To the Members,
It is our privilege to present the 51st Director's Report for R K SWAMY Limited for the financial year ended March 31, 2024. The most significant and far-reaching event in 2023-24 was the listing of the Company's shares in the Stock Exchanges - BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") on March 12, 2024. The Company is the first Integrated Marketing Services player to be listed on the Main Board of these Stock Exchanges. The offer for subscription to the Company's shares received an overwhelming response. The Board of Directors takes this opportunity to thank all the shareholders who have reposed confidence in the Company.
1. FINANCIAL PERFORMANCE AND OPERATIONAL HIGHLIGHTS:
The Company performed robustly in 2023-24, with double-digit percentage increases in revenue and profitability.
a. FINANCIAL RESULTS:
The Company's performance during the financial year ended March 31, 2024 as compared to the previous financial year is summarized below: Amount in Rs. Lakhs
Standalone
Consolidated
Particulars
Earnings before interest, tax, depreciation & amortization (EBITDA)
Finance Costs, Depreciation and Amortization expenses
Earning per equity share: Basic & diluted
^Gr oss margins is Revenue from Operations less Operating expenses b. STATE OF AFFAIRS OF THE COMPANY AND FINANCIAL PERFORMANCE:
The Company is one of the leading Integrated Marketing Services groups in India, offering a single-window solution for Creative, Media, Data Analytics and Market Research Services. During the year, the Company has undertaken innumerable projects for over 400 Clients operating in a wide range of categories. The nature of services rendered and work accomplished can be seen at www.rkswamy.com, www.hansaresearch.com and www.hansacequity.com.
PERFORMANCE OVERVIEW:
Revenue from Operations for the financial year 2023-24 was Rs. 33,151.56 Lakhs, higher by 13.29% as compared to Rs. 29,261.31 Lakhs for financial year 2022-23.
Total Income for the financial year 2023-24 was Rs. 33,539.15 Lakhs, higher by 11.81% as compared to Rs. 29,995.80 Lakhs for financial year 2022-23. The Other Income for the financial year 2023-24 was Rs 387.59 lakhs, which was lower as compared to Rs 734.49 lakhs in the previous year on account of lower credit write backs and interest on loans which was settled in the financial year 2022-23.
Earnings before interest, tax, depreciation and amortization for the financial year 2023-24 was Rs. 7,428.50 Lakhs, higher by 18.09% as compared to Rs. 6,290.79 Lakhs for financial year 2022-23.
Profit Before Tax for the financial year 2023-24 was Rs. 5,356.91 Lakhs, higher by 25.80% as compared to Rs. 4,258.18 Lakhs for financial year 2022-23.
Profit after Tax for the financial year 2023-24 was Rs. 3,972.48 Lakhs, higher by 27.07% as compared to Rs. 3,126.00 Lakhs for financial year 2022-23. At a consolidated level, in the financial year 2023-24, the Company registered its highest profit after tax.
During the year under review, there was no change in the nature of business of the Company. c. MATERIAL EVENTS:
CONVERSION OF THE COMPANY INTO A PUBLIC LIMITED COMPANY:
The Company was converted into a Public Limited Company under the Companies Act, 2013 ("Act") and consequently, the name of our Company was changed from ‘R K SWAMY Private Limited' to ‘R K SWAMY Limited' pursuant to the resolution passed by the Board of Directors on June 16, 2023 and a special resolution passed by the Shareholders of the Company on July 3, 2023. A fresh certificate of incorporation dated July 17, 2023 was issued by the Registrar of Companies, Chennai.
