Esprit Stones Ltd Directors Report

10. ANNUAL RETURN:

11. SHARE CAPITAL:

Authorized Share Capital

During the year, the company has not alterted the Authorized share capital. Hence, the authorized share capital of the Company as at March 31, 2025 was Rs. 25,00,00,000 (Rupees Twenty-Five Crore only) consisting of 2,50,00,000 (Two Crore and Fifty Lacs) equity shares of Rs. 10 (Rupees Ten) each.

Issued and Paid-Up Capital

During the year, the paid-up share capital of the Company increased from Rs. 57,95,200 (Fifty-Seven Lakh Ninety- Five Thousand and Two Hundred) equity shares having face value of Rs. 10 (Rupees Ten) each. Now currently, the paid-up share capital of the Company is Rs. 21,94,52,000 (Rupees Twenty-One Crores Ninety-Four Lakhs and Fifty- Two Thousand) comprising of 2,19,45,200 (Two Crores Nineteen Lakhs Forty-Five Thousand and Two Hundred) equity shares of face value of Rs. 10 (Rupees Ten) each.

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Details of Loans and advance granted, Investments made and Guarantees given during the year by the Company under review, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

During the year the Company has given loan to any person or other body corporate, gave guarantee or provided security in connection with a loan to any other body corporate or person and acquired by way of subscription, purchase or otherwise, the securities of any other body corporate as detailed below:

13. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All Related Party Transactions are entered during the Financial Year are in compliance to the provisions of law, the Policy on Materiality of and dealing with Related Party Transactions ("Related Party Policy") and were entered with the approval of Audit Committee, Board and Shareholders if and as applicable. All related party transactions were entered into were on arms length basis and in ordinary course of business forms parts to notes to the Financial Statements.

14. COMPLIANCE WITH THE SECRETARIAL STANDARDS:

The Company has complied with the applicable SS-1 (Secretarial Standard on Meetings of the Board of Directors) and SS-2 (Secretarial Standard on General Meetings) issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

15. DETAILS OF EMPLOYEE STOCK OPTIONS:

The Company does not have any Employee Stock Option Scheme / Plan.

16. AUDITORS AND AUDITORS REPORT:

16.1 STATUTORY AUDITORS & THEIR REPORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and rules made thereunder, M/s. A Bafna & Company (FRN No. 003660C), Chartered Accountants have been appointed as statutory auditors of the company at Fifth Annual General Meeting held on November 30, 2021 for a term of five consecutive years from the conclusion of Fifth Annual General Meeting till the conclusion of the 10th (Tenth) Annual General Meeting of the Company.

Pursuant to Section 139 and 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate from the Auditors to the effect, inter-alia, confirming that their appointment continues to be within the limits laid down by the Act, is as per the term provided under the Act, that they are not disqualified for continuing such appointment under the provisions of applicable laws and also that there are no pending proceedings against them or any of their partners with respect to professional matters of conduct.

The Audit Report for the financial year 2024-25 is attached herewith. The report does not contain any reservation, qualification or adverse remark. Information referred in the Auditor Report are self-explanatory and do not call for any further comments.

16.2 COST AUDIT AND COST RECORDS:

Provision of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company during the financial year under review.

16.3 SECRETARIAL AUDIT:

During the financial year 2024-25, M/s. Abhik Jain & Associates, Practicing Company Secretary, who was appointed as the Secretarial Auditor of the Company for the financial year 2024-25, tendered their resignation with effect from 15^th February, 2025, due to in process to surrender the certificate of practice and hence cannot continue as Secretarial Auditor of the Company and consequently ceased to be the Secretarial Auditor of the Company.

In view of the above, the Board of Directors, at its meeting held on 11^th March, 2025, appointed M/s. Ronak Jhuthawat & Co., Practicing Company Secretary, having Membership No. 9738 and Certificate of Practice No. 12094, to conduct the Secretarial Audit of the Company for the financial year 2024-25, in accordance with the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder. The Secretarial Audit Report for the financial year 2024-25 as issued by M/s. Ronak Jhuthawat & Co. is annexed as "Annexure-8" to this Report and forms part of the Annual Report.

