DIRECTORS' REPORT
To
The Members,
ESCONET TECHNOLOGIES LIMITED
Your directors have pleasure in presenting the 12th Annual Report of the Esconet Technologies Limited ("Company") together with the Standalone and Consolidated Audited Financial Statement(s) of the Company for the Financial year ended March 31, 2024.
In compliance with the applicable provisions of the Companies Act, 2013, (‘the Act') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations'), this Annual Report containing, inter alia, Standalone and Consolidated Audited Financial Statements, Notice of Annual General Meeting (‘AGM'), Directors' Report, Management Discussion and Analysis Report, Auditors' Report and other important information is circulated to Members and others entitled thereto.
1. Financial Results:
Standalone
There have been no material changes and commitments that have occurred after close of the FY till the date of this report which affect the financial position of the Company. There has been no material change in the nature of business of the Company. Based on the internal financial control framework and compliance system established in the Company and verified by the auditors and reviews performed by the management and/or the Audit Committee of the Board, your Board is of the opinion that Company's internal financial controls were adequate and effective during the FY 2023-24.
2. Financial Performance:
A. Standalone
The Standalone Revenue from Operations for the F.Y. 2023-24 was Rs. 137.47 Crores against Rs. 94.65 Crore in the previous year. The Company has reported total income of Rs. 137.72 Crore for the current year as compared to Rs. 94.97 Crores in the previous year. The Net Proft for the year under review amounted to Rs. 5.29 crore in the current year as compared to Rs. 3.03 crore in the previous year.
B. Consolidated
The Consolidated Revenue from Operations during the year for the F.Y. 2023-24 was Rs. 140.55 Crores. The Company has reported total profit after tax of Rs. 5.43 Crore for the current year as compared to Rs. 3.03 Crore in the previous year.
During the Financial Year 2023-24, the company experienced significant growth in operating revenue as compared to the previous Financial Year. This is a testament to the hard work and dedication of our team, as well as the successful implementation of our strategic initiatives.
Our innovative approach and commitment to delivering exceptional products and services have resonated with our target audience and members, resulting in increased sales and customer loyalty. We have also been able to capitalise on emerging trends and market opportunities, allowing us to stay ahead of the competition and retain our loyal customers and members.
3. Consolidated Financial Statements
Pursuant to Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company and its subsidiary Company prepared in accordance with the relevant Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, forms part of this Annual Report.
4. Conversion of Company from Private Limited to Public Limited
During the financial year, the company has been converted from a "Private Limited Company" to a "Public Limited Company" and the name of the Company has been changed from "Esconet Technologies Private Limited" to "Esconet Technologies Limited" w.e.f. September 21st, 2023, and the Fresh Certificate of Incorporation by the then Registrar of Companies, New Delhi was issued to reflect the change in constitution of the Company.
5. State of Company's Affairs and Future Outlook
The Company understands the importance of adapting to changing market conditions and evolving customer needs and believe that continuous improvement is key to staying ahead of the competition. Our focus is on streamlining processes, improving efficiency, and leveraging technology to drive growth and improve client satisfaction. Our aim is to create a more agile and innovative organization that is better equipped to respond to market changes and capitalize on new opportunities. The management is confident that the transformation will position the company for long-term success and growth.
6. Change in the Nature of Business
During the year there was no change in main business activities of the Company During the year under review.
7. Details of Lock - In of Shares
In accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, the shares held by our esteemed Promoters and Public Shareholders (who held shares before our Initial Public Offering) are subject to and held in lock-in state as mandated by the SEBI regulations.
8. Dividend:
Pursuant to Section 134 (3) of the Companies Act, 2013 read with Secretarial Standard (SS-4) the Board of Directors, after considering holistically the relevant circumstances and current financial positions, has decided that it would be prudent not to recommend any dividend for the year under review.
The Board of Directors of the Company had approved and adopted a Policy on Distribution of Dividend, as amended from time to time, to comply with Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations').
The said Policy of the Company sets out the parameters and circumstances that will be taken into account by the Board in determining whether or not to distribute dividend to its shareholders, the quantum of profits and/or retained profits earned by the Company to be distributed as dividend.
The policy is available on the website of the Company viz. https://www.esc.co.in.
9. Transfer of Amounts to Investor Education and Protection Fund
There was no amount lying with regard to unpaid and unclaimed dividend of earlier years which was required to be transferred or is due to be transferred to the Investor Education and Protection Fund (IEPF) during the financial year 2023-24, in terms of the applicable provisions of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules'), as amended time to time.
