To,
The Members,
Esaar (India) Ltd
Your Directors are pleased to present the 72nd Annual Report of Esaar (India) Ltd together with Director's Report, Audited Financial Statements and Auditors' Report for the Financial Year ended March 31, 2024.
1. FINANCIAL RESULTS
Your Company's financial performance during the Financial Year 2023-24 is summarized below:
(Rs. in Lakhs except EPS)
2. RESULTS OF OPERATIONS
During the year, your Company has generated a revenue of Rs. 652.28 lakhs as compared to Rs. 1846.20 lakhs in the previous year. Further, the Company has incurred a Net Loss of Rs. (48.28) lakhs as against the Net Profit of Rs. 447.70 lakhs in the previous year.
3. CHANGE IN THE NATURE OF THE BUSINESS
There was no change in the nature of business of the Company for the year under review. Further, information on the business overview and outlook and state of the affairs of the Bank is covered under the Management Discussion & Analysis section of the Annual Report.
4. CHANGE IN THE NAME OF THE COMPANY
During the year under review, there was no change in the name of the Company.
5. MATERIAL CHANGES OR COMMITMENTS
During the year, the open offer was made by M/s. Prabhat Capital Investments Limited ("Acquirer") for the acquisition of upto 53,15,050 (Fifty Three Lakhs Fifteen Thousand and Fifty Only) fully paid-up equity shares of the face value of ?10/- each, representing upto 26% (Twenty Six Percent) of the Voting Share Capital of Esaar (India) Ltd (the "Target Company") at an offer price of ? 5/- (Rupees Five Only) per Equity Share, from the Public Shareholders by the acquirer for the purpose of ("Offer" or "Open Offer"). However, the Reserve Bank of India ("RBI") vide letter dated May 07, 2024 and email communication dated May 14, 2024 has not granted the approval. Subsequently, in terms of the Regulations 23(1) of the SEBI (SAST) Regulations, the Open Offer stands withdrawn.
6. CHANGE IN SHARE CAPITAL
During the Financial Year there was no change in the Authorized Share capital of the Company.
7. TRANSFER TO RESERVE AND SURPLUS
Your Company decided not to transfer any amount to the Reserves for the year ended March 31, 2024.
8. DIVIDEND
With a view to strengthening the financial position of the Company, your Board has not recommended any dividend on shares for the FY 2023-24.
9. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND
The Company does not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).
10. PUBLIC DEPOSITS
Your Company has been registered as a NBFC in terms of the provisions of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. Your Company is categorized as Non-Deposit taking Non-Banking Financial Company. The Company has not accepted/invited any deposits during the year from the public falling within the ambit of Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
11. BUY-BACK / SWEAT EQUITY / BONUS SHARES / EMPLOYEE STOCK OPTIONS
During the year, the Company has neither issued any shares including sweat equity, employee stock options or bonus shares nor has bought back its shares.
12. ISSUE OF DEBENTURES, BONDS OR ANY NON-CONVERTIBLE SECURITIES
The Company has not issued any Debentures, Bonds or Non-Convertible Securities.
13. ISSUE OF CONVERTIBLE WARRANTS ON PREFERENTIAL BASIS The Company has not issued any convertible warrants during the year.
14. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES, IF ANY
The Company neither have any Subsidiary, Joint venture or Associate Company nor there are Companies/ Body Corporate which have become/ ceased to be subsidiary / Joint Venture / Associate during the FY 2023-24.
The Company has formulated a Policy for determining Material Subsidiaries. The Policy is put up on the Company's website at www.esaar.in.
15. STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. Harish Arora & Associates, Chartered Accountant (Firm Registration No. 015226C) was appointed as the Statutory Auditors by the Members at the 67th Annual General Meeting of the Company till the conclusion of 72nd Annual General Meeting to held for the FY 2023-24 of the Company.
Further, the Board of Directors have recommended the appointment of M/s. Sumit Ranka and Associates, Chartered Accountants (Firm Registration No. 147837W) as the Statutory Auditors of the Company to hold office for a term of 5 consecutive years from the conclusion of 72nd Annual General Meeting till the conclusion of 77th Annual General Meeting of the Company to conduct audit of accounts of the Company for the financial year ending 31st March 2025 till 31st March, 2029 at the remuneration as may be decided by the Board, subject to approval of members at the ensuing Annual General Meeting.
