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Explicit Finance Ltd.

BSE: 530571 Sector: Financials
NSE: N.A. ISIN Code: INE335G01019
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NSE 05:30 | 01 Jan Explicit Finance Ltd
OPEN 3.80
PREVIOUS CLOSE 3.80
VOLUME 2500
52-Week high 4.78
52-Week low 1.51
P/E 19.00
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.80
CLOSE 3.80
VOLUME 2500
52-Week high 4.78
52-Week low 1.51
P/E 19.00
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Explicit Finance Ltd. (EXPLICITFINANCE) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their Twenty Seventh (27th)Annual Report on the business and operations of the company along with the AuditedFinancial accounts for the Financial Year ended 31st March 2021.

FINANCIAL RESULTS

(Amount in Lacs)
Particulars Year Ended 31st March 2021 Year Ended 31st March 2020
Total Revenue 670.20 723.22
Less: Operating Expenses & Provisions 673.15 725.00
Profit/(Loss) before Tax (2.94) (1.78)
Less: Provision for Taxation 0 0
Profit/(Loss) after Tax (2.94) (1.78)
Comprehensive Income/(Loss) 41.56 (12.95)
Profit/(Loss) After Tax (PAT) including Other 38.62 (14.73)
Earnings per Share (EPS) (Rs.) 0.42 (0.16)

REVIEW OF OPERATION

During the financial year under review total income of the Company is Rs. 670.20 Lacsas compared to last year's total income of Rs 723.22 Lacs. Company has incurred loss ofRs. 2.94 lacs as compare to loss of Rs. 1.78 lacs of the previous year beforecomprehensive income/(loss).

BUSINESS REVIEW

Explicit Finance Limited ("The Company") is a non-banking financial companyengaged in Secondary capital market activities and also provide a wide range of servicesincluding: -

• Individual/Corporate Finance

• Loans against Shares and securities

• Loans against property

• Financial Consultancy Services

DIVIDEND

During the year under review due to the losses incurred the Board of Directors has notrecommended any dividend.

MANAGEMENT DISCUSSION ANALYSIS REPORT

The Management Discussion and Analysis forms an integral part of this Report and givesdetails of the overall industry structure economic developments performance and state ofaffairs of your Company's various businesses internal controls and their adequacy riskmanagement systems and other material developments during the financial year 2020-21.

A. INDUSTRY STRUCTURE & DEVELOPMENT IMPACT OF CORONAVIRUS (COVID-19)

Amid the 2nd wave of coronavirus pandemic several countries across theworld resorted to partial lockdowns to "flatten the curve" of the infection. Theworld economy is expected to shrink considerably

Indian economy may be seen contracting in 2021-22 also but not like 2020-21 under 2ndwave of Covid impact. Economic activity in India slowed down due to partial lock down byvarious states.

RISKS AND CONCERNS

1. In recent times NBFCs have been found to be constantly facing problems withmanaging their liquidity positions owing to multiple factors such as increase in borrowingcosts asset -liability mismatches nature of assets and reluctance of lenders/investors.

2. The cash-strapped non-banking financial company (NBFC) sector is bracing for anotherchallenge. Moratorium becomes crucial for NBFCs and HFCs as disbursements and collectionswill take a hit because of 2nd wave of the coronavirus pandemic resulting in cash flowproblems.

3. Small and medium-sized NBFCs are most at risk due to the disruption caused by theCovid-19 outbreak. The economic disruption brought about by the COVID-19 2ndwave will have a severe impact on the incomes of such borrowers for several monthsdepending on the intensity of the outbreak.

4. Banks choke NBFC lifeline by parking more funds with RBI. Funding challenges couldmount for NBFCs as banks become more selective in extending credit

OPPORTUNITIES

• Equity Markets all over the world has hit new highs and are still in the upwardmode. Credit offtake may increase significantly.

• Some business like pharma retailers have shown tremendous growth.

