To,
The Members
DHARNI CAPITAL SERVICES LIMITED
The Board of Directors are pleased to present the Company's 9th Annual Report on the business & operations of the Company, together with the Audited Financial Statement for the financial year ended March 31,2024.
1. FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMAMNCE OF THE COMPANY
The Company's financial performance for the financial year ended March 31st, 2024, is summarized as below' (Rs. in lakhs)
2. BUSINESS PERFORMANCE • Standalone:
During the year the Company has generated revenue from operations of Rs. 925.94 lakhs (including other income) and earned net profit after tax Rs. 293.85 Lakhs as compared with the corresponding figures in the previous year of Rs. 499.74 Lakhs and Rs. 119.06 Lakhs respectively. The total revenue is increased by Rs.
426.2 Lakhs as compared with last year and net profit after tax is increased by Rs. 174.79 Lakhs as compared with last year.
• Consolidated:
During the year the Company has generated revenue from operations of Rs. 957.47 lakhs (including other income) and earned net profit after tax Rs. 310.71 Lakhs as compared with the corresponding figures in the previous year of Rs. 499.74 Lakhs and Rs. 119.06 Lakhs respectively. The total revenue is increased by Rs. 457.73 Lakhs as compared with last year and net profit after tax is increased by Rs. 191.65 Lakhs as compared with last year.
3. DIVIDEND
Your Directors are constrained not to recommend any dividend for the year under report.
4. TRANSFER TO RESERVES
During the year under review, your Company has profit of Rs. 293.85 Lakhs and an amount of Rs. 293.85 Lakhs is proposed to be retained in the Profit and Loss Account.
5. SHARE CAPITAL
• Authorized Share Capital
During the year, the company has not alterted the Authorized share capital. Hence, the authorized share capital of the Company as at March 31, 2024 was Rs. 2,10,00,000 (Rupees Two Crore and Ten Lacs only) consisting of 2,10,00,000 (Two Crore and Ten Lacs) equity shares of Rs. 1 (Rupees One) each.
• Issued and Paid-up Capital
The paid-up Equity Share Capital of the company is Rs. 2,07,30,000 (divided into 2,03,70,000 Equity shares of Rs. 1/- each) as on March 31,2024.
During the year under review the company has not issued & allotted equity.
6. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, apart from the loans made, guarantee given or security provided by the Company in the ordinary course of business are given in the Notes to accounts forming part of the Audited Financial Statements for the year ended March 31,2024.
7. ADOPTION AND ALTERATION IN MEMORANDUM AND ARTICLE OF ASSOCIATION:
The Company has not made any alteration in Article of Association. However, the Company has amended in Memorandum of Association of the Company by addition in object clause in its members meeting dated 18.03.2024.
8. CHANGE IN NATURE OF BUSINESS:
There has been addition in the business activity in the main object of the Company by way of passing special resolution in extra ordinary general meeting held on 18.03.2024 during the year under review.
9. INVESTOR COMPLAINTS AND COMPLIANCE:
The Company has not received investor complaint during the year and the same was submitted to BSE pursuant to SEBI (LODR) Regulation, 2015.
10. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Your Company does not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there are no funds which were required to be transferred to IEPF till the date of this Report.
11. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
. FROM THE END OF FINANCIAL YEAR TILL THE DATE OF REPORT:
There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.
12. PROVISION OF FINANCIAL ASSISTANCE TO THE EMPLOYEES OF THE COMPANY FOR THE PURCHASE OF ITS OWN SHARES:
The company has not provided any financial assistance to its employees as per Section 67 of the Companies Act, 2013 (the ‘Act").
13. SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES:
As on March 31,2024 the Company does have one subsidiary Company as mentioned below:
AOC-1 in accordance with first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 is attached as Annexure-I.
14. PARTICULARS OF EMPLOYEES:
In terms of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees of the Company have been provided in Annexure II to this Board's Report. Further, statement containing details of employees as required in terms of Section 197 of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of the ensuing Annual General Meeting. A copy of the statement may be obtained by shareholders by writing to the Company Secretary at the Registered & Corporate Office of the Company or at hemant.dharnidharka@gmail.com.
15. PARTICULARS OF CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNING AND OUTGO:
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read along with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy and technology absorption are as mentioned below:
A. Conservation of energy:
(i) the steps taken or impact on conservation of energy; The Company does not belong to the category of power intensive industry and hence consumption of power is not significant. However, the management gives due importance to conservation of energy wherever feasible, and also reviews from time to time, the measures taken / to be taken for reduced and prudent consumption and conservation of energy.
