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Explicit Finance Ltd.

BSE: 530571 Sector: Financials
NSE: N.A. ISIN Code: INE335G01019
BSE 00:00 | 19 Feb 1.81 0
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NSE 05:30 | 01 Jan Explicit Finance Ltd
OPEN 1.81
PREVIOUS CLOSE 1.81
VOLUME 25
52-Week high 2.36
52-Week low 1.81
P/E
Mkt Cap.(Rs cr) 2
Buy Price 1.81
Buy Qty 45.00
Sell Price 1.72
Sell Qty 95.00
OPEN 1.81
CLOSE 1.81
VOLUME 25
52-Week high 2.36
52-Week low 1.81
P/E
Mkt Cap.(Rs cr) 2
Buy Price 1.81
Buy Qty 45.00
Sell Price 1.72
Sell Qty 95.00

Explicit Finance Ltd. (EXPLICITFIN) - Auditors Report

Company auditors report

To the Members of

Explicit Finance Ltd.

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone financial statements of Explicit Finance Limited (the‘Company') which comprise the Balance Sheet as at 31st March 2019 andthe Statement of Profit and loss and the Statement of Cash flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as the ‘financialstatements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (the ‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 and profit and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (‘SAs')specified under section 143 (10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (the ‘ICAI')together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.There are no key audit matters to be communicated in our report.

Information Other than the Financial Statements and Auditor's Report Thereon

• The Company's management and the Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and our auditor'sreport thereon

• Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

• In connection with our audit of the financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

• If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making Judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and Completeness of the accountingrecords relevant to the preparation and presentation of the financial Statements thatgive a true and fair view and are free from materials misstatement whether due to fraudor error.

In preparing the financial statements management and the Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 (the Order) issued by theCentral Government in terms of Sub-section (11) of Section 143 of the Act we enclosed inthe Annexure A statement on matters specified in paragraph 3 & 4 of the saidorder.

As required by Section 143 (3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on 31st March 2019 from being appointed as adirectors in terms of section 164(2) of the Act.

f) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofsection 143 of the companies Act 2013 ("the Act") is enclosed as an AnnexureB to this report.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For M/s S C Mehra & Associates LLP

Chartered Accountants

FRN. 106156W/W100305

Deepak Oza

Partner

M. No. 045890

Mumbai dated 30th May 2019

ANNEXURE-A TO INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Independent Auditors Report to the members of the companyon the financial statements for the year ended 31st March 2019 we report that:-

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a regular program of physical verification of fixed assets which isin our opinion reasonable having regard to the size of the Company and the nature of itsassets. In accordance with this program certain fixed assets have been physicallyverified by the management during the year and no material discrepancies have been noticedon such verification.

c) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the management the title deeds of immovable properties are held in the name of theCompany.

2. As explained to us verification of inventory of shares and securities held in thephysical format and those held in the dematerialized format have been conducted atreasonable intervals by the management which in our opinion is reasonable having regardto the size of the Company and nature of its inventories. No material discrepancies werenoticed on such verification.

3. As explained to us the company had not granted any loans secured or unsecured toany companies firms Limited Liability Partnerships or other parties covered in theregister maintained under section 189 of the Act and hence provisions of Clause 3(iii) ofthe aforesaid Order are not applicable to the Company.

4. The Company is a Non-Banking Financial Company registered with Reserve Bank ofIndia. The Company has not granted any loans or provided any guarantees or security to theparties covered under Section 185. Further provisions of Section 186 are not applicableto the Company. Therefore the provisions of Clause 3(iv) of the said Order are notapplicable to the Company.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public within the meaning of Sections 73 7475 and 76 of the Act and the Rules framed thereunder to the extent notified.

6. In our opinion and according to the information and explanations given to usmaintenance of cost records under sub-section (1) of the Section 148 of the Companies Act2013 has not been prescribed by the government.

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund income tax service tax and goods andservice tax with effect from 1st July 2017 and other material statutory duesas applicable with the appropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income-tax service-tax or goods and servicetax which have not been deposited on account of any dispute.

8. The Company has not defaulted in repayment of Loans or Borrowings from any financialinstitutions bank Government or debenture holders during the year. Accordingly paragraph3 (viii) of the Order is complied.

9. The Company has not raised any money by way of initial public offer further publicoffer (including debt instruments) and term loans and hence provisions of Clause 3(ix) ofthe aforesaid Order are not applicable to the Company.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

11. The Company has paid / provided managerial remuneration in accordance with therequisite approvals mandated by the provision of the Section 197 read with Schedule V ofthe Act.

12. The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicable tothe Company and hence provisions of Clause 3(xii) of the aforesaid Order are notapplicable to the Company.

13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with related parties are incompliance with sections 177 and 188 of the Companies Act 2013 where applicable and thedetails have been disclosed in the financial statements etc. as required by the applicableaccounting standards.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and henceprovisions of Clause 3(xiv) of the aforesaid Order are not applicable to the Company.

15. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.

16. The company has obtained registration as required under section 45-IA of theReserve Bank of India Act 1934.

For M/s S C Mehra & Associates LLP

Chartered Accountants

FRN. 106156W/W100305

Deepak Oza

Partner

M. No. 045890

Mumbai dated 30th May 2019

ANNEXURE B TO THE AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

Opinion

We have audited the internal financial controls over financial reporting of ExplicitFinance Ltd. ('the Company') as of 31st March 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to the financial statements and such internal financial controlswere operating effectively as at 31st March 2019 based on the internalfinancial controls with reference to the financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting (the ‘GuidanceNote') issued by the Institute of Chartered Accountants of India (the ‘ICAI').

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019based on the internal control over financial reporting criteria establish by the companyconsidering the essential components of internal control stated in the guidance note onAudit of internal financial controls over financial reporting issued by the Institute ofChartered Accountants of India.

For M/s S C Mehra & Associates LLP

Chartered Accountants

FRN. 106156W/W100305

Deepak Oza

Partner

M. No. 045890

Mumbai dated 30th May 2019

ADDITIONAL AUDITORS' REPORT

To

The Board of Directors

Explicit Finance Ltd.

As required by the Non-Banking Financial Companies Auditors' Report (Reserve Bank)Directions 2016 issued by the Reserve Bank of India in terms of Sub-Section (1A) ofsection 45MA of the Reserve Bank of India Act 1934 (Act 2 of 1934) we report that:

a. The company is engaged in the business of non-banking financial institution and ithas obtained a Certificate of Registration (CoR) from the Bank.

b. The company is holding CoR issued by the bank and it is entitled to hold such CoR interms of its asset/income pattern as on 31st March 2019.

c. The Company is meeting the required Net Owned fund requirement by the RBI.

d. The Board of Directors has passed a resolution for non-acceptance of any publicdeposits.

e. The company has not accepted any public deposits during the current Financial Year.

f. The company has complied with the prudential norms relating to income recognitionaccounting standards asset classification and provisioning for bad and doubtful debts asapplicable to it in terms of Non-Banking Financial (Non-Deposit accepting or Holding)Companies Prudential Norms (Reserve Bank) Directions 2016.

For M/s S C Mehra & Associates LLP

Chartered Accountants

FRN. 106156W/W100305

Deepak Oza

Partner

M. No. 045890

Mumbai dated 30th May 2019