• With normal monsoon and availability of vaccine may significantly improve thebusiness scenario around the world.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Control measures and systems are established to ensure the correctness of thetransactions and safe guarding of the assets. Considering the size and nature ofactivities the company has adequate internal control system covering both accounting andadministrative control. In addition the internal audit is carried out periodically. Themanagement ensuring an effective internal control system so that the financial statementsand reports give a true and fair view and during the year under review no material orserious observation has been received from the Internal Auditors of the Company forinadequacy or ineffectiveness of such control.

B. HUMAN RESOURCES

The company always regards human resources as its most valuable asset and continuouslyevolves policies and process to attract and retain its substantial pool of managerialresources through friendly work environment that encourages initiatives by individuals andrecognizes their performance.

C. CAUTIONARY NOTE

Certain Statements in the Management Discussion and Analysis describing the company'sviews about the industry expectations objectives etc. may be understood 'forwardlooking statement' within the meaning of applicable laws and regulations. Factors likechanges in Government regulations tax laws and other factors such as industrial relationsand economic developments etc. may further influence the company's operations orperformance. Actual results may differ substantially or materially from those expressed orimplied.

RESERVES

In view of current year losses company has not transferred any amount to statutoryreserve account.

SHARE CAPITAL

The Company had not issued any equity shares either with or without differential rightsduring the F.Y. 2020 - 2021 and hence the disclosure requirements under Section 43 andRule 4 (4) of the Companies (Share Capital and Debentures) Rules 2014 are notapplicable.

DEPOSITIS

The Company has neither accepted nor renewed any deposits from public or members duringthe year under review under Section 73 of the Companies Act 2013 read with Chapter V ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. There areno unclaimed deposits unclaimed/unpaid interest refunds due to the deposit holders or tobe deposited to the Investor Education and Protection Fund as on 31st March2021.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act 2013 andarticles of association of the Company Mr. Jitendra Bhanushali (DIN: 0009050287)(Independent Director)of the company retires by rotation in the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment.

CHANGES IN KEY MANAGERIAL PERSONNEL (KMP'S) DURING THE YEAR 2020-21

There were no changes in Key Managerial Personnel category during the period under review.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) & 134(5) of the Companies Act 2013 the Board ofDirectors of the Company hereby confirm that:

i. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

ii. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe loss of the company for that period;

iii. proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

iv. proper annual accounts have been prepared on a going concern basis;

v. internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively; and

vi. proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

DECLARATION BY INDEPENDENT DIRECTOR

All Independent Directors have submitted the declaration of Independence as requiredpursuant to Section 149(7) of the Act stating that they meet the criteria of Independenceas provided in section 149(6) of the Companies Act 2013 and are not disqualified fromcontinuing as Independent Directors.

EVALUATION OF DIRECTORS COMMITTEE AND BOARD

Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard of Directors has carried out evaluation of the Board its Committees and IndividualDirectors. The evaluation process has been explained in the Report on CorporateGovernance which forms part of this Board's Report.

Also the Independent Directors at their meeting reviewed the performance of theBoard its Chairman and Non-Executive Directors of the Company.

NUMBER OF BOARD MEETINGS HELD DURING THE PERIOD

A notice of the Board Meeting is circulated well in advance with Agenda includingdetailed explanation to be discussed to enable the Board to take an informed decision.

The intervening gap between the meetings was within the period prescribed under theCompanies Act 2013 and the Listing Agreement/Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. Further 05 (Five)Board Meetings were held during the year ended 31st March 2021 the dates are31st July2020 21st August 2020 15th September 2020 13thNovember 2020 and 12th February2021. Detailed information on the BoardMeetings with regard to attendance of each of the Directors thereat have been included inthe Corporate Governance Report which forms part of this Board Report.