There were no shares on which were required to be transferred or is due to be transferred to the IEPF, during the FY 2023-24.
10. Initial Public Offer and Listing of shares of the Company
The Shares of the Company were listed on National Stock Exchange SME platform, on 23rd February 2023. The Company has paid the annual listing fee for the financial year 2024-2025. The Equity Shares of the Company has the electronic connectivity under ISIN No. INE0RQZ01017.
Depositories
Your Company has arrangements with National Securities Depository Limited (‘NSDL') and Central Depository Services (India) Limited (‘CDSL'), the Depositories, for facilitating the members to trade in the fully paid-up equity shares of the Company in Dematerialized form. The Annual Custody fees for the FY 2023-24 has been paid to both the Depositories.
11. Statement Of Utilization of Funds Raised Through IPO Under Regulations 32 (1) of The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
During the year under review, the company has come up with Initial Public Offer of 33,60,000 (Thirty-Three lakhs Sixty Thousand only) Equity shares of Rs. 10/- each at issue price of Rs. 84/- per Equity share, including a premium of Rs. 74/- per equity share aggregating to Rs. 2822.40 Lakhs.
Pursuant to Regulation 32(1)(a) and 32(1)(b) of The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company hereby states that:
- There was no deviation(s) in the utilization of public issue proceeds from the objects as stated in the prospectus dated February 20th, 2024.
- There has been no variation(s) in the use of proceeds from the objects stated in the prospectus dated February 20th, 2024.
12. Share Capital Structure of the Company
A. Authorized Capital and Changes thereon if any
During the year under the review the company has increased its Authorized Share Capital from Rs. 1,00,00,000/- (Rupees One Crores) to Rs. 15,00,00,000/- (Rupees Fifteen Crores) in its Extra-Ordinary General Meeting Held on 23rd September 2023.
As on date of this Report the Authorized Capital of the Company is Rs. 15,00,00,000 (Rupees Fifteen Crores) divided into 1,50,00,000 (One Crore and Fifty Lakh) equity shares of Rs. 10/- each.
B. Paid up Capital and Changes thereon, if any:
The Issued, Subscribed and Paid-up capital is Rs. 12,36,00,000/- (Rupees Twelve crores Thirty-Six Lakhs) divided into 1,23,60,000 (One Crore Twenty-Three Lakh and Sixty Thousand) equity shares of Rs. 10/-.
During the year, the Company had issued Shares by way of following Allotments:
and the issued, subscribed, and Paid-up capital of the company is increased from Rs. 76,71,000/- to Rs. 12,36,00,000/-.
Other than above-mentioned there has been no change in the Share Capital, Issued, paid up and Subscribed Capital of the company during the year under review.
13. Particulars of contracts or arrangements with related parties
The Company does have transactions with related party in terms of Section 188 of the Companies Act, 2013. Hence, the disclosure required to be provided under Section 134(3) (h) of the Companies Act, 2013, in Form AOC - 2 is applicable is furnished as Annexure I to this report.
The Disclosures as required under Accounting Standard - 18 (AS-18) ‘'Related Party Disclosures'' notified under Rule 7 of the Companies (Accounts) Rules, 2014 have been provided in the Notes forming part of the Financial Statements.
14. Subsidiary Companies and Joint Venture
The Company has one Subsidiary Companies named Zeacloud Services Private Limited as on 31st March 2024.
Your Company funds its subsidiary (ies), from time to time, as per the fund requirements, through loans, guarantees and other means to meet the working capital and other business requirements.
Apart from the above, there is no other Subsidiary / Joint-venture/Associate within the meaning of 2(87) and 2(6) of the Act, of the Company.
Audited Accounts of Subsidiary Companies:
Your Company has prepared the Audited Consolidated Financial Statements in accordance with Section 129(3) of the Act read with the applicable Accounting Standards and Listing Regulations. As required under the Accounting Standards, issued by the Institute of Chartered Accountants of India (‘ICAI') and applicable provisions of the Listing Regulations, the Audited Consolidated Financial Statements of the Company reflecting the Consolidation of the Accounts of its subsidiaries are included in this Annual Report. Further, a statement containing the salient features of the financial statements of subsidiaries pursuant to sub-section 3 of Section 129 of the Companies Act, 2013 ('the Act') in the prescribed form AOC-1 is appended to this Board Report as Annexure - 1A.
In accordance with Section 136 of the Act, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of the subsidiaries are available on the website of the Company viz. https://www.esc.co.in.