(ii) the steps taken by the company for utilising alternate sources of energy; Though the activities undertaken by the Company not energy intensive, the Company shall explore alternative sources of energy, as and when the necessity arises.
(iii) the capital investment on energy conservation equipments; NIL
B. Technology absorption:
(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)
C. Foreign Exchange Earnings and Outgo:
Your company does not have any foreign exchange earnings and outgo during the year under review.
16. INSURANCE:
Your Company has complied with necessary requirement.
17. RISK MANAGEMENT FRAMEWORK:
The Company has laid down a well-defined Risk Management framework covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non- business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.
18. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has in place a Whistle Blower Policy, which provides for a framework to report the genuine concerns against the suspected or confirmed fraudulent activities, allegations of corruption, violation of the Company's Code of Conduct.
The Company will provide adequate safeguards against victimization of persons who use this mechanism. Such persons shall have direct access to the Chairman of the Audit Committee when appropriate.
The whistle blower policy is placed on the website of the Company and can be accessed at
https://www.dharnicapital.com/investor-relations
Whistle Blower Policy Vigil Mechanism.pdf
19. CODES AND STANDARDS
Your Company has formulated various policies and codes in compliance with provisions Companies Act, 2013, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and to ensure high ethical standards in the overall functioning of the organization. The said policies and codes are periodically reviewed by the Board of Directors. The key policies and codes as approved by the Board of Directors and the respective compliance there under are detailed herein below:
(a) Fair Practice Code
Your Company has in place a Fair Practice Code (FPC), which includes guidelines on appropriate staff conduct when dealing with the customers and on the organization's policies vis-a-vis client protection. During the year under review, FPC was modified by the Board and the grievance redressal mechanism within the Company was further strengthened. The following policy is placed on the website of the Company and can be accessed at https://www.dharnicapital.com/investor-relations
(b) Policy on Disclosure of material events and information
During the year under review, your Company has adopted the Policy on Disclosure of Material Events and Information, in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to determine the events and information which are material in nature and are required to be disclosed to the Stock Exchanges. The policy is placed on the website of the Company and can be accessed at https://www.dharnicapital.com/investor-relations available by name "Archival Policy"
(c) Code of Conduct for Board Members and the senior management
The Company has adopted Code of Conduct for the Board of Directors and the Senior Management Personnel to set forth the guiding principles on which the Company and its Board and Senior Management Personnel shall operate and conduct themselves with multitudinous stakeholders, government and regulatory agencies, media and anyone else with whom it is connected. The following policy is placed on the website of the Company and can be accessed at https://www.dharnicapital.com/investor-relations
(d) CEO & CFO Certification
The Chief Executive Officer and Chief Financial Officer Certification as required under Regulation 17(8) read with Part B of Schedule II of the SEBI(LODR) Regulation, 2015 not applicable on the company as the company is SME company and exemption is granted to SME under Regulation-15(2) of SEBI (LODR), Regulations, 2015.
(e) Code for Prevention of Insider Trading Practices
The Company has formulated and adopted a Code for Prevention of Insider Trading Practices in accordance with the model code of conduct as prescribed under the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, as amended. The code lays down guidelines, which includes procedures to be followed and disclosures to be made while dealing in the shares of the Company. The code is applicable to the promoters, directors, senior designated employees and their dependents and the said persons are restricted from dealing in the securities of the Company during the 'restricted trading periods' notified by the Company, from time to time.
(f) Code of Business Ethics (COBE)
The Company has adopted a Code of Business Ethics (COBE) which lays down the principles and standards that govern the activities of the Company and its employees to ensure and promote ethical behavior within the legal framework of the organization.
The Company has a Policy on Prevention, Prohibition & Redressal of Sexual Harassment of Women at Workplace and an Internal Complaints Committee (ICC) has been constituted there under. The Policy's primary objective is to protect the women employees from sexual harassment at the place of work and also provides for punishment in case of false and malicious representations. During the year no complaints were received in this regard.
(g) Comprehensive Risk Management Policy
The Company is committed to manage its risk in a proactive manner and has adopted a structured and disciplined approach to risk management by developing and implementing risk management framework. With a view to manage its risk effectively your Company has in place a Comprehensive Risk Management Policy which covers a formalized Risk Management Structure, along with other aspects of risk management i.e. credit risk management, operational risk management, market risk management and enterprise risk management. The Risk Management Committee of the Board, on periodic basis, oversees the risk management systems, processes and minimization procedures of the Company.
(h) Corporate Social Responsibility (CSR) Policy
The Company has not developed or implemented any CSR initiatives. The provisions contained in section
135 of the Companies Act, 2013, as well as the Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to your Company for the year under review.