Pursuant to Listing Regulations, the Board of Directors has proposed the appointment of M/s Ronak Jhuthawat & Co., Company Secretaries, Secretarial Auditors (Unique Identification No.: P2025RJ104300), to hold office for a period of five consecutive years commencing from F.Y. 2025-26 to F.Y. 2029-30, for the approval of the members in the ensuing Annual General Meeting of the Company.

16.4 INTERNAL AUDITOR & THEIR REPORT:

Pursuant to the provisions of Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014, the Company has appointed M/s. Pallavi Mehta & Associates, Chartered Accountants (Firm Registration No. 016194C), as the Internal Auditor of the Company for the financial year 2024-25.

The Internal Auditor functions independently and reports directly to the Audit Committee. The scope, methodology, and functioning of the internal audit are periodically reviewed and approved by the Audit Committee to ensure adequacy of internal financial controls, operational systems, risk management and compliance framework across various functions of the Company.

The Internal Auditor has carried out audits at periodic intervals and submitted their reports to the Audit Committee. Their observations and recommendations were duly reviewed and taken into consideration for strengthening the internal control systems. Based on the reports of the Internal Auditor, management has taken necessary corrective actions where required, to further improve the internal processes and control environment.

The Audit Committee, while reviewing the internal audit findings, did not note any material observations having significant impact on the financial position or operations of the Company.

17. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as "Annexure 3".

18. POLICY RELATING TO DIRECTORS APPOINTMENT AND REMUNERATION ETC:

In compliance with the requirements of Section 178 of the Companies Act, 2013 the Company has laid down a Nomination and Remuneration Policy.

The salient features of the NRC Policy are as under:

i. Setting out the objectives of the Policy

ii. Definitions for the purposes of the Policy

iii. Policy for appointment and removal of Director, KMP and Senior Management

iv. Policy relating to the Remuneration for the Managerial Personnel, KMP, Senior Management Personnel & other employees

v. Remuneration to Non-Executive/ Independent Director.

19. ANNUAL EVALUATION OF BOARDS PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

In compliance with the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has carried out an annual evaluation of the performance of the Board as a whole, the Committees of the Board, and individual Directors including Independent Directors.

The performance of the Board, its committees, and individual Directors was evaluated through a structured questionnaire covering various aspects such as composition, effectiveness of the Board processes, information flow, decision-making, performance of specific duties and obligations, attendance and contributions at meetings, and guidance/support provided to management.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the director being evaluated. The Independent Directors, in a separate meeting held in accordance with the provisions of the Act and Securities and Exchange Board of India Listing Regulations, reviewed the performance of the Chairperson, the Non-Independent Directors, and the Board as a whole.

The outcome of the evaluation reflected high levels of engagement and effective functioning of the Board and its Committees. The Board expressed satisfaction over the overall functioning, governance framework, and the contributions made by each Director towards the growth and performance of the Company.

20. BOARD MEETINGS HELD DURING THE FINANCIALYEAR 2024-25:

The Board/Committee meetings are pre-scheduled and proper notices of Board and Committee meetings is circulated to the Directors well in advance to enable them to plan their schedules and to ensure their meaningful participation in the meetings.

During the financial year under review, 11 (Eleven) Board Meetings were held as per Section 173 of the Companies Act, 2013. The gap between two Board meetings was in compliance with the provisions contained in the Act, MCA General Circular no. 11/2020 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015. The annual calendar of meeting is broadly determined at the beginning of each year. The details of the meetings held during the year are as under:

21. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors, in respect of the year ended 31st March, 2025, hereby confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed

b) along with proper explanation relating to material departures;

c) 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;

d) 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

e) for preventing and detecting fraud and other irregularities;

f) The Directors had prepared the annual accounts on a going concern basis;

g) The Directors had laid down proper internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively; and

h) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.

22. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

During the year, no company has become or ceased to be a subsidiary, joint venture or associate of the Company.

Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014, Statement containing salient features of the financial statement of subsidiaries or associate companies or joint ventures in prescribed format AOC-1 is attached as "Annexure 4".

Details of Subsidiary/ JV/ Associate Company is given below:

The manufacturing operations for the Subsidiary Company M/s Addwaya Chemicals Private Limited were closed due to directions received from the Rajasthan State Pollution Control Board, (RSPCB), District-Rajsamand, State- Rajasthan under Section 33(A) of the Water (Prevention and Control of Pollution) Act, 1974 and Section 31(A) of the Air (Prevention and Control of Pollution) Act, 1981, situated at Araji No. 1953/11, 2080/10 & 2082/11, Village- Rathujana Negdiya, Tehsil-Nathdwara, District- Rajsamand, State-Rajasthan under Section 33-A of the Water (Prevention and Control) since March 10, 2025. Currently, the operations are on hold in the subsidiary and it may take some more time to resume operations after taking necessary approvals.

23. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all Independent Directors of the Company, confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

The Independent directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of independent directors maintained with the Indian Institute of Corporate affairs in terms of Section 150 of the act read with rule 6 of the Companies (appointment & Qualification of directors) rules, 2014. The Board is of the opinion that all the Independent Directors of the Company possess requisite qualifications, experience and expertise in their domain areas and that they hold highest standards of integrity.

24. CHANGE IN THE NATURE OF BUSINESS:

During the year under review, there has been no change in the nature of business of the Company.

25. INSURANCE:

The Company has taken adequate insurance to cover the risks to its employees, property (land and buildings), plant, equipment, other assets and third parties as may be applicable.

26. DETAILS OF THE DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board of Directors of the Company comprises of 6 [Six] directors as on March 31, 2025 who brings in a wide range of skills and experience to the Board. During the year under review and till the date of this report, there is no

change in composition of Board of Directors and Key Managerial Personnel of the Company. In view of the applicable provisions of the Companies Act, 2013.

Retirement of Director by rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and Articles of Association of the company, Mr. Pradeep Lunawath, Director of the Company liable to retire by rotation, has offered himself for reappointment at the ensuing Annual General Meeting of the company. A resolution for her reappointment is being proposed at the Annual General Meeting and his Profile is included in the Notice.

Composition of the Board as on March 31, 2025

27. COMMITTEES OF THE BOARD:

The Board of Directors of your Company have formed various Committees, as per the provisions of the Companies Act, 2013 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as a part of the best corporate governance practices, the terms of reference and the constitution of those Committees is in compliance with the applicable laws.

In order to ensure focused attention on business and for better governance and accountability, the Board has constituted the following committees:

A. Audit Committee

B. Nomination and Remuneration Committee

C. Stakeholders Relationship Committee

D. Corporate Social Responsibility Committee

E. Finance Committee

F. Internal Complaints Committee

The terms of reference of Audit Committee and Nomination and Remuneration Committee are in compliance with applicable provisions, rules and regulations of Companies Act, 2013 as amended from time to time and Listing regulations of Securities and Exchange Board of India.

A. AUDIT COMMITTEE:

The Audit Committee was constituted in the board meeting dated 06.02.2024 with following roles and responsibilities:

(1) oversight of the listed entitys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

(2) recommendation for appointment, remuneration and terms of appointment of auditors of the listed entity;

(3) approval of payment to statutory auditors for any other services rendered by the statutory auditors;

(4) reviewing, with the management, the annual financial statements and auditors report thereon before submission to the board for approval, with particular reference to:

a) matters required to be included in the directors responsibility statement to be included in the Boards Report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;

b) changes, if any, in accounting policies and practices and reasons for the same;

c) major accounting entries involving estimates based on the exercise of judgment by management;

d) significant adjustments made in the financial statements arising out of audit findings;

e) compliance with listing and other legal requirements relating to financial statements;

f) disclosure of any related party transactions;

g) modified opinion(s) in the draft audit report;