INITIAL PUBLIC OFFER ("IPO"):
During the year under review, the Company made its Initial Public Offer (‘the Offer') comprising of an Offer for Sale and Fresh Issue, details of which are summarized below:
The offer had been authorised by a resolution of the Board of Directors on August 7, 2023 and by the Shareholders on August 8, 2023. The offer was open for public from March 4, 2024 to March 6, 2024. The Company completed its IPO successfully with participation of several leading domestic and global Institutional Investors as well as NRIs, HNIs and Retail Investors. The Offer was oversubscribed by ~26 times. The Board also places on record its appreciation for the support provided by various Authorities & Regulators, Lead Merchant Bankers, Stock Exchanges, Depositories, Counsels, Consultants, Auditors, Registrar & Transfer Agent and Employees of the Company for making the IPO of the Company a success. The equity shares of the Company were listed on BSE Limited and National Stock Exchange of India Limited effective from March 12, 2024. d. MANAGEMENT DISCUSSION AND ANALYSIS
As required under Regulation 34 read with Schedule V(B) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), report on Management Discussion and Analysis is given below:("MD&A") The Company is one of the leading Integrated Marketing Services groups in India, offering a single-window solution for Creative, Media, Customer Data Analytics and Market Research Services. The Company has a track record of over five decades, and works with leading private companies/groups, major institutions of India, Public Sector Enterprises, Multinational companies and a host of ambitious Indian brands. Driven by its Clients' continuous demand for more effective and efficient Marketing Services, the Company pursues a contrarian strategy by providing a comprehensive range of services in the following interrelated and complementary business segments under a unified management: (i) Int egrated Marketing Communications, (ii) Cus tomer Data Analytics and Marketing Technology; and (iii) F ull-Service Market Research (including Customer Experience measurement) and Syndicated Studies. During financial year 2023-2024, the Company's Integrated Marketing Communications segment contributed to Rs. 16,048.77 lakhs (48.41%), Customer Data Analytics and MarTech segment contributed to Rs. 8,855.53 lakhs (26.71%) and Full-Service Market Research segment contributed to Rs. 8,247.26 lakhs (24.88%) in the revenue from operations. The Company's results of operations and key business metrics are subject to quarterly variations. Historically, the company records an increase in revenue from operations in third and fourth quarters (October to March). The Company operates in a professional services space and recognizes that talent is critical to deliver a high level of services to its clients. The Company had employed over 2,500 associates as of March 31, 2024.
Opportunities and Threats
The addressable market for overall marketing services in India grew at a CAGR of 5.6% between FY 2019 and 2023, reaching Rs 1,936 billion in FY 2023, supported by growth in the marketing spends of Indian companies. The same is expected to reach a range of Rs 3,500-3,750 billion by the end of FY 2028 at a CAGR of 12.5%-14.5%. This provides the Company an opportunity to leverage its capability for growth. At the same time the industry is significantly competitive with numerous established agencies (including multinational corporations) and major companies. Amid intense competition, it is crucial to attract, retain, and help grow talented employees, which can have an impact on profit margins.
Outlook
India has demonstrated economic resilience and emerges as a symbol of optimism, maintaining its position as the world's fifth-largest economy and expected to continue leading as the fastest-growing major economy. India's GDP remains strong and expected to grow by 6.5% as per IMF GDP forecasts.
Risk and concerns
The Company has constituted a Risk Management Committee as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of which are provided in the Report on Corporate Governance. Foreseeable risks that the Company may encounter and concerns have been addressed in a documented Risk Management Policy which is reviewed by the Risk Management Committee and the Board from time to time.
Internal control systems and their adequacy
The Company's Internal Control System is commensurate with the size and nature of its business and in line with the requirements of the regulations. During FY 2023-24, the management has assessed the effectiveness of the Internal Control over Financial Reporting and has determined that this is effective.
Ratios
The required details of significant changes (25% or more) in the key financial ratios for the financial year 2023-24 as compared to the financial year 2022-23 are as follows:
Ratio
Reason for change
Current ratio
The current ratio has improved on account of (i) Cash inflow post the Initial Public Offering and (ii) Improvement in Net receivables (Trade Receivables - Trade Payables).
Debt Equity ratio
The Debt to Equity ratio of the company has improved due to (i) increase in total equity post the Initial Public Offering. (ii) Reduction in borrowings by Rs.411.25 lakhs and (iii) Reduction of lease liability to the extent of Rs.951.71 lakhs.
Return on Capital Employed
This is due to increase in shareholder's equity post the Initial Public Offering.
Return on Net-worth
This is due to increase in the Average shareholder's equity post Initial Public Offering.
e. KEY PERFORMANCE INDICATOR (KPIs):
The Key financial metrics and Key operational metrics are shared below to help understand and analyse the business performance.