16. INTERNAL AUDITOR
During the FY 2023-24, M/s. Grandmark & Associates, Chartered Accountants, Mumbai (FRN: 011317N), had been appointed as the Internal Auditor of the Company.
Further, the Company has appointed M/ s. Rao & Shyam, Chartered Accountants (Firm Registration No. 006186S) as the Internal Auditor of the Company for the FY 2024 - 25.
17. STATUTORY AUDIT REPORT
The Auditors' Report on the financial statement for the current year is self-explanatory, therefore does not require any further explanation. The Company has already submitted declaration pursuant to Regulation 33(3)(d) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, ("SEBI LODR") to the Stock Exchange.
18. COST AUDITOR REPORT AND COST RECORD
The Directors state that Section 148(1) of the Companies Act, 2013 is not applicable to the Company.
19. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
M/s. NVB & Associates, Practicing Company Secretaries (Membership No: 12268; CP No. 16069), were appointed as the Secretarial Auditor to conduct the Secretarial Audit of the Company for the FY 2023-24, pursuant to Section 204 of the Companies Act, 2013, and rules made there under. The Secretarial Audit Report for the FY 2023-24 forms part of the Annual Report. The Secretarial Audit report for the current year is self-explanatory, therefore does not require any further explanation.
Further, the Company has re-appointed M/s. NVB & Associates, Practicing Company Secretaries as the Secretarial Auditor to conduct the Secretarial Audit of the Company for the FY 2024-25.
20. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 31, 2024, the Company has Four (4) Directors consisting of - One (1) Whole-Time Director, and Three (3) Non- Executive and Independent Directors.
i. Independent Director:
Pursuant to the recommendations of the Nomination and Remuneration Committee, Mr. Rajesh Kumar A. Pandey was appointed as an Additional Director (Independent Director) of the Company in the Board Meeting held on January 27, 2023 and has been regularized as an Independent Director in the Extra Ordinary General Meeting held on April 20, 2023.
During the FY 2023-24 Mr. Raju Kishan Darade has resigned from the post of Independent Director from the Board with effect from June 30, 2023.
Ms. Dipti Shashank Yelve has been re-appointed as an Independent Director of the Company at the 71st Annual General Meeting of the Company held on September 30, 2023 to hold office for a second term of 5 (five) consecutive years on the Board of the Company.
ii. Executive Director/Whole-time Director:
Pursuant to the recommendations of the Nomination and Remuneration Committee, Mr. Bipin D. Varma was appointed as Additional Director of the Company in the Board Meeting held on January 27, 2023 has been regularized in the Extra Ordinary General Meeting held on April 20, 2023.
Further during the FY 2024-25, the designation of Mr. Bipin D. Varma was changed from Executive Director to Whole-Time Director with effect from May 10, 2024, subject to the approval of Members in ensuing General Meeting.
Ms. Shruti Rahul Joshi resigned from the post of Whole -Time Director and Chief Financial Officer of the Company with effect from February 14, 2024.
iii. Women Director:
Your Company's Board is represented by One (1) Woman Director, Ms. Dipti Shashank Yelve.
Ms. Dipti Shashank Yelve has been re-appointed as an Independent Director of the Company at the 71st Annual General Meeting of the Company held on September 30, 2023 to hold office for a second term of 5 (five) consecutive years on the Board of the Company
iv. Non-Executive - Non-Independent Director:
During the FY 2023-24, Mr. Mehul Hasmukh Shah resigned from the post Non-Executive, Non-Independent Director of the Company with effect from February 14, 2024.
v. Directors Retiring by Rotation:
According to Section 152(6) of Companies Act, 2013, the Company is required to retire one-third of the directors by rotation at every Annual General Meeting. However, the aforesaid provision shall not be applicable for the 72nd Annual General Meeting of the Company since Mr. Bipin D Varma, Executive Director is proposed to be appointed as the Whole-Time Director of the Company and rest of the Directors are Independent Directors who do not fall within the purview of this provision.
vi. Key Managerial Personnel:
During the FY 2023-24, Ms. Palak Jain (Membership No. A57361) was appointed as the Company Secretary and Compliance Officer of the Company with effect from May 12, 2023. However, she has tendered her resignation from the post with effect from June 26, 2024.
Further, Mr. Mithlesh Kumar Ayodhya Prasad Jaiswal is appointed as the Chief Financial Officer of the Company with effect from May 10, 2024.