(5) reviewing, with the management, the quarterly financial statements before submission to the board for approval;

(6) reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency, monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;

(7) reviewing and monitoring the auditors independence and performance, and effectiveness of audit process;

(8) approval or any subsequent modification of transactions of the listed entity with related parties;

(9) scrutiny of inter-corporate loans and investments;

(10) valuation of undertakings or assets of the listed entity, wherever it is necessary;

(11) evaluation of internal financial controls and risk management systems;

(12) reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

(13) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

(14) discussion with internal auditors of any significant findings and follow up there on;

(15) reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

(16) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

(17) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

(18) to review the functioning of the whistle blower mechanism;

(19) approval of appointment of chief financial officer after assessing the qualifications, experience and background, etc. of the candidate;

(20) carrying out any other function as is mentioned in the terms of reference of the audit committee.

(21) reviewing the utilization of loans and/ or advances from, /investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing as on the date of coming into force of this provision.

(22) consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger, amalgamation etc., on the listed entity and its shareholders.

The audit committee shall mandatorily review the following information:

(1) management discussion and analysis of financial condition and results of operations;

(2) management letters / letters of internal control weaknesses issued by the statutory auditors;

(3) internal audit reports relating to internal control weaknesses; and

(4) the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the audit committee.

(5) statement of deviations:

(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable.

(b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus notice.

COMPOSITION & MEETING DETAILS OF THE AUDIT COMMITTEE:

B. NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee was constituted in the board meeting dated 06.02.2024 with

following roles and responsibilities:

(1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board of Directors a policy relating to, the remuneration of the Directors, Key Managerial Personnel and other employees;

(2) For every appointment of an Independent Director, the Nomination and Remuneration Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director. The person recommended to the Board for appointment as an independent director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:

a. uses the services of an external agencies, if required;

b. considers candidates from a wide range of backgrounds, having due regard to diversity; and

c. considers the time commitments of the candidates.

(3) formulation of criteria for evaluation of performance of Independent Directors and the Board of Directors;

(4) devising a policy on diversity of Board of Directors;

(5) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal.

(6) whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of Independent Directors.

(7) recommend to the Board, all remuneration, in whatever form, payable to senior management.

COMPOSITION & MEETING DETAILS OF THE NOMINATION AND REMUNERATION COMMITTEE:

C. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee was constituted in the board meeting dated 06.02.2024 with

following roles and responsibilities:

(1) Resolving the grievances of the security holders of the listed entity including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.

(2) Review of measures taken for effective exercise of voting rights by shareholders.

(3) Review of adherence to the service standards adopted by the listed entity in respect of various services being rendered by the Registrar & Share Transfer Agent.

(4) Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrant/annual reports/statutory notices by the shareholders of the company.

COMPOSITION & MEETING DETAILS OF THE STAKEHOLDERS RELATIONSHIP COMMITTEE:

D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Corporate Social Responsibility Committee was re-constituted in the board meeting dated 06.02.2024

with following roles and responsibilities:

(1) Formulation and Recommendation of CSR Policy, Ensure the policy aligns with the companys mission, legal requirements, and community needs;

(2) Identifying and Recommending CSR Activities, Schedule VII of the Companies Act (in India), Relevant CSR regulations in the operating jurisdiction;

(3) Budgeting and Allocation, Recommend the amount of expenditure to be incurred on CSR activities, ensure spending meets the minimum prescribed percentage of net profits (e.g., 2% of average net profits over the last 3 years, under Indian law);

(4) Monitoring CSR Activities, Monitor the implementation of CSR projects directly or through implementing agencies, set up transparent monitoring mechanisms to track the progress of ongoing initiatives, review periodic reports and ensure timelines and budgets are being followed;

(5) Compliance and Reporting, ensure CSR activities are in compliance with legal and regulatory standards, Ensure proper disclosure of CSR policy, programs, and outcomes on the companys website and in the Annual Report;

(6) Evaluation of Impact, recommend methods for impact assessment of CSR initiatives, use feedback and evaluation data to improve future programs;

(7) Engagement with Stakeholders, facilitate dialogue with communities, NGOs, local bodies, and government agencies, build partnerships and encourage employee involvement in CSR activities;

(8) Governance and Ethics, ensure that CSR initiatives are ethically executed and reflect corporate values, Promote a culture of social responsibility within the organization.