Key financial metrics
Key operational metrics
Top 10 Clients
Top 50 Clients
Integrated Marketing Communications
Customer Data Analytics and MarTech
One-to-one customer intelligence campaigns
Digital Queries (Online Reputation Management ("ORM")/Chat/E- Mail)
Full-Service Market Research
Computer aided telephonic interviews ("CATI")
f. DIVIDEND:
The Board of Directors at their meeting held on May 24, 2024, have recommended payment of Rs. 2 (40%) per equity share having a face value of Rs. 5 each as final dividend for the financial year 2023-24. This recommendation is subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") of the Company and will be payable to those shareholders whose names appear in Register of Members/Beneficiary Position statement as on the Record date.
In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, the dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source as per applicable tax rates.
Pursuant to Regulation 43A of the SEBI Listing Regulations, the Company has adopted Dividend Distribution Policy. The Dividend Distribution policy is available on the website of the Company at https://www.rkswamy.com/ pdf/03_Dividend_Distribution_Policy.pdf g. UNPAID DIVIDEND & IEPF:
The Company was not required to transfer any amount to the Investor Education & Protection Fund (IEPF) as there were no Unpaid Dividend balances with the Company. h. TRANSFER TO RESERVES:
During the year under review, no amount was transferred to any reserves by the Company. i.
CORPORATE GOVERNANCE REPORT:
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under the SEBI Listing Regulations forms part of this Annual Report. A certificate from M/s S. Dhanapal & Associates, Company Secretaries, confirming compliance with corporate governance norms, as stipulated under the SEBI Listing Regulations, is annexed to the Corporate Governance Report.
j. SHARE CAPITAL:
During the year under review, Company increased its authorised capital from Rs. 10 Crores to Rs. 30 Crores and also simultaneously sub-divided its authorized share capital, such that 3,00,00,000 equity shares of Rs. 10 each aggregating to Rs. 30 Crores were sub-divided into 600,00,000 equity shares of Rs. 5 each, aggregating to Rs. 30 Crores.
During the year under review, there were changes in the paid up share capital of the Company, which are summarized below:
Date
Particular
July 25, 2023
One fully paid-up equity share of the Company of Rs.10 each was sub-divided into two fully paid-up equity shares of Rs. 5 each.
July 28, 2023
Bonus shares were issue at par in proportion of 4 new equity shares of Rs. 5 each for every one existing fully paid up equity share of Rs. 5 each
March 08, 2023
Fresh Issue of 60,20,101 by way of an Initial Public
*This includes 1,40,350 equity shares which were allotted to eligible employees who submitted Bids under the Employee Reservation Portion and who were allotted shares at a discounted offer price of Rs. 261 per share.
k. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company has the following wholly owned subsidiaries/step down subsidiaries as on March 31, 2024: a. Hansa Research Group Private Limited; b. Hansa Customer Equity Private Limited; c. Hansa Direct Private Limited; d. Aut osense Private Limited; e. Dsquar s Private Limited; e Solution f. Hansa Marketing Services L.L.C and (Dubai, UAE) g. Hansa Marketing Services Private Limited (Dhaka, Bangladesh)
Out of the above, Hansa Research Group Private Limited which is engaged in the business of providing Full Service Market Research and Hansa Customer Equity Private Limited which is engaged in the business of Customer Data Analytics and MarTech are the material subsidiaries of the Company.
The Company's Policy for determining material subsidiaries is available on the Company's website at https:// www.rkswamy.com/pdf/08_Policy_for_Determining_Material_Subsidiaries.pdf A separate statement containing the salient features of financial statements of subsidiaries of the Company in the prescribed Form AOC-1 forms a part of Consolidated Financial Statements, in compliance with Section 129(3) and other applicable provisions, if any, of the Act read with the Rules issued thereunder.