As on March 31, 2024, the Company has no Material Subsidiary. The Policy for determining Material Subsidiaries is available on the Company's website viz. https://www.esc.co.in.
15. Registered Office and other Offices of the Company
The Registered Office of the Company is presently situated at D - 147, Okhla Industrial Area, Phase - 1, New Delhi, India - 110020.
16. Registrar and Share Transfer Agent
To provide services to the Shareholders, the Company has appointed M/s Skyline Financial Services Private Limited, (SEBI Regi. No.- INR000003241) having its Registered office at D-153/A, 1st floor, Phase I, Okhla Industrial Area, New Delhi, Delhi - 110020, as Registrar and Transfer Agent (RTA) & Share Transfer Agent (STA) of the Company.
17. Public Deposits
Your Company had not accepted/renewed any deposits from the public or the Members, within the meaning of Section 73 of the Act read with Chapter V of the Act and the Companies (Acceptance of Deposits) Rules, 2014, during the financial year 2023-24, and as such no amount of principal or interest on deposit from public or Members, was outstanding as of the Balance Sheet date.
18. Directors and Key Managerial Personnel
The Board of the Company is a balanced one with an optimum mix of Executive and Non-Executive Directors and comprises of Six (06) Directors; Thee Executive Director, Three Non-Executive Director out of which Three are Independent Directors and out of which one is women Independent Director. They show active participation at the board and committee meetings, which enhances the transparency and adds value to their decision making.
As on the date of this report, the Board of the company constitutes of the following directors and KMPs:
*Mr. Himanshu Purohit, has resigned with effect from 10th June 2024 from the Position of the Chief Financial Officer of the Company.
During the year under review and as on date of this report the following officials were appointed/resigned or redesignated:
19. Number of Board Meetings:
During the year under review, 27 (twenty-seven) Board Meetings were convened and held in accordance with the provisions of the Companies Act, 2013 and rules made there under and in compliance with the Secretarial Standard I as issued by the Institute of Company Secretaries of India.
Name of Directors
20. Number of General Meetings:
During the year under review, total 6 (Six) Extra Ordinary General Meetings were convened and held in accordance with the provisions of the Companies Act, 2013 and rules made there under and in compliance with the Secretarial Standards as issued by the Institute of Company Secretaries of India as follows:
- 9th August 2023
- 26th September 2023
- 11th October 2023
- 16th October 2023
- 3rd November 2023
- 20th November 2023
The Annual General Meeting of the Company for the last Financial Year was held on 11th September 2023 at the Registered office of the Company.
21. Details of Committees of the Board:
At present, the Board has following Five (5) Committees:
• Audit Committee
• Nomination and Remuneration Committee
• Stakeholders' Relationship Committee
• General Business Committee
• Internal Complaints Committee
• IPO Committee (Dissolved with effect from 29th May 2024)
The Composition of this Committees and relative compliances are in line with the applicable provisions of the Companies Act, 2013 read with the Rules and applicable provisions of the Listing Regulations.
The terms of reference of these Committees are determined by the Board and their relevance reviewed from time to time. Meetings of each of these Committees are convened by the respective Chairperson of the Committee. The Board supervises the execution of its responsibilities by the Committees and is responsible for their action. The minutes and proceedings of the meetings of all Committees are placed before the Board for review from time to time. The Minutes of the Committee Meetings are sent to all members of the Committee individually and are placed before the Board for review from time to time.
Following are the details of Board Committees;
A. Audit Committee
Your Company has constituted the Audit Committee in accordance with Section 177 and other applicable provisions of Companies Act, 2013 read with rule 6 of the Companies (Meetings of Board and its Power) Rules, 2014 and applicable clauses of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and any other applicable guidelines. Further, the Audit Committee was constituted by way of a Board resolution dated 2nd November 2023. The Committee comprised of 3 members during the financial year.
The detail of the composition of the Audit committee along with their meetings held/attended is as follows:
Attendance at the Committee Meeting held on
The Company Secretary of the Company shall act as a Secretary to the Audit Committee. The Chairman of the Audit Committee shall attend the Annual General Meeting of our Company to answer shareholder queries, if any.
The Audit Committee shall continue to be in function as a committee of the Board until otherwise resolved by the Board in accordance with its powers as Part C of Schedule II of SEBI Listing Regulation, 2015 as amended and the Companies Act, 2013 or any other power and responsibilities as may be designated by the board of directors from time to time.
