Sharika Enterprises Ltd Directors Report.

To the Members of Sharika Enterprises Limited

The Directors have pleasure in presenting the 21st Annual Report of your Company together with its audited financial statement for the financial year ended March 31, 2019.

FINANCIAL RESULT:

STANDALONE (in Rs.)

Particulars 2018-19 2017-18
Total Income 244,678,690 192,339,169
Total Expenditure 232,846,169 163,201,138
Profit/ (Loss) before Tax 11,832,520 29,138,031
Profit/ (Loss) after Tax 8,927,137 22,676,115
CONSOLIDATED (in Rs.)
Particulars 2018-19 2017-18
Total Income 245,199,851 194,480,810
Total Expenditure 237,488,463 174,171,193
Profit/ (Loss) before Tax 7,711,388 20,309,617
Profit/ (Loss) after Tax 4,806,004 13,847,701

FINANCIAL HIGHLIGHTS STANDALONE:

Income:

The Total Income for the year ended March 31, 2019 is Rs. 244,678,690 more than Total Income of the previous year.

Depreciation and Finance Costs:

Depreciation for the year is higher at Rs. 50,72,351 which is lower compared to previous year. Total Finance costs for the year ended March 31, 2019 was Rs. 1,36,87,751.00 which is lower as compared to previous year.

Profit before Tax and Exceptional Items:

Profit before Tax stood at Rs. 1,18,32,350 as compared to previous year Rs. 2,91,38,031.

Borrowings:

The total borrowings stood at Rs. 92,6111,372 as on March 31, 2019 as against Rs. 82,052,596 as on March 31, 2018 for the standalone entity.

Profit / (Loss) after tax:

The Profit after Tax for the year is at Rs. 89,27,137 as compared to a profit of Rs. 2,26,76,115 for the previous year.

FINANCIAL HIGHLIGHTS CONSOLIDATED

The consolidated income of your Company for the year ended March 31, 2019 aggregated Rs. 245,199,851 as against for the previous year Rs. 194,480,810. The consolidated turnover increased by 26.08 %.

The consolidated profit after Tax aggregated to Rs. 4,806,004 for the year has declined when compared to the profit after Tax of Rs. 13,847,70 for the previous year. The consolidated financial results of the current year were impacted due to various operational factors.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Consolidated Financial Statements of your Company and its Subsidiary and Joint Venture prepared in accordance with the relevant Accounting Standards of the Institute of Chartered Accountants of India, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the Consolidated Accounts.

Your Company has one Subsidiary and one Joint Venture as at March 31, 2019. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of your Companys Subsidiary and Joint Ventures in Form AOC-1 is attached to the Financial Statements of your Company.

PERFORMANCE OVERVIEW AND STATE OF COMPANYS AFFAIRS:

During the year under review, your Company has earned net profit of Rs. 8,927,137. Your directors are hopeful for the bright future of the company in years to come. The company will continue its efforts to reduce costs and improve efficiencies, enhance value-addition to its customer base and maximize capacity utilization. With these efforts the company hopes to generate revenues and profitability.

NATURE OF BUSINESS:

Incorporated in 1998, Our Company engaged in Engineering Procurement Construction (EPC) contracts, specialized assembling, trading activities, Erection Services, representation services to majorly power Generation, Transmission and Distribution sector. We have grown consistently over the years and widened our portfolio which covers installing power transmission EHV cables, designing & installing EMS (Energy Management System) and allied distribution automation Equipments such as Autoreclosers, fault passage indicators (FPI) etc., designing and installing of Solar Power Generation plants.

Our Company is headquartered in the National Capital Region in India and with having assembling unit in Jammu and Noida. Also our Company is an ISO 9001:2015 certified for providing Consultancy, Project Management, EPC Contracts in field of Power Generation, Transmission and Distribution. We operate in the infrastructure sphere in India focusing on the power sector and work with international and Indian power equipment manufacturers and involved in project management/EPC contractors.

Our Company is also engaged in trading of LED lights, EHV cables & accessories, power capacitors, switchgears & Cast Resin Transformers.

Our Services are:-

1. Engineering Procurement Constructions (EPC)

2. Representative Services

3. Other consultancy Services

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there is no change in the nature of business activity of the company.

DEMATERIALIZATION OF EQUITY SHARES:

All the Equity Shares of the Company are in dematerialized form with either of the depositories viz. NSDL and CDSL.

ANNUAL RETURN:

The details forming part of the Annual Return shall also be available on Website of the Company which is www.sharikaindia.com

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

APPROPRIATIONS:

Dividend:

No dividend was declared during financial year under review.

Reserves:

The Board of director has not transferred any amount to Reserves.

LISTING:

The Equity Shares of the Company are listed on SME Platform of BSE Limited w.e.f. 27th November, 2017. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2018-19.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT:

Mr. Rajinder Khazanchi (Independent Director) resigned in relevant year on 17.05.2018, Mr. Mahesh Pandey (Company Secretary & Compliance Officer) resigned in relevant year on 26.06.2018 while Mr. Ranjeet Verma and Ms. Pinki Kumari was appointed as Independent Director in relevant year on 14.08.2018 which might affect the financial position of the company between the end of the financial year to the date of signing of financial statement and directors report.