In accordance with Section 136 of the Act and the SEBI Listing Regulations, copies of the standalone and consolidated financial statements of the Company and the separate audited financial statements in respect of each of the subsidiary companies are open for inspection and are also available on the website of the Company at https://www.rkswamy.com/regulatory-disclosure.html Further, contribution of subsidiary companies to the overall performance of the Company is outlined in Note No. 41 of the Consolidated Financial Statements. The Company did not have any joint venture or associate companies during the year or at any time after the closure of the year and till the date of the report. l. PUBLIC DEPOSITS:
During the year, the Company had not accepted any deposits within the meaning of the provisions of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
m. LOANS FROM DIRECTORS OR DIRECTORS' RELATIVES:
During the year, the Company had not obtained any loan from any of the Directors or their relatives.
n. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:
In line with the requirements of the Act and SEBI Listing Regulations, the Company has formulated a Policy on Materiality of and dealing with Related Party Transactions ("RPT Policy") , which is available on the website of the Company at https://www.rkswamy.com/pdf/09_Policy_on_Materiality_of_and_dealing_with_Related_Party_ Transactions.pdf All contracts, arrangements and transactions entered by the Company with related parties during financial year 2023-24 were in the ordinary course of business and at arm's length. Certain transactions, which were repetitive in nature, were approved through the omnibus route.
During the year, the Company did not enter into any related party transactions, which could be considered material, in accordance with the Company's RPT Policy. Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable.
All applicable related party transactions were presented before the Audit Committee/Board on a regular basis as required under the Act and SEBI Listing Regulations. The disclosure on related party transactions as per IND AS 24 has been provided under Note No. 37 of the standalone financial statements and Note No. 36 of the consolidated financial statements of the Company. o. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished as below: (A) Conservation of energy:
Steps taken or impact on conservation of energy
Being a service company, the expenditure on energy is minimal.
Steps taken by the Company for utilizing alternate sources of energy
The company has endeavored to create an internal awareness on energy conservation.
Capital investment on energy conservation equipment
No capital investment has been made on energy conservation equipment.
(B) Technology absorption:
Benefits derived like product improvement, cost reduction, product development or import substitution
The Company has been progressively embracing technology and digitization to create content and automate its processes.
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
Whether the technology has been fully absorbed
Not Applicable
If not fully absorbed, areas where absorption has not taken place, and the reasons thereof
Expenditure incurred on Research and Development
Nil
(C) Foreign exchange earnings and Outgo:
Amount in Rs Lakhs
p. ANNUAL RETURN:
Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of Act, the draft Annual Return as on March 31, 2024 is available on Company's website https://www.rkswamy.com/pdf/Form_MGT_7_2023-24.pdf q. PARTICULARS OF INVESTMENTS, LOANS, GUARANTEES AND SECURITIES:
The particulars of investments, loans, guarantees and securities covered under Section 186 of the Act are set out in Note no 8 and 9 of the standalone financial statements of the Company. r. MATERIAL CHANGES AFTER END OF FINANCIAL YEAR:
There were no material changes and commitments which affected the financial position of the Company, between the end of the financial year March 31, 2024 and date of this Report. s. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Company has laid down adequate internal financial controls commensurate with the scale, size and nature of the business of the Company. The Company has in place adequate policies and procedures for ensuring the orderly and effective control of its business, including adherence to the Company's policies, safeguarding its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. Effectiveness of internal financial controls is ensured through management reviews, controlled self-assessment and independent testing by the internal and statutory auditors of Company.
2. MATTERSRELATEDTODIRECTORS,KEYMANAGERIALPERSONNEL&SENIORMANAGEMENT:
a) BOARD OF DIRECTORS:
During the year under review, Narasimhan K Swamy, the whole-time Director of the Company was designated as Group CEO of the Company on July 21, 2023, Pattabhi K Raman was appointed as Non-Executive, Nominee Director of the Company representing Evanston Pioneer Fund LP on June 6, 2023. Further, during year Nalini Padmanabhan, Rajiv Vastupal Mehta, T T Srinivasaraghavan and Sunil Sethy were appointed as Independent Directors of the Company on July 3, 2023 by the shareholders of the Company. There was no resignation by any Directors during the financial year.
As on March 31, 2024, the Board of Directors of the Company comprised of the following:
Sr. No. Name of Director
Srinivasan K Swamy 1. (Also known as Sundar Swamy)
Narasimhan K Swamy 2. (Also known as Shekar Swamy)
* Based on the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at their meeting held on May 24, 2024 considered and approved the change in the designation of Srinivasan K. Swamy from Chairman & Managing Director to Executive Group Chairman, Narasimhan K. Swamy from Whole-time Director & Group CEO to Managing Director & Group CEO of the Company and appointed Sangeetha Narasimhan as CEO of the Company in addition to her existing position as Whole-time Director of the Company effective from July 1, 2024. This is subject to approval of the shareholder through postal ballot of the Company.