B. Nomination and Remuneration Committee
Our Company has constituted Nomination and Remuneration Committee in terms of Section 178, Schedule V and other applicable provisions of Companies Act,
2013 read with rule 6 of the Companies (Meetings of Board and its Power) Rules,
2014 and applicable clauses of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and any other applicable guidelines, in the meeting of the Board of Directors held on 2nd November 2023.
The functions of the Committee are as per the provisions of the Companies Act, 2013 besides others which may be delegated to it by the Board.
The detail of the composition of the Nomination Remuneration committee along with their meetings held/attended is as follows:
The Company Secretary of our Company shall act as a Secretary to the Nomination and Remuneration Committee.
C. Stakeholders Relationship Committee
Our Company has constituted the Stakeholders Relationship Committee in terms of Section 178 sub section (5) and other applicable provisions of Companies Act,
2013 read with rule 6 of the Companies (Meeting of Board and its Power) Rules,
2014 and applicable clauses of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in the meeting of Board of Directors dated 2nd November 2023.
The detail of the composition of the Stakeholders Relationship committee along with their meetings held/attended is as follows:
The Company Secretary of our Company shall act as a Secretary to the Stakeholders Relationship Committee.
22. Policy on Directors' appointment and remuneration
The Nomination and Remuneration Committee is entrusted with the responsibility of identifying and ascertaining the integrity, qualification, expertise, and experience of the person for appointment as Director, KMP or at Senior Management level and recommending their appointment for the consideration of the Board.
The Company has drawn up Nomination and Remuneration policy in line with the requirement of Section 178 of the Companies Act, 2013. The Policy inter alia provides that a person should possess adequate qualification, expertise, and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.
The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 in respect of employees of the Company, is enclosed as Annexure-II and forms an integral part of this report.
Extract of the policy are available on the Company's website www.esc.co.in.
23. Vigil Mechanism / Whistle Blower Policy
Section 177(9) of the Companies Act, 2013 mandates every listed company to constitute a vigil mechanism. Similarly, Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, laid down to establish a mechanism called the "Whistleblower Policy" for directors and employees to report concerns of unethical behavior, actual or suspected, fraud or violation of the Company's Code of Conduct.
The Company has a Vigil Mechanism cum Whistle Blower Policy (‘Vigil Mechanism') in place. The Vigil Mechanism is a system for providing a tool to the employees of the Company to report violation of personnel policies of the Company, unethical behaviour, suspected or actual fraud, violation of code of conduct.
The Company is committed to provide requisite safeguards for the protection of the persons who raise such concerns from reprisals or victimization.
The Policy provides for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Board of Directors affirm and confirm that no employee of the Company has been denied access to the Committee.
Below is report under vigil mechanism during the financial year 2023-2024.
Details of the Vigil Mechanism are available on the Company's website www.esc.co.in.
24. Corporate Social Responsibility
During the year under review, the provisions of Section 135 of the Companies Act, 2013, did not apply to your Company. However, the Company remains committed to fostering a strong corporate culture that integrates CSR values with business objectives.
The provisions of Corporate Social Responsibility under Section 135 of the Companies Act, 2013, will now apply to your Company for the Current Financial Year 2024-25, as the Company's net profit exceeds Rupees 5 crores as of March 31,2024.
In accordance with Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility) Rules, 2014, as amended by the CSR Amendment Rules, 2021, your Company is exempt from constituting a CSR Committee since the CSR expenditure obligation for the relevant year does not exceed Rs. 50 lakhs. Therefore, the Board will carry out the required functions itself, and your Company is not required to form a CSR Committee as of the date of this report.
25. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace
Your Company has zero tolerance towards any action on the part of any of its officials, which may fall under the ambit of "Sexual Harassment" at workplace. Pursuant to the provisions of Section 21 of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, Redressal) Act, 2013, the Company formulated a Policy on Prevention of Sexual Harassment at Workplace. All employees (permanent, contractual, temporary, trainees, etc) are covered under this policy. An Internal Complaints Committee (ICC) was constituted which is responsible for redressal of complaints related to sexual harassment at the workplace.
Pursuant to the said Act, the details regarding the number of complaints received, disposed and pending during the FY 2023-24, pertaining to incidents under the above framework/ law are as follows:
26. Policy on Code of Conduct and Ethics
Being a SME listed Company exemption has been provided to the Company from formulating of Code of Conduct for Board of Directors and Senior Management Personnel.