(I) Remuneration Policy
The Nomination and Remuneration Committee had laid down criteria for determining Directors Qualification, Attributes and Independence of a Director, remuneration of Directors, Key Managerial Personnel and other employees and criteria for evaluation of Directors, Chairperson, Non-Executive Directors and Board and the evaluation process of the same. The following policy is attached herewith as Annexure-III and also placed on the website of the Company and can be accessed at https://www.dharnicapital.com/investor-relations (j) Familiarization Programme for Independent Directors:
The objective of a familiarization programme is to ensure that the non-executive directors are updated on the business environment and overall operations of the Company. This enables the non-executive directors to make better informed decisions in the interest of the company and its stakeholders. The following policy is placed on the website of the Company and can be accessed at https://www.dharnicapital.com/investor- relations
20. DIRECTORS AND KEY MANAGERIAL PERSONAL
The Board of Directors of the Company comprises of Four [4] directors of which one [1] is Non Executive Directors (woman Director); One [1] is Chairman & Managing Director & Two [2] are Non- Executive Independent Director as on March 31,2024 who brings in a wide range of skills and experience to the Board.
• Retirement of Director by rotation
In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and Articles of Association of the company, Ms. Preeti Saraogi, Director of the Company liable to retire by rotation, has offered herself for reappointment at the ensuing Annual General Meeting of the company. A resolution for her reappointment is being proposed at the Annual General Meeting and her Profile is included in the Notice.
• Composition of the Board as on March 31,2024
Based on the confirmations received none of the Directors are disqualified for being appointed/re- appointed directors in terms of Section 164 the Companies Act, 2013.
During the year following changes took place in the Board of Directors / KMP of Company:
Resignation
30.09.2023
• Declaration from Independent Directors on Annual Basis:
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meets the criteria of their Independence as laid down in Section 149(6) and the provisions of Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
21. STOCK OPTION (ESOP)
During the year Company has not issued any stock options to its employees.
22. FORMAL EVALUATION OF THE PERFORMANCE OF THE BOARD COMMITTEE OF THE BOARD AND INDIVIDUAL DIRECTOR:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 and Part D of Schedule II to the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as working of its Audit, Nomination and Remuneration, Stakeholders' Relationship Committee. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specified duties, obligations and governance.
The exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company etc.
The Independent Directors of the Company met on March 30, 2024 without the presence of NonIndependent Directors and members of the management to review the performance of Non Independent Directors and the Board of Directors as a whole; to review the performance of the Chairman and Managing Director of the Company and to assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors. The performance evaluation of the Independent Directors was carried out by the entire Board.
23. NUMBER OF THE MEETINGS OF THE BOARD
The Board met Seven (7) times during the year under review. The details of the number of meetings of the Board held during the Financial Year 2023-24 and the attendance therein is as under:
Attendance of Directors in meeting:
24. MEETING OF INDEPENDENT DIRECTOR:
During the year under review, 1 (one) meeting of Independent Directors of the Company was held on 30.03.2024 in which both independent directors were present.
The object of Independent Meeting was to review the performance of Non- Independent Director and the Board as a whole including the Chairperson of the Company. The Company assures to hold the Separate Meeting of Independent Director of the Company as earliest possible.
25. COMMITTEES OF THE BOARD
The Board of Directors of your Company have formed various Committees, as per the provisions of the Companies Act, 2013 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as a part of the best corporate governance practices, the terms of reference and the constitution of those Committees is in compliance with the applicable laws.
In order to ensure focused attention on business and for better governance and accountability, the Board has constituted the following committees:
• Audit Committee
The Audit Committee was constituted in the board meeting dated 10.08.2022 with following roles and responsibilities:
(1) oversight of the listed entity's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
(2) recommendation for appointment, remuneration and terms of appointment of auditors of the listed entity;
(3) approval of payment to statutory auditors for any other services rendered by the statutory auditors:
(4) reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
a) matters required to be included in the director's responsibility statement to be included in the Board's Report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
b) changes, if any, in accounting policies and practices and reasons for the same;
c) major accounting entries involving estimates based on the exercise of judgment by management;
d) significant adjustments made in the financial statements arising out ofaudit findings;
e) compliance with listing and other legal requirements relating to financial statements;
f) disclosure of any related party transactions;
g) modified opinion(s) in the draft audit report;
(5) reviewing, with the management, the quarterly financial statements before submission to the board for approval;
(6) reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency, monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;
(7) reviewing and monitoring the auditor's independence and performance, and effectiveness of audit process;
(8) approval or any subsequent modification of transactions of the listed entity with related parties;
(9) scrutiny of inter-corporate loans and investments;
(10) valuation of undertakings or assets of the listed entity, wherever it is necessary;
(11) evaluation of internal financial controls and risk management systems;
(12) reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
(13) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
(14) discussion with internal auditors of any significant findings and follow up there on;
(15) reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
(16) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
(17) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
(18) to review the functioning of the whistle blower mechanism;
(19) approval of appointment of chief financial officer after assessing the qualifications, experience and background, etc. of the candidate;
(20) carrying out any other function as is mentioned in the terms of reference of the audit committee.