^ Nominee of Evanston Pioneer Fund L.P.
b) KEY MANAGERIAL PERSONNEL & SENIOR MANAGERIAL PERSONNEL:
The Key Managerial Personnel (KMP) of the Company (other than Directors) and Senior Managerial Personnel (SMP) as of March 31, 2024 are listed below:
Sr. No.
Name
* During the year under review Aparna Bhat was appointed as Compliance Officer of the Company.
Ther e was no resignation of KMP/ SMP during the financial year. c) RETIREMENT BY ROTATION:
In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of the Company, Srinivasan K Swamy (DIN: 00505093) whose office is liable to retire by rotation at the forthcoming AGM and being eligible, offers himself for reappointment. The Board of Directors on the recommendation of the Nomination and Remuneration Committee ("NRC") recommends his reappointment. Appropriate resolution for reappointment of Srinivasan K Swamy as the Director of the Company is being placed for the approval of the shareholders of the Company at the ensuing AGM.
3. DISCL OSURES RELATED TO BOARD, COMMITTEES AND POLICIES:
a. BOARD MEETINGS:
The Board of Directors met 10 times during the financial year ended March 31, 2024 and the meetings held, were in compliance with the provisions of the Act and rules made thereunder. The Company has complied with the applicable Secretarial Standards in respect of the Board meetings and General Meetings.
Name of Director
b. DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received the certificate of independence from all the Independent Directors pursuant to Section 149 of the Act and Regulation 16 of the SEBI Listing Regulations, confirming and certifying that they have complied with all the requirements of being an Independent Director of the Company. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct. The Company has also received declarations under Regulation 25(8) of SEBI Listing Regulations from the Independent Directors confirming that there was no existing or anticipation of any circumstances during the year that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.
The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, skills, experience and expertise and they hold highest standards of integrity and fulfils the conditions specified in the Act and SEBI Listing Regulations.
c. BOARD EVALUATION:
The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The Board evaluation exercise for FY 2023-24 was carried out after the closure of financial year through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.
The Directors in their evaluation were of the opinion that the affairs of the Board, the conduct of the Board members, the functioning of the Board and Committee, and the conduct of the individual Directors including the Chairperson were effective and satisfactory. d. REMUNERATION OF DIRECTORS AND EMPLOYEES:
Disclosure comprising particulars with respect to the remuneration of directors and employees and other details, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this Report as Annexure-I and forms a part of this Report. In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report. 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 Secretarial_rkswamy.com e. BOARD COMMITTEES:
During the year under review and pursuant to the SEBI Listing Regulations, the Board had reconstituted certain existing committees and constituted certain new Committees and amended / adopted the terms of reference of the said Committees.
As on the date of this report, the Board has the following committees: a. Audit and Compliance Committee b. Nomination and Remuneration Committee c. Corporate Social Responsibility Committee d. Risk Management Committee e. Stakeholders' Relationship Committee
The IPO Committee was constituted specifically for the purpose of IPO. Pursuant to the listing of equity shares of the Company on the Stock Exchanges, the IPO related matters had concluded and therefore the IPO Committee was dissolved w.e.f. March 26, 2024.
During the year, all recommendations of the Committees of the Board have been accepted by the Board.
The composition and terms of reference of all the Committees of the Board of Directors of the Company is in line with the provisions of the Act and the SEBI Listing Regulations.
A detailed note on the composition of the Board and its Committees, meetings held during the year and its terms of reference is provided in the Corporate Governance Report forming part of this Annual Report.
f. NOMINATION REMUNERATION & BOARD DIVERSITY POLICY:
The Board has framed and adopted a Nomination Remuneration and Board Diversity Policy ("NRC Policy") in terms of the Section 178 of the Act. The NRC Policy, inter-alia, lays down the principles relating to appointment, cessation, remuneration and evaluation of Directors, Key Managerial Personnel and Senior Management employees and other matters as provided under Section 178 of the Act. The NRC Policy was amended during the year under review to align with the provisions of SEBI Listing Regulations. The remuneration paid to the Directors is as per the terms laid out in the NRC Policy of the Company.