However, Board of Directors has formulated and adopted Code of Business Conduct Ethics for Director & Senior Management Executive policy. As an organization your Company places a great importance in the way business is conducted and the way each employee performs his/her duties. Your Company encourages transparency in all its operations, responsibility for delivery of results, accountability for the outcomes of our actions, participation in ethical business practices and being responsive to the needs of our people and society.
Towards this end, your Company has laid down a Code of conduct applicable to all the employees of your Company and conducted various awareness sessions across the Company. The Code provides for the matters related to governance, compliance, ethics and other matters. In this regard certificate from Managing Director as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been received by the Board.
The said policy is attached herewith as Annexure - VIII.
27. Auditors
a) Statutory Auditors
The Members of the Company at the 11th Annual General Meeting (‘AGM') held on September 20,2022 approved the appointment M/s Goel Mintri & Associates., Chartered Accountants (Firm Registration No.006569C), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the ensuing Annual General Meeting.
The Independent Auditors' Report for fiscal 2024 provided by the statutory auditor does not contain any qualification, reservation, or adverse remark. The Independent Auditors' Report is integrated in this Annual Report.
Re-appointment of Statutory Auditor
It is proposed to re-appoint M/S Goel Mintri & Associates, Chartered Accountants, who are holding the Office of the Statutory Auditor till the Conclusion of the ensuing Annual General Meeting of the Company, for 2nd term and further period of 5 years from the conclusion of the ensuing 12th Annual General Meeting of the Company till the Conclusion of the 17th Annual General Meeting of the Company to be held in year 2029.
The Statutory Auditors have confirmed their eligibility and submitted their certificate of non-disqualification to hold office of Statutory Auditors of the Company, to the Board of Directors the Company, and the Board in their meeting held on 26th July 2024 has considered their re-appointment as statutory auditor and recommended the same to the shareholders for their approval.
b) Internal Auditors
The provisions of Section 138(1) of Companies Act, 2013 is now applicable to Company and Company has appointed M/s Arora Rahul & Co., Practicing Chartered Accountants, to carry out Internal Audit for the Financial Year 202425, in its Meeting of Board of Directors held on 29th May 2024.
c) Cost Auditors
Your company does not fall within the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost records & Audit) Rules, 2014, therefore no such records required to be maintained.
28. Secretarial Audit:
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, made there under, mandates the company to have Company Secretary in practice for furnishing secretarial audit report, accordingly, have appointed The Secretarial Auditor of the Company.
The Board of Directors of your Company had already appointed M/s Ragini Agrawal & Associates, Practicing Company Secretaries, Noida, a peer reviewed firm, to act as the Secretarial Auditor to the Company, in the Meeting of the Board of Directors held on 29th May 2024.
The Secretarial Auditors' Report for the financial year ended 31st March 2024, does not contain any qualification, reservation, or adverse remark.
The Secretarial Auditors' Report for the financial year ended 31st March 2024, is enclosed as Annexure VI to the Board's report, which forms part of this Integrated Annual Report.
29. Employees' Stock Option Plan:
During the fiscal year under review, Esconet Technologies Limited did not issue any stock options to its employees.
The Company recognizes the importance of stock options as a tool for employee motivation and retention, aligning employee interests with those of the shareholders. However, after careful consideration of current market conditions and the Company's strategic goals, the decision was made not to grant any stock options for this period.
Esconet Technologies Limited remains committed to evaluating and potentially implementing stock option plans in the future as part of its broader compensation strategy. This approach ensures that we remain competitive in attracting and retaining top talent while aligning with our long-term business objectives. The Company will continue to review its compensation policies and make adjustments as necessary to support the growth and success of both the employees and the organization.
30. Secretarial Standards
Esconet Technologies Limited is committed to maintaining the highest standards of corporate governance and compliance. In line with this commitment, the Company has adhered to all applicable Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI) and approved by the Central Government pursuant to Section 118(10) of the Companies Act, 2013, for the financial year 202324.
We acknowledge the role of the ICSI in promoting excellence in corporate governance and appreciate their efforts in establishing these standards. These Secretarial Standards encompass a comprehensive set of guidelines and best practices aimed at ensuring transparency, accountability, and consistency in corporate operations and governance. Compliance with these standards is integral to fostering trust and integrity in our corporate processes and practices.
31. MD & CFO Certification
In compliance with Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managing Director (MD) and Chief Financial
Officer (CFO) of Esconet Technologies Limited have provided a comprehensive certification to the Board of Directors for the financial year 2023-24.