(21) reviewing the utilization of loans and/ or advances from,/investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing as on the date of coming into force of this provision.
(22) consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger, amalgamation etc., on the listed entity and its shareholders.
B. The audit committee shall mandatorily review the following information:
(1) management discussion and analysis of financial condition and results of operations;
(2) management letters / letters of internal control weaknesses issued by the statutory auditors;
(3) internal audit reports relating to internal control weaknesses; and
(4) the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the audit committee.
(5) statement of deviations:
(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable.
(b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus notice.
Composition & Meeting details of the Audit Committee:
• Mr. Vinay Agarwal (Chairman & Independent Non-Executive Director)
• Mr. Jaideep Mittra (Independent Non-Executive Director)
• Mr. Hemant Dharnidharka (Executive Director)
During the year reference, 7 (Seven) meetings of Audit Committee were held as mentioned below:
b) Nomination and Remuneration Committee :
The Nomination and Remuneration Committee was constituted in the board meeting dated 10.08.2022 with following roles and responsibilities:
(1) formulation of the criteria for determining qualifications, positive attributes and independence of a
Director and recommend to the Board of Directors a policy relating to, the remuneration of the Directors, Key Managerial Personnel and other employees;
(2) For every appointment of an Independent Director, the Nomination and Remuneration Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:
a. use the services of an external agencies, if required;
b. consider candidates from a wide range of backgrounds, having due regard to diversity; and
c. consider the time commitments of the candidates.
(3) formulation of criteria for evaluation of performance of Independent Directors and the Board of Directors;
(4) devising a policy on diversity of Board of Directors;
(5) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal.
(6) whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors.
(7) recommend to the Board, all remuneration, in whatever form, payable to senior management
Composition & Meeting details of the Nomination and Remuneration Committee:
• Ms. Preeti Saraogi (Director)
During the year reference, 3 (Three) meetings of NRC Committee were held as mentioned below:
c) Stakeholders' Relationship Committee:
The Stakeholders' Relationship Committee was constituted in the board meeting dated 10.08.2022 with following roles and responsibilities:
(1) Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.
(2) Review of measures taken for effective exercise of voting rights by shareholders.
(3) Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered by the Registrar & Share Transfer Agent.
(4) Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrant/annual reports/statutory notices by the shareholders of the company
Composition & Meeting details of the Stakeholders' Relationship Committee:
• Composition & Meeting details of the Stakeholders' Relationship Committee:
During the year reference, 1 (One) meetings of Stakeholders' Relationship Committee were held as mentioned below:
26. SHAREHOLDER'S MEETING
During the financial year ended March 31,2024, 2 (Two) General Meetings were held. Further, details of the meetings are as under:
27. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY TRANSACTIONS
WHITEFIELD MAIN ROAD,
GARUDACHARPALYA
BANGALORE
WHITEFIELD MAIN ROAD, GARUDACHARPALYA BANGALORE
In accordance with the provisions of Section 188 of the Act and rules made thereunder, the transactions entered with related parties are in the ordinary course of business and on an arm's length basis, the details with respect to the related party transactions are mentioned in the notes to the audited financial statements.
During the financial year under review, the company has not entered into material contract, arrangement or transaction with related party, as defined under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Related Party Transaction Policy of the Company. The Policy on Related party transaction is uploaded on the website of the Company. The web link of the same is https://www.dharnicapital.com.
Form AOC-2 as per the Related Party Transactions is not applicable to the Company.
28. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has in place a Policy on Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year, no complaint was received by the Company.
29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATOR OR COURT OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
During the year there has been no such significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.
30. BSE COMPLIANCES:
The Company was listed on SME Platform of BSE Exchange as on 31st January, 2023. Further, the Company has complied with all the applicable compliances with respect to the quarterly/yearly compliances to be done during the year.
31. LISTING FEES:
Your Company has paid requisite annual listing fees to Bombay Stock Exchange (BSE) where it's equity shares are listed.
32. MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records as prescribed under section 148(1) of the Companies Act, 2013
33. SECRETARIAL STANDARDS
During the year under review, the Company has complied with the applicable secretarial standards issued by the Institute of Company Secretaries of India.
34. AUDITORS AND AUDITORS' REPORT
1. Statutory Auditors
M/S BSD & Co., Chartered Accountants (Firm Registration No. 000312S) were appointed as Statutory Auditors of the Company for a period of 5 (five) consecutive years, at the Annual General Meeting of Members held on 30.11.2021 on a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors. They have confirmed their eligibility and qualifications required under the Act for holding office as Statutory Auditors of the Company.
The Statutory Auditor's Report forms part of the Annual Report. There is no audit qualification, reservation or adverse remark for the year under review. There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and/ or Board under Section 143(12) of Act and Rules framed thereunder.
2. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Pursuant to Reg. 24A of Securities Exchange Board of India (Listing Obligation & Disclosure Requirement) (Amendments) Regulations, 2018, the Board of Directors of the Company had appointed M/s Ronak Jhuthawat & Co., Practicing Company Secretaries, Udaipur, to undertake the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report for the financial year ended March 31,2024, is annexed as "Annexure IV" and forms an integral part of this Report.
The said report, does not contain any qualification, reservation or adverse remark, and thus do not call for any further comments.
35. INTERNAL AUDIT & INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has adequate internal control procedures commensurate with its size and nature of business. Your Company has clearly laid down policies, guidelines, and procedures that form a part of the internal control systems. The adequacy of the internal control systems encompasses the Company's business processes and financial reporting systems and is examined by the management as well as by its internal auditors at regular intervals.
The internal auditors conduct audits at regular intervals to identify the weaknesses and suggest improvements for better functioning. The observations and recommendations of the internal auditors are discussed by the Audit Committee to ensure timely and corrective action.
Your Company has appointed M/S BAGRODIA & CO., Chartered Accountants as an Internal Auditor of the Company, who reports to the Audit Committee and to the Board of Directors of the Company. The Internal Auditor conducts comprehensive audit of functional areas and operations of the Company to examine the adequacy of and compliance with policies, procedures, statutory and regulatory requirements. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations.
The audit function maintains its independence and objectivity while carrying out assignments. It evaluates on a continuous basis, the adequacy and effectiveness of internal control mechanism. The function also proactively recommends improvement in policies and processes, suggests streamlining of controls against various risks.
Your Company has laid down set of standards, processes and structure, which enables it to implement internal financial control across the Company and ensure that the same are adequate and operating effectively.
36. REPORTING OF FRAUDS BY AUDITORS :
During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee under Section 143(12) of the Act any instances of fraud committed against the Company by its officers or employees.
37. DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Act, for the financial year ended on March 31,2024, the Directors hereby confirm that:
• in the preparation of the annual financial statements for the year ended March 31,2024, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed and there were no material departures from the same;
• the Directors 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 and of the profit of the Company for the year ended on that date;
• the Directors have taken proper and sufficient care has for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
• the Directors have prepared the annual accounts on a going concern basis;
• the Directors have laid down internal financial controls to be followed by the Company and that the financial controls were adequate and were operating effectively;
• the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and were adequate and operating effectively.
38. REPORT ON CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
The Company has taken adequate steps to adhere to all the stipulations laid down in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 and Rules thereto, as amended from time to time.
Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Disclosures as required under The Companies Act, 2013 and the Rules thereto, Company being listed on SME platform, is exempted from this provision.
39. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management's Discussion and Analysis Report, for the year under review, is presented in as separate section forming part of this Annual Report.
40. CORPORATE SOCIAL RESPONSIBILITY
During the year under review, the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, are not applicable to the Company.
41. ANNUAL RETURN
Pursuant to section 92(3) read with Section 134(3)(a) of the Act, the Annual Return is available on the Company's website and can be accessed at https://www.dharnicapital.com.
42. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.
43. ACKNOWLEDGEMENTS:
Your Board of Directors take this opportunity to express their appreciation to all stakeholders of the Company including the Ministry of Corporate Affairs, Securities and Exchange Board of India, the Government of India, Stock Exchanges and other Regulatory Authorities, Bankers, Lenders, Financial Institutions, Members, Credit Rating agencies, Customers of the Company for their continued support and trust. Your directors would like to express deep appreciation for the commitment shown by the employees in supporting the Company in achieving continued robust performance on all fronts.
In closing, we would like to thank all the investors as well as the communities we operate in who have reposed their trust in us and supported us in our journey.
For and on behalf of the Board of Directors