The extract of the terms of reference of the NRC Policy of the Company are provided in the Corporate Governance Report forming part of this Annual Report. The Policy is also available on the website of the Company at https://www.rkswamy.com/pdf/19_Nomination_Remuneration_and_Board_Diversity_Policy.pdf
g. RISK MANAGEMENT:
The Company recognises that risk is an integral and inevitable part of business and is fully committed to manage the risks in a proactive and efficient manner. The Board of Directors of the Company had formed a Risk Management Committee to frame, implement and monitor the risk management plan of the Company. Further the Company has adopted a Risk Management Policy which provide guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company's businesses, and is working on a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. The Audit Committee has additional oversight in the areas of financial risk and controls.
The Risk Management Policy has been uploaded on the website of the Company on website of the company at https://www.rkswamy.com/pdf/04_Risk_Management_Policies.pdf
h. CORPORATE SOCIAL RESPONSIBILITY POLICY:
During the financial year 2023-24, the Company has spent Rs. 27.42 Lakhs towards Corporate Social Responsibility (CSR) expenditure, in terms of the CSR annual action plan approved by the CSR Committee and the Board of Directors. The CSR initiatives of the Company were towards protection of culture and eradicating hunger, poverty and malnutrition. During the year Board reconstituted the CSR Committee of the Company. As on March 31, 2024 the CSR Committee of the Company consists of the following members: i. Sriniv asan K. Swamy- Chairperson ii. Nar asimhan K. Swamy- Member iii. Nalini P admanabhan- Member The CSR annual action plan of the Company for the financial year and CSR policy of the Company is available on the website of the Company at https://www.rkswamy.com/pdf/RKS_Annual_Action_Plan_2024-25.pdf The CSR Committee confirms that the implementation and monitoring of the CSR Policy was done in compliance with the CSR objectives and Policy of the Company. During the financial year ended March 31, 2024, 1 (One) meeting of the CSR Committee was held. The Report on Corporate Social Responsibility is annexed herewith as Annexure– II and forms a part of this Report.
i. VIGIL MECHANISM/WHISTLE-BLOWER:
The Company has established a Vigil Mechanism/ Whistle-blower policy at group level covering subsidiary Companies in accordance with the provisions of the Act and the SEBI Listing Regulations. Vigil Mechanism/ Whistle blower policy has been formulated with a view to provide a mechanism for Employees, Directors and other stakeholders of the Company to approach the designated Ombudsperson and/or the Chairperson of the Audit Committee of the Company to report actual or suspected unethical behavior, fraud or violation of the Company's Code of Conduct/ ethics/ principles and matters specified in the Policy. Employees and other stakeholders are required to report actual or suspected violations of applicable laws and regulations and the Code of Conduct. Such genuine concerns disclosed as per Policy are called "Protected Disclosures" and can be raised by a Whistle-blower through an e-mail or a letter to the Chairperson of the Audit Committee. The Company affirms that in compliance with the Whistle-Blower Policy/ Vigil Mechanism no personnel had been denied access to the Audit Committee. The Vigil Mechanism and Whistle-blower policy is available on the Company's website and can be accessed at https://www.rkswamy.com/pdf/13_Vigil_mechanism_and_Whistle_Blower_Policy.pdf
4. AUDIT ORS AND REPORTS:
a. STATUTORY AUDITORS & AUDIT REPORT:
The Statutory Auditors have issued an unmodified opinion on the financial statements for the financial year 2023-24. The Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. M/s. Deloitte Haskins & Sells, (Firm Registration No – 008072S) were appointed as Statutory Auditors of the Company at the annual general meeting held on September 19, 2019, and they will be completing their term of appointment at the conclusion of the ensuing Annual General Meeting in 2024. Further the Board of Directors, subject to the approval of the shareholders, based on the recommendation of the Audit Committee have approved the appointment of M/s. CNK & Associates LLP (Firm Registration No -101961W), Chartered Accountants, as Statutory Auditors of the Company, in place of the retiring Statutory Auditors, for a term of
five consecutive years from the conclusion of ensuing 51st Annual General Meeting till the conclusion of 56th Annual General Meeting of the Company to be held in the year 2029 at such remuneration plus out of pocket expenses and applicable taxes, as may be mutually agreed between the Board of Directors of the Company and the Auditors. M/s. CNK & Associates LLP have confirmed their eligibility and confirmed that there is no disqualification under the Act for holding the office as Statutory Auditors of the Company.