This certification encompasses a detailed affirmation regarding the accuracy and completeness of the Company's financial statements and addresses other key matters as specified under the said regulations.
The certificate received is attached herewith as per Annexure-VII.
32. Adequacy of Internal Financial Controls with reference to the Financial Statements
A well-established, independent, multi-disciplinary Internal Audit team operates in line with governance best practices. It reviews and reports to management and the Audit Committee about compliance with internal controls and the efficiency and effectiveness of operations as well as the key process risks.
The Board has adopted adequate policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of 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.
The Company has successfully laid down the framework and ensured its effectiveness. Esconet has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. Esconet has also well-defined processes for formulating and reviewing long term and business plans. Esconet will continue its efforts to align its processes and controls with best practices.
33. Annual Evaluation of Board Performance
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors in their separate meeting who also reviewed the performance of the Board as whole.
The Nomination and Remuneration Committee has defined the evaluation criteria, procedure for the performance evaluation of the Board of Directors.
The Board's functioning was evaluated on various aspects, including inter alia degree of fulfilment of key responsibilities, Board Structure and Composition, effectiveness of Board process, information and functioning.
The Directors were evaluated on aspects such as attendance and contribution at Board Meeting and guidance/support to the management outside Board/Committee Meetings.
In addition, the Chairman was also evaluated on Key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement of all Board Members. Evaluation of Independent Directors was done by the Entire board.
34. Disclosure u/s 184(1) & 164(2) of the Companies Act, 2013
The Company has received the disclosure in Form DIR-8 & MBP-1 from its Directors being appointed or re-appointed and has noted that none of the Directors are disqualified under Section 164(2) of the Companies Act, 2013 which is required to be disclosed in this report pursuant to Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
Certificate of Practicing Company Secretary
The Company has obtained a certificate from Mr. Ragini Agrawal, Proprietor of M/s Ragini Agrawal & Associates, Practicing Company Secretary, Noida stating that none of the Directors on the Board of the Company have been debarred/ disqualified from being appointed /continuing as Directors of any company, by the SEBI and Ministry of Corporate Affairs or any such Statutory authority.
The said certificate is annexed with this annual report as Annexure-V.
35. Particulars of Loans, Guarantees and Investments
Particulars of Loans & Investment as required under Section 186 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules, 2014 are given in Notes forming part of Financial Statements. There is no Guarantees given during the year under review.
36. Declaration of Independent Directors:
Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence provided in Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect their status as Independent Director during the year under review.
The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar (‘IICA').
In the opinion of the Board, the independent directors possess the requisite integrity, experience, expertise and proficiency required under all applicable laws and the policies of the Bank.
37. Meeting Of Independent Directors:
The Company's Independent Directors meet at least once in every financial year without the presence of Executive Directors or management personnel. Such meetings are conducted informally to enable Independent Directors to discuss matters pertaining to the Company's affairs and put forth their views to the Lead Independent Director.
No sitting fee is paid to the Independent Directors for the said meeting
During the year under review, one Meeting of the Independent Directors was held on 27th March 2023 for the F. Y. 2023-24 to discuss:
- Evaluation of the performance of Non-independent Directors and the Board of Directors as a whole.
- Evaluation of the performance of the chairman of the Company, considering the views of the Executive and Non- Executive directors.
- Evaluation of the quality, content, and timeliness of flow of information between the management and the board that is necessary for the board to perform its duties effectively and reasonably.
- Review the mechanism of safeguard the interests of all Stakeholders.
38. Criteria of making payments to Non-executive Directors including all pecuniary relationship or transactions of Non-executive Directors
The Independent Directors are not paid any remuneration other than the sitting fee for attending meetings of the Board and the Committees thereof as approved by the Board.
There has been no pecuniary relationship or transactions of the Non-executive Directors vis-a-vis the Company during the year except the sitting fee paid to them.
39. Directors Responsibility Statement
The Board of Directors of the Company confirms:
a) that in the preparation of the annual accounts for the year ended 31st March 2024 the applicable Accounting Standards have been followed.
b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.
c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the Provisions of the
Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
d) That the Directors have prepared the annual accounts for the year ended 31 st March 2024 on a ‘going concern' basis.
e) that the Directors have laid down internal financial control and that such internal financial control are adequate.
f) that the Directors have devised proper system to ensure compliance with the Provisions of all applicable laws.
40. Disclosures Relating to Remuneration of Directors, Key Managerial Personnel and Particulars of Employees
The information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ Employees of your Company is appended in Annexure II forming part of this Report.