COMPOSITION & MEETING DETAILS OF THE CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

E. FINANCE COMMITTEE:

The Finance Committee was constituted in the board meeting dated 02.09.2024 with following roles and

responsibilities:

(1) Budgeting and Financial Planning, Develop and recommend the annual operating and capital budgets, Review and monitor adherence to the approved budget, recommend adjustments or reallocations as needed;

(2) Monitor monthly/quarterly financial statements, ensure that spending aligns with organizational goals and approved budgets, Ensure adequate internal controls and risk management systems;

(3) Develop and recommend financial management policies (e.g., reserves, investments, procurement, cash handling), Ensure compliance with legal, regulatory, and ethical standards;

(4) Recommend and liaise with external auditors, Oversee the annual audit process, Review and act on audit findings, Monitor and manage financial risks;

(5) Recommend investment strategies in line with policy, monitor investment performance and compliance, Review the organizations liquidity and long-term financial planning;

(6) Collaborate on financial projections related to fundraising, ensure resources are used efficiently and effectively;

(7) Present financial reports and analysis to the Board, provide financial insights to assist in strategic decisionmaking.

COMPOSITION & MEETING DETAILS OF THE FINANCE COMMITTEE:

F. INTERNAL COMPLAINTS COMMITTEE:

The Internal Complaints Committee was constituted in the board meeting dated 28.03.2018 with following

roles and responsibilities:

(1) Promote awareness about sexual harassment and the organizations zero-tolerance policy, organize training and sensitization programs for employees and management, Advise the employer on workplace safety and policy improvements;

(2) Accept written complaints of sexual harassment within stipulated timelines, Determine the admissibility of the complaint and offer informal resolution if requested, conduct fair, unbiased, and timely investigations, including interviews with involved parties and witnesses; Keep detailed documentation of all proceedings in a confidential manner, Submit findings and disciplinary recommendations to the employer;

(3) Provide a safe space for complainants to share experiences without fear of retaliation, Assist the complainant during the inquiry process (e.g., allowing for representation, leave during inquiry), Protect complainants and witnesses from victimization;

(4) Ensure the organization complies with applicable laws, Assist in any external audits or inspections;

(5) Review cases and suggest systemic changes to prevent recurrence, Evaluate the effectiveness of current policies and recommend updates.

COMPOSITION & MEETING DETAILS OF THE INTERNAL COMPLIANTS COMMITTEE:

28. PUBLIC DEPOSITS:

The Company has not accepted or renews any deposits, within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

29. DEPOSITORY SYSTEM:

The Company has entered into agreement with the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to enable shareholders to hold shares in a dematerialized form. The Company also offers simultaneous dematerialization of the physical shares lodgedfor transfer.

30. UNSECURED LOAN FROM DIRECTORS:

During the year under review, the Company has not borrowed an unsecured loan from any of the Directors of the Company.

31. DISCLOSURE UNDER SECTION 164 OF THE COMPANIES ACT, 2013:

The Company has received disclosures in Form DIR - 8 from all the Directors of the Company and has noted that the none of the Director is disqualified under Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The internal financial controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Financial Statements.

These include those policies and procedures that i) pertain to the maintenance of records which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the Financial Statements in accordance with Generally Accepted Accounting Principles and that receipts and expenditures are being made only in accordance with authorisations of the Management and the Directors of the Company and iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use or disposition of the assets that can have a material effect on the Financial Statements.

The Management assessed the effectiveness of the internal financial controls over financial reporting as of March 31, 2025, and the Board believes that the controls are adequate.

33. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance on sexual harassment at workplace and committed to provide a safe and conducive work environment to its employees. In line to make the workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), the Company has constituted the Internal Complaints Committee ("ICC") to redress complaints received regarding sexual harassment. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The following is a summary of complaints received and resolved during the financial year:

34. MATERNITY BENEFIT PROVIDED BY THE COMPANY UNDER MATERNITY BENEFIT ACT, 1961:

The Company declares that it has duly complied with the provisions of the Maternity Benefit Act, 1961. All eligible women employees have been extended the statutory benefits prescribed under the Act, including paid maternity leave, continuity of salary and service during the leave period, and post-maternity support such as nursing breaks and flexible return-to-work options, as applicable.

The Company also ensures that no discrimination is made in recruitment or service conditions on the grounds of maternity. Necessary internal systems and HR Policies are in place to uphold the spirit and letter of legislation.

The Company remains committed to fostering an inclusive and supportive work environment that upholds the rights and welfare of its women employees in accordance with applicable laws.

GENDER-WISE COMPOSITION OF EMPLOYEES:

In alignment with the principles of diversity, equity, and inclusion (DEI), the Company discloses below the gender composition of its workforce as on March 31, 2025.

This disclosure reinforces the Companys efforts to promote an inclusive workplace culture and equal opportunity for all individuals, regardless of gender.

35. NSE COMPLIANCES AND LISTING FEES:

The Company was listed on SME Platform of NSE Exchange as on 02^nd August, 2024. Further, the Company has complied with all the applicable compliances with respect to the quarterly, half-yearly and yearly compliances to be done during the year. Further, the annual listing fees for the FY 2025-26 has been paid.

36. DOWNSTREAM INVESTMENTS:

The Company neither have any Foreign Direct Investment (FDI) nor invested as any Downstream Investment in any other Company in India.

37. AUDIT TRAIL APPLICABILITY (AUDIT AND AUDITORS) RULES, 2014 - RULE 11 OF THE COMPANIES ACT, 2013:

The Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2025 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

38. APPOINTMENT OF DESIGNATED PERSON (MANAGEMENT AND ADMINISTRATION) RULES, 2014 - RULE 9 OF THE COMPANIES ACT, 2013:

In accordance with Rule 9 of the Appointment of Designated Person (Management and Administration) Rules 2014, it is essential for the company to designate a responsible individual for ensuring compliance with statutory obligations.

The company has proposed and appointed Mrs. Anjali Pandey, Company Secretary and Compliance Officer as Designated person in a Board meeting and the same has been reported in Annual Return of the company.

39. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

40. CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements required pursuant to section 129(3) of the Companies Act, 2013 (read with rule 6 of the Companies (Accounts) Rule, 2014 as amended from time to time) have been prepared in accordance with the relevant accounting standards as per the Companies (Accounting Standard) Rules, 2006.

The Audited Consolidated financial statements are provided along with the Standalone Financial Statements.

41. PREVENTION OF INSIDER TRADING:

42. DETAILS OF APPLICATION/ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

Neither any application was made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.

43. 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:

As Company has not done any one-time settlement during the year under review hence no disclosure is required.

44. CORPORATE GOVERNANCE REPORT:

The Company Being Listed on Small and Medium Enterprise (SME) Platform of National Stock Exchange of India Limited (NSE), the provisions of Corporate Governance are not applicable to the Company. Non-Applicability of submission of Report on Corporate Governance is given in "Annexure 5".

45. CFO AND MD CERTIFICATION:

Compliance Certificate as Required Under Regulation 17(8) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is Given in "Annexure 6".

46. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Company Being Listed on Small and Medium Enterprise (SME) Platform of National Stock Exchange of India Limited (NSE), the provisions regulation 25(7) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company.

