As on: Nov 01, 2024 05:27 AM
Dear Members,
Your Directors have pleasure in presenting before you their 41stAnnual Report together with the Audited Accounts of the Company for the year ended 31st March, 2024.
FINANCIAL RESULTS:-
The standalone financial results of theCompany for the year under review are summarizedfor your consideration:
STATE OF COMPANY'S AFFAIRS/ BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR/HIGHLIGHTS/OPERATIONS
Emerald's Journey Towards Financial Excellence
DIVIDEND :-
Your Directors have recommended dividend of INR 0.10 per share inthe current financial year.
RESERVE:
Entire amount of Net Profit has been transferred to Profit and Loss Surplus account, which appears under the head “Reserves and Surplus.” An amount of INR 60,12,080/- has been transferred to Statutory Reserve Fund u/s 45 IC @20% .
SHARE CAPITAL
The Authorised Share Capital of the company is Rs. 50,00,00,000/- divided into 5,00,00,000 Equity Shares of Rs. 10/- each. The paid up share capital of the company is Rs. 30,14,36,500/- divided into 3,01,43,650 Equity Shares of Rs. 10/- each for the period endedMarch 31, 2024.
- The Company has not bought back any of its securities during the year under review.
- The Company has issued Employee Stock Option Schemes during the year under review.
- No Bonus Shares were issued during the year under review.
- The companyhas not issued any shares with differential voting rights during the financial year.
EMPLOYEE STOCK OPTION SCHEME:
Pursuant to the approval of the Members through Postal Ballot dated 24th October, 2023, the Board of directors of the Company approved the ‘EFL ESOP Scheme 2023' (“Scheme”) as per the Regulations of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.
During the previous financial year 2023-24, the Nomination and Remuneration Committee of the Board in their meeting held on February 29, 2024 granted 1,80,000 stock options and on March 22, 2024 granted 50,000 stock options to the eligible Employees as per the Scheme of the Company at an exercise price of Rs.27 per share. The options granted under the Plan shall be exercised not earlier than minimum period of 1 (one) year and not later than maximum period of 4 (four) years from the date of vesting.
The Scheme of the Company is in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB & SE Regulations). Secretarial Auditors' certificate to the effect that the Scheme of the Company has been implemented in accordance with the SEBI Guidelines and as per the resolution passed by the members of the Company has been obtained by the Company.
DIRECTORS: -
In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. SanjayAggarwal (DIN 02580828), Managing Director of the Company retires by rotation in the ensuing Annual General Meeting and being eligible offer him for re-appointment.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declarations that they meet the criteria of Independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has zero tolerance policy in case of sexual harassment at workplace and is committed to provide a healthy environment to each and every employee of the company. The Company has in place “Policy for Prevention and Redressal of Sexual Harassment” in line with the requirements of sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter referred to as ‘the said Act') and Rules made there under. As per the provisions of Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee (ICC) at the Registered Office, Works to deal with the Complaints received by the company pertaining to gender discrimination and sexual harassment at workplace.
Further, as per the provisions of Section 21& 22 of the aid Act, the Report in details of the number of cases filed under Sexual Harrasement and their disposal for the financial year under review, is as under:
Sr. No. No. of cases pending as on the beginning of the financial year under review
No. of complaints filed during the financial year under review
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
Mr. Deepak Gour, Director (Independent) has resigned from the company w.e.f. 7th August, 2024 due to his professional commitments. Mr. Manjeet Kaushik (DIN: 10746402) and Mr. Akshay Kumar Agarwal(DIN: 07144917)are appointed as Additional Directors in the capacity of Independent Directorw.e.f. 17th August, 2024 subject to approval of Shareholders to hold office for a term upto fiveconsecutive years commencing from the date of ensuing Annual General Meeting.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
The Company has issued and allotted 26,31,579convertible warrants on a preferential basis having face value of Rs. 10/- each at a price of Rs. 38/- each on May 7, 2024 pursuant to the permission of members taken through Extraordinary General meeting held on 19th April, 2024.
MAJOR CHANGES HAPPENING DURING THE FINANCIAL YEAR
Your Directors wish to inform that there have not been any changes during the Financial Year under review: a. In the nature of Company's business b. Generally in the class of business in which the Company has an interest.
LISTING AND LISTING REGULATIONS:-
The equity shares of the company are listed on the BSE Ltd. During the year, Company executed Uniform Listing Regulations in accordance with the requirements of SEBI circular DCS/ COMP/12/2015-16 dated October 13, 2015, with BSE Limited.
The company is regular in paying the listing fee.
INSIDER TRADING:
The Board of Directors has adopted The Code of Conduct for Prevention of Insider Trading in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider trading policy of the company lays down guidelines and procedures to be followed and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The requisite information has been given by way of an Annexure D-1 to this Report.