In accordance with provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in the annexure to this report. In terms of provisions of Section 136(1) of the Companies Act, 2013 this report is being sent to the members without this annexure. Members interested in obtaining copy of the annexure may write to the Company Secretary and the same will be furnished on request. The said information is available also for inspection at the registered office of the Company during working hours.
41. Means of Communication
Information like Half Yearly / Annual Financial Results and press releases / presentations on significant developments in the Company that have been made available from time to time have been submitted with the Stock Exchanges to enable them to put on their websites and communicate the Members. The same is also made available to Institutional Investors or to the Analysts (if any) and are also hosted on the Company's website at www.esc.co.in.
The requirements to publish Half Yearly / Annual Financial Results in English and Hindi language newspapers is not applicable to the company in accordance with Regulation 47 (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, hence no financial results were published in any newspapers.
The Company is disseminating all reports / information including half yearly Financial Results, Shareholding Pattern and other disclosers and Report etc., electronically on NSE website viz. www.nseindia.com.
42. Business Responsibility & Sustainability Report
Esconet Technologies Limited is committed to upholding high standards of business responsibility and sustainability. While the regulatory requirements for the Business Responsibility and Sustainability Report (BRSR), as stipulated under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, do not apply to our company for the financial year 2023-24, we recognize the importance of transparency in environmental, social, and governance (ESG) practices.
While the BRSR is not mandatory for us at present, we are considering the benefits of voluntary incorporating such a report in the upcoming years. This initiative would align with our long-term strategy to enhance our ESG disclosures, thereby fostering greater transparency and accountability.
43. Annual Return
Pursuant to Notification dated August 28, 2020, issued by the Ministry of Corporate Affairs as published in the Gazette of India on 28th August 2020, the details forming part of the extract of Annual Return in Form MGT-9 is not required to be annexed herewith to this report.
As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return in E-form MGT-7 shall be available at website of the Company at www.esc.co.in.
In pursuance of the Companies (Management and Administration) Second Amendment Rules, 2023, the Board of Directors of the Company have appointed Chief Financial Officer & Company Secretary as the Designated Person for compliance under the said Rules.
44. Disclosure of Particulars for Conservation of Energy, Technology Absorption, Foreign Exchange Earnings, and outgo
Information's as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is given in Annexure- III forming part of this Report.
45. Corporate Governance Report
Esconet Technologies Limited is committed to upholding the highest standards of corporate governance, ensuring compliance with the principles of good governance, and maintaining a robust framework that promotes transparency, accountability, and integrity in all our operations. Our commitment to these principles reinforces our dedication to acting in the best interest of our stakeholders.
In accordance with Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliance with the corporate governance provisions as specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46, as well as Para C, D, and E of Schedule V, is not applicable to listed entities that have their specified securities listed on the SME Exchange. Therefore, the requirement to file a Corporate Governance Report with the Stock Exchange does not apply to Esconet Technologies Limited for the financial year 202324.
Since the Company's securities are listed on EMERGE SME Platform of NSE, Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para-C, D and E of Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, are not applicable to the Company. Hence Report on the Corporate Governance does not form part of this Board's Report.
46. Management Discussion and Analysis Report
In accordance with Regulation 34 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 ("Listing Regulations") the Management Discussion and Analysis (MD&A) Report of the Company for the year under review is presented in a separate section forming the part of the Annual Report is attached here with as Annexure IV and forms part of this Report.
47. Material Changes and Commitments during the Year under review, if any:
a) The Shareholders has approved the following resolutions in Extra Ordinary General Meeting dated October 11,2023:
- Appointment of M/s Goel Mintri & Associates as Statutory Auditor of the Company to fill the casual vacancy arisen due to resignation of M/s S. Agarwal & Co., Chartered Accountant.
b) The Shareholders has approved the following resolutions in Annual General Meeting dated September 11,2023:
- Re-designation /Appointment of Mr. Santosh Kumar Agrawal as Managing Director.
c) Other Material changes during the year under review:
- The Remuneration to be paid to Mr. Santosh Kumar Agrawal and Mr. Sunil Kumar Agrawal was increased to Rs. 3,00,000 per month in the Board meeting held on 29th June 2023, when the Company was a Private Limited Company, and the same was not required approval of shareholders.
- Formed Audit Committee, Nomination & Remuneration Committee & Stakeholders relationship committee and IPO Committee of the Board in the Board Meeting held on 2nd November 2023.