Additionally during the financial year ended 31st March 2021 a separatemeeting of the Independent Directors was held on 12th February 2021 incompliance with the requirements of Schedule IV of the Companies Act 2013 and Regulation25(3) and 25(4) of the Listing Regulations

Post the Independent Directors Meeting the collective feedback of each of theIndependent Director was scaled and measured on defined ratings thereby covering theperformance of Board as a whole performance of the non-independent directors andperformance of the Chairman.

COMMITTEES OF THE BOARD

The Board of Directors of your company has constituted various committees in compliancewith the provisions of the Companies Act 2013 and Listing Regulations.

• Audit Committee

• Nomination & Remuneration Committee

• Stakeholder Relationship Committee

All decisions pertaining to the constitution of Committees appointment of members andfixing of terms of reference/ role of the committees are taken by the Board of Directors.A detailed note on the Board and its Committees is provided under the Corporate GovernanceSection in this Annual Report.

NOMINATION & REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The appointment and Remuneration Policies stated in the Corporate GovernanceReport of the Company that forms part of the Annual Report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

Information as required under the provisions of Section 197(12) of the Companies Act2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (including any statutory modification(s)/amendment(s)/re-enactment thereoffor the time being in force) is set out in Annexure-I hereto which forms part of thisBoard's Report.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANY

The Company does not have any subsidiary or associate company and has not entered intojoint venture with any other company during the financial year ended 31st March2021. Accordingly a statement under the provisions of Section 129(3) of the CompaniesAct 2013 containing salient features of the financial statements of the Company'ssubsidiary(ies) in Form AOC-1 is not enclosed.

CORPORATE GOVERNANCE REPORT

As stipulated under the provision of Regulation 34 (3) read with Schedule V (c) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a separate reporton Corporate Governance Report forms integral part of this Board Report. The requisitecompliance certificate as required under Part E of Schedule V of the Listing Regulation isissued by Jain &Trivedi Chartered Accountants pertaining to the compliance of theconditions of Corporate Governance is Annexed thereto.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return pursuant to the provisions of Section 92 read withRule 12 of the Companies (Management and Administration) Rules 2014 is annexed herewithas Annexure -II to this report.

STATUTORY AUDITORS

M/s S C Mehara & Associates LLP Chartered Accountants (FRN:106156W) were appointedas the Statutory Auditors of the Company during the 24th AGM held on 14thSeptember 2018 for a period of five years as per the provisions of Section 139 of theCompanies Act 2013.

However with the Notification dated May 7th 2018 issued by the Ministry ofCorporate Affairs (‘MCA')the first proviso to Section 139(1) of the CompaniesAct2013 pertaining to the requirement of annual ratification of appointment of Auditorsby member is omitted.

Accordingly as per the companies (Amendment) Act 2017 ratification of the appointmentof Statutory Auditors during their period of appointment will not be considered.

AUDITORS' REPORT

Independent Auditor's Report

There are no qualifications reservation or adverse remark or disclaimer in theIndependent Auditor's Report provided by M/s. S C Mehra & Associates LLP CharteredAccountants for the F.Y. 2020-2021. The notes to accounts forming part of financialstatements are self-explanatory and need no further clarification.

Secretarial Audit Report

Pursuant to Provision of Section 204 of the Companies Act 2013 and Rules framed thereunder Board of Directors have appointed M/s. Vishal Manseta Practicing CompanySecretaries to conduct Secretarial Audit. The Secretarial Audit Report for the FinancialYear ended 31st March 2021 forms the integral part of the Board Report asAnnexure-III. There are no qualifications reservation or adverse remark or disclaimer inSecretarial Audit Report.

Details in respect of frauds reported by auditors under sub-section (12) of section 143other than those which are reportable to the central government

There are no such frauds committed by the Company which are reported by auditors.