CORPORATE GOVERNANCE:-
Your Company is committed to maintain the highest standards of Corporate Governance. As required under Listing Regulations, 2015, Report on Corporate Governance is annexed herewith as Annexure D-10 and forms a part of this Annual Report. A Certificate from Mr. Kanwaljit Singh, a Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is also annexed with the Annual Report.
BUSINESS RESPONSIBILITY REPORT
Regulation 34 (2) (f) the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/EMPLOYEES:-
The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Companies Act 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.The details under Section 197 (12) of the Companies Act, 2013 read with Rules 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as Annexure D-4.
NUMBER OF MEETINGS OF BOARD
During the year 2023-24, 16 Board Meetings were held including one meeting of Independent Directors on the following dates:.
Sr. no.Date of Board Meeting
POLICY ON DIRECTORS' APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached as Annexure D-2, which forms part of this report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT:
Management Discussion & Analysis Report for the year under review, as stipulated under Part B of Schedule V to the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section as Annexure D-3 forming part of this Annual Report.
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Regulations with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors. Accordingly, following is the criteria for evaluation: - a. Criteria for evaluation of the Board of Directors as a whole: i. The Frequency of Meetings ii. Quantum of Agenda iii. Administration of Meetings iv. Flow and quantity of Information from the Management to the Board v. Number of Committees and their role. vi. Overall performance of the Company b. Criteria for evaluation of the Individual Directors including Independent Directors; i. Experience and ability to contribute to the decision-making process ii. Problem solving approach and guidance to the Management iii. Attendance and Participation in the Meetings iv. Personal competencies and contribution to strategy formulation v. Contribution towards statutory compliances, monitoring of controls and Corporate Governance
The Independent Directors had met separately on 20.03.2024 without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non-Executive Directors.
The Nomination and Remuneration Committee has also carried out evaluation of every Director`s performance. The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires.The Directors express their satisfaction with the evaluation process.
STATUTORY AUDITORS & AUDITORSREPORT: -
M/s S. Lal Bansal & Co., Chartered Accountants, Chandigarh, was appointed as Statutory Auditors of the Company in the last Annual General Meeting to hold office till the conclusion of Annual General Meeting to be held in the year 2027. The Auditors' Report being self-explanatory requires no comments from the Directors. Further, there are no reservations, qualifications or adverse remarks in the Audit Report given by them in respect of the Financial Year 2023-24.
SECRETARIAL AUDITORS AND THEIR REPORT
Mr. Anil Negi (M. No. 46547), a Company Secretary in practice having CP No. 17213, was appointed as Secretarial Auditor of the Company till the financial year 2024 pursuant to Section 204 of the Companies Act, 2013. As required by Listing Regulations, he has been appointed as Secretarial Auditor of the subsidiary company on 31.03.2021 for a term of 5 years.
The Secretarial Audit Report of the company and its subsidiary as submitted by him in the prescribed form MR-3 is attached as Annexure D-5 and forms part of this report.
FRAUDS REPORTED BY AUDITORS
There are no frauds reported by auditors under sub-section (12) of section 143 including those which are reportable to the Central Government.
COST AUDIT
As per the Cost Audit Orders, Cost Audit is not applicable to the Company.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 (Act) and SEBI Listing Regulations and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
As required pursuant to provisions of section 134(1) (e) of the Act, the Company has a well-placed, proper and adequate internal financial control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the internal Audit function is well defined in the Organization. The internal financial control system ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly.
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
The Company has in place a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company and also the comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically as per the Risk Management Policy of the Company, framed in terms of the Companies Act, 2013. The risks faced by the Company and their minimization procedures are assessed by the Board. Further, the Company identifies risks, and control systems are instituted to ensure that the risks in each business process are mitigated. The Board provides oversight and reviews the Risk Management Policy on a regular basis. In the opinion of the Board there has been no identification of elements of risk that may threaten the existence of the Company.
SUBSIDIARIES/ASSOCIATES
The Company has a subsidiary M/s Eclat Net Advisors Pvt. Ltd. (CIN: U74140CH2015PTC035473) as defined in the Companies Act, 2013. Report on the performance and financial position of the subsidiary in the specified format AOC-1 is annexed to the Directors' Report as Annexure D-6.
DEPOSITS
The Company has neither accepted nor renewed any deposits during the Financial Year 2023-24 in terms of Chapter V of the Companies Act, 2013. Information in this regard, therefore, is nil. There was no noncompliance of provisions of chapter V of the Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUSAND COMPANY`S OPERATIONS IN FUTURE
The Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Company`s operations in future.
CORPORATE SOCIAL RESPONSIBILITY
The Company is not covered under section 135 of Companies Act, 2013 hence details regarding policy on Corporate Social Responsibility is not applicable to the Company.However the company is voluntarily contributing towards CSR, mainly towards girls' education and treatment of economically weaker patients.