PUBLIC DEPOSITS:

Company does not accept and / or renew Fixed Deposits from the general public and shareholders.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has given loan during the financial year 2018-19, the details of which are specified in Note No. 18 of financial statement as on 31st March 2019.

The company has neither made any investment nor given any guarantee during the financial year 2018-19.

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

There was no change in the capital structure for the relevant year 2018-19.

BOARD POLICIES

The details of all the policies approved and adopted by the Board are available on the website of the Company www.sharikaindia.com . You can also access them directly via this link http://www.sharikaindia.com/policy.php

Policy on directors appointment and remuneration

The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2018, Our Board of Directors consists of 7 (seven) Directors out of which 3 (three) are Executive Directors, 2(two) are Non-Executive Women Directors and 2 (two) are Independent Directors.

The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, at www.sharikaindia.com. You can access it directly via this link too http://www.sharikaindia.com/policy.php

We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

AUDITOR AND AUDITORS REPORT:

Statutory Auditor:

M/s WDK & Associates, Chartered Accountants, was appointed as Statutory Auditors of the Company at 16th Annual General Meeting of the Company to hold office for five consecutive years subject to ratification at every annual general meeting. Finding satisfactory performance of auditor, Board on the recommendation of Audit Committee recommends ratification of the appointment of M/s WDK & Associates as Statutory Auditors. The Auditors are proposed to be re appointed for a period of 5 years from the conclusion of 21st AGM till the conclusion of 26th AGM.

Statutory Auditors Report: The Auditors Report does not contain any qualification, reservation or adverse remark and report are self-explanatory and do not call for any further comments.

Secretarial Auditor:

M/s Kundan Agrawal & Associates, Company Secretaries, was appointed as Secretarial Auditor of the Company by the Board of Directors w.e.f. 30th May, 2019 for the Financial Year 2018-19.

As the Company recently got listed at BSE SME Exchange, thus Company appointed Secretarial Auditor for the first time.

The Auditors Report does not contain any qualification, reservation or adverse remark and report are self-explanatory and do not call for any further comments.

Secretarial Auditors Report: The Auditors Report does not contain any qualification, reservation or adverse remark and report are self-explanatory and do not call for any further comments.

The report of Secretarial Audit in Form MR -3 is annexed to & forms part of this Report.

Internal Auditor:

Mr. Ravinder Bhan was appointed as Internal Auditor of the Company for the financial year 2018-19 who is acting independently. He reports directly to the Board.

Internal Auditors Report: The Auditors Report does not contain any qualification, reservation or adverse remark and report are self-explanatory and do not call for any further comments.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions of Companies Act, 2013 w.r.t. CSR are not applicable on the Company

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Board of Directors hereby state and confirm that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2019 the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments 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 31st March, 2019 and of the profit and loss of the company from 1st April, 2018 to 31st March, 2019.

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis; and

e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS:

Transactions with related parties in the ordinary course of the Companys business and none of these fall under the purview of the provisions of section 188 of the Companies Act, 2013. The details of RPT are more fully explained in Note No. 30 of Financial Statements.

The policy on Related Party Transactions is available on our Website www.sharikaindia.com . You can access it directly via this link too http://www.sharikaindia.com/policy.php

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy-

i. the steps taken or impact on conservation of energy; Nil

ii. the steps taken by the company for utilizing alternate sources of energy; Nil

iii. the capital investment on energy conservation equipments; Nil

B. Technology Adsorption-

i. the efforts made towards technology absorption-Nil

ii. the benefits derived like product improvement, cost reduction, product development or import substitution- Nil

iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- Nil

iv. the expenditure incurred on Research and Development- Nil

C. Foreign Exchange Earnings and Outgo: Nil

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013 READ WITH RULES:

The Company has not received any complaint of sexual harassment during the year under review.

SIGNIFICANT AND MATERIAL ORDERS OF REGULATORS OR COURTS OR TRIBUNALS:

A significant material order was passed by Himachal Pradesh Electricity Board for declaration of automation of SCADA system.

L.S. Cable India Private Limited for the supply of medium voltage cable.

There are no other significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

COROPRATE GOVERNANCE

As per Regulation 15 under Chapter IV of SEBI (LODR) Regulations, 2015, the listed entity which has listed its securities on the SME exchange are exempt from complying with the Corporate Governance provisions as specified in Regulation 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and sub-regulation 2 of Regulation 46.

Your Company has been listed on SME Platform of Bombay Stock Exchange and thus provisions of Corporate Governance are not applicable on your Company. Though, your Company tries to follow all the corporate governance practices as much as it can. Thus, separate Corporate

Governance Report is not provided this year however Company is providing Management Discussion & Analysis report which forms a part of this Annual report.