Appropriate resolution for appointment of M/s. CNK & Associates LLP, as statutory auditor of the Company is being placed for the approval of the shareholders of the Company at the ensuing AGM. b. MAINTENANCE OF COST RECORDS:
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company. c. SECRETARIAL AUDITORS:
M/s. S. Dhanapal & Associates LLP, Practicing Company Secretaries were appointed as the Secretarial Auditors of the Company and its material subsidiaries Hansa Research Group Private Limited and Hansa Customer Equity Private Limited for the financial year 2023-24.
The Secretarial Auditor's Report of the Company for the year under review in prescribed form MR-3 is annexed to this Report as Annexure – III-A and forms a part of this Report.
Pursuant to Regulation 24A (1) of the SEBI Listing Regulations, the Secretarial Audit Reports of the Company's two unlisted material subsidiaries i.e. Hansa Research Group Private Limited and Hansa Customer Equity Private Limited are attached as Annexure-III-B & Annexure-III-C respectively and forms a part of this Report.
The Secretarial Audit Report of the Company and the Reports of its unlisted material subsidiaries do not contain any qualification, reservation, adverse remark or disclaimer. d. INTERNAL AUDITOR:
Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, M/s. ASA & Associates LLP, Chartered Accountants were appointed as the Internal Auditor to conduct audit for the year under review. The Internal Auditor of the Company reports functionally to the Audit Committee of the Company, which reviews and approves the annual internal audit plan for the Company. e. REPORTING OF FRAUDS BY AUDITORS UNDER SECTION 143(12):
There were no instances of reporting of frauds by the Auditors of the Company under Section 143 (12) of the Act read with Companies (Accounts) Rules, 2014. f. AUDIT TRAIL
The Auditors have reported that the Company has complied with the Audit trail requirements as required under Rule 3(1) of the Companies (Accounts) Rules, 2014 and reported under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of Audit trail. However, in case of subsidiaries, the Audit trail facility was not fully available as mandated. The management of subsidiaries has assured that they are in the process of upgrading the financial software appropriately to ensure compliance with the said requirements of MCA to the extent necessary.
5. OTHER DISCLOSURES:
Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under: a. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:
No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. b. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended March 31, 2024, the Board of Directors hereby confirm 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 y have 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 as at March 31, 2024 and of the profit of the Company for that year; c. the y have taken proper and sufficient care rds the maintenance of adequate accounting records in accordancetowa with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. the y have prepared the annual accounts of the Company on a going concern basis; e. the y have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. c. DISCLOSURE REGARDING INTERNAL COMPLAINTS COMMITTEE:
The Company has in place a Policy for Prevention, Prohibition and Redressal of Sexual Harassment at workplace which is in line with the requirements of the Sexual Harassment of women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder ("POSH"). The Company has constituted an Internal Committee and has complied with the provisions of POSH. The Company has filed an Annual Report with the concerned Authority. No complaints were received under POSH during the year under review. d. AWARDS AND RECOGNITIONS:
The details of awards received by Company and its subsidiaries have been provided separately and forming part of this report. e. DIRECTORS & OFFICERS INSURANCE POLICY
The Company has a Directors & Officers Liability Insurance Policy for a quantum and with a coverage which in the opinion of the Board is adequate.
6. MISCELLANEOUS:
a) The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is required to be furnished. b) The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is required to be furnished. c) The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is required to be furnished. d) During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished. e) During the year, there was no proceeding initiated by or against the Company under the Insolvency and Bankruptcy Code, 2016. f) The r equirement to disclose the details of difference between amount of valuation done at the time of onetime settlement and valuation done while taking loan from Banks & Financial Institutions along with the reasons thereof, is not applicable.
7. A CKNOWLEDGEMENTS AND APPRECIATION:
The Directors thank the Company's customers, vendors, investors, lenders, partners and all other stakeholders for their continuous support. The Directors also thank the Government of India, State Governments and concerned Government departments and agencies for their co-operation. The Directors appreciate and value the contribution made by all the employees and their families.
8. C AUTIONARY STATEMENT:
Statements in this Report and the Management Discussion & Analysis Report describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.
For and on behalf of the Board