PARTICULARS OF LOANS GUARAUNTEES OR INVESTMENTS

Pursuant to Section 186 (11) of the Companies Act 2013 read with Rule 11(2) of theCompanies (Meetings of Board and its Powers) Rules 2014 the loan made guarantee givenor security provided in the ordinary course of business by a Non- Banking FinancialCompany (NBFC) registered with Reserve Bank of India are exempt from the applicability ofprovisions of Section 186 of the Act.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict ofinterest with the company at large. Accordingly disclosures of related party transactionsin Form AOC-2 have not been furnished. All Related Party Transactions were placed beforeAudit Committee and Board for their approval. Your Company has formulated policy ofRelated Party Transaction which is also available on the website of the Company.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

No material changes and commitments which could affect the Company's financial positionhave occurred till date of this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

The Company does not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

• Conservation of Energy & Technology Absorption

The Company is not engaged in manufacturing activities and therefore provisionsrelating to conservation of energy and technology absorption are not applicable to it.However efforts are being made to minimize consumption of energy wherever possible.

• Foreign Exchange Earnings and Outgo

During the year under review there were no Foreign Exchange earnings and outgo.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has approved Risk Management policy andguidelines wherein all material risks faced by the company are identified and assessed.Moreover in the said Risk Management Policy the Board has defined a structured approach tomanage uncertainty cultivating the same in their decision making pertaining to allbusiness divisions and c orporate functions. For each of the risks identifiedcorresponding controls are assessed and policies and procedures are put in place formonitoring mitigating and reporting on periodic basis.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Corporate Social Responsibility are not applicable to the company ascompany does not fall into ambit of the provisions of section 135 of Companies Act 2013and Companies (Corporate Social Responsibility Policy) Rules 2014 .

ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS

In respect of internal financial control the Board has adopted the policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguard ing of its assets the timelyprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliabl e financial information. Furtherthe management regularly reviews the control for any possible changes and takesappropriate actions.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal control systems and their adequacy are included inthe Management Discussion and Analysis Report which forms part of this report.

CHANGES IN NATURE OF BUSINESS IF ANY

During the year under review there is no change in the nature of business of theCompany.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In pursuant to the provisions of section 177(9) and (10) of the Companies Act 2013 aWhistle Blower Policy / Vigil Mechanism for directors and employees to report genuineconcerns has been established by the Company in order to maintain highest standards ofethical moral and legal conduct adopted Vigil Mechanism/Whistle Blower policy to providean avenue to its employees to raise concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentations of any financial statements and reportsetc. The Audit committee of the company oversees the said mechanism from time to time.None of the Company personnel has been denied access to the Audit Committee. The WhistleBlower Policy of the Company is also available on the website of the Companywww.explicitfinance.net

DISCLOSURE UNDER THE HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The company has in place an Anti-Harassment policy in line with the requirements of thesexual harassment of women at the workplace (Prevention Prohibition & Redressal) Act2013. Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. During the year under review company has not received anySexual Harassment Complaints. Company has zero tolerance policy in case of sexualharassment at workplace and is committed to provide a healthy environment to each andevery employee of the company.

RBI GUIDELINES

The company continues to comply with all the requirements prescribed by the ReserveBank of India from time to time as applicable.

SIGNIFICANT ORDERS PASSED BY REGULATORS COURTS OR TRIBUNALS IMPACTING GOING CONCERNAND COMPANY'S OPERATIONS

No orders have been passed by any Regulator or Court or Tribunal which can have animpact on the going concern status and the Company's operations in future.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING

Pursuant to Clause 9 of the Revised Secretarial Standard-1(SS-1) and Standard-2 (SS-2)your company has complied with applicable Secretarial Standard issued by the Institute ofCompany Secretaries of India during the financial year under review.

ACKNOWLEDGEMENT

The Directors takes this opportunity to thank all their colleagues at Explicit FinanceLtd. for their professionalism and dedication to the task at hand. The board also wishesto place on record their appreciation for valuable support given by the Bankers Clientsand Shareholders.

For and on behalf of the Board of Directors
Swati Dave
Managing Director
DIN:03299627
Mumbai dated 12th August 2021

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