- Mr. Vineet Agrawal and Mr. Sunil Kumar Agrawal were re-designated as Whole Time Director of The Company in the Extra-Ordinary General Meeting of the Company Held on 26th September 2023.
- The Company's shares were listed on National Stock Exchange of India (NSE) Emerge Platform on February 23, 2024.
48. Other Disclosures and Reporting
Your directors further state that during the year under review:
a) the Company has not taken any deposits from Public or Shareholders of the Company;
b) there were no significant / material orders passed by the Regulators or Courts or Tribunals impacting going concern status of your Company and its operations in future;
c) there are no qualifications, reservation or adverse remark or disclaimer made by the Statutory Auditors in their Report.
49. Details In Respect of Frauds Reported by Auditor
During the year under review, the Statutory Auditors, Internal Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its officers or employees, to the Board of Directors under Section 143(12) of the Act, details of which needs to be mentioned in this Report.
50. Website:
In compliance with Regulation 46 of SEBI (LODR) Regulations, 2015, the Company has maintained a functional website namely www.esc.co.in containing basic information about the Company. Our digital presence is more than just a regulatory requirement; it is a heartfelt commitment to transparency, accessibility, and support for all our stakeholders.
Our website is designed to be a rich repository of essential information about our company. It serves as a gateway to understanding who we are, what we do, and how we are committed to our mission. Here, you will find a wealth of resources including our company's policies, financial results, and annual reports. These documents are crafted with care to provide a clear and honest view of our performance and future aspirations.
Furthermore, we have made it a priority to include detailed information about the designated officials who are entrusted with the responsibility of assisting and handling investor grievances.
51. Significant And Material Orders Passed by The Regulators or Courts or Tribunals Impacting The going Concern Status of The Company:
We are pleased to share that Esconet Technologies Limited has not received any significant or material orders from regulators, courts, or tribunals that would impact our ongoing status or future operations. This positive outcome is a testament to our unwavering commitment to integrity, compliance, and excellence in all our endeavors.
52. Human Resource Development
The Company acknowledges that its employees are the foundation of its sustainable approach and play an unparalled role in its growth story. The Company places human resources management at the forefront and continually investing in human capital development, which includes building skills and capabilities.
The Company undertakes robust learning and development initiatives that include technical, functional, leadership development and culture-building programmes. The learning and development needs are recognized through various processes, which includes Company's vision and mission, competency frameworks and training needs identified through performance management system on regular basis. The outputs of these programs have been very positive and have helped to improve the skills, personality, and performance of the participating individuals. Your Company constantly endeavors to improve upon its practices and processes for employee satisfaction through effective communication and engagement and promoting a culture based on trust and confidence. We aim to develop a culture that is based on fairness and respect.
The Company sees its employees as critical to the future and believes that every employee needs to possess apart from competence, capacity and capabilities, sustainable values, current and contemporary which would make them useful and relevant and competitive in managing the change constructively for overall growth of the organization. To this end the company's approach and efforts are directed towards creating a congenial work atmosphere for individual growth, creativity and greater dedicated participation in organizational development. The Company believes that the success of an organization largely depends on the quality of its workforce. Employee relations remained cordial and peaceful throughout the year.
53. Particulars of Employees and Related Disclosures
In accordance with Section 134 (2) read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, this report is being sent to all the shareholders of the Company, excluding the details of employees who were in receipt of remuneration of not less than Rupees 102 lakh during the year ended March 31, 2023 or not less than Rupees 8.5 lakh per month during any part of the said year. As there were no employees receiving the remuneration in excess to the mentioned above.
54. Declaration Under Insolvency and Bankruptcy Code
We are pleased to share with our valued stakeholders that during the year under review, Esconet Technologies Limited has not made any applications nor had any proceedings pending under the Insolvency and Bankruptcy Code, 2016.
55. Declaration Regarding Settlement with Banks/Financial Institutions
We are pleased to inform our cherished stakeholders that during the year under review, Esconet Technologies Limited has not made any settlements with banks or financial institutions. As a result, no valuations were necessary.
56. Cautionary Statement
Statements in this Directors' Report and Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.
57. Acknowledgement:
Your directors wish to place on record their appreciation and sincere thanks to the Customers, Business Partners, Government and all statutory authorities for their unwavering support and co-operation. Your directors, also acknowledge the hard work, dedication, and Commitment of the employees and place on record the appreciation of the dedication and hard work contributed by employees, individually and collectively, in the overall progress of the Company during the last year.