21. ANNUAL RETURN
Pursuant to Sections 92 and 134 of the Act, the Annual Return along with Notice of AGM is available on the website of the Company. The web link for the same is www.esaar.in.
22. FAMILIARIZATION PROGRAMME
Through the Familiarization programme, the Company apprises the Independent Directors about the business model, corporate strategy, business plans and operations of the Company. Directors are also informed about the financial performance, annual budgets, internal control system, statutory compliances etc. They are also familiarized with Company's vision, core values, ethics and corporate governance practices.
Details of Familiarization programme of Independent Directors with the Company are available on the website of the Company at www.esaar.in.
23. INDEPENDENT DIRECTOR'S MEETING
The Independent Directors of the Company meets once in every financial year without the presence of Executive Directors and management of the Company. The role of the Independent Directors is as per the provisions of Companies Act, 2013, as well as the SEBI LODR.
24. DECLARATION BY INDEPENDENT DIRECTOR
Pursuant to Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, the Independent Directors of the Company have given the declaration to the Company that they qualify the criteria of independence as required under the Act.
25. REGISTRATION WITH INDEPENDENT DIRECTOR'S DATABANK
The Independent Directors of the company are registered with Independent director databank.
26. NOMINATION AND REMUNERATION POLICY
An extract of the Company's policy relating to directors appointment, payment of remuneration and discharge of their duties is attached herewith as Annexure I. The policy is available on the website of the Company at www.esaar.in.
27. A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR
In the opinion of the board, the Independent Directors fulfil the conditions specified in SEBI LODR, and are independent of the management of the Company. The Independent Directors have complied with the code prescribed in schedule IV of the Companies Act, 2013.
28. MEETING OF BOARD OF DIRECTORS
Details of meeting of the board of Directors forms part of the Corporate Governance Report.
29. PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of Companies Act, 2013 and SEBI LODR, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder committee, including the Chairperson of the Board who were evaluated on parameters such as level of engagement and contribution and independence of judgment thereby safeguarding the interest of the Company.
The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairperson and the Non- Independent Directors was carried out by the Independent Directors. The Directors has expressed its satisfaction with the evaluation process.
30. PARTICULARS OF EMPLOYEES
The Directors and employees do not exceed the remuneration criteria prescribed in Section 197 of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Details attached as Annexure II.
The said information in detail is available for inspection at Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary, at the registered office and the same will be furnished on request.
31. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of loans, guarantees given and investments made during the year, as required under Section 186 of the Companies Act, 2013 and Schedule V of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulations, 2015, are given in the notes to the financial accounts forming part of the Annual Report.
32. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There were contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013. The related party transactions as per AS 18 are given in the notes to the financial accounts and forms part of the Annual Report.
Pursuant to Section 188 (1) of the Act, particulars of contracts/arrangements entered into by the company with related parties is attached to the director report in as Annexure III. The Company's Policy on Related Party Transaction is available on the Company's website: www.esaar.in.
33. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE OUTGO
The information pertaining to Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo as required under section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure IV.
34. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis report is annexed in Annexure V.
35. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Company has adequate internal financial controls besides timely statutory audit and limited reviews of performance taking place periodically.
36. RISK MANAGEMENT POLICY
The Board of Directors of the Company has put in place a Risk Management Policy which aims at enhancing shareholders' value and providing an optimum risk-reward trade-off. The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.
37. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. The Board has framed the "Whistle Blower Policy" as the vigil mechanism for Directors and employees of the Company. The web link for the policy is: www.esaar.in.
38. CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility were not applicable for FY 2022-23. However, the same is applicable for FY 2023-24. As per the provisions of Section 135 of the Companies Act, 2013, the Company is not required to form a CSR Committee as the value of amount to be spent does not exceed the threshold limit. Hence, the Board of Directors carry out the functions of the CSR Committee. The details of CSR activities is given in Annexure VI.
39. CORPORATE GOVERNANCE
The Company has complied with the provisions of Regulation 17 to 27 of the SEBI LODR, to the extent possible. A separate section on Corporate Governance forms part of the Directors' Report as stipulated in SEBI LODR, is included in the Annual Report as Annexure VII.
40. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has a policy for prevention of sexual harassment as required under The Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company has constituted Internal Complaints Committee to redress complaints received and has complied with the provision relating to the same.
i. number of complaints filed during the financial year - None
ii. number of complaints disposed of during the financial year - None
iii. number of complaints pending as on end of the financial year - None
41. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditor and Secretarial Auditor of your Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
42. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During FY 2023-24, there were no significant or material orders passed by any court or tribunal impacting the going concern status and Company's operations in future.
However, Reserve Bank of India ("Bank") has passed the following rejection order for application made by the Company for for the acquisition of upto 53,15,050 (Fifty-Three
Lakhs Fifteen Thousand and Fifty Only) fully paid-up equity shares representing upto 26% (Twenty-Six Percent) of the Voting Share Capital of the Company by Prabhat Capital Investments Limited vide its letter dated March 07, 2024 and email communication dated May 14, 2024.
43. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR
The following changes took place in the Company between the end of Financial Year and the date of Board Report:
i. Mr. Mithlesh Kumar Ayodhya Prasad Jaiswal was appointed as the Chief Financial Officer of the Company with effect from May 10, 2024.
ii. Ms. Palak Jain, resigned from the position of Company Secretary and Compliance Officer with effect from June 26, 2024.
44. MATERIAL DEVELOPMENTS DURING THE FINANCIAL YEAR
During the Financial Year, M/s. Prabhat Capital Investments Limited ("Acquirer") entered into a Share Purchase Agreement ("SPA") with Mr. Dheeraj Shah, the promoter of the Company dated September 21, 2023. The Acquirer has agreed to purchase 6,34,688 Equity Shares representing 3.10% of the Voting Share Capital ("Sale Shares"), from the Promoter at Rs. 5 (Rupees Five Only) per Equity Share.
Pursuant to the Share Purchase Agreement ("SPA"), the Acquirer issued a Public Announcement ("PA") to the Public Shareholders of our Company for the acquisition of upto 53,15,050 (Fifty-Three Lakhs Fifteen Thousand and Fifty Only) fully paid-up equity shares of the face value of Rs. 10/- each ("Equity Shares") at an offer price of Rs. 5/- (Rupees Five Only) per Equity Share, representing upto 26% (Twenty-Six Percent) of the Voting Share Capital of the Company.
Further, pursuant to paragraph 61 of Master Directions DNBR.PD.007/03.10.119/2016-17 issued by Reserve Bank of India ("Bank") (Now Direction 42.2 of the Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023) any change in the shareholding of an NBFC, which would result in acquisition / transfer of shareholding of 26 percent or more of the paid up equity capital of the applicable NBFC, shall require to take prior approval of Bank. Therefore, the Company authorized two directors of the Company to make an application to the bank for obtaining prior approval due to change in the shareholding of the Company which would result in transfer of shareholding of 26 % or more of the paid-up equity capital of the Company.
However, RBI vide its letter dated March 07, 2024 and email communication dated May 14, 2024, intimated the Target Company that the application is returned on account of audited financials of proposed shareholder viz. M/s. Prabhat Capital Investment Limited ("PCIL") not being in conformity with the qualifying Directions of CIC Master Direction, 2016. As the RBI approval has not been granted. As consequences, in terms of the Regulations 23(1) of the SEBI (SAST) Regulations, the Open Offer has been withdrawn.
45. POSTAL BALLOT
There was no resolution passed by Postal Ballot during the FY 2023-24.
46. EXTRA ORDINARY GENERAL MEETING
During the year, an Extra Ordinary General Meeting of the Members of the Company was held on Thursday, April 20, 2023.
47. IN CASE THE SECURITIES ARE SUSPENDED FROM TRADING, THE DIRECTORS REPORT SHALL EXPLAIN THE REASON THEREOF
The trading of the Company has not been suspended.
48. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
As on March 31, 2024, there is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.
49. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
There is no one time settlement done with bank or any financial institution.
50. SECRETARIAL STANDARDS
During the FY 2023-24, the Company has complied with the applicable provisions of Secretarial Standards issued by The Institute of Company Secretaries of India.
51. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors state that:
i. In the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii. Appropriate accounting policies have been selected and applied consistently and the Directors 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 profits of the Company for the year ended March 31, 2024;
iii. Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Annual Accounts of the Company have been prepared on going concern basis;
v. Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively;
vi. Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
52. ACKNOWLEDGEMENT
Your Directors take this opportunity to express deep and sincere gratitude to all the stakeholders of the Company.