AUDIT COMMITTEE
Your Directors wish to inform that in Compliance with Section 177 of the Companies Act, 2013 and Regulation 18 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, an audit committee has been duly constituted. The Audit Committee as on March 31, 2024comprises of the following Directors:
Details of the Audit Committee have been separately given in the corporate governance report. Further, all recommendations of Audit Committee were accepted by the Board of Directors.
NOMINATION & REMUNERATION COMMITTEE
In terms of Regulation 19 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to the provisions of section 178 of the Companies Act, 2013, Nomination & Remuneration Committee as on March 31, 2024 comprises of the following Directors:
The details of Remuneration Policy and the Committee are furnished in the Report on Corporate Governance, which is annexed herewith.
STAKEHOLDERS RELATIONSHIP COMMITTEE
In terms of Regulation 20 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted Stakeholders Relationship Committee with following composition as on31.03.2024: -
ANNUAL RETURN
The Annual Return of the Company, pursuant to sub-section 3(a) of Section 134 and the provisions of Section92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the financial year 2023-2024 in the Form MGT-7 has been uploaded on Company's website and the web link for the same is https://emeraldfin.com/wp-content/uploads/2024/08/Draft-Form_MGT_7-2024.pdf
The extract of Annual Return as on March 31, 2024 in the prescribed Form No. MGT-9, pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is attached herewith as Annexure-D-7 and forms part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments under Section 186 of the Act as at end of the Financial Year 2023-24 are not applicable to the company as company is a non banking finance company, though the information is attached as Annexure D-8 which forms part of this report.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIES ACT, 2013
With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm's length basis. Hence, provisions of Section 188 (1) are not applicable. However, as these transactions were in the ordinary course of business and on an arm's length basis, in the opinion of the Board these transactions are justified to be executed. The detail of these transactions is given in Annexure D-9, which forms part of this report.
During the year, the Company had not entered into any contract or arrangement with related parties which could be considered ‘material' according to the policy of the Company on Materiality of Related Party Transactions. Your attention is also drawn to the Related Party disclosures set out in Note no. 27of the Financial Statements.
VIGIL MECHANISM
The Company has established a Vigil Mechanism cum Whistle Blower Policy in terms of Section 177 (10) of the Companies Act, 2013 and also in terms of Regulation 22 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The detail of the said Vigil Mechanism cum Whistle Blower Policy is given in the Corporate Governance Section, which is annexed herewith. The Vigil Mechanism cum Whistle Blower Policy is also available on the Company's website https://www.emeraldfin.com/wp-content/uploads/2017/09/ Whistle-Blower-Policy.pdf.
DIRECTORS' RESPONSIBILITY STATEMENT:-
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
COMPLIANCE
The company has devised proper systems to ensure compliance of all laws applicable to the company and the compliance reports issued by the Departmental Heads are placed before the Board every Quarter confirming compliance by the Company with all applicable Laws.
CEO/CFO CERTIFICATION
In accordance with Regulation 17 (8) read with Part B of Schedule V to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to corporate governance norms the
Managing Director has submitted necessary certificate to the Board of Directors stating the particulars specified under the said Clause. The certificate has been reviewed by the Audit Committee and taken on record by the Board of Directors.
DEMATERIALIZATION OF SHARES
As mentioned in Company's earlier Annual Reports, the Company's equity shares are in compulsory Demat mode in terms of SEBI Guidelines. This has been facilitated through arrangement with NSDL and CDSL. About 98.94% of the shares of the Company are already in dematerialized form. M/s Mas Services Limited, New Delhi is acting as the Registrar and Share Transfer Agents for this purpose and acts as common share agency in terms of SEBI Guidelines.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did 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).
COMPLIANCE WITH THE SECRETARIAL STANDARDS
The company has duly complied with the applicable Secretarial Standards during the financial year 2023-24.
SUMS DUE TO MICRO, SMALL & MEDIUM ENTERPRISES
There is no liability towards principal and interest payable to Micro, Small & Medium Enterprises as on 31st March, 2024.
ONE TIME SETTLEMENTS
The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence 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 is not applicable.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes initiatives to reduce consumption of electricity and water.
CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)
No Insolvency resolution process has been initiated/ filed by a financial or operational creditor or by the company itself under the IBC before the NCLT.
ACKNOWLEDGEMENT:-
The Directors take this opportunity to express their deep sense of gratitude to its Central and State Governments and local authorities for their continued co-operation and support.
They also would like to place on record their sincere appreciation for the commitment, hard work, and high engagement level of every employee of the Company.
The Directors would also like to thank various stakeholders of the Company including Clients, Reserve Bank of India, Company's Bankers, advisors, local community, etc. for their continued committed engagement with the Company.
They would also like to thank the shareholders of the Company for their confidence and trust reposed in the management team of the Company.