47. REPORTING OF FRAUD, COMMENTS BY BOARD ON EVERY QUALIFICATION, RESERVATION, ADVERSE REMARK OR DISCLAIMER:

For the Financial year 2024-25, the Statutory Auditor has not reported any instances of frauds committed in the Company by its Officers or Employees under Section 143(12) of the Companies Act, 2013.

48. CODE FOR THE BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL:

The code of conduct has been circulated to all the members of the Board and Senior Management personnel and they have affirmed their compliance with the said code of conduct for the financial year ended 31^st March, 2025. A declaration to this effect signed by Mr. Sunil Lunawath, Managing Director, DIN: 01105117 and Mr. Nitin Gattani, Joint Managing Director, DIN: 00173258 of the Company is appended at the end of this report as "Annexure 7".

49. GENERAL OTHER DISCLOSURES:

During the Financial year 2024-25, the following transaction were reported:

a) During the year the company has not Issue sweat equity shares, bonus shares or employees stock option;

b) Disclosure of certain type of agreements binding listed entities: There were no agreements entered as such.

50. ACKNOWLEDGEMENT AND APPRECIATION:

Your directors wish to place on record their deep appreciation for the co-operation extended by the bankers and the services rendered by the employees at all levels and their dedication.

(A) Conservation of Energy:

(i) the steps taken or impact on conservation of energy; The Company have also installed solar power plant with an aggregate installed capacity of 1,706 KW at our Manufacturing Facilities which enable us to reduce our power costs. Further we have installed ground mounted solar generation plant of 1,300 KW at Gajner, Rajasthan and have long term open access agreement with state power grids for transmission of electricity which further reduces our utility costs as we get the credit benefit of such transmission in our power bill. The management gives due importance to conservation of energy wherever feasible, and also reviews from time to time, the measures taken / to be taken for reduced and prudent consumption and conservation of energy.

(ii) the steps taken by the company for utilising alternate sources of energy; The Company generates substantial part of electricity for its consumption through solar panels installed on the rooftop of factories and ground mounted solar generation plant installed at Gajner, Rajasthan.

(iii) the capital investment on energy conservation equipments: Rs. 1,030.84 Lakhs.

(B) Technology Absorption:

(i) the efforts made towards technology absorption: The Company has imported multiple machines for manufacturing of its products from Italy and China and gets updates from these vendors on latest technology. Further, the technical team regularly visits foreign countries to understand the current market developments in the products being offered by the Company.

(ii) the benefits derived like product improvement, cost reduction, product development or import substitution: The

Company is able to produce improved products and is able to do the new product development through these imported machines.

(a) the details of technology imported: Not applicable

(b) the year of import: Not applicable

(c) whether the technology been fully absorbed: Not applicable

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not applicable

(iv) the expenditure incurred on Research and Development: NIL C) Foreign Exchange Earnings and Outgo during the year:

[Pursuant to Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014]

1. A BRIEF OUTLINE ON CSR POLICY OF THE COMPANY:

In compliance of Section 135 of the Companies Act, 2013 (Act) and Companies (Corporate Social Responsibility Policy) Rules, 2014 and other notifications, circulars issued by the Ministry of Corporate Affairs from time to time, Esprit Stones Limited ("the Company") adopted and implemented CSR policy on undertaking the corporate social responsibility activities.

ESL will volunteer its resources to the extent it can reasonably afford to contribute towards enhancing the quality of life thereby the standard of living of people, particularly those belonging to the marginalized section of society. It will take up projects and /or carry out activities under broad programs i.e. Education, Empowerment, Health, Relief, Infrastructure and Conservation within the scope of activities prescribed under Schedule VII of the companies Act, 2013

2. COMPOSITION OF CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company:

4. Provide the executive summary along with web links of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable (attach the report):

Not Applicable, as average CSR obligation in pursuance of subsection (5) of section 135 of the Act, in the three immediately preceding financial years is less than threshold prescribed in the Act.

5. CSR OBLIGATION:

6. DETAILS OF CSR FOR THE FINANCIAL YEAR:

Ensuring the eligibility of for the appointment/continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification.

This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.