmed that their appointment, if made, will be in compliance with the provisions of Section 141(3)(g) of the Companies Act, 2013. The Board has proposed to appoint M/s R D V & Associates. Chartered Accountants (Firm Reg. No. 006128C), as statutory Auditors of the Company for a tenure of 5 years (from the conclusion of forthcoming 26th Annual General Meeting to be held in calendar year 2024 to 31st Annual General Meeting to be held in calendar year 2029.

There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditor's Report are self explanatory. During the year, the Auditor had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134(3) (ca) of the Act.

Secretarial Audit:

Pursuant to the Provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Managerial Personnel) Rules, 2014, the Company has appointed "M/s Jaivinder Singh & Associates", a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company.

The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of the applicable corporate laws. The Secretarial Audit Report annexed as Annexure-B

28. AUDITOR'S REMARKS

The Auditors' remarks on the annual accounts are selfexplanatory and do not require further comments from the Company

29. CHANGE IN NATURE OF BUSINESS, IF ANY

No change in the nature of the business of the Company done during the year under review.

30. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to provision of Section 135 of the Companies Act, 2013, your Company does not fall within the criteria of turnover and/or/ profit and/or net worth, therefore, the Company has neither formed CSR Committee nor CSR Policy.

31. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments which have occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report that may affect the financial position of the Company.

32. 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 operations.

33. LISTING WITH STOCK EXCHANGES

The Company confirms that it has paid the Annual Listing Fees for the year FY 2023-24 to the Bombay Stock Exchange where the Company's equity shares are listed.

34. POLICY ON CODE OF CONDUCT & ETHICS AND SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Sharika Enterprises has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the said act. There have been no complaints of sexual harassment received during the year.

35. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is also enclosed as Annexure D to this Report.

The information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to the top ten employees in terms of remuneration drawn and their other particulars also form part of thisreport. However, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

36. DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of knowledge and belief and according to the information and explanations obtained by them, hereby confirm that:

In the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanation relating to material departures.

Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates are made so as to give a true and fair view of the state of affairs of the Company as of 31st March, 2024 and of the profits of the Company for the year ended on that date.

Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

The annual accounts of the Company have been prepared on a going concern basis.

Proper Internal Financial Controls were in place and that the Financial Controls were adequate and were operating effectively.

Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

37. SECRETARIAL STANDARDS

During the year 2023-24, the Company has complied with applicable Secretarial Standards issued by the Institute of the Company Secretaries of India.

38. OTHER DISCLOSURES

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to:

(a) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016; and

(b) instance of one-time settlement with any bank or financial institution.

39. ACKNOWLDGEMENT

Your directors would also like to extend their gratitude for the co-operation received from financial institutions, the Government of India and regulatory authorities. The board places on record its appreciation for the continued support received from customers, vendors, retailers and business partners, which is indispensable in the smooth functioning of Company. Your directors also take this opportunity to thank all investors and shareholders, and the stock exchanges for their continued support. Your directors place on records their deep appreciation to employees at all levels for their hard work, dedication and commitment. Their contribution to the success of this organization is immensely valuable.