Board diversity

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender that will help us retain our competitive advantage.

Our Board has been constituted in compliance with the Companies Act and the SEBI Listing Regulations and in accordance with the best practices in Corporate Governance.

Declaration by independent directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

Board evaluation

The Companies Act, 2013 provides that a formal annual evaluation needs to be made by the Board of its own performance and that of its Committees and individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated. The board of directors in consultation with Nomination & Remuneration Committee has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provisions of the Companies Act, 2013. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of Committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. The evaluation of Independent Directors was carried out by the entire Board and that of the Chairman and Non Independent Directors were carried out by the Independent Directors. In a separate meeting of Independent Directors, performance of non-Independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company.

Familiarization program for independent directors

All new independent directors inducted into the Board attend an orientation program. Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The terms and conditions of appointment of Independent Director and Familiarization Program for independent directors are available on our website, at www.sharikaindia.com. You can access them directly via this link too http://www.sharikaindia.com/policy.php .

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Appointments

Mr. Ranjeet Verma Kumar, Mr. Sanjay Verma and Ms. Pinki Kumari were appointed as Independent Directors in the relevant year on 14.08.2018.

Resignations

Mr. Mr. Rajinder Khazanchi (Independent Director) resigned in relevant year on 17.05.2018, Mr. Mahesh Pandey (Company Secretary & Compliance Officer) resigned in relevant year on 26.06.2018.

MEETINGS OF THE BOARD AND COMMITTEES:

Meeting of the Board

During the year 2018-19, Nine board meetings were held on respective date, 28.05.2018, 30.05.2018, 28.06.2018, 14.08.2018, 01.09.2018, 13.11.2018, 15.12.2018, 28.01.2019, 01.03.2019, 05.03.2019. The attendance of directors at the board meetings is as given below:

Name of Directors Designation Attendance Particulars
Number of Board Meetings
Held Attended
Mr. Rajinder Kaul Managing Director 10 10
Mr. Ravinder Bhan Whole-time Director 10 10
Mr. Arun Kaul Whole-time Director 10 10
Ms. Mukta Mani Kaul Non-Executive Director 10 10
Mr. Ashok Kumar Kaul Independent Director 10 10
Mr. RANJEET VERMA KUMAR Independent Director 6 6
Ms. PINKI KUMARI Independent Director 6 6
Mr. SANJAY VERMA Independent Director 6 6

Meetings of Audit Committee:

During the year 2018-19, One Audit Committee meeting was held on 13th October, 2018. The attendance of directors at the Audit Committee meeting is as given below:

Name of Directors Designation Attendance Particulars
Number of Committee Meetings
Held Attended
Mr. RAJINDER KAUL Member 1 1
Mr. ASHOK KUMAR KAUL Member 1 1
MR. RANJEET VERMA Chairman 1 1

Meetings of Nomination & Remuneration Committee:

During the year 2018-19, One Nomination & Remuneration Committee meeting was held on 13th October, 2018. The attendance of directors at the Nomination & Remuneration Committee meeting is as given below:

Name of Directors Designation Attendance Particulars
Number of Committee Meetings
Held Attended
Mrs. MUKTA MANI KAUL Member 1 1
Mr. ASHOK KUMAR KAUL Chairman 1 1
MR. RANJEET VERMA Chairman 1 1

Meetings of Stakeholder Relationship Committee:

During the year 2018-19, no Stakeholder Relationship Committee meeting was held.

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 the Companys 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.

There is adequacy of control w.r.t. Financial statements of the Company

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

Your Company has established a "Whistle Blower Policy" and Vigil Mechanism for directors and employees to report to the appropriate authorities concerns about the unethical behavior actual or suspected, fraud or violation of the Companys code of conduct policy and provides safeguards against victimization of employees who avail the mechanism and also provide for direct access to the Chairman of the Audit Committee. The said policy has been uploaded on the website of the company www.sharikaindia.com . You can see it directly via this link http://www.sharikaindia.com/img/pdf/vigil-mechanism.pdf

CODE OF CONDUCT

Company keenly follows the code of conduct and ethics. The code of conduct of our Company is given on our Website www.sharikaindia.com . You can directly access the code of conduct via this link too http://www.sharikaindia.com/policy.php

RISK MANAGEMENT

The Company has adequate internal control systems and procedures to combat the risk. The Risk management procedures are reviewed by the Audit Committee and Board of Directors on time to time basis.

ACKNOWLEDGEMENT:

Your Directors are pleased to record their gratitude for the understanding and support received from the share holders, financial institutions, bankers, customers and suppliers of the Company.

For SHARIKA ENTERPRISES LIMITED
Sd/- Sd/-
(Rajinder Kaul) (Ravinder Bhan)
Date: 05/09/2019 Managing Director Wholetime Director
Place: Delhi DIN: 01609805 DIN: 01609915
Add C-581 Sarita Vihar New Add: A-581, Pocket-A Sarita
Delhi 110044 Vihar